It is called "Silicon Fen" by analogy with Silicon Valley in California, because it lies at the southern tip of the English Fenland. The interest in technology in the area started with Acorn Computers.
More than 1000 high-technology companies established offices in the area, during the five years preceding 1998. Some early successful businesses were Advanced RISC Machines and Cambridge Display Technology. In 2004, 24% of all UK venture capital (8% of all the EU's) was received by Silicon Fen companies, according to the Cambridge Cluster Report 2004 produced by Library House and Grant Thornton.
The so-called Cambridge phenomenon, giving rise to start-up companies in a town previously only having a little light industry in the electrical sector, is usually dated to the founding of the Cambridge Science Park in 1970: this was an initiative of Trinity College, Cambridge University and moved away from a traditional low-development policy for Cambridge.
The characteristic of Cambridge is small companies (as few as three people, in some cases) in sectors such as computer-aided design. Over time the number of companies has grown; it has not proved easy to count them, but recent estimates have placed the number anywhere between 1,000 and 3,500 companies. They are spread over an area defined perhaps by the CB postcode or 01223 telephone area code, or more generously in an area bounded by Ely, Newmarket, Saffron Walden, Royston and Huntingdon.
In 2000, then Chancellor of the Exchequer Gordon Brown set up a research partnership between MIT and Cambridge University, the Cambridge–MIT Institute, in order to increase international collaboration between the two universities and to strengthen the economic success of Silicon Fen.