Nick Pandya on Uk Racing's New Centre of Excellence

Forget the M4 corridor as Britain's biggest hi-tech cluster of fast-growing companies and jobs. A new growth area is emerging which is already supporting 40,000 high-skilled jobs - and is being dubbed Motorsport Valley.

The valley, centred on the Silverstone racing circuit, arcs across the East and West Midlands and capitalises on Britain's position as a global leader in the engineering of Formula 1 and other motor racing cars.

Volume car manufacturing in the UK may have gone into decline, but the reverse is true at the top end of the market.

Six of the 10 Formula One Grand Prix teams are based in the UK and it has been the focus of significant investment from Ford, Daimler Chrysler, Audi, Renault and BMW in the last five years. The motorsport sector's rapid growth can be demonstrated by the 500% surge in turnover experienced by the country's top 50 motorsport engineering firms between 1989 and 2000, with jobs in these companies doubling over the same period.

Silverstone, the mecca of British motorsport, announced recently it is building a £4.2m innovation centre, with construction work starting next month. It aims to be the research and development hub for the UK motor sport industry, in a joint venture between track owners the British Racing Drivers' Club (BRDC) and the East Midlands Development Agency (EMDA) which is investing £1.8m to back the project.

The EMDA was set up in 1999 to bring more jobs and skills to the regions and aimed to make the East Midlands a better place to live and work. The Silverstone project is part of the agency's vision to turn the area into one of the top 20 highest performing economic regions in Europe by 2010.

The cluster concept is at the core of at tempts by regional development agencies across the country to foster self-sustaining growth poles. Under clustering, similar businesses group together, collaborate on research and development and capitalise on spin-offs in other industrial sectors.

The motor sport valley cluster already has an annual turnover of £4.6bn, sustains 2,200 businesses, and provides a living for around 40,000 workers - of whom 25,000 are highly skilled engineers. EMDA chairman, Derek Mapp, says: "This major initiative for the Silverstone circuit aims to build on the sector's global reputation for innovation excellence and knowledge generation. It also aims to stem the industry's creeping loss of motor engineering technology leadership from the UK."

Scheduled to open in October, the centre will house up to 40 high performance engineering start-up companies on a 500,000 sq ft site that will become the Silverstone Technology Park. Alex Hooton, chief executive of the BRDC, says: "We want to maintain Silverstone and the UK's prominence as a motorsport industry. We need as many catalysts for that industry as possible. The technology park will be a good starting point."

At the new innovation centre there will be room for 16 'incubator' units in which start-up companies will get a friendly package of support. There will also be 27 suites for growing companies rentable for periods of three to five years.

Graham Brown, head of the government's motor sport unit, says: "This is going to be a true innovation centre, not a managed workshop initiative. We will house start-ups and work with established motorsport companies. There is certainly a healthy interest in the centre and we have received many expressions of interest."