In a massive coup for the city of Stirling, Codebase – the UK’s largest incubator space provider – announced it would open its latest centre there
The decision is a huge surprise as the smart money was on the influential high-tech operator moving into Glasgow’s expanding tech sector or to Manchester to facilitate its UK expansion plans – not one of Scotland’s smallest cities (see below).
Stirling Council’s Stuart Oliver says projects including Codebase Stirling will allow the city to develop, grow and attract high-value knowledge based businesses, while retaining its graduates.
To establish a secondary location as a successful tech hub requires many factors. Belinda Waldock, co-founder of Software Cornwall, umbrella body for the county’s tech-businesses, says that members see the prerequisites to facilitate growth as: skills and knowledge; recruitment and careers development; visibility and culture; infrastructure and environment and collaboration and networking.
Initially, growth will only come if the location offers an educated workforce. And if the local university does not offer relevant courses, they must be persuaded to. Waldock says Software Cornwall discussed businesses’ needs with local colleges four years ago. “Then [renowned art-college] Falmouth University said it would never run a science course. It now runs one of the top computer-games BSc’s around.”
With an educated workforce, new graduates must be enticed to remain. Quality of environment is paramount, but only in conjunction with fulfilling career opportunities. Amelia Saberwal, innovation leader at Woods Bagot, says: “For debt-ridden students, a nice place to live isn’t enough. They need a whole lifestyle”. Falmouth University established Launchpad which works with the likes of BBC and Sony to find services they require, then create graduate start-ups to provide solutions. It is expected to create 500 jobs by 2023.
Saberwal says regional cities should concentrate on providing centres of excellence. “It’s no good just reinventing yourself as Silicone Sunderland. Base growth on what is fundamental to your area’s existence.”
Bill Page, research manager at Legal and General and chairman of the BCO Research Committee, says: “When a location plays to its strengths the hi-tech companies have an automatic end-user.”
But as Mark Charlton, head of research at Colliers says: “The job is just part of the package”. And integral within that package is workspace. Charlie Green, co-founder of The Office Group, says even tech start-ups have sophisticated tastes. “They’ve experienced quality environments and want it for themselves – and it must be affordable.”
With developers wary of young companies in secondary locations, workspace is an obstacle to establishing growth hubs. Page says: “Canary Wharf can afford to take risks and foster start-up environments, for example, Level 39, but in less glamorous locations, there are more challenges to development.”
Workspace provision has largely come from the new breed of serviced office/co-working operators, which offer connectivity, clustering and flexibility vital to hi-tech businesses. John Williams, marketing head, at one such company, The Instant Group, says that with little vacant space and rising office rents at popular hi-tech hubs such as Oxford and Brighton, growth is spreading to more secondary cities. Williams says TIG is experiencing most demand in places such as Leicester and Nottingham where the burgeoning tech companies seek flexible city centre space.
TIG’s research into start-ups found that Liverpool is the UK’s most entrepreneurial city and along with the East Midlands, it is there they expect growth.
Page agrees “Look at the lifecycle of a market, lots of [company] births, deaths and marriages is a good indication of progress.”
The alternative to new development is utilising what already exists. Page says national corporations’ portfolios could provide start-ups with co-working space, who in turn become customers.
However, Suzanne Gill, partner at solicitor Wedlake Bell, warns modern hi-techs may not wish to be associated with staid corporates. Instead she feels big accountants and lawyers may consider running diffusion brands such as Waterstones’ ‘unbranded bookshops’ so both sides benefit but maintain an image. Gill does see huge potential with telecoms companies. “BT’s sites have the best broadband and there’s exchanges everywhere.”
Once education, workforce, lifestyle and buildings are in place, hubs need funding. Most financiers and venture capitalists are in London, and they like to be near their investments. But Waldock says start-ups do not need to be physically close to funders. Also, the fintech revolution is having an effect. Gill says: “Crowdfunding is changing the way many businesses access funds.” Indeed, one of the UK’s largest group investors, Crowdfunder, is based in Newquay, Cornwall.
The government’s recent digital policy paper will provide funds and services for hub development, so regional competition for success will increase. For developers and investors, the key is getting the right partner in the best location. As Waldock says: “Creating and growing a digital economy is extremely difficult to get right – but rewards are huge.”
What local authorities need to focus on
Chorley Council’s proposed development of the £8.4m 54,000 sq ft Digital Office Park is one of many examples of authorities attempting directly to create a hi-tech community. But there are calls for councils to take a wider enabler approach.
Legal and General’s Bill Page says authorities should leave development to the experts, while providing background support. “Success requires organic growth. Authorities should provide a nudge rather than building a hub and filling it.” He says planners should demand affordable start-up workplaces within a commercial development.
Software Cornwall’s Belinda Waldock says councils should encourage growth through the procurement process. She feels the red tape around contracts means local hi-tech businesses lose out to conglomerates like Microsoft. “Councils must use procurement to encourage local involvement. A local solution may develop into a national business.”
Stirling seeks to build sustainability
When Codebase Stirling opens in April, it will be the city’s first step in its drive to become a top UK hi-tech hub. The council has spent £200,000 refurbishing an underused building to provide the Edinburgh-based incubator operator with a 300-desk modern unit offering touchdown space, offices and collaboration areas. Codebase is one of the key instigators behind Edinburgh’s position as one of Europe’s top tech communities, and has been brought in for its experience in helping start-ups succeed with mentoring, clustering and finance advice.
Stuart Oliver, economic growth service manager for Stirling Council says: “Everywhere wants a digital hub, but we have credible partners. You can carry out your business from anywhere but you need to access funding – Codebase gives that.”
The city already has a hi-tech service provider community, but Oliver says the project will add value by creating a production industry. The council started out by establishing an industry-led education group, which worked with schools and the city’s top 40 university to tackle skills shortages, develop courses and evolve the curriculum.
Preceding the Codebase Stirling decision, the council applied for funding to bring on three more tech buildings for follow-on space and to attract established companies.
Within 10 years, the council hopes 1,000 new jobs will have been created with an estimated GVA of £25m by 2022.
“But,” says Oliver, “we’ll build sustainably – we won’t try and be a new Edinburgh.”
Lawrence Higgins
