Business Premises: Honey Pots & Hives- Maximizing the potential of rural enterprise hubs - Dr Paul Cowie, Research Associate, Centre for Rural Economy, Newcastle University
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Business Premises: Honey Pots & Hives- Maximizing the potential of rural enterprise hubs - Dr Paul Cowie, Research Associate, Centre for Rural Economy, Newcastle University

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    Business Premises: Honey Pots & Hives- Maximizing the potential of rural enterprise hubs - Dr Paul Cowie, Research Associate, Centre for Rural Economy, Newcastle University Business Premises: Honey Pots & Hives- Maximizing the potential of rural enterprise hubs - Dr Paul Cowie, Research Associate, Centre for Rural Economy, Newcastle University Presentation Transcript

    • Honey Pots & Hives: Maximising the potential of rural enterprise hubs Dr Paul Cowie Rural Enterprise Support Workshop Enterprise Research Centre 27th February 2014
    • • The CRE/RGN partnership • One of five UK Government pilot programs funded from 2012 -2015 to pilot new ways to overcome barriers to economic growth in rural areas • NE RGN theme was ‘rural enterprise hubs’ • Part of the CRE research project was to establish what a rural enterprise hub was and what it should do.
    • • Building on the rural economy knowledge base already out there: – Dominated by atomised microbusinesses – Significantly higher levels of home-based businesses – Difficulty in gaining access to extra-local markets and networks – Overcoming dominant preconceptions of rural businesses: lifestyle businesses, low-tech and no- growth. • How do rural enterprise hubs fit into this picture?
    • • Overview of hubs – There is a mix ownership: 50% private (most large estates); 33% not- for-profit; 17% local authority – Smallest hub (Amble 4ways) 7 units – Largest (Berwick Incubator) 35 units – Range of units from 9m2 to 473m2 – Not as much physical flexibility as expected – only 2 were able to adjust the size of units and mainly by letting two adjacent units – Not much flexibility in relation to tenure. Only 1 allowed subletting/sharing and 2 worked on ‘easy in, easy out terms’ – Fear of unknown and lack of legal capacity to accommodate flexible arrangements – They are under financial pressure: higher overheads, more empty units and longer re-let times. – Significant amounts of cross-subsidy within property portfolios
    • • Hubs are spread thinly across the region • Most are focused on accessible rural locations • However this is not a complete picture
    • • Building a typology: • Two dimensions to differentiate hubs: – X–axis relates to the provision of services and support – traditional incubator differentiation – Y-axis relates to nature of hub: honeypot or hive – the rural dimension. • Gives 4 broad typologies of hubs A destination hub which is only lightly managed A destination hub which wide ranging / intensive support’ A hub with mainly B2B occupiers which is only lightly managed A hub with mainly B2B occupiers with wide ranging / intensive support’
    • • The stakeholder engagement with hub owners/managers revealed a number of issues: – Hubs are businesses in their own right. – They feel as isolated and disconnected as the businesses the host. – Most have little or no experience of managing this type of premises. – They needed to be networked as much as the businesses within them. • The NE Hub network has now been founded. – Links rural and urban hubs in the NE – Shares best practice – Helps business move to grow-on space. – Still finding its feet and developing
    • • Hub Occupiers • General statistics – Younger businesses in hubs than general pop. – Average FT employees = 4.9 (4.5 in RBS) – Average PT employees =1 (2 in RBS) Rural Business Survey (2009) Hub Occupier Survey (2013) 0 - 2 years 8% 41% Over 2 - 5 years 16% 6% Over 5 - 10 years 20% 29% Over 10 - 20 years 20% 12% Over 20 - 50 years 25% 12% Over 50 years 11% 0%
    • • Customers – More likely to be B2B than B2C – More likely to serve a market which is regional or national than general rural business pop.
    • 0% 20% 40% 60% 80% 100% 120% Factors influencing move to hub Of no relevence Not relevant No opinion Relevent Very relevant 0% 20% 40% 60% 80% 100% 120% Barriers to growth - Hub Occupier Survey Strongly disagree Disagree Neither agree nor disagree Agree Strongly Agree
    • • This seems to suggest a two stage process. Possibly a transition. • 58% of businesses in hubs had moved there from home. • This suggested rent and flexible letting terms can be used to help ease the transition to a more commercial business outlook. • Later support can be included to foster collaboration once they are settled in the hub.
    • • The final chart shows the networking activity currently taking place in the hubs. • Again in contrast to expressed wishes very little collaboration taking place. • Lots of informal networking but not clear what added value this brings 0% 20% 40% 60% 80% 100% 120% Networking Activity within hubs Daily Weekly Monthly Less than Once a month Never
    • • RGN has supported the development or improvement of 5 hubs in the first round and [ ] in the second round • Strong demand for space in the new hubs, a number were filled by word of mouth. • In one case the return of a home-based business started locally now international • Still much to do in terms of networks and support
    • • Conclusion • Need to take into account the differences between hubs i.e. the Hub Typology and the nature of the hub occupiers. • Hubs seem to offer an affective bridge between early stage/home based businesses and a more commercial mature enterprise: – This offers opportunities for the hub to create a wider network of home-based businesses as a pool of potential occupiers – Offers opportunities to deliver targeted businesses support to these businesses. This could be both hard (business skills) and soft (mentoring) – A two stage approach may be needed. Concentrate on the bottom line issues, rent and tenure, and later develop the other elements, networking and collaboration • Hubs are businesses themselves, they need to network and collaborate just as much as the businesses they support.
    • • Thank you • The full report can be found at: http://www.ncl.ac.uk/cre/publish/researchreports/Honey%20Pots%20and%20HivesFINAL .pdf