What and where are the opportunities for businesses in the Enterprise M3 area to innovate and grow?
The guests, invited from many of the key sectors which have made the region such an investment hotspot, set out their own strategies as well as uniting behind the challenge of building a long-lasting future for the next generation of investors and industries. The growth hub was created by a partnership of Business South, Surrey County Council, Hampshire County Council, BE Group and Set Squared, an enterprise collaboration between the universities of Bath, Bristol, Exeter, Southampton and Surrey.
SETsquared board member Keith Robson opened the debate by setting out the benefits of a united strategy. He said: “We run a high-class business incubation network across the universities after originally importing some ideas from San Diego’s Connect programme. There is an annual review of incubators around the world and SETsquared has now broken through and is the Number One academic incubator worldwide. In the last ten years we have supported more than 1,000 companies who between them have raised £1bn of investment.
“The real thing now for the UK is how we engage with the regional economic agenda. We are very keen to be a proactive partner in the Enterprise M3 growth hub – it is a really great opportunity for the UK and for our region to work in partnership.”
Keith is also chief operating officer for the University of Surrey’s 5G Innovation centre, which is a £75m programme involving 25 corporates, and he pointed out: “What got us through the bidding process for that was the weight of industry support here and the belief they had in this rather radical proposal that we would format Guildford into the world’s leading centre for research, with a unique 4km-wide live testbed for products. I share a passion for the opportunities here to break the mould, so why don’t we promote ourselves – sometimes we do a terrible job at connecting and communicating.”
Philip Davies of Deimos Space UK said he had been working in the space sector for more than 30 years and had lived and worked in the region for more than 25 years including at Surrey Satellites, which is still the university’s most valuable spin-out.
He told his fellow guests: “Just over two years ago I was asked to be the MD for Deimos, which was quite big in Spain, but effectively a new start-up for the UK. The reason they came here was because they saw it as a massive growth area, partly because of the Innovation and Growth Strategy, supported by industry and Government. The UK’s aim is to have a £40bn slice of the global sector, which requires a lot of actions - which is what really interests me. The UK is also looking at creating the regulatory framework for a space port which would allow satellite and horizontal take-offs for space tourism, which would be a big step to improving the space economy in the UK.
Prem Gyani is one of the Growth Hub Champions helping mentor firms in the region and he said after being thrown out of Imperial College and out of Surrey University as a young man he had spent 32 years “in corporate servitude” around the world.
“In 2006 I started my own company which was hugely successful and was sold for a tidy sum, which I then very promptly lost because I thought I was going to be ‘Zuckerberg II’. But in 2013 I reset my life and started a social enterprise helping disadvantaged kids get into high-paid jobs in the digital sector.
“Two years later I reset it again and am now working for a number of companies, which has helped me to realise that the world of the hierarchal glass and steel corporations is dead – and long may it rest. In its place is an environment where young people will be making decisions on what value exchanges they want.
“What frustrates me is that our schools, colleges and universities and our workplaces absolutely do not encourage that type of environment. I would like to see that we have the balls to break the system and encourage innovation and inspire creative aspiration. We need to acknowledge success and encourage risk rather than killing productivity because of a lack of engagement.”
For the local government view on the debate, Mark Pearson, director of business growth at Surrey County Council, first said he was a not a typical public sector employee.
“For the last six years I have championed, both inside and outside the county, a smart economic growth strategy about growing an economy and the part played by the public sector in making sure there are the right skills and the right infrastructure is in place.
“This strategy centred on four categories: Social, human, environmental and physical, and now we have added financial, relationship, intellectual and then split the physical category into infrastructure and manufactured.
“The way they all interact with each other has led to the strategy moving way beyond Surrey. Here, we have put Surrey back on the map as a place to do business and have been shouting about that success.
“Also, we are the most wooded county in England and a lot of people talk about the environmental side of it, but it is not the primary reason people come here to live – they come here to do business and provide that vital sustainable prosperity and then discover the rest later. And that sustainable prosperity is not only for the owners and shareholders, but also for the staff and the wider social value they have.”
For the Surrey Chamber of Commerce, Louise Punter told of her background in large corporates and her move to the two aspects of her new job where she represented businesses but also needed to run the chamber as an SME.
She said: “We have ten staff and run around 200 events, so I can appreciate how difficult it is to run a small business. We are the glue because initiatives come and go, but the one thing that carries on regardless is the chambers of commerce – we look outwards to our membership and see the expertise and innovation we have here.
“Among all this, we must try to make sure enough businesses think about exporting because we have fantastic support for them, but we seem to be the only ones on the ground dragging them there kicking and screaming. We have to persuade them it is a good thing to do, despite what happened on 23 June.”
Looking at the cyber-crime sector Rob Carolina, executive director of the Institute for Cyber Security Innovation, said he started his working life with a tech start-up doing software for the Apple Macs. “I learned about small businesses the hard way by becoming part-owner of one without really knowing what I was supposed to do,” he said. “I then went from small to large and was headhunted by PWC and then back to small niche practice. The relationship with the university began in the 1990s when I was asked to talk to security specialists about regulation and issues to do with cryptography.
“More recently I was asked by the Royal Holloway to head up this role where my job, to put it bluntly, is to take in money from people outside and give them something that is useable in exchange, looking either at what causes something to be not secure, or what can be
done to think what security will look like in five to ten years.
“But....the internet doesn’t work. By that I very specifically mean the authentication problem where we can’t determine who we are dealing with at the other end of a communication. We keep coming back again and again to this problem and if we are looking for opportunity, the most immediate is IoT - the Internet of Things.
“As we keep connecting more things to the internet, we discover how insecure they are. Here in the M3 Corridor there is a huge concentration of know-how, experience, development and talent that can be harnessed to solve that.”
Maureen Frost, deputy chief executive at Hampshire Chamber of Commerce, said the dominant sectors for her role were marine and aerospace, with a mix of high-tech businesses alongside a lot of rural spaces, with a lot of grants given out to support the low-carbon agenda.
“I have found so much potential in international trade and exporting, but a lot of businesses are afraid of experimenting, so we try to take away some of that pain. One of the other issues to be addressed is blocking at the top of the age group in certain companies, where a lot of people who would previously have been retired have no intention of doing that now and are blocking youngsters with more innovative skills.
Bryan Hoare, MD of the BQ, said people needed to be made more aware of the enterprise and innovation in the area. He said: “BQ has been campaigning for our entrepreneurs for many years, certainly in support of more international trade and what we can do to help our next generation be successful. Innovative practice in education is something we would champion as one way the private sector can really get to the heart of things and make a difference.”
In the ever-evolving gaming sector, Patrick O’Luanaigh leads Ndreams, the largest UK software developer to be solely focused on online virtual reality games. He told the other guests: “VR is great for games but it will also revolutionise a lot of industries in the next few years with the likes of staff training and architecture. We are currently raising a round of investments, much of which looks as if it will come from China which is a shame, but then
it is still quite a risky area with headsets still to be launched.
“Guildford is the biggest gaming hub in the UK, with around 40 developers making some of the biggest games in the world, but just wonder if there is a way of getting some of these amazing high-tech industries like aerospace and medical as well as VR to work together a bit more.”
Tom Higgins runs Gold-i, a world leader in the development of intelligent plug-ins and
services for foreign exchange dealing. He said he had developed his company without any outside funding ‘because that is how I thought you did it’.
“Having expert advice externally certainly helped me, with Vistage (a global network of private advisory groups) being particularly helpful for two hours every month,” he said. “One thing I have realised is that as far as funding for SMEs is concerned, the banking model just isn’t working. The Funding Circle model where they help you through the process and charge lower interest rates was just a million times easier.
“Another thing that is broken is the board and corporate governance structure, with so many disconnects between people doing the work and the managers. Some of the decisions I have seen have been really wrong and scary.”
Canadian Stephen Mooney came to the UK in 2007 with his company offering software to help organisations understand their energy and carbon positions through web-based systems. “We had about 40 staff and some interesting clients when we exited in 2010 and I came to a crossroads and truly recognised the value of innovation,” he said.
“I found an inherent fear of dealing with SMEs and I started to see that as my challenge, so I met with Set Squared and better understood the SMEs’ problems. I then got involved with the Surrey 100, a group of angel investors that does an even more horrific job than Guildford does at promoting itself, despite a lot of talent and some really cool investments.
Stephen, who is also one of only 21 business leaders worldwide working with UKTI’s Global Entrepreneur Programme, now runs Guildford-based Synoptica which uses data analysis to help define business needs and match them to the best solutions from a global network.
He added: “The UK as a whole is very good at ideas and innovating, but I question whether we have the risk tolerance and infrastructure to lead on that innovation.”
Roya Croudace, Director of the Enterprise M3 Growth Hub, agreed that what was going on
in the region was ‘absolutely incredible’ and she recalled thinking this was the UK’s best-kept secret. “The key agenda of the Growth Hub is about supporting innovation and high growth in the most dynamic LEP outside London. I still sit there thinking there is so much more we can do, getting our younger generation excited about what they can do. A lot of businesses across the region don’t know what is happening and what support is out there, so I will make sure they know where they can get simplified help and let them know what else is going on in the region and how we can connect and collaborate.”
Mark Pearson challenged the situation, saying: “That’s all good stuff, but it was good stuff when I came to the county eight years ago. Why do we keep trying these things if it isn’t working? Is it because we already have 65,000 companies, including in excess of 300 large companies, and £37.5bn GVA, and the place is just too successful and people are getting too comfortable and complacent?”
Prem Gyani went further, saying the captains of industry at the event might not be the right people to debate it. “We have all made it to some extent and we are now rearranging the deckchairs on the Titanic because we all have our experiences which are forming our opinions, but those opinions don’t work anymore,” he said.
The challenges were clear and there was agreement around the table that while there was huge success in the region, and that everyone should be rightly proud of that, there still needed to be a focused and united drive to make sure the achievements and profile of the region was sustainable for decades to come.
Speaking about the ways different industries could be brought together, Philip Davies said: “One of the things Innovate UK has done in recent years is to set up Catapult centres, which looked at how some countries were better at commercialising some of the innovations that came out of universities.
“They decided the programme should be industry-led, with the aim of industrial growth. There is now a network of them like offshore, digital and, for us, the Satellite Applications Catapult Centre, where companies can go if they want to work with anything to do with space. They know the universities and the other companies and have all the connections.”
There were also plans to expand the Set Squared operation to support future growth, and Keith Robson told the group: “We work with five universities, each of which has a significant footprint, but even combined that is small compared to the breadth of the region we are talking about.
“So there is now a significant plan to spread out a number of other incubation centres across the region, which had been working towards a multiplication of three or four times - but unfortunately that involved ERDF funding, which has been awarded by Europe but, perversely, is being held by our Government.”
The debate moved closer to home by looking at what could be done for the very small businesses that may might not have access to on-site support at an incubation centre.
Maureen Frost at the Hampshire Chamber replied: “To be honest, there is great difficulty in us finding them and them finding us. It is quite scary talking to local authorities who don’t even have a database of businesses in their boroughs. If they are VAT-registered you have half a chance and if they are limited companies you can go through Companies House, but those setting up as sole traders or partnerships and working from home are very difficult to find.”
She also urged more companies to put in for innovation and enterprise awards, which tended to be poorly supported, perhaps because companies might think there would be too much competition, while the reverse was the case. Reflecting on media coverage, she also said it was important that ‘good news’ stories were regularly pushed out, and there was a scheme at Basingstoke College of Technology where marketing students were being paired with SMEs and were helping draw up their business plans.
Over at Surrey Chamber, Louise Punter said: “We have had postcards out in various coffee bars and sports centres offering start-up advice in Elmbridge, just one very small area, but they are starting to come through and who knows how far they could go. But it is very time-consuming and there is a gap because you have to go through so many different channels.
“I would choose the word apathy rather than complacency – and even then it is not because businesses are just sitting on their backsides. But there is apathy and concerns about networking, which has this big picture about talking to ‘cliquey’ people who are all accountants or solicitors. Networking for me happens without leaving your office – it is about knowing who is out there to talk to.
“After 16 years at Surrey and sitting round so many tables like this, I can tell you that one little group is never going to make it happen – what we have to do is join the dots and not feel that there is an overlap, but that we are all promoting what is out there.”
Prem Gyani added that he saw this network of support as an infrastructure for innovation: “That infrastructure should include networks, peer groups, educators and all the things necessary for innovation. If we start talking about an infrastructure, I think we could change the conversation. It won’t happen tomorrow, but by 2025 we could say that Enterprise M3 would have the UK’s first such structure.”
That would need a lot of advance planning, but he went on to challenge the value of STEM teaching as a tool, saying that it discouraged innovation and produced ‘robots’.
Back to business and relationships, Stephen Mooney said: “The first thing we need to do is understand our clients better. There is nobody here who represents the people we are talking about and if we are to have these debates we have to start bringing them to the table. If we are not speaking a different language to the younger people it is certainly a different dialect.
“What I do with the Surrey 100 is visit these companies and help them shape their pitch and carve out their business model and then the business angels give them guidance and money to get them to the next level. That is all tried and trusted and we don’t need to change it, just promote it more.
“If you just took the Surrey Research Park and took the CEOs of all those companies and then maybe BAe and then some satellite people and connect that with some of the smaller guys, that is just one small eco-system that would help solve this problem.”
Rob Carolina returned to the potential of IoT and said: “In the nineties this part of the world saw the confluence of a lot of unusual skillsets, which still give the region a huge opportunity. Things like the early adoption of cellphones led to a lot of work here.
“This led to more and more expertise in dealing with very small computer programmes and the current breakthroughs with IoT, which mostly subsists on the idea that computing platforms are getting smaller and you need that skillset. Another thread that comes into the discussion from the side is cyber security expertise. If you are looking for that the two bigget markets in the world are Washington DC and the South-East of the UK. The Washington market is driven entirely by the defence industry and some incredible amounts of money that have gone into R&D and procurement.
“But here it is a lot to do with the financial services industry - and fintech is a further thread to explore. You have talent and interesting companies and some paths to market – all of which create the elements of opportunity if you can draw those threads together.”
Following the fintech theme, Tom Higgins said his company set up here because this was where he was brought up and he knew the area. He added: “Our average length of service here is about four years because people like working here and there aren’t other people trying to poach them all the time and it is a life choice.
“Fintech could do an awful lot more in Surrey and I don’t really know why it doesn’t. The area we are thinking about is blockchain technology (building a database of Bitcoin transactions on the web) which has relevance in so many areas.”
Rob Carolina agreed that this was a sector where Britain could be a world-leader and said: “It has been said that this country is very good at innovating, but very unsuccessful at being successful. I have certainly seen a lot of people in finance, law and accounting who are unnaturally unwilling to engage with anything technical, it seems to be a mark of pride to say they have other people to understand that sort of thing.
Patrick O’Luanaigh said the lack of management and business skills was a factor in the equation. “I have worked with UK and American games developers and there is a massive difference between the two because the creativity and ideas coming from the UK was stronger than from America, but the Americans had a layer of management and our companies were all led by creatives, artists and coders who were very technical but didn’t have a clue about how to grow a business. Starting up on my own was scary – I tried to research as much as I can but there isn’t as much available over here. I wish I knew more about these great organisations earlier on rather than progressing through trial and error.”
Growing a business means exporting, and Maureen Frost said there wasn’t enough of this: “A lot of the problem is perception that it is going to be more difficult than it is and realising that exporting is services as well as goods. We also need to raise awareness about protection against currency risk and look at the languages that we are teaching our children.”
Keith Robson also highly recommended the British embassies around the world, who were very helpful in hosting events to boost profiles, and Louise Punter said she was working on a pilot project to develop better trade links with twinned town and cities.
Roya Croudace talked about the strong relationships in the region, saying: “One of the things about Enterprise M3 as a LEP is that it is one of the best partnerships in the country, with all the right people around the table. The bar is set very high here, so how do you get better and let more people know?”
Closing the debate, Roya said: “There are so many exciting thing’s happening in the region and there are common themes around sustainability and communication. “We will be looking at connecting, collaborating and communicating across as many disciplines as possible in as many areas of this region as we can.”
Guildford Harbour Hotel
Thanks to Guildford Harbour Hotel for hosting our Live Debate. If you’re visiting Guildford, there’s no better place to stay than the Harbour Hotel, a short walk from the cobbled High Street in the centre of the town. Formerly a Radisson Blu venue, the rooms at this modern, glass-fronted property are large, smart and comfortable, with velvet-like décor and furnishings.
Guildford Harbour Hotel, 3 Alexandra Terrace, High Street, Guildford GU1 3DA. To book, visit www.guildford-harbour-hotel.co.uk, or email email@example.com for rooms, or firstname.lastname@example.org for meetings and events.