Manufacturing ConfidenceIn MediaCityEdited by Matt Bakerand Richard Phillips Manchester Business School The Impact of MediaCity UK Original Thinking Applied
2Contents Foreword Peter Kawalek Manufacturing confidence Felicity Goodey Creating space, creative space Kalam Ali Realising convergence: Lessons from the Canadian experience Peter Lyman, Kristian Roberts and Stephen Hignell MediaCity: A new entrepreneurial era Fred Hasson Changing the game Damian Hodgson Funding the barbarians at the gate Kalam Ali Manufacturing confidence revisited Richard PhillipsContributorsKalam Ali is an experienced investment banker and corporate financier with a background in technology investment banking andcorporate finance.Felicity Goodey is a former BBC journalist and chair of the Central Salford Urban Regeneration Company. She led the team whichcreated The Lowry, Britain’s national millennium project for the arts, an international theatre and gallery complex, which attracted tothe area more than £450 million of private sector investment and helped create 5,700 new jobs.Fred Hasson is the founder of Tiga (Independent Developers Trade association) for whom he was CEO for seven years and of theEuropean Games Developers Federation where he was Chairman for five years.Stephen Hignell is a consultant in Nordicity’s London office and a seasoned project and business development manager withsignificant experience in both public and private sector projects.Dr Damian Hodgson is a senior lecturer in Organisational Analysis at Manchester Business School and convenor of the MP3(Managing Projects, Programmes and Portfolios) network at MBS.Professor Peter Kawalek (Manchester Business School) works with students on topics related to new media and informationsystems. He has worked at various levels. He has experience to board level in media industries, and works extensively withgovernment, including Department of the Taoiseach, Department of Communities and Local Government and the NHS.Peter Lyman is senior partner with Nordicity, and one of its founding principals.Dr Richard Phillips is lecturer in Comparative Organisational Analysis at Manchester Business School, where he teaches on the Full-time MBA as well as doctoral research programme.Kristian Roberts is a manager at Nordicity and a recognised expert in digital content industries in Canada and internationally.
3Forewordby Peter KawalekMedia is at the heart of MediaCity. But us what was true and what was not new institutions have shaken thewhat is it and why build a whole city true. Just having written one conferred confidence of established institutions,around it? If one thinks about media in expertise and status. Just having read particularly the way in which oldera conventional way, media simply means one could make you a lecturer. Students institutions charge the masses for theirany number of things we experience could not afford books, both in terms ability to participate in it. Yet rather thanthrough a ‘screen’- be it a computer, of the purchase price and the effort to replace the fundamental technologymobile/smart phone, radio, television set read. The lecturer could. So, hey presto, and institution of the book, theseor even the printed page. Even in the age he had a job for life. The lifetime of the new institutions tend to repackageof the internet where the computer and book, that is. it, finding new ways to embody thatmobile phone are becoming the screens knowledge and experience as wellof choice, particularly for the younger Great institutions could be formed as new institutions around which togeneration, our love affair with media is around books; parliaments, universities disseminate and consume it. What isstill firmly rooted in the telly. If deprived and churches. The first two of these Amazon’s Kindle if not this?of it, watching TV tends to be the ‘media’ sought to manufacture knowledge. Thewe would most miss. third admitted only to being its guardian. And this is media today. It is a great A major function of churches became, if co-existence and fighting for position ofIt is our love of television and all that you think about it, version control. Which different forms of knowledge, experienceit entails that so much informs our is the right version? What do we send and ways of participating in it. Medialiteracy and association with media. to the printer? What do we keep for the today is about an age of remarkableYet if you think about media in this committee? Because of books, religion contest and conflict. In 1962, Marshallway, you inherit all the baggage that became an act of faith rather than an McLuhan predicted the move towardsthis entails media is about someone exploration of horizons. People could say a global village marked by constantmaking programmes, someone to you, if you don’t believe verse x and conflict over ideas. We need only reflectbroadcasting programmes, someone chapter y, then you are not true. After all, upon the events of today to appreciatepaying for programmes, someone it is written down. the aptness of his observations aboutcozying up on the sofa after work to the trajectory of media. Has Wikileakswatch programmes, etc. For most With the electronic age came new not challenged the values andpeople media is a particular institution institutions. The BBC, 20th Century Fox, legitimacy with which governments andthey participate in in some way, shape Disney and EMI. These institutions organisations define the right to accessor form. Were we to think of a name created new kinds of contest in society what should be known and not knownthat captured our experiences with that over what we know and experience about the world? Have social networksinstitution, the BBC may well be it. And about our world. Rather than replace like Facebook and Twitter not helped toif we continue to think of media in this earlier institutions, these new media fuel the revolutionaries on the streetsway, we miss the bigger picture of what institutions often build themselves of Egypt and inspired similar uprisingmedia is about. Continue in this vein, upon those of the old and reproduced across the Middle East?and the vision of MediaCity will struggle its patterns. The BBC uses scriptwritersto project itself as anything other than to produce scripts around which These are powerful reminders of thewhat others might think of as simply a whole institution of actors and impact that comes when you allowBBC-City. production teams mobilise to amplify simple change in who writes the text, its content to a mass audience. This is who paints the image, who capturesYet this is not the only way to think not fundamentally different from the the idea, and then open up access to,about media. Media might also be choreography with which the church and participation in, the dance thatthought of as the art and science of used scribes to produce the scriptures, surrounds its production and circulation.knowledge around which different and then built institutions around the These are powerful reminders of whatinstitutions form to shape how ideas good book with priests and a whole media ultimately is about. And asare captured and disseminated. On range of other actors engaged in forms MediaCity looks to define itself throughthis reading, media is far more than of ritual performances that equally its vision of what it believes media istelevision and the BBC. It is a vast served to amplify the dissemination and about, it is a reminder to think moremultiplicity of institutions all competing consumption of their knowledge. carefully about what it is, and about whofor our attention and seeking to shape is to be involved in that choreography.what we come to pay attention to in Yet with the rise of any new institution,our world, how we experience it, what the old institutions usually feel theirwe come to understand about it, and position shifting and their confidenceultimately, how we act upon it. undermined. And right when we grew comfortable with a particular form ofJust think about it. The printed word what media looks and feels like, alonggave us the ‘right’ word. There were came the internet and a new swatheofficial versions of things. Books told of digital institutions were born. Sure,
4Manufacturing confidenceby Felicity GoodeyFelicity Goodey charts the history of an than the adjoining city of Manchester two anchor investments that got theinspiring transformational journey that and had long provided much of the first phase away were the first multi-still has a long way to go. actual labour for all of its neighbour’s screen cinema in the North of England, once great industries, Salford really did and only the second in the country, andOne of the great attributes of the North get the rotten end of the deal. a hotel called the Copthorne Hotel. ItWest, and particularly the Greater was revolutionary. Nobody had done itManchester area, is its ingenuity and So here was Salford, an impoverished before and meanwhile on their doorstepconfidence. The history of MediaCity is local authority with this enormous Manchester was still languishing andreally the history of efforts to find that and derelict port and a horrible, highly Liverpool was in a right old mess.confidence, the people to lead a vision contaminated canal, reputedly the mostfor change, and sustain its momentum contaminated waterway in Europe, Salford ploughed its own furrow andover time. wondering what to do about it. The rapidly, but in isolation, created Salford waterways were in such a poor state Quays, a destination where people livedThe region used to be at the centre that you couldn’t sell it to anyone, you and where people worked. Modernof Britain’s economic might with all could only give it away for free. Even offices and service industries moved in,the innovation in manufacturing and then, no one was interested. Rather, one as we moved away from manufacturingproductivity that came with the first enterprising developer actually asked into the service sector. But the problemindustrial revolution. These were the Salford to pay them £500,000 for the was that this early investment madedays that made Liverpool one of Britain’s privilege of taking it off their hands so little difference to the local population.busiest ports, importing all the raw he could fill the waterways and turn Most of the jobs were going, not tomaterials that fuelled the insatiable the docks into, what else, a car park. Salford people, but to commuters fromdemand from manufacturers in But even this was impossible, as an Cheshire, Derbyshire, and elsewhere.Manchester. These were the days that Act of Parliament has mandated the Local people, trained for a world ofturned Trafford Park into the largest waterway remains since it now forms manufacturing, had neither the skillsindustrial estate in Europe on the back Cheshire’s main drain. And draining nor, in many cases, the aspiration toof a monumental effort to build a canal it was. Thankfully, there were people, acquire new skills to take advantagesystem that brought access to the sea like Salford’s council leader of the ‘70’s of the service sector jobs that were36 miles closer to Manchester. These Les Hough and his Chief Executive being developed here. After years ofwere the days when Salford was the Port Roger Rees, with the will to search for a unemployment, lack of aspiration, asof Manchester, reflecting the fact that better situation and the confidence to much as lack of skills, was a major barrierthe Manchester Ship Canal didn’t quite do something themselves rather than to regeneration not only in Salford but inmake it all the way to Manchester. But wait for someone else to solve their many other parts of the North.that was then. problems. Were it not for these people who had the confidence to reinvent Once more Salford City Council, byEventually, industrial output would a place no one wanted to associate now with a new Leader, Bill Hindsrequire bigger container vessels that with, the MediaCity site of today would and Chief Executive John Willis, took acould not get up the canal system. never have happened. Herein lies a huge leap of faith. They decided theyEventually the pattern of world trade lesson. To achieve transformation, needed something that would be awould change and shift the powers of you need leadership and you need catalyst for transformational change.industrial might not only away from courageous people. While it may be But the Council recognised localthe region, but away from the country hard to find, often in people from the authority mistakes of the past. In theas a whole. And eventually, the Port of most unexpected places, finding it is 1960s terraced houses had been pulledManchester would die. Yet unlike the nonetheless an absolute prerequisite to down and replaced with tower blocks.Liverpool port which boasts more Grade successful regeneration. Communities were destroyed and theI Listed Buildings than any other place result was a social disaster. The samein the country outside of London, the When you find it, you also need to thing happened all over the country.Port of Manchester left Salford with support that leadership and confidence. New housing replaced the towerno redeeming features, no marvellous In the case of the Port of Salford in the blocks but still there was no changebuildings, virtually nothing that could 1970s, turning it into the Salford Quays in the social wellbeing of the area. Asbe reclaimed at a later date and easily of today would take a huge amount the Leader, Bill Hinds, said, “We need abuilt upon. Eventually there was of bravery to find the money to back it. catalyst, we need something which willnothing left of the Port of Manchester The Council stuck its collective neck out transform aspiration and attitude, notbut widespread contamination and and was absolutely correct. The rest of just the attitude of people on the outsidedereliction right in the middle of an the world, struggling with recession, looking in, but more importantly, wealready impoverished city. Adding insult thought they were completely barmy. need to transform the attitude and theto injury, what was once the Port of An initial investment of £45 million of aspirations of the people themselves;Manchester was renamed the Port of public money brought in £450 million of the local residents of Salford”. WithoutSalford! For a city that is actually older investment over the next ten years. The aspiration it is almost impossible to get
5people to change tack. You can put all participate in the success of the Lowry. history to it. Just across the border, inthe skills training in the world together, And without them, the relatively modest the City of Manchester, the BBC hadbut if people do not believe it will make subsidy of £1 million pounds a year from for some time been talking aboutany difference to them, why should Salford to get the project off its feet decentralisation. The pressure on thethey be bothered to take advantage of would not be enough to keep the vision BBC came from back bench MPs whoit. Salford recognised that to change alive. were getting sick and tired of the factaspirations, it was no good building that although the licence fee is in effectsomething ordinary. Only something Today, the Lowry hosts everything a National Tax they perceived the BBCof international quality and distinction from the world’s most famous ballet to be entirely London and South Eastwould send the message to everyone companies, drama companies and opera centred; why should the North paythat Salford people can also have the companies right the way through to the licence fee anymore? As the timevery best. Peter Kay and sing the Sound of Music. for licence fee renegotiations was fast Now in its 11th year, the centre is totally approaching the BBC decided it neededSalford officers looked around the world financially stable and makes 95% of its to look at decentralisation seriously.for inspiration. They saw the power of own income. The Lowry alone has, on an Its first option was to consider thearts-based projects in Baltimore and the investment of £127 million, brought in redevelopment of existing premises inpowerful effect this had on regeneration. to date, directly and indirectly, £1 billion Manchester, the Network ProductionGuided once again by the architect who pounds of private sector investment; Centre, my old home, a horrible buildinghad created the vision for Salford Quays, not a bad return. Yet behind those in need of redevelopment! ManchesterPeter Hunter, they decided to create an figures is a very simple secret, a vision thought this was a done-deal so wheninternational arts and entertainment to build something that is able to root I began to take interest in the BBCcomplex in the middle of one of the itself in and transform the ambitions opportunity I got my knuckles wrappedmost deprived communities in this and confidence of the community that and was told to go away. Then the BBCcountry. In 1989 Peter Hunter and participates in that project. This is the moved the goalposts.Peter Henry, the erstwhile Industrial success of the Lowry. And one of theDevelopment Officer for Salford came greatest experiences of my life was in The new BBC Director General, Markto me and said, “We’ve got an idea.” the bar one evening listening to three Thompson, saw something elseThey showed me an artist’s impression, local ladies solemnly comparing the happening in the world. He sawbased on the regenerated Quays as far relative merits of the three greatest that digital technology would notas it had gone. Only about half the docks ballet companies in the world. In 1989 only change the way we broadcasthad been developed. Several complete had you asked those ladies had they but change everything we do,piers were still empty. On the end of one ever been to the ballet, they would have communications, leisure, entertainment,of them, pier 8, Peter Hunter had super- laughed at you and said why would we education, healthcare, government etc.imposed an image of the Royal Albert want to go to a ballet and there aren’t He realised that unless the BBC changedHall. My reaction was “You have got to be any here anyway. What a long way it would be in serious trouble, and as ajoking. An Opera House on the Quays?.” Salford has come. former broadcaster, who also had a stakeThey said, “And why not?” in a commercial broadcast production The Lowry was a turning point company, I recognised that too. By thisTo keep such vision going would require for Salford. It started to engender time the BBC had five potential sitesseriously hard work. For many, the confidence in a place that has long had in mind, two of which were in Centralimmediate reaction to an international very little going for it. And the power of Salford, and when the BBC came to us toarts and entertainment complex for confidence is its infectiousness. One of discuss them the gloves were off and weSalford was that we had all collectively the best headlines we ever got through were plunged into a real competition.taken leave of our senses. Why not build Lowry was in the Financial Times, ofa little local theatre? That would be nice. all places, under the headline “New If you are in a battle and want to winOr a community arts centre? That would York, Paris, Madrid, Salford.” That is just you need to know what the client wants.be good and much less expensive. But the kind of headline you want when Fortunately the BBC introduced me toSalford’s response was would either you are trying to transform a place. It Professor Mike Joroff who is a work placemake any difference? It would be just concerned the visit of the Paris opera/ planner, but ‘work place’ not in termsthe same as putting in another road, or ballet company to Salford, the first time of offices but in terms of cities. He isanother row of houses, or another estate; in 40 years that this company had ever from MIT, Massachusetts and he invitedwould that make any difference, would performed outside a national capital; me to join forces with the Cambridge/that transform anything? The real crux and they came to us. MIT Group who were looking roundof the matter lay in finding a way to Manufacturing confidence is what all the world at examples of where theembed the project within a community. great projects must be about. That is next big drivers for western economiesThis was the lesson that Salford’s then what the community wants. Salford were going to come from. 21st centurydeputy chief executive, Tony Struthers, people are proud of where they come cities such as Arabianranta Helsinki,a town planner by profession and a from, proud of the fact that they have Crossroads Copenhagen, Digital Mileman who later became President of the battled through huge adversities, but Zaragoza, Internet City Dubai, DMCRTPI, would take from the Baltimore we want transformation for the future. Seoul, one north Singapore, and ofexperience. Anything less than MediaCity is simply a continuation in course MIT itself represented beaconssomething ambitious, an international that effort. of where the future was heading. Thesearts and entertainment centre of were not business parks, not scienceexcellence, would not have a chance Yet MediaCity has its own challenges to parks but urban landscapes, 24-hourof inspiring the residents of Salford to get over. The idea itself has a particular cities being developed on the outskirts of
6already well-established cities, designed attractive destinations, places which We should not forget this point.as places that attract and retain creative enjoy rich culture, attractive landscapes, Ultimately, instead of just building apeople. They are specially designed and beautiful public spaces. Salford new home for the BBC, as our rivals wereplaces where people live, play, work, is no longer competing with Hull or proposing, we are taking the BBC as anlearn, and research; they are destinations Leeds or Birmingham or London; we are opportunity and trying to use that as ain themselves. Some are driven by big competing with Amsterdam, Paris, Seoul, catalyst to unlock a globally significantmedia; some by design, some by big and Singapore for the kind of talent MediaCity. There is still a lot to do butscience. In conversation with Mike Joroff that you need to drive these industries. with a developer like Peel Holding’s bossone evening about these world-class And why should they come to us? We John Whittacker Mediacity has founddevelopments, typically 150 to 250 plus have got to offer great housing, great once again a man of courage and visionacres, I said, “Do you think we could be education, great places to live, distinctive to drive it forward.world class?” He looked down his nose at places with character. ‘More Salford, lessme and replied, “Well I don’t know about anywhere’, a place in which local peoplethat, but I think you could be globally are ready to welcome newcomers likesignificant”. And that will do us, we will the BBC because they are comfortablebe globally significant! that this new investment will also benefit them and their families.And this is what we were proposing with Achieving this distinctiveness is muchMediaCity. Digital new technologies of what has driven MediaCity to date.will revolutionise everything we do and There is everything here in phase 1 thatthat means we have to put in the right you would find in a city offices, housesinfrastructure and create attractive and apartments, hotels, crèches, shopsplaces. If you want to transform your and supermarkets, and a tram right toeconomy, you have to attract and retain the doorstep of the BBC. And we are onlycreative people. That means creating the first 37 acres of a 200-acre site.
7Creating space, creative spaceby Kalam AliIt will take more than simply building venues, art galleries, coffee shops touting for marketing and promoting new ideasoffice space for entrepreneurs to make free wifi, numerous developer meetups - to a larger community of ‘followers’. InMediaCity a success, argues Kalam Ali. many of which are sponsored (free beer short, the development of the web has and pizza) - and venture capital funds given to entrepreneurship the possibilityMuch has been discussed about setting up offices locally has earned it of building innovative digital mediaecosytems that support innovative the nickname ‘silicon roundabout’. In products more cheaply, the possibilityproduct development and the success recognition of the vibrant networking, of finding other like-minded people toof technology clusters such as Silicon clustering and knowledge sharing work with (via wikis, blogs, news articles,Valley in the US. Everyone wants to taking place in this area the Technology podcasts, as well as tools for organisingknow how to create these ecosystems Strategy Board recently announced events), and a possibility of finding anand most of the time, people conclude a £1m funding competition for local initial market to prove their concepts.that the secrets are so complex that companies touting this area as the ‘Techit’s impossible to re-create the magic City’. That said, another factor also playingformulas behind past successes. Yet if a key role in driving this growth inyou looked more closely at the situation While much of these developments look entrepreneurship is access to physicalright now in London where I live, you simply like the evolution of a variety of space. Yet the physical spaces thatcannot but notice something interesting formal and informal networking events appear to support this growth inis happening to the entrepreneurial in a cheaper side of the city there seems entrepreneurship are not simply aboutecosystem. This makes me think it might to be something driving the appetite for providing traditional ‘office space’.be better to simply pay more attention these events. They are not developments Rather, on any given day in London, whatto what is already beginning to happen driven by some central plan, but a one can observe is people using publiclocally, rather than fixate on where we process of spontaneous and continuous spaces, such as wi-fi enabled cafes, andthink the grass is greener. self-organisation. The web is playing transforming them into spontaneous a central role in these developments. ‘co-working hubs’ - as places to workIn the digital space in London there has Online communities are no longer a in and as well as informal (and formal)been a noticeable upsurge in visibility replacement for meeting up in real life, meeting spaces for a variety of businessaround entrepreneurial activities in but are becoming the tools for finding, and social purposes. In short, whatthe last couple of years. Despite the organising and connecting to other we are witnessing is a process wherefinancial crisis, numerous groups of people with interesting ideas, in real life. a combination of virtual tools andbudding entrepreneurs have begun to open physical spaces are increasinglyemerge. For instance, East London has The web has been offering becoming the modern office space ofincreasingly become the place to be if entrepreneurs new opportunities to the digital entrepreneur.you’re a budding web, tech and media build businesses with the emergencecompany. The emergence of co-working of free web services that increase While it might not be possible to copy‘hubs’ offering flexible and affordable efficiency and cut costs, as well as routes the ecosystem surrounding Silicon Valleywork space with hi speed internet set to market previously controlled by larger that does not mean you cannot createagainst a backdrop of numerous digital gatekeepers. Social networks such as an ecosystem that works here.creative agencies, tech startups, record Facebook and Twitter have also begun tolabels, film companies, entertainment give individuals a relatively free channel
8In Britain, part of the challenge was revitalised in six months becoming We are in a period of widespreadof creating an environment for ‘a mixture of playful pop-up shops and experimentation and innovation inentrepreneurship to flourish seems to independent businesses with more long- digital platforms. As this continuesboil down to the fact that when we term ambitions’ 1. to expand it becomes increasinglybuild places for enterprise to happen, important to understand emerging Spacemakers recently listed somethe remit of most infrastructure business models, disruptive innovation, noteworthy features of their strategy:development organisations and their the new mechanics for mediafunders is too narrowly conceived. The • build trust through personal distribution and provide relevant andgame is more about building spaces outreach and engagements mediated timely support to those companies andthat can be rented to particular groups through open online networks as well as individuals innovating in these areas.who get to use it as their own private regular open meetings and collaborative Some companies will fail, that’s normalspaces. This is simply not conducive to events; in any ecosystem, but we want to seecreating an ecosystem for entrepreneurs • re-use existing assets, recognise lessons learnt applied quickly and bestand a culture of enterprise. While places potential of the space and involve local practice adopted across an industry. Thislike MediaCity clearly wish to sell offices communities; tends to spread better in robust andto groups who want their own space, • engage in co-production and not just well connected ecosystems - where theit seems like its success also depends top-down consultation. process of learning, adapting, innovatingupon fostering an environment in and growing are all embodied into thewhich entrepreneurship flourishes to This resulted in a successful campaign local culture and day to day activities.supply larger organisations, in the fast that transformed the market, bringinggrowing sectors it is targeting, with the it to life and adding much needed Proximity to and access to establishedinnovation and talent that supports value to local communities whilst also players and large companies also playstheir ambitions. Consequently, large demonstrating to its property developers a key part in this process as seasonedecosystem projects like MediaCity may better ways of encouraging local industry executives guide, mentor andfind inspiration in what is happening at commerce. This included weekly themed connect earlier stage initiatives to theirthe other end of the spectrum where events co-organised with the various larger counterparts seeking to harnessideas and smart people come together arts collectives, pop up shops and the these innovations.creating the next wave of success stories. current residents which created the ‘glue’ that brought together new tenants with From a corporate finance perspectiveMuch of the demand for new types of old, both benefitting from the increased a successful self organising ecosystemspaces to support creative entrepreneurs footfall drawn to this hub of activity. as described here creates growthis increasingly being supplied by opportunities which scale well andmembers of the same community. For Themed hackdays, a popular activity in inspire more successes. This will attractinstance, intermediary organisations digital industries, achieves something talent, investment, expansion capitalsuch as ‘Spacemakers.org.uk’ have similar where entrepreneurs, tech and create strong conditions for M&Abegun tackling these issues through startups and freelancers come together activity, which in turn creates even moredevelopment projects in areas where in an experimental event hosted by a sustainable feedback loops - such asempty spaces are underutilised despite business where the expertise of the the next generation of leaders whothe value they afford local communities. innovators is drawn upon to find creative contribute further to its success.Like larger public infrastructure projects, solutions to a business problem in anthe effort begins with repurposing informal, relaxed atmosphere.unused or diminishing spaces. However,these projects are not about building For larger ventures like MediaCity, someto an economic plan and then looking of these lessons may offer useful waysto find people for which that plan of expanding the digital media and techfits. Rather, the game is about actively cluster in Salford. In particular, activitieslooking for ways to harness the strength that encourage collaboration betweenand motivation that already exists within entrepreneurs and industry, such asthe local community by finding new ‘hackdays’, mentoring and projectways to enhance network connections finance, for example, would help createbetween newcomers and residents. feedback loops and networks whichAs with the wi-fi enabled cafe that reward effective information exchangespontaneously becomes the co-working and networking, which in turn stimulatehub for many creative entrepreneurs, a greater entrepreneurial activity. Thecentral aim of the development project backdrop to this would also require anis to find ways of incorporating both exercise in branding or instilling a senseonline and offline tools for channeling a of belief and urgency that Mediacity (orconstant flow of relationships into that any other similar infrastructure project)space. Consider the case of the Brixton is not only useful office space but also aVillage Project, an indoor market which defining moment for digital industries inwas close to empty and is now a hub this region.of cultural, entrepreneurial activitiesand social exchanges in South London.The NY Times recently ran a story on itdescribing how a mostly empty market1 http://travel.nytimes.com/2010/08/08/travel/08headsup.html
9Realising convergence:Lessons from the Canadian experienceby Peter Lyman, Kristian Roberts and Stephen HignellPeter Lyman, Kristian Roberts and Stephen 2. A single production company (or BBC competing online for news-boundHignell from Nordicity, one of Canada’s two companies working within a co- eyeballs), the globalisation of medialeading strategy consulting firms for the production agreement) in this example, further heightens competition. With thecreative industries, explain why policy the two companies work together heightened level of competition creatingsteps to stimulate convergent activity from the initial stages of development a deep level of engagement withneed to be handled carefully. through the distribution of the final users/viewers that can move between product, both have equitable access to platforms, this can be the key to gainingAmong the wash of jargon that seems talent and both products are considered (or maintaining) market share.to pop up faster in the digital age than to be part of an overall experience.weeds growing in an un-kept garden, As the above examples show,one of the most resilient terms to arise ‘convergence’ can occur at a variety ofin the creative industries has been levels. So why does a convergent creative‘convergence.’ Indeed, this loose concept product stand a better chance of successthat ‘things are coming together’ has in this environment? The assumptionappeared to underwrite policy and is that extending the users’ experiencefunding decisions around the world. over multiple platforms with a varietyLike most jargon (eg globalisation), of ways to interact with the materialconvergence lacks precise definition, (e.g. linear audiovisual content andbut has real – if nebulous – effects on interactive game content) will havethe field of endeavours to which it is a number of desirable effects. Theseapplied. This short essay will provide benefits include (but are not limited to)a working definition of ‘convergence’ a deeper relationship with the user/view,and examine efforts to realise tangible more aggregated television viewers (andbenefits from convergent activity in the thus more advertising revenue), andcreative industries. In so doing, it will increased direct unit sales (eg of DVDs ordraw upon the Canadian experience of other merchandise).with convergence to highlight lessonsfor consideration by MediaCityUK. From our perspective, the push towards convergence seems to be driven (at leastOne can define convergence (insofar in part) by the on-going digitalisation ofas it relates to the creative industries) all forms of media for consumption on aas the ‘conjoining of previously distinct screen – in other words, by a shift in themedia in the financing, development, devices that consumers use to accessproduction and distribution of creative content. From the growth of ebooks,content.’ Notably, this definition extends (projected to grow at a compoundwell beyond the notion of convergence annual rate of 23.3% through 2014) 2being primarily a distribution issue. to the increasing web and app-basedIndeed, for reasons that will be presence of magazines, all media areelaborated upon below, practical converging towards a common digitalconvergence must touch all stages setting. Indeed, PricewaterhouseCoopersof content creation. Let us draw two estimates that by 2014 one third ofhypothetical examples to make this all global entertainment and mediadistinction clear spending will be on digital products 3. Among more industrialised jurisdictions,1. A producer of a television programme that ratio is expected to be even higher.contracts an interactive media producerto develop an accompanying product in Related to this digital revolution is thethis example, the interactive producer is increasingly global nature of mediabrought in at the end of the production distribution. With services like iTunes andcycle, has limited access to talent, other digital download services, it hasand is generally considered to be a become much easier to sell one’s creativemeans of marketing the TV property product in distant lands. This lowerthat is peripheral to the core creative barrier to market entry has resultedexperience. in an increased level of competition within traditional media (eg television, sound recording, etc). When combined with increased competition between media (eg both the Economist and2 PricewaterhouseCoopers, Global Entertainment and Media Outlook, 2010-2014.3 Ibid.
10International policy examplesThis convergence of media has created between their approaches (as describedan impetus for governments around the in the table below), all initiatives areworld to develop initiatives to help their aimed at stimulating co-located creativecreative industries cope with the highly industries to productively build off onedisruptive effects of the digitising media. another.While there are numerous differencesJurisdiction Development ApproachSeoul, South Korea Digital MediaCity A state-of-the-art digital media entertainment (M&E) cluster, located in Sangam-dong over 569,925m2 at the centre of metropolitan Seoul. A live/work/study/play space including ‘green parks, music cafes, vitalised streets and comfortable housing facilities’ Focussed on ‘the new development and improvement of businesses that enhances the capabilities of the existing large cities . . . not about painting on a clean slate but remodelling Seoul.’ Planned completion in 2015.Dubai, UAE Dubai MediaCity A tax-free media zone located in Dubai. Purports an ‘open and flexible environment’ including an ‘international media production zone’ aimed at creating a cluster environment for media production companies from across the industry value chain, and from across the world, to interact and collaborate effectively.Singapore Mediapolis Singapore’s first digital media hub where creative talents live, work and play in a synergistic environment. 19 hectares of innovation and R&D facilities including green screen capabilities, digital production and broadcast studios. It will also offer broadband connectivity to enable efficient processing, management and distribution of digital media content and services. Slated to be fully completed by 2020.Zaragoza, Spain Digital Mile Occupies the space between an old train station and a new one. Co-location of housing, business, art and education with access to advanced telecommunication infrastructure. Contains several ‘digital public spaces’.While the promise of convergence is - which is, after all, where convergence is right resources at the right time. In short,indeed real, so too are the challenges most obviously observed. However, for a enabling convergence requires a flexiblethat accompany it. As alluded to convergent product to realise its promise, policy approach.above, most of the talk of convergence one must also address the financing,(understandably) is focussed on the development and production of mediadistribution and consumption of media such that all parties have access to the
11Lessons from the Canadian experienceThe recent launch of the Canada products and by mandating a production, post-production) and canMedia Fund (CMF) exemplifies multiplatform distribution model, even extend the production cycle beyondthe difficulty of a heavy-handed Canadian television and interactive the final distribution of the product (egapproach to convergence. In 2008, the producers would immediately be with patches, new levels, new characters,Government of Canada expressed its stimulated to converge their activities. etc). Furthermore, soon after the CMF’sdesire to stimulate innovation in the However, it is here that policy makers inception, producers pointed out that‘screen-based industries’ by combining have missed the middle of the production not all television programs actuallyexisting funding programmes into a chain (ie development and production). benefit from a convergent digital property.converged funding programme. Theresulting CMF has two major streams For example, whereas television As a result of these difficultiesan aptly-named ‘convergent stream’, producers tend to require access to (including some producers avoiding theand an ‘experimental stream.’ For this talent (ie actors, director, etc.) for a programme entirely), the first two yearspaper, we will focus on the convergent short duration towards the end of a of the CMF have been tumultuous andstream’ which ‘supports multi-platform production cycle (i.e. during principal the desired outcomes have yet to beCanadian projects they provide content photography), interactive producers realised. Indeed, only 2% of all fundingon at least two distribution platforms, tend to require access to that talent that was delivered through the CMF’sone of which is television.’4 once the majority of the project convergent stream in its first year was has been completed. Indeed, most spent on original digital media productsThe critical (and flawed) assumption interactive products lack the defined and only 37% of projects funded havemade by policy makers is that, by three-stage development cycle of a any convergent products at all (excludingsupporting the financing of convergent television production (ie pre-production, websites and streaming content). So, the4 It should be noted that a website or similar ‘brochureware’ is not deemed to be distribution on a non-television platform.
12key lesson to be drawn from the CMF is what relevance does MaRS have for film/that one cannot mandate convergence, TV convergence with interactive media.and that combining funding To answer that, we must first point outmechanisms is not sufficient impetus that MaRS was intended to primarilyto change the underlying production house life sciences and biotechnologyincongruities of the television and firms with a nod to digital media – butinteractive communities in Canada. now digital media firms make up over 80% of the resident companies. The keyLike the CMF, the Province of Ontario lesson here is not to try to predict how(regional government) has taken your support mechanisms and servicespolicy steps to stimulate convergent will be used. Rather, as with the IP Fund,activity through an innovative funding the lesson is to identify a key activity andmechanism. To that end, in 2009-10 the stimulate that activity (without a viewProvince launched a pilot fund called to the end product). This wide-anglethe Intellectual Property Development lens approach may be appropriate forFund (IP Fund), aimed at supporting MediaCityUK.‘eligible early stage developmentactivities to bring screen-based content A summary of lessons learntproperties closer to production or marketready stage.’ Rather than targeting the If one accepts the premise thatdistribution of content ‘on more than convergence is occurring and that itone platform,’ the IP fund targeted a is desirable, policymakers should beparticular type of activity research and considering means to stimulate activitydevelopment. that will allow local firms to exist at the forefront of this type of contentBy rebating a portion of the early stage development. From the above examples,development costs of a ‘screen-based one can conclude that if MediaCityUK isproduct’ the IP fund does not directly to effect an increased level of convergentstimulate convergence per se, but rather creative product, it should consider theenables the types of activities (e.g. new following lessons from the Canadianprototypes, new business and marketing experienceplans, market research) necessary toreap a financial reward from convergent POLICYMAKERSmedia properties (which remains a SHOULD BE CONSIDERINGsomewhat elusive goal). If convergenceis a natural consequence of changing MEANS TO STIMULATEconsumer habits and heightening ACTIVITY THAT WILL ALLOWglobal competition, this focus on the LOCAL FIRMS TO EXIST‘fuzzy front end’ of screen-based mediaseems quite appropriate. With this AT THE FOREFRONT OF THISapproach, the IP Fund was widely lauded KIND OF CONTENTby Ontario’s creative industries. The IP DEVELOPMENTFund thereby shows the importanceof targeting core innovation activities • It is difficult - and even perhaps-rather than trying to predict a desirable counter-productive - to mandateoutcome of that innovation. convergent activity;Given that MediaCityUK is looking • Flexible programs with broadto effect some change by co-locating definitions of eligible content (e.g.firms, it may be helpful to draw on ‘screen-based content’) have met withthe experience of a Canadian co- greater success;location facility. To that end, Toronto’s • It is important to target a particularMaRS Discovery District (MaRS) offers type (or types) of activity to promote,some key lessons in the stimulation such as front-end research andof convergence of previously distinct development;industries. While MaRS is not dedicatedsolely to the creative industries it does • Do not try to predict how yourmaintain a strong presence in ‘digital programs/facilities will be used - remainmedia.’ MaRS offers low(er) cost facility flexible and keep goals (creative) industryspace to small entrepreneurs and agnostic.supports these tenants with a rangeof services including speakers series’,facilitated access to key market data andmentoring (among others). Given itsbroad scope, one might reasonably ask
13MediaCity: a new entrepreneurial era?by Fred HassonIt is the pirouetting kite surfer, not the PSBs. Rather then the growth of new values to save us from the difficultiesmega tanker, that enterprise policy enterprise, much of the Act simply led of fostering a genuine growth in newmakers and implementers need to be to the growth of new employment enterprise. Furthermore, while the BBCfocussed on, argues Fred Hasson. contracts. It should not be forgotten that will soon begin to occupy its anchor much of the thinking behind MediaCity position at MediaCity, we also cannotThe concept of MediaCity UK was emerged out of this period, a variation rely upon television to be the engineconstrued at a time when all things on the theme of well-established of growth in new enterprise. Indeed,looked bright. The dot com bubble didn’t government interests to grow enterprise the challenge of MediaCity lies instop the wheels of economic growth while also getting value for money. the problem that we can no longerfrom turning. The importance of the rely upon the established areas ofcreative industries was, like property The MediaCity initiative also fits squarely media - film, television, and music - toprices, only going in one direction up. with another key pragmatic feature provide that growth engine of newAnd pushing the BBC out of expensive of current thinking on enterprise. For creative enterprise. While it is true thatLondon premises looked like a good the government, much of its efforts to established markets are still where theway to get more value for money out of support new enterprise have tended majority of economic activities are based,our principle public service broadcaster to fit a mould where public monies are each of these areas is experiencing(PSB). The idea of turning the Beeb into utilised in capital investment projects. In their own signs of decline. Even inan ‘anchor’ tenant at a place designed to one form or another, these projects are the computer games space, one ofbe the home of Europe’s largest media supposed to provide a physical home for the principle growth segments in theenterprise zone should be recognised for new economic activities and associated creative industries, the writing is on thewhat it is - a continuation of some well- supports. For instance, the growth of wall for many of the traditional formstrodden aspects of government thinking new business ‘incubators’ in Britain in of console-based gaming with theiron how to spur the growth of new recent years has tended to have a strong blockbuster development budgets andenterprise. Indeed, at a British Screen bias towards providing a physical space large development teams. In otherAdvisory Council (BSAC) conference for new enterprise to flourish. words, MediaCity is a microcosm ofin February 2011, Ed Vaisey, the current the broader UK challenge of growingDCMS Minister, placed great emphasis This aspect of the government’s thinking new enterprise to ‘re-balance’ theon the government’s interest to build is understandable, particularly given economy. It personifies the challengeupon the successful model used in the what had been happening in the UK of finding a new model with newpast to create the independent TV sector. property markets for the last two thinking about how to spur new formsIn other words, as we seek to understand decades. Essentially, by using public of economic activities during a time ofwhat the government has in store for its monies to redevelop derelict land industrial transformation and economicplans for ensuring a sustainable future and filling it with new shiny premises stagnation. And it encapsulates thefor the film and creative industries, all where you could be relatively sure of challenge of managing a situationthe signs are that we should expect occupancy rates, you not only help where traditional markets still outweighmore of the same. Accordingly, it helps to gentrify those previously deprived the uncertainty of emerging markets,to begin this discussion with a little places, but you provide the government yet where short-term economic gainsbackground into what that thinking is with one assurance that the risks of depend upon forms of certainty thatall about. failure in growing new enterprise can are certainly undergoing declines in the be mitigated by the increase in the future.Part of the government’s thinking underlying value of those properties -behind MediaCity is broadcasting something that seemed to be more or At present, the greatest prospect forspecific in nature. Using the BBC as a less assured in the UK. While the rhetoric new enterprise at MediaCity lie intool to spur the growth of (independent) of regional development may provide the emerging media markets. These‘enterprise’ has long been one of Britain’s the legitimacy for efforts to push more markets are all about new forms ofsuccesses in finding a form of industrial of the BBC out of London, we should not interactive/social media, mashingpolicy that is not about the state ‘picking forget that such moves are a necessary together traditionally separate forms ofwinners’. Initially this was achieved consequence of a model looking to media, communication, education andthrough imposing a 25% quota on the harvest the value of past development entertainment, through new contentpublic service broadcasters, the 1990 projects while the gettin’ is good. creating and content distributionBroadcasting Act mandating a level of technologies. These markets are allacquisition of content from independent Unfortunately, the unfolding of events about new enterprises that labour toTV producers. A space for new enterprise since the current financial crisis erupted explore a wide space of opportunitieswas born, at least in a principle. in 2007/08 has washed away the good and find new routes to market. TheyUnfortunately, given that new enterprise ol’ days and many of the assumptions are emerging markets that establisheddoes not simply emerge from nowhere, that made the original concept of players are too jaded, risk averse, ormuch of this ecology was initially filled MediaCity seem like a clever idea. We otherwise inflexible to follow. And theyby people who were once inside the can no longer rely upon high property are markets that nonetheless face the
14age-old struggle of how to fund thedevelopment and exploitation of thesenew opportunities. These are the realcontexts that modern enterprise faces.My concern with current thinking isthat the government still clings to whatworked in the past at a time when thereis simply no contemporary legislativeopportunity, 20 years on, to set theemerging ‘digital’ media sector alight.Accordingly, the litmus test for progressin thinking about growth, enterpriseand MediaCity is one defined by theextent to which it moves beyond theaim of getting the BBC and other largetenants to occupy new shiny buildings.While this may be critical in assuringthe viability of a property developmentproject, it has little obvious connection tothe aim of enterprise and in contributingto Britain’s ability to re-group itself toclaim a piece of these emerging pies.MY CONCERN WITHCURRENT THINKING ISTHAT THE GOVERNMENTSTILL CLINGS TO WHATWORKED IN THE PASTThinking differently about enterpriseClearly, MediaCity is a capital Secondly, it stands to reason that outside depend upon a system of public grantsinvestment project that must, as part of the public service broadcasters, many and subsidies administered throughof its raison d’être, strive to attract large if not most major media companies layers of bureaucracy. And in so far thatmultinational media tenants to pay for would only look to MediaCity if they these enterprises did not simply existits shiny new facilities. Yet this need could tap into a unique ecology of pre-MediaCity, that ecology of enterpriseis not divorced from a concern with creative talent and business experience must somehow be ‘created’, both in agrowing new enterprises. Rather, it is capable of supplying world-class consolidating sense of attracting thisdependent upon them and for two basic products and services at competitive talent from elsewhere around thereasons: prices. We should not forget that many country, and internationally, as well of the new media opportunities are not as in the sense of building an ecologyFirstly, for most international media originated by the multinationals. They that drives the growth of genuinelymultinationals, the UK will never be are acquired by them. In the digital new talent into the future. In short, thetheir main market. While an important ecosystem, the Disney’s of this world are formula for MediaCity success on itsnational market, it is simply too small there to pay $600m for a website that own occupancy criteria is fundamentallycompared with the likes of the US or cost an entrepreneur less than $600k about success of enterprises that reallythe prospects of emerging markets in to build and prove the concept of. It is should never be burning their cash onChina, India and elsewhere. Coupled this pirouetting kite surfer, not the mega shiny office space.with the relatively strong pound and tanker, that is what efforts to promotehigh cost of production, Britain is simply media enterprise must stay focused on. Two key concerns inform this shiftnot a natural home for many media in mental processing the issue ofmultinationals to use as a major supply Building enterprises that make others enterprise and what it really means,base (which is why many US information want to be a part of them, as buyers of and the question about what enterprisetechnology companies for instance products, services, or company stock, is needs in order to thrive. Let me tacklewould rather choose places like Ireland what MediaCity must be relentlessly each in turn.over the UK as their regional base for focused upon. These are the enterprisessupplying the European market). Given that excite investors hoping to get into Enterprise is a term that means manyall the kicking and screaming the BBC the action early on before eventually things to different people. In Brightonhas put into a relatively small move exiting through trade sale, or in more where I live, it might refer to the cafes,from London to Salford, it is hard not to rare situations, public floatation. These bars, hairdressers or any other of theimagine the barrier is even greater for are the enterprises that overcome innumerable niche life-style businessesother media giants. the so-called ‘equity-gap’ and do not that occupy the North Laines alongside
15that occupy the North Laines alongside How well has Britain faired with For instance, when we think aboutthe budding technology companies the this project? Unfortunately, the Google, we often think immediatelycity is known for. However, when the government’s own evaluation of these about ‘Silicon Valley’ and any numberPrime Minister talks about enterprise, programmes suggest interventions of features that seem to be associatedand more recently about the ‘enemies do not actually go to ‘high growth’ with its success, yet are difficult toof enterprise’, what he is talking about enterprises. For instance, the National reproduce on this side of the pond.is what the government’s effort to Audit Office concluded in December Similarly, when budding entrepreneurspromote growth through ‘enterprise’ 2009 that of the 28 separate VC funds in think about enterprise, they often thinkreally boils down to. operation at the time, not only were all about where they need to be in order broadly created with similar, open-ended to pursue their ambitions. Whether orAll the signals are that government objectives, but that these funds as a not the entrepreneur in question seesthinking on the matter has not whole were failing to actually go to high themselves as part of a new ‘creativefundamentally shifted. Thinking on growth businesses, failing to generate a class’, they nonetheless have someenterprise has long tended to treat the net positive return for the government, concept about what ‘the place to be’notion as interchangeable with that of and thus making these interventions looks like.entrepreneurship, or more commonly, highly expensive business support thatas a reference to a small (and medium- did not provide any clear value for money. It is no accident that urban planningsized) business - the ‘SME’ in policy It seems like all the effort to conform gurus like Richard Florida have picked upspeak. Enterprise is tantamount to to a fundamentalist interpretation of on the role that place plays in spawninginterventions designed to support the EU and WTO competition rules only creativity and innovation out of people.broadest range of ‘enterprise’ possible, means we still attempt to pick winners, Indeed, the location of MediaCity isdistinguishing only between ‘large’ but do so in ways that tend to support already supposedly positioned in onebusinesses and ‘those that still have losers. How can we hope to have of the leading centres of creativity inroom to grow’. growth and build businesses capable of the country. Unfortunately, the mere capitalising on new opportunities when fact that MediaCity has been builtSure, while setting up a hairdresser does government thinking on enterprise is somewhere that tops the league tablesrepresent enterprise compared with just simply a muddled excuse for support in terms of some ‘creativity index’ doeslooking for a job in one, it is nonetheless mechanisms that are not fit for purpose? little to guarantee that enterprise willa million light years away from what Where is the leadership on enterprise come and grow if only you build yourawaits budding entrepreneurs in the when all the talk revolves around a field of dreams in the right post code.digital economy as in any other area language hell bent upon defending Indeed, if the BBC’s own previous recordwhere the foundations for Britain’s itself against any whiff of criticism of of cautious creativity is anything to gofuture economy could lie. It seems that industrial patronage or social exclusion by, simply ensuring a couple of anchorthe only way in which government and thus forces government action to be tenants are present also does notthinking can entertain these differences a ‘one size fits all approach’ open to the guarantee that enterprise will flourish.in enterprise is through another broadest range of ‘enterprise’ possible?common policy distinction ‘high growth’. So what makes MediaCity the place toDespite not wanting to ‘pick winners’, be? Some broadband infrastructurethis is actually what many government BUILDING ENTERPRISES that is still far inferior to competitorsinventions are all about. THAT MAKE OTHERS WANT in Scandinavia and East Asia? Some TO BE A PART OF THEM, Media Enterprise Centre still lookingAlongside policies intended to for a clear sense of its service offering AS BUYERS OF PRODUCTS,support every SME in the country, the and value to enterprise? A clear andgovernment reserves many of its most SERVICES OR COMPANY convincing answer to the question ofpowerful support mechanisms to STOCK, IS WHAT MEDIACITY enterprise growth is yet to emerge. Asonly those enterprises qualifying for MUST BE RELENTLESSLY MediaCity look to build confidence in itsvarious ‘access to finance’ schemes. vision of the future, I suggest it go backNow, whether we are talking about the FOCUSSED UPON to basics. Think about what enterprisemany venture capital funds that have is really about and focus on thingspublic monies invested directly into The fact of the matter is no one knows that help to accommodate its diversity.companies or other private VC funds, or what the winners of tomorrow look Current thinking pretends this diversityvarious tax-incentive schemes, such as like at the moment. The fact of the does not exist. It does so in order tothe Enterprise Investment Scheme (EIS) matter is ‘the market’ has just as much apportion support to entrepreneursor Venture-Capital Trusts (VCTs) both difficulty in picking winners as ‘the as one would assign patients to theof which give tax reliefs to incentivise state’. So who should be the recipients doctors with the shortest queue. It is aprivate investment into small businesses, of enterprise support? One suggestion form of thinking that constantly seekswe are talking about the qualification is that the focus of thinking about to grow entrepreneurs through somethat is essentially about ‘high growth enterprise needs to change. Enterprise standardised assembly line and referralpotential’. Let us speak plainly about is not simply the stand-alone business, service that may seem like an ‘efficient’these schemes, they are interventions but the relationships with things way of spending money, and may evenwhose success fundamentally depends these businesses need to thrive. When keep the public sector’s value for moneyupon spotting and supporting a number thinking about what these things may vultures at bay, but never delivers theof high growth businesses. be, we are invariably drawn to some growth that is the ultimate criterion of notion of the ecology that reproduces success. that business and the people in it.
16New thinking new actionsNotwithstanding the concerns raised to promote the zone’s initial offering. course, one might think that this is whatabove, I believe that MediaCity could be This leads to the chicken and egg the anchor tenants are supposed to do.the place to be, and that the blueprint problem. How do you entice a broader My point is that EMBAFs are not simply afor creating a real and lasting media range of enterprises when the initial complimentary approach, they are actuallyenterprise hub around MediaCity should offering is based around a few anchor a better tool for the MediaCity project.look and feel ‘something’ like this companies and activities? But if you don’t entice this range of enterprises, you Large media firms tend to attract smaller1. Identification of the media enterprise don’t entice more large anchor tenants companies that want to get work fromspace (as opposed to office space) that from outside broadcasting and media them. The drive to co-locate is thusMediaCity is going to operate in. education. only as ‘sticky’ as the sourcing policies of those large firms. This changes, andMediaCity will clearly start life as A key lever of inward investment needs the reason to be at MediaCity changesa ‘television’ production hub with to be people and relationships that for those firms as well. Now, large firmsassociated skills development activities enterprises want to access, particularly know they are usually in the driver’s seatcoupled with some seedling ventures those that help broker access to the of negotiations and will always lookinto other areas like computer gaming. things all businesses requires access to for more and more concessions fromBut given the fact that one of the key markets, access to money, and access their locations in one way or another.anchors to the potential success of to other forms of technical and busi- The result, keeping large firms happy toMediaCity is the significant availability ness expertise. These are things that stay in one place is always an expensiveof venture capital and loan funds MediaCity does not have a monopoly on proposition somewhere in the fine print.the region has a 10-year window of and thus must build partnerships with And what do we get? Given the diversityopportunity to make something of, in order to strengthen its offering. Given of opportunities in the media space, yourMediaCity must seek to attract the that a major potential resource is the large anchor firm still only attracts aenterprises that make investors excited. availability of alternative funding op- relatively biased sample of the potential tions to the commissioners at the BBC, opportunity space. Furthermore,Without wanting to be overly relationships that help enterprises access large firms are large because they areprescriptive, in the digital space, the those options represent one obvious area good at keeping as much money asexciting enterprises generally fall into to incentivise new partnership building. possible flowing to them and not tothe following categories someone else. As such the companies A KEY LEVER OF INWARD they attract are not really about growth. • those that dis-intermediate existing INVESTMENT NEEDS TO Rather, they are usually looking to lowervalue chains across all media; their costs to make a little more money • those that create tools and BE PEOPLE AND out of their current deals. And if theytechnology that can simplify the RELATIONSHIPS THAT can do this well, they can take moreprocesses of building interactive content ENTERPRISES WANT TO deals away from others, cornering thefor any or all interactive platforms; ecosystem and becoming the preferred • those that create innovative content ACCESS supplier to the media giant. Is this thebased applications; Attracting enterprises by virtue of the kind of firm MediaCity wants to attract? • those that create tools and possibility of alternative opportunities to Is this the eco-system of the future?technology that can track users’ needs fund new media ventures is essentiallyand habits; the world of corporate finance where In contrast, EMBAFs scan their world • those building applications that combinations of (proven) entrepreneurs, looking to detect opportunities beforeallow consumers to better communicate business mentors and assessors, and other gets their hands on them first.and do new things; business angel/financiers (‘EMBAFs’ In media, this usually means they look • those that develop and find new for short) come together to help cover for companies doing things that theways of developing technical or content gaps in the knowledge, experience large firms are not pursuing. In short,based IP. and funding as well as help shape EMBAFs work to scan the opportunity a new awareness of media spaces space not already captured by theThe question is how does MediaCity find and opportunities that a particular large firms. This is critical to MediaCityand approach enterprises in this space entrepreneurial team may be poised to becoming something more than a TVwherever they may be around Britain, go after. hub. Furthermore, EMBAFs spend theirEurope or internationally. This takes us own time and money doing this. Theyto the next element of the blueprint. EMBAFs are growth-seeking beasts, only get this back by using whatever usually looking to work with investment resources they have access to, and2. A new form of high growth enterprise groups, to identify and support those targeting those resources to companieszone run with different kind of market enterprises the community believe to be that are looking for growth, not reducingprinciples of enough potential to work with. Were costs. These kinds of companies should MediaCity to draw upon EMBAFs around be critical to MediaCity. And that’sAll businesses are built upon the country if not also internationally, really the power of the EMBAF. Theyrelationships needed to foster their it would have a key lever for identifying make the task of building the enterprisedevelopment. Currently, enticing and attracting a better stock of community around MediaCity far easierbusinesses to come to the region is entrepreneurs from around the globe, and cheaper to kickstart than offeringbased upon the sales pitch of those paid not just from around the North West. Of incentives that Media Giants will want
17as compensation for bringing their Yet let us not forget the legacy of past and at each stage of investment, inbusiness to Salford. investment agendas still alive and well foreign companies relative to their that should come to see MediaCity as a domestic counterparts. For start-upHow to progress this front? Clearly, key part of their activities. For instance, and expansion stage investmentsyou have to offer EMBAMFs resources not long before the last General Election, in particular, the average size of UKthat are actually useful to growing Lord Mandelson got the government venture capital investment which goesbusinesses. There are basically two to think about ways to start picking into a foreign company has been six tocomplimentary ways of going about it. winners. This emerged in the guise of seven times greater than comparableFirstly, MediaCity can facilitate a process a £900m Special Investment Fund (SIF), investment in UK companies over theof identifying resources that are useful which offered money to grow projects in 1998-2007 period. Couple this with theand can be used as an incentive for targeted sectors. At present, only a tiny fact that many professional investors areEMBAFs to think about opportunities bit of this is coming to MediaCity. There not particularly media savvy, what hopesthat makes sense for the project. needs to be an important follow-up can we really have that much of theFurthermore, you can underwrite the to this. How MediaCity might seek to government’s efforts to overcome thecosts they incur in searching for growth use EMBAFs could be one way to help equity gap actually apply to the digitalcompanies. There are likely to be clever consolidate a new appeal for funding to media space? MediaCity representsways to do this that avoid common accelerate the range of projects the zone an obvious champion to raise theseattempts turn these individuals into is able to engage with. concerns and lead the way towards ansalaried employees or members of alternative approach.some prestigious committee. For LARGE FIRMS ARE LARGEinstance, helping them bid for new BECAUSE THEY ARE GOOD And why should MediaCity concern itselfforms of government funding into ‘social AT KEEPING AS MUCH with such things? How else will it raiseenterprise’. This would help use public funds to build new facilities and servicesmoney to pump-prime the building MONEY AS POSSIBLE of interest to media enterprises? Asof EMBAF relationships with both the FLOWING TO THEM AND the government invariably focuses onproviders of space and services specific NOT TO SOMEONE ELSE things that suit its own policy interests,to MediaCity, as well as providers of such as motions to cut red tape andcapital and other forms of important Another potentially relevant initiative give SMEs more possibility for winningresources available within the region. that is also more or less targeting government contracts, the governmentProgress on both of these fronts is what the same sectors and industries as will perceive its support of MediaCity ascan help turn the power of the market the SIF, including creative industries, going no further than helping force theinto the agents of MediaCity. is the UK Industry Investment Fund BBC’s hand. (UKIIF). This is a £325m VC fund withThis takes us to the final part of the the government acting as an investor In championing a new thinking onblueprint. Championing a vision for how to the tune of £150m, with private VC enterprise, MediaCity is essentiallysupport for enterprise can look and work funds contributing £175m. There is little working to set a new agenda frommuch differently than it has in the past, to report on the successes or failures of which its own requests for enterpriseeffectively helping to carve out a new this project having only been afloat for funding are to be defined against. Aspace for what the role of Government a year. However, the critical issue is how view which makes EMBAFs central toand its regional agencies is all about. these funds are structured and operated the methodology not only fits with the given the concerns raised by the ‘market’ and ‘social enterprise’ ethos of3. The role of Government and regional National Audit Office and other studies the day, but also fits with the interest notsupport agencies (by NESTA for instance) on the problems to recreate the plethora of bureaucratic of publicly backed VCs to growing new agencies that always seem to wantEMBAFs already work with private enterprises. These initiatives are all their salaries paid for to administer. Itinvestors, but what we now need is to experiments in a debate that has raged creates a vehicle through which otherinvent new arrangements to enable within government circles for at least a groups, such as educational institutions,them to work with a project of building decade-the so-called ‘equity gap’ debate can work with entrepreneurs anda broader media ecology. The role of about the need to fill the £100k-£2m EBAMFs to provide a combination ofgovernment and its support agencies funding gap for supporting new and technical (in the case of science andwill always be critical to getting the growing businesses. In this area, the engineering based departments) as well‘market’ to act as part of a larger project. government has recently begun to move as commercial (in the case of businessAnd given the limits on what MediaCity, away from investing its own money into and management based departments)at present, can offer to enterprise, companies, towards a model of investing supports to businesses. It creates theMediaCity stakeholders will be directly in members of UK VC industry. possibly to get around the filters that allimportant in changing the government’s The risk of this manoeuvre is that it bets government officials have for ‘sectors’mind on how best to create the Britain’s future on those enterprises and requesting special or supplementaryincentives for activating broader sectors that the VC industry is already funds unique to them, opening the doorparticipation and enterprise community- comfortable in dealing with. to reforms that are about fixing whatbuilding efforts. As highlighted above, is clearly broken forms of old thinkingthe social enterprise agenda is likely We already know, thanks to the about enterprise and old policies forto be one avenue for exploring these work of the British Venture Capital supporting new enterprise in highpossibilities alongside the expressed Association, that the UK VC industry growth areas.need for better ways to offer business chooses to invest not only more moneysupports to enterprise. in foreign companies, but also invests For me at least, this is an exciting vision more money per company, on average, of what MediaCity could be about.