Dr Eben Upton on the UK Tech Sector Advantage

Yeah. So we've been building Raspberry Pis with Sony here in Pencoed since the summer of 2012. So 14 years. We're unusual in that we started manufacturing in China and then we progressively reshored manufacturing through the UK. And I think this is an insight that this was an early insight for us. I think people tend to have a misconception that the Far East is the place to go at scale when in fact often the advantages of Far East manufacturing taper off at volume once you can afford to automate the production process. It doesn't really matter where the robots are, right? And so what we realized very early on was that by embracing aggressive production automation we could achieve cost parity, factory gate cost parity between a Chinese contract manufacturer, coastal China, and the UK. Once you've achieved cost parity, of course, there are huge advantages to having your contract manufacturing near your design center. So this kind of designed by Apple in California, manufactured in China thing just doesn't work for us. What we like to do is we design in Cambridge, we manufacture in South Wales. There's a constant dialogue and physical presence between the two organizations, very frequently, you know, driving backwards and it's a 4-hour car ride, not a 12-hour plane ride. And really we always characterize this as coming to Sony and saying every month, what do you hate about making our product? Like what is hard about making our product? What leads to production downtime? What leads to scrappage? What leads to inefficiency in the system? And if you ask that question every month for 12 years, what you end up with is a product which has been very aggressively, very extensively designed for manufacturability. So quite a large amount, we talk a lot about the Raspberry Pi cost structure advantage. A lot of that, that our business is built on, it's how we compete in the market. A lot of that cost structure advantage is built on this very long history now, this legacy of working hand-in-glove with Sony to make our products more manufacturable.

So yeah, so my mother's, because of course my mother's family are from South Wales and you know as I, you know, I grew up spending summers here, spending summers just outside Newport in Pontypool. And surrounded by factories, right? I have from a very early age this feeling that Wales is a place where you go if you want to build things.

I think that's right. Yes. So, Raspberry Pi exists obviously, you know, we have these enormous ambitions now. And I think we've grown beyond that initial ambition, but the initial ambition was simply to get more young people interested in computers in the hope that some of them might choose to apply to study computer science at Cambridge.

Well, I mean clearly Cambridge is one of the preeminent centers for the hard sciences, for academic hard science research in the world, in Europe. It's also one of the places that has had the best track record of translating a portion of that research success into commercial success. It's always been a place, the whole time I've been in Cambridge. I went to Cambridge horrifyingly 30 years ago, 30 years ago next month. And in our whole time there, you know, long before I went to Cambridge there was this culture of trying to build businesses out of either the academic research which was happening at the university or out of the, you know, once you've attracted an engineering workforce to a place, sometimes those businesses that are built have nothing to do with the university. They're simply there to draw on the talent pool that's been attracted to the town, by the university, and by previous generations of business. So, I think it's somewhere that does incredible world-class research. It's somewhere that translates that research. It's somewhere that's got that depth of, you know, we talk about the depth of intellectual talent, the depth of experience. You know, one of the interesting things about founding and running a business in Cambridge, and Raspberry Pi is my fourth, the fourth time I've done this, is that you can always, there will always be somebody there who's done it before, right? There's always be somebody you can call on who has had some experience and we've benefited enormously from that in terms of informal advice, but also in terms of the people we've been able to recruit to our board of directors and to the board of trustees of the Raspberry Pi Foundation. And finally, it's somewhere, you know, it's somewhere with access to capital. It's somewhere where, you know, one of the other, you know, previous generations of business success, they generate engineering talent, they generate a pool of engineering talent, they generate a pool of management talent and they also generate pools of capital that can be deployed in order to help early stage businesses get that a little bit bigger.

I think it's very viable. I mean the UK has this wonderful track record in creating businesses and critically in scaling those businesses. We sometimes talk about the problem not being a problem of startups being a problem of scaleups. The UK is increasingly successful not just at generating new businesses but at turning those businesses into unicorns. Wonderful unicorn factory in this country, some of that in London, a lot of that in Cambridge. So I think it is. I started my first startup in London in the autumn of 1998. So again, like so 28 years ago. I think it's become easier. I think there is a positive mindset, positive attitude towards entrepreneurship as a lifestyle choice, as a career choice. I think it's increasingly seen as being a valid, viable way to live your life. I think that's, I think it's wonderful. I've certainly, I've had an absolutely wild ride doing business in the UK and doing business in Cambridge.

Yeah. My first business, so, Idea Works 3D, which I founded in 1998, they are now called Marmalade Game Studio. I sold my shares many, many, many years ago. But if you play a Hasbro game on your mobile phone, that's actually Marmalade Game Studio. What's really wonderful there is I've had no financial interest in that business for most of the 28 years that it's existed. But you can still, you get a lot of satisfaction out of knowing that there's been a business that has been generating revenue, generating profits, employing people, paying taxes, you know, for three decades. So there's, yeah, even when you don't necessarily have any continued operational participation or financial participation in a business just knowing that there is a thing out there in the world that exists that wouldn't have existed without you, it's an amazing feeling.

Well, this relationship with Sony, it is pretty much the oldest commercial relationship, one of a handful of commercial relationships which have really powered the growth, powered the success of Raspberry Pi. We could not have done this. I think the traditional flow, the traditional offshored, you outsource manufacturing makes a lot of sense. I don't really believe at our scale offshored manufacturing makes much sense at all. So I think if we'd gone down that path, I think one or more of the difficult times, you know, if you've been in, we've been building physical, I'm a software engineer so when I came into this I remember walking into the factory here just before Easter in 2012 and it was like nothing I'd ever seen before. But building things out of atoms is harder than building things out of bits. You'll always have, you know, we're going through a very interesting moment right now with the price of memory, with the price and availability of volatile and non-volatile storage. These moments will always come along and I think if we'd taken one of those more traditional approaches, I think on one of those occasions we probably would have stumbled. We've been able to get through those with Sony's support. We've been able to grow the business with Sony's support. And we're super excited to do another 14 years, maybe another 14 years after that as a customer of Sony.

No, no, no. 14 years retired, I'll be on a beach.