To grow a business, someone has firstly to start one and then run one.  Admittedly the same person does not have both to start a business and run it, but for the moment let us assume that this is one person and that her name is Olivia1The most popular girl’s name in Britain 2019. .  Olivia is interested in starting and growing a tech business.

How easy is it for Olivia to start a business and run it in the UK / Newcastle in particular?

There are two sources which inform our understanding of this. After that, we can consider the impact of these things on new business creation.

The 2 data sources that tell us about the environment for starting and running a business to grow it, are the World Bank Doing Business project and the Global Entrepreneurship Monitor project. The former offers a macro view, the latter a micro view.

Doing business in the UK is generally easier than in most other countries

The WB Doing Business database captures 190 countries and ranks the ease of doing business across 10 variables.  The table shows the summary results for the UK. The overall rank of 8 for the UK is very high. It is easy to ‘do business’ in the UK.

Note that the variables that contribute to this overall rank cover a lot of ground. They include for example that, in some countries, it is very difficult to access electricity. Also, in some countries, Olivia would find it hard because she’s a woman.

Starting a business is relatively easy (but should it be?)

 

 

There are 3 World Bank variables that are particularly interesting for Olivia.  They are: (a) starting a Business, (b) Getting Credit and (c) Resolving Insolvency.

For Olivia to grow her business, I suggest we need to look at an additional variable. I discuss that variable below.

This chart shows these 3 variables for a number of competitor countries. The ranking here is different. The ranking here is based only on the 34 members of OECD, not all 190 countries in the full World Bank Doing Business Database.

The chart shows just how different is the US from these comparison countries.  My interpretation is summed up in the chart headline.  In the USA (to which we should aspire in terms of their ability to grow businesses), it is hard to start a business, but much easier to grow it by accessing credit, and much easier to close it, should it run into trouble.

Resolving insolvency easily is important. Things go wrong and when they do, they should be sorted out quickly. Speedy resolution means that key players can move on, learn from mistakes, and start again.  Many have pointed out that, in the UK, there is a degree of shame being associated with a failed business, while in the US it is viewed as a learning experience, a stepping stone, a rite of passage. The ease with which insolvency is resolved in the US is an aspect of this.

Subtly, the fear of insolvency affects entrprepreneurs’ attitude to risk.  Growing a business involves taking risks. While I do not believe that people take reckless risk, it is obvious that reducing the ‘costs’ of insolvency is likely to enhance attitude to risk.

Growing a business is about entrepreneurship – how does the UK rate?

Global Entrepreneurship Monitor has been reporting annually since 1999. The 2019 report covers 50 countries. Each country has its own research team and produces its own report to a global template and standard.

GEM has a measure called ‘Total Early Stage Entrpreneurship Activity’ (TEA) which is the combination of two measures. Measure 1 is ‘nascent entrepreneurs’. 

These are individuals who commit resources, such as time or money, to starting a business. To qualify as a nascent entrepreneur, the business must not have been paying wages for more than three months. Measure 2  is ‘new business owner-managers’. These are businesses which have been paying income, such as salaries or drawings, for more than three, but not more than forty-two, months.  More detail on the methodology can be found in the UK 2019 report.

TEA for the UK in 2019 was 9.9% which is close to half the US rate of 17.4%.  Although I’m not a fan of spider diagrams, this one shows the key differences between the US and UK which go towards explaining this difference.  A score closer to 10 is better.

A look at the variables suggest that there is little local economies can do in the UK to address these differences.   However, there is one exception to this – a variable that can be addresssed locally. And a second over which a degree of influence is possible.  These are the two variables to do with ‘entrpreneurial education’.  One of these looks at entrepreneurial education in schools. The other looks at entrepreneurial education post school.

Entrepreneurial education in Newcastle

Recently, I have sat in on virtual meetings and also seen commentary on social media which refer to the ‘digital jobs market’ in Newcastle. Apparently, a large proportion of all advertised jobs are tech related.  Also, I have heard many references to initiatives designed to enhance the ‘careers’ of young people in technology.

But enhancing her ‘career prospects’ in IT, is not what Olivia wants. She doesn’t want a career in IT.  Olivia wants to start and grow an IT business.  Olivia wants to offer careers in IT.

For Olivia, this is a problem.  She knows (because she’s read the GEM Report on Britain), that entrepreneurial education is important, but she struggles to find it in Newcastle. Olivia has looked at the syllabuses at Newcastle schools including Newcastle’s University Technical College and has come away disappointed.

Olivia was particularly disheartened by two comments on the UTC why we’re different page.

One comment told Olivia that she’d be wearing ‘business attire’ – which is not the image Olivia has of a tech entrepreneur. The other comment told Olivia that she would be occupied during ‘9-5 working hours’.  And again, this does not match the picture Olivia has of life as a tech entrepreneur.

Starting and growing (more tech) businesses will build Newcastle back better

So, based on real data comparing us with other countries, it is possible to identify things we can do to help Newcastle build more businesses and bigger businesses. However, it is important also to recognise that nothing we do will deliver results fast.  Some of the things that the US does, and to which I referred in another post (like SBIR), have been in place for many years.  The UK, having implemented SBIR badly, abandoned it. Policies like enhancing entrepreneurial education need commitment and review continuously.

It is possible for Newcastle to get great.  It can only do that based on understaning its position in the world. That understanding is ONLY possible by analysing data.

The outcome will be more and bigger businesses

Policies are no good unless they are monitored.  What is our starting point?  How does Newcastle’s business demography stack up and what might be sensible targets for say 5 years?  I discuss this here.

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19th February 2024

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When they are right, why are economists so easily ignored?  Simon Wren Lewis, a macro-economist wrote a recent, good, blog on this.  For those of us who have worked with regional economics, the problem is further complicated because the data is messy.  But, ‘levelling up’ regional economies requires us to grapple with these difficulties, all the while remembering that we’ve been here before.

For example, not too long ago, most of us accepted that small firms create jobs and big firms lose them. That conclusion is now mediated by some who say that the quality of the created jobs is poor and low skilled. Or, that we do not need jobs in more firms, we need more jobs in fewer, high growth firms.

Regional GDP. Thanks to https://www.gotcredit.com/
North East Regional GDP must go UP

The latter is a very seductive argument for regional players.  The PR that comes with association with a high growth business is attractive.  And in a small regional economy (like that of Newcastle and its neighbours) it is easy for a very small number of growing business to assume significant status.

So do we need more firms? Or better firms?

In the North East, what are the features the regional economy that need ‘levelling up’ and what do we do to make it happen?

Higher GDP is the outcome we want.

Along with others, I would argue that GDP is the key metric that would indicate that ‘levelling up’ has been succesful. If we achieve higher GDP, almost everything else follows.  So what needs to happen to raise regional GDP?

The golden age of regional economic research delivered little.

In the period of the last Labour government, a lot of money slushed around to deliver regional growth.  Agencies were created and research funded to answer what, at the time, appeared to be useful questions.

I think that a lot of that research was good, empirically robust and policy driven. Also, a significant number of good ideas were copied from the US.

However, the initiatives that flowed from the research were often badly implemented or non-existent. The project management was terrible.

Where ideas were copied from the US, there was little attempt to understand why they worked on the ground in America.  What was it about the particular US environment that made them work?.  1Two initiatives which are examples of this are SBIR (the Small Business Innovation Research initiative) and BIDs (Business Improvement Districts). The former is long abandoned in the UK, but going strong still in the US; the latter is going both here and in the US, but rather more succesfully in the US.  There is more detail about why these initiatives were poorly implemented in the UK here.

And at the end of this golden age of economic development initiatives, we’re still talking about the need to ‘level up’.

Truths from the Golden Age.

Unlike the ‘golden age’, the last decade has witnessed an almost complete absence of notable, centrally driven, regional economic research.  Picking the golden nuggets from the golden age, I would argue for the following, ‘truths’ :

  1. Small firms DO create jobs; big firms DO lose them. The quality of those jobs is perhaps debateable, but the core finding holds.
  2. The UK has fewer medium sized firms than, for example, the USA. Small firms find it easier to grow in the US than they do in the UK.
  3. Starting a business in the UK is administratively easy but culturally / emotionally / educationally challenging.
  4. Some places have appreciably more firms than others, per head of population. The impact of this on competition, levels of service, innovation and productivity is considerable.

In this post and others which follow, I discuss these point with a focus on the North East with an attempt to use official data (ONS / NOMIS).

I am not reviewing the academic work on all of this. I hope I manage to inject a measure of ‘it’s obvious isn’t it’ without referencing the literature.

Small firms and job creation

http://www.nyphotographic.com/ I am not going to say much about this.  The initial research was conducted by David Birch at MIT.   In 1979 he published The Job Creation Process, in which he showed that most new jobs in the US are created by small companies. This study caught the attention of politicians at home and abroad. Birch’s work, although criticised, is considered groundbreaking because it opened the study of small businesses, which had been disregarded by economists before this.

The research to see if what Birch had found in the US, applied in the UK, was funded by the Department of Education and undertaken by Trends Business Research (confession: this is a company which I founded).  More recently, but still more than 10 years ago, the Department of Business (BEIS) commissioned a team at Aston University to look again – and the core finding that small firms create jobs, holds true.

When I first got involved with these findings, like many, I was initially surprised by them. Surely, big firms must turn in big job creation alongside big revenue. But a few moments reflection tells us that the finding is accurate. The news we read is of big firms delivering real, significant job losses and the number of small firms an any economy far outweighs the number of big ones. Common sense affirms the core finding.  And although I am not reviewing the literature, I will say (because I know it to be true) that Trends Business Research went to the most enormous trouble to confirm the data.

This is not to say that other points about the quality of the jobs or the regional disparities or the sector distribution are not accurate. It is merely to say that job creation comes from small firms.

With that thought, the bigger question is why does the UK struggle to grow firms?  What is the size of the problem?  I discuss this in this post.

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19th February 2024

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How must offices in a post Covid-19 world adapt to play their part in restoring vibrant life to our city centres?  There are 5 lessons to learn.

In an earlier post, I spoke about what we’d like to see to encourage businesses and people back to Newcastle City Centre and its close neighbourhoods. Most of the things I spoke about are not within our gift. However, we recognise that businesses like ours – responsible for office space – have a part to play.  How  must The Racquets Court begin thinking big about smaller offices, to meet the changing demand for space.

What has changed?

In the past 12 months, we (and most of the planet) have learned how to work from home.

We know what we like about it and what we don’t. We know what we miss and what we do not. We’ve solved some problems and not others.

The genie is out of the bottle. It will not be put back.

We are not certain what all of these lessons are, but these are some that we are working with.  We must:

  1.  combine the best of ‘home’ with the best of the office
  2. tempt people with ensuring that the frustrations they ‘probably’ encounter at home will never be ecountered at the office
  3. recognise that it will be the norm, not the exception, for people to combine working from home with working at the office
  4. ensure that the safety from infection that people feel at home are replicated to the fullest extent possible at the office
  5. work with the knowledge that the pressure for employees to work from home, some of the time, will come from their employers.

The best of home PLUS the best of the office / compensating for the frustrations of working at home

The evidence suggests that, where home is comfortable, people enjoy working there. That phrase ‘where home is comfortable’ however is a big one.

There is an obvious connection between how well off someone is and the degree to which they find working at home comfortable. More than this, the better paid will find it easier to afford the additional costs of working at home. Although homeworkers save on travel (and on clothes that are worn below the waist), outside the South East, this may not compensate for the greater costs incurred for utilities.

There are other issues.  ‘Before Covid-19’, home was big enough, now it is not.  The desk chair used for brief periods before Covid-19 was OK; sitting on it now for hours at a time, it’s killing my back.  Before Covid-19, the table was OK for brief periods of work;  as a desk, the table is too small.  And ‘my table’ has not before been used so extensively for work; my table is my metaphor for the difficulty of separating home from work.  Where does one stop and the other start? Before Covid-19, this was relatively easy to distinguish; today it is much harder.

Connectivity?  OK for my personal use;  Zooming and Teamsing all day is entirely different. And my partner is on it too – it won’t cope.

The psychological impact of Zooming and Teamsing

Microsoft has largely found itself missing out on the plethora of slang associated with the harms associated with video conferencing. We have ‘Zoom Gloom’ and ‘Zoom Fatigue’.  The slang does however mask real concerns about the psychological impact of the exccessive use of this technology.

So we should assume that employers who care about their people will wish to reduce the use of Zoom and Teams by bringing them back into an office – at least for part of the week.

Playing our part – tempting people back to a Newcastle City Centre office.

We have to be comfy.  We’re not ‘home’ but we can be a great alternative. You will not get a bad back sitting at your desk (because the chairs have won design awards in Germany and the USA).  The desks are amply sized, screened and with nifty pull away tops to hide the wires.  They are made in Yorkshire.  The office will be quiet because the carpet is designed to insulate you from office noise.Thinking big about smaller offices

The coffee won’t run out, because it’s locally sourced and delivered. When the building is full, you’ll be able to reach into the fruit bowl and grab an orange or an apple, sourced from Grainger Market.  You’ll never have to wait for the kettle to boil or for the tap to run cold because boiling and chilled water is on tap.  And your space will be clean – because we clean it every night. (And we employ our own cleaners – on excellent terms and conditions).

These luxury features have guided us from the beginning; we have always wanted to be thinking big about smaller offices.

We will be flexible with space – desk space and meeting space

You will probably not want space every day of the week. We will therefore offer you space when you need it. If you need desk space for only 0ne or two days a week – then we will make that possible. If you need one desk one week and two every other week – we’ll accomodate that too. If you need to meet others in the middle of the night – well, that OK because the building is 24/7.

Thinking big about smaller offices: meeting roomsWe recognise also that this way of working is unlikely to reduce the Zoom or Teams load. This is because not all of your people will be together at the same time. So we will make our meeting spaces more flexibly available.  Before Covid-19, meeting room were bookable for a minimum of half day.  We will reduce this to 2 hours for those outside The Racquets Court; for members, we will reduce this to one hour.

And of course, you do not have to worry about connectivity.  The Racquets Court is one of the very few buildings connected to Stellium’s Metro Network.  We have a Gigabit carrier and 200 Mb up AND down. Every desk has a wired connection and there are 3 wireless networks in the building. If you need extra security, then we can offer your own connectivity the Metro Network.

Covid-19 has not disappeared. The Racquets Court must be safe

Currently, desks are socially distanced; we have reduced the capacity of our cafe area.

We have installed a facial recognition, no touch, temperature scanner. We anticipate that everyone entering The Racquets Court will wish to ‘scan in’.

There is a hand sanitisation station at the entrance to the building and all sinks are stocked with Arran Aromatics luxury hand wash and hand cream. Regular handwashing and sanitising is drying out our hands.  It is very important therefore to moisturise them.

Air Circulation

Additionally, The Racquets Court has a sophisticated air circulation system. It does not have air conditioning.  The system continuously draws fresh, filtered air into the building and pushes out the air from inside. Thinking big about smaller offices: cafe / kitchenTherefore, you can feel confident that the air you breathe is as fresh as possible and filtered.

Our system is also more environmentally friendly than air conditioning, helping to protect our planet as well as our people.

The Racquets Court also has a self-opening glass roof for maximum fresh air. And of course, it has rain sensors so it closes automatically when the weather turns.

Cycling to The Racquets Court

Many of us are avoiding public transport and cycling. Newcastle City Council is promoting this of course with more cycle lanes.  The Racquets Court has secure bike storage. And there are luxury showers to freshen up (Arran Aromatics toiletries provided).

Making the home / office balance work for all

If you are running a business, and you’ve downsized your office needs, we assume that you will wish to devote resource towards making your people feel as though their home / office balance works in their favour.  This is about your business thinking big about smaller offices.

If you can get it right, if your people feel that they can get the best of both worlds (comfort, ease, frustration-free, hygiene factors satisfied), then employee satisfaction will be high and productivity will increase.

And the cost to you is predictable; there will NO additional costs except for those you ask for such as a meeting room for an hour or two.

If you are an employee, then going to the office should be an appropriate alternative for everything that working from home might offer. And perhaps that should include the odd additional trinket that you might not get at home.  This might capture some of the things mentioned above, but also easy access to John Lewis, Marks & Spencer and Fenwick, a drink after work in a City Centre pub, followed by a trip to the cinema or theatre.

This is what we mean by thinking big about smaller offices

In my last post on this subject, I talked about Newcastle’s ‘bit’ – those things over which we have no control which make our City attractive. This post has been about our ‘bit’

Our ‘bit’ is the offer of luxurious office space in the centre of our City which people will WANT to work in.  The future appears to be that many of us will wish to combine working from home and at the office; we believe that The Racquets Court can be ‘the offfice’ that makes this combination work to the benefit of businesses and the people who work in them.

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19th February 2024

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Well, what a year!

It turns out that 2020 hasn’t quite gone as planned for most of us, but now we need to focus on how to adapt in this new world.

When we built The Racquets Court, the idea was to create a close-knit community. A place to build strong relationships, new collaborations and explore new and exciting projects. At the beginning of 2020, our memberships was growing steadily, enquiries were increasing and we were having new conversations with different organisations nearly every day. Lockdown meant we had to press pause on many things and think of ways we could continue to function as a workspace, but, a workspace where people feel safe and comfortable to work from.

What We’ve Done to Make Our Workspace Safe

Safe Workspace Poll
Via Linkedin.com

We attended several (virtual) seminars about getting back to the office, making the office safer and co-working communities in general, all of which gave us some good ideas to explore for The Racquets Court. We took time to conduct research into our ideas and sought feedback from members, visitors and followers and finally arrived at ideas to improve the safety within our space and promote good health.

Air Circulation

Fortunately, The Racquets Court has a sophisticated air circulation system rather than air conditioning. Why is that important? The system continuously draws fresh, filtered air into the building and pushes out the air from inside. Therefore, you can feel confident that the air you breathe is as fresh as possible and filtered.

Our system is also more environmentally friendly than air conditioning, helping to protect our planet as well as our people.

And, on top of this, The Racquets Court has a self-opening glass roof for maximum fresh air. The clever thing is, it has rain sensors so it closes automatically when the weather turns.

Connectivity

We mention this regularly because it really is important – and getting more so with every day that passes. The Racquets Court is one of the few buildings in the North East connected to the Stellium Network. Our standard network speed is 200MB (up and down) via a gigabit carrier. This means your video conference calls and online collaboration platforms will perform better, enabling you to work for efficiently.

Temperature Scanner

Our research indicated that the majority of respondents felt safer with a temperature scanner at the entrance to their workplace. Although body temperature is not a substitute for COVID-19 testing, it does indicate whether someone should be entering The Racquets Court and our scanner gives an audible response and is capable of facial recognition. This therefore helps us to protect our members.

Temperature Scanner

Social Distancing

We fully promote social distancing with The Racquets Court. The desks are spaced out throughout the building and we have reduced capacity in the smaller spaces such as meeting rooms and the main kitchen.

Hand Sanitising & Hand Washing

We have installed a hand sanitisation station at the entrance to the building and have ensured all sinks are stocked with Arran Aromatics luxury hand wash and hand cream. Regular handwashing and sanitising is drying out our hands (a small price to pay to prevent the spread of COVID-19), however as the colder months come, it is very important to look after hands – and moisturising will do that.

 

I’ve Got Bills, I’ve Got To Pay…

While many people have been enjoying working from home over the summer, as winter comes, the heating comes on and the bills go up. Our packages include utilities so your team can relax a bit when it comes to heating and electricity bills at home.

Bike Storage & Showers

Avoiding public transport can be a pain, but something many of us are doing. We have secure bike storage along with showers (Arran Aromatics toiletries provided) to help you get into work safely.

You can read more in our Safe Working Guide.

COVID-19 Plan

 

If you would like to explore workplace options at The Racquets Court, get in touch with a member of our team today.

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19th February 2024

Essential Kit Every Remote Worker Needs in 2024

Remote working isn’t a new thing, but it has risen in popularity since the pandemic. Many businesses have embraced remote or hybrid working. This...

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What a way to spend a Tuesday evening!

With canapes circling, drinks flowing, and enticing cupcakes, Nick Forbes, Leader of Newcastle City Council, officially opened The Racquets Court.

The exclusive launch event, held on 14th May 2019, included well-known representatives from leading tech businesses, Newcastle City Council, NE1, Newcastle and Northumbria Universities.

Nick Forbes, Paul Miller, Matthew Smith

Nick said:
“Newcastle was home of the first industrial revolution and we need to be a part of the next industrial revolution too, and what The Racquets Court is hoping to achieve is to consolidate our position as a global leader in digital technology and understanding big data. What you’re achieving here is, I hope, a part of a bigger narrative for the rebirth and regeneration of Newcastle as a major global city.  The transformation of this building symbolises the rebirth and regeneration of Newcastle.” 

The Racquets Court is the first building to be connected to the Stellium 40km metro fibre network which delivers latency to New York of 65 milliseconds; the network supports near real-time access to rapidly changing data (you can read more about our connectivity here). This phenomenal technology is helping the city become one of the best connected cities in the UK and really helping to put Newcastle on the map.

Paul Miller, co-founder of Gavurin, talked to guests about the journey the building had been on and how the vision for The Racquets Court was realised with the help of some of Newcastle’s finest’s businesses. Tolent, IDP Architects and Elliotts Quantity Surveyors played key roles in the restoration of the building (read more about this here).

Their teamwork has earned a place on the shortlist for the Constructing Excellence North East Awards for the award for Integration & Collaborative.

Paul said:
I’ve learned that Newcastle has some great businesses creating wonderful things. The City’s connectivity offers opportunities to take that creativity everywhere – fast.

Paul Miller
Paul Miller, Co-Founder of The Racquets Court & Gavurin

The event provided a platform for The Racquets Court to showcase how far the building had come in a short space of time.

In its original form, the building had only one floor, was open and as dull as an empty sports hall often is! The transformation has included the restoration of the beautiful glass roof and eye-catching victorian spiral staircase. Another floor has been added to create more space, but it has been left open to retain the buildings unique character.

The Racquets Court was also shortlisted for the 2019 RICS awards which took place in April, and is also shortlisted for a second CENE award for Preservation & Rejuvenation. The winners will be announced at a ceremony on 14th June 2019.

We’d like to say a huge thank you to all our guests for helping celebrate with us, and we’re excited to welcome all members to The Racquets Court.

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19th February 2024

Essential Kit Every Remote Worker Needs in 2024

Remote working isn’t a new thing, but it has risen in popularity since the pandemic. Many businesses have embraced remote or hybrid working. This...

Read More >

6th February 2024

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The Racquets Court, a leading provider of innovative coworking solutions, is thrilled to announce that it has been awarded the prestigious title of “Best...

Read More >