We may be entering the deepest recession for 300 years. There are 6 million people furloughed – across all sectors – and many businesses are in hibernation, clinging on and hoping for clarity of when the lockdown will end, what ‘post-lockdown’ will really mean and what state their own business, and their employees, will be in by then.
There are so many variables and unknowns, but a few things are very clear to me. Firstly, that the need for generic office space will change due to changing attitudes (or constraints) to travel and proximity to others. Secondly, that there are certain areas that will come to the fore, to drive both societal wellbeing and economic activity, and, thirdly, that we are in need of hope.
This is all relevant to the innovation sector and the role of incubators and science parks as enablers of important economic activity to create businesses that create high-value, stable employment and create useful products and services. I’ll come back to the ‘useful’ bit.
Incubators and science parks also have a role as leaders when we need stability for economic recovery. While many such organisations have been bludgeoned with the sudden loss of revenue from event hire, short-term rental etc. and only recently received government support for them and their tenants (thanks to, amongst others, UKSPA’s lobbying for a review of business rates as the proxy to supporting small businesses) these innovation assets are typically established, by the public or private sectors, with long-term economic development goals. They should therefore have some buffer to ride the storm, so to speak. So long as their respective stakeholders can hold their breath, so to speak, and stick to the long-term goals.
These stakeholders have, I suggest, a responsibility to provide leadership in these times and show commitment to the sector – not least because if they do not, we risk losing a significant plank for recovery. The old tension between short-term metrics and long-term mission is now more acute than ever, but there is some reciprocity here: if the owner/funder of an incubator or science park provides ‘leadership symbols’ of stability and ambition now, they are more likely to secure short and medium term business.
It is pleasing to see therefore, the bringing to market of one of the most exciting, yet still speculative, development opportunities in the sector: The Golden Valley Development, home of Cyber Central UK. I’ll declare my interest here as a consultant to Cheltenham Borough Council, who have provided what I think is highly significant leadership symbol both to the local economy but also on the national stage.
In getting to the stage of coming to market, to seek a joint development partner, Cheltenham – a town of some 120,000 people – has been forced to deeply analyse the strength of the proposition that exists, to validate its own decision but also provide evidence to the market of viability.
Many of Cheltenham’s strengths are well known: a 60-year presence of GCHQ, the town’s biggest employer by a long way, a strong cultural offer – including through the 75 years of ground-breaking Cheltenham festivals, and the Sunday Times’ accolade of one of the best places to live in the UK.
But was that enough to bring a 45-hectare development to market? The hunch was that the proposition was compelling but the size of the Town and the emerging trends (most recently accelerated) for distributed and flexible business working, especially in the technology sector necessitated a deeper analysis of actually what was already in play.
The first thing to do was to take a very high-level look, from a global perspective. As Henri Murison, the Director of the Northern Powerhouse Partnership, highlighted at the UKSPA conference in Leeds, just before the lockdown in March, if you are an investor in India, China or the US, looking at the innovation capacity of a town or city, even if each has notable strengths, is just not big enough. Henri gave the example of Leeds and Manchester needing to appear as one, from a global perspective, to be big enough to be relevant in health-tech innovation.
Part of the national relevance, of course, comes down to the domain, or sector. In an increasingly complex, geo-political world with so many more people across diverse work environments with more data being transferred across public networks, then the social and physical sciences, services and technologies, that we need to see developed become more and more important. The Cyber sector, already worth £8.3bn pa and the UK’s fastest growing industry even before the Covid-19 pandemic, is clearly the useful domain to focus on. Useful for society as well as for the economy.
Although Gloucestershire has a density of cyber-related businesses of 6 times the national average, and Cheltenham a Location Quotient of 11.2 and thus a powerhouse of cyber related technology in the UK, as an economic unit, Cheltenham will just not be visible enough on the global stage to fulfil it’s potential.
So, it becomes obvious to look at the bigger picture. What is the relevant economic context for this cyber opportunity? We must look at the emerging Western Gateway, economic association from Swansea to Swindon, Cheltenham down to Salisbury – with a combined economy of £107bn and 160,000 businesses. With cyber as key sector, both in its own right and an increasingly important enabler of resilience on Western Gateway’s other strengths of Energy, Health, Finance and Advanced Engineering, this then provides the global context and a means to be a stronger part of national dialogue.
By looking a bit broader than Cheltenham we also realise the accessibility and density of the other key attributes we need for a vibrant innovation ecosystem: academia (19 universities within 75 minutes’ drive) and an overwhelming concentration of global and UK technology corporates in and around Gloucestershire. Many of the latter will be active in the cyber sector already but have the innovation capacity to stimulate deeper and richer economic activity – through procuring innovation and attracting talent.
So, by looking more closely at the fundamentals of the regional offer, and understanding what can be unlocked in such an important sector for future digital and economic wellness, what at first glance might look like yet another property development with a slightly odd timing, in fact is perhaps the best statement to make at the start of what could be the UK’s most challenging decade.
But just going back to leadership symbols for a moment. We have the opportunity here, given the changing and challenging economic environment, to really build both inclusion and innovation into the DNA of this development.
I encourage all stakeholders and leaders of innovation assets, to seize this opportunity to play their part in supporting the recovery by understanding the holistic role that they can play in the regional economy, for the long term.
Now, more than ever, science parks, innovation campuses and incubators must have permeable boundaries.
Nick Sturge MBE CDir MIET FRSA
UKSPA Honorary Member and Consultant to Cheltenham Borough Council