Making Newcastle attractive to business

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Making Newcastle attractive to business

The Racquets Court is dependent on vibrant life returning to Newcastle. And vibrant life in the City depends on workplaces like The Racquets Court. We’re inter-dependent. This post is about making Newcastle attractive to business.  If we can do this, the people of Newcastle, and around, will return – in droves.

What must we (the owners of The Racquets Court) do, (our bit) and what must ‘the City’ do, (its bit)?  This post is about the latter; we discuss the former here.

Is investing in our City a ‘choice’?

For close to a year, there has been a debate about lockdown choices.  Should we prioritise health or the economy?  Our position is that this is not  a ‘choice’.  We prioritise health because unless our population is healthy, they will not be working, buying goods and services, stimulating demand.  The health of our people is the pre-condition to a healthy economy.

Some may argue that investing in our City is a ‘choice’. In other words, we can choose between prioritising resource allocation to our communities most in need, and investing in making Newcastle attractive to business. However, like the Covid-19 example, this is not a choice.  Unless Newcastle is attractive to business, those most in need will continue to suffer joblessness and deprivation.  Businesses that are attracted to Newcastle or are started here, create jobs which are a pre-condition for an end to deprivation.

Choosing to invest in Newcastle

Restoring life to Newcastle is about reimagining the extensive literature on what makes locations attractive to businesses. This is not new material; it has been around a long time. We must remember and adapt it to the current / post Covid-19 situation we face.

Location attractiveness to businesses – those who run them and work in them is about four features:

  1. Are we close to arts and entertainment facilities that our people can enjoy and use? This is the culture effect.
  2. Do transport links effectively and efficiently connect our business and our people to those other places we need to connect to? This is the easy access effect.
  3. Does the location look good? Is it attractive? Will our people want to walk its pavements to get to the arts venues that it houses? This is the ‘wow’ effect.
  4. Are we close to other businesses with whom we co-operate and compete and organisations that support our activity such as Universities or trade associations? This is the cluster effect.

The culture effect.

In spite of evidence that shows that, for entrepreneurs, theatres, galleries, museums are greater attractors than beaches and countryside, the North East seems wedded to promoting the latter over the former. Perhaps this explains why Darlington has attracted the Treasury rather than Newcastle – an odd decision which may incite insurrection amongst the Mandarins.

For Newcastle, it must be a priority to open our culture venues as soon as we can. They must not be starved of support; their role is crucial.

The easy access effect.

People will continue to be nervous of public transport for some time. How might we facilitate access? Perhaps the restrictions on some parking might be eased? Perhaps city fringe spaces might be opened?  For example, the space traditionally used for the Hoppings on the Town Moor might be used with people completing the journey on foot.  How many other cities in the UK have such a potential facility so close to the City centre?

I am not of course suggesting this as a permanent facility – merely a temporary one until a semblance of normality is resumed.

The ‘wow’ effect.

It’s very good news indeed to see that the City is to invest in its Centre.  I have occasionally been dismayed by previous efforts in the City which have featured copious quantities of astroturf and planting and plant containers that are aesthetically challenged – so please let this happen to deliver a ‘wow effect’.

But it’s not just the City Centre. Gosforth is a key residential attractor for entrepreneurs and others thinking about re-locating to Newcastle.  Gosforth High Street is currently a mess of largely filthy red and white poles delineating cycle lanes, with the white patches peeling off many of them. This is not a plea for the removal of cycle lanes. It is a plea to make them look good.

The cluster effect.

To deploy a cliche … last but not least.  Those that know my background will be unsurprised to see me talk about clusters. I led the UK’s whole economy cluster mapping project in 2001;  I remain persuaded that the concept is powerful.  It is surprising just how much of what we said 20 years ago, retains its currency.

For businesses like ours (data technology – ish), proximity to Newcastle University is a great example of the cluster phenomenon. However, the relationship of our business to others, close by, is less obvious. I have no idea what clusters there are – and I am not persuaded that others do.

Are there examples of City Centre clusters?

Our own City of London is an obvious blueprint. The City takes in all financial services, City University, specialist printing (financial services is THE biggest user of print services) and so on. Post Brexit – who knows?

Making Newcastle attratvie to business - examples from LA

Clothing everywhere / California Mart / FIDM. CLICK to enlarge

Outside the UK, the clothing cluster in Los Angeles is a wonderful exemplar.  The cluster captures masses of manufacturers right there in central LA, the Fashion Institute of Design and Merchandising (FIDM) and California Mart, where buyers from across the US can easily visit hundreds (yes hundreds) of small clothing designers.

I recall discussing the strategy that gave rise to the re-imagined and commercially successful fashion infustry in Los Angeles (with the LA Development Corporation). My overwhelming impression was the clarity with which the strategy was articulated, based as it was on a solid research base. The LA cluster is now bigger and more successful than that in New York. It has given rise to brands like Diesel and American Apparel as well as clothing tech businesses that challenge the traditional hegemony of France and Germany.

Both of these are examples of clusters based on markets (finance and clothing). Today, we’re more likely to see clusters defined by a technology – ‘digital’ for example.

Clusters – technology based or market based?

I find it difficult to identify the glue that might bind businesses together simply because they use similar tech.  Certainly, the most recent work on clusters is remarkably devoid of a market focus.  A 2018 BEIS study uses some nifty maths to identify clusters, but I don’t see what use the analysis is.

For example, this study identifies the second largest advertising cluster in the UK to be centred on Manchester (my team found the same in 2001 – industrial structures change slowly). However, the study evinces no curiousity about why it’s located there.

The answer is to with the fact that Manchester was the home of the original catalogue industry (Grattan for example) that sprung out of the clothing businesses based in the North West – the precursor of online apparel. 1 THIS IS WHAT WE SAID IN 2001:  Perhaps associated with both textiles and household goods is the region’s major strength in mail order retailing. Its size, degree of geographic concentration, links to industries such as market research, advertising and packaging and its role as a distribution channel for consumer and household goods, suggests that mail order might be seen as a significant regional cluster in its own right. In this context, it is worth emphasising that the industry is not dissimilar in many ways to the emerging industries.

And from the embers of what was there, other things spring up.  Alongside Misguided, there is Boohoo, Pretty Little Things, Matalan and others.  Supporting them is the textiles department of Manchester University and those other industries (advertising and so on), that we identified in 2001.  They are all thriving and adapting in a digital age.

Having a market oriented understanding of clusters enables strategies to prevent clusters unravelling, or stimulating appropriate responses if that unravelling can’t be stopped.

For the moment, suffice to say that the evolving industrial structure of Newcastle has never been more important. I don’t detect a strategy for it, but if vibrancy is going to be restored to our city, then we need one.

Making Newcastle attractive to business:  the cost

As a business resident in Newcastle, I am not wholly familiar with the parties to all of this.  I think my comments take in the City itself, NE1 (the Business Improvement District for central Newcastle), The Freemen of Newcastle (who own the Town Moor), bus operators and so on.

This is important for us. We’d be prepared to increase our NE1 levy to contribute.  I recognise this is a team effort – we want to be in the team …..