The world's leading EDA and design-services company, Cadence Design Systems Inc. (San Jose, Calif.), is working with the U.K. government to create a "design factory" in Livingston, Scotland, that will employ up to 1895 system-on-chip designers by 2004.

It is a revolutionary plan, and potentially the smartest piece of inward investment yet encouraged by the Scottish Enterprise, the local development agency.

Of course, the 1895 figure has to be a top-side guess--who can possibly know exactly what numbers of staff will be required in a particular operation in seven years time--but if it represents a genuine intention, this will be one of the largest concentrations of design talent in the world.

I have no doubt that Cadence's desire to get to 1895 employees is partly driven by financial incentives offered by Scottish Enterprise. Another driver is the commitment of the local Scottish universities to create the world's first Systems-Level Integration Institute, along with a well-tuned flow of graduate engineers.

No investment numbers have been given out, but it has been estimated that Cadence's investment will total about $160 million. And this highlights where Scottish Enterprise has been remarkably awar e and forward-looking.

Traditionally, inward investment support has concentrated on manufacturing jobs. For example, to encourage the investment in a wafer fab--creating, say, 1000 jobs and costing $1.5-billion to $2-billion--governments have had to offer a mix of grants and local tax holidays that can amount to 30 percent of the projected cost. In other words, a few hundred million dollars can buy you 1000 jobs in semiconductor manufacturing. The experience in Scotland's Silicon Glen, where there are many inward-investor wafer fabs, is that neither semiconductor manufacturing nor system assembly have created many spin-off companies that can grow to create yet more jobs.

A design factory is a very different proposition. Design engineers are much more mobile and much more likely to create start-up businesses.

Cadence gets good access to the graduate flows from the Scottish universities and the SLI Institute, and access to engineering talent is one of the biggest problems facing all electronic s companies as we enter the 21st century. But Cadence will also be training a new generation of design entrepreneurs.

If the U.K. supports Cadence to the tune of 30 percent, $50 million will help create hundreds of jobs at Cadence, but perhaps thousands of jobs within design teams that either locate close to Cadence or spin-out from it.

For the U.K. taxpayer, that represents a much better return and the possibility of kick-starting a revolution in post-industrial wealth creation.

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