Tag Archives: entrepreneurship

How can the UK Government support our rural entrepreneurs?

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Rural Wales, house by a river

By Steven McGinty

Rural businesses play a significant role in the UK economy. Yet, policymakers often overlook their contribution and, as such, have failed to realise the economic opportunities in many of our rural areas.

Last year, University of Essex researcher Anupriya Misra presented an insightful webinar (register to hear a recording of the webinar) outlining some of the key challenges facing rural entrepreneurs, as well as the likely drivers of growth.

The make-up of the rural economy

Research by the House of Lords Library shows that the rural economy accounts for approximately 20% of England’s total economic activity, an estimated £229 billion.

Unsurprisingly, one of the key differences between city and rural economies is the size of the agriculture, forestry, and fishing sectors. In England, they amount to 2% of the Gross Value Added (GVA) of the rural economy. However, in rural areas classed as ‘sparsely populated’ this figure significantly increases, with these industries accounting for 32% of registered local businesses.

In Scotland and Northern Ireland, agriculture, forestry, and fishing play a more prominent role in the rural economy. In Scotland, 13 out of its 32 local authorities have more than 50% of their population living in rural areas, with these councils contributing 20.6% of Scotland’s GVA. In Northern Ireland, 25% of VAT registered businesses are involved in agriculture, forestry, and fishing, and outside of Belfast, it’s the largest industry in each local authority area.

The challenges for rural entrepreneurs

Many rural businesses have a strong entrepreneurial spirit, and the products they sell make up a significant proportion of UK exports. For example, 25% of Britain’s goods exporters are registered in rural areas. Nevertheless, these rural entrepreneurs can face barriers their counterparts living in cities are far less likely to experience. This includes:

  • Slow broadband – Online rural businesses can be particularly affected by slow broadband speeds. In addition, businesses involved in the tourism industry are affected, as free wi-fi is becoming an increasingly important part of the visitor experience.
  • Skills shortages – Rural businesses in sparsely populated areas can struggle to recruit the right staff, and their existing staff can experience challenges accessing training and development opportunities.
  • Poor transport infrastructure – Poor infrastructure can make it challenging for rural businesses to recruit, as well as connect to suppliers and customers in larger urban centres.
  • Difficulty accessing finance – Lower land values in rural areas can also limit a business’s ability to provide collateral for loans.

Why do some rural areas do better than others?

An interesting question raised by webinar presenter Anupriya Misra is why do some rural areas outperform others? In her view, a mixture of supply and demand factors impact on an area’s economic performance. For instance, having access to high skilled labour, good transport links to cities, beneficial planning laws, and business support are very important for supporting rural economic growth.

Additionally, rural areas which have a wealthy local population or have products with strong global demand are also likely to be high performing.

Business advice and networking

A key theme to emerge from the webinar was the important role business advice and networking plays for rural entrepreneurs. Fledgling rural businesses will often need a range of support, including help to develop their business management skills (such as basic accountancy skills), legal advice, as well as guidance on grant writing and the funding opportunities available to them.

Entrepreneurs looking to grow their business, will need other forms of support, from help to develop an online marketing strategy to advice on providing great customer service. Informal networks, and opportunities to connect with other business owners, can also be an invaluable resource.

In 2012, the Department for Environment, Food and Rural Affairs (Defra) set up the Rural Growth Network (RGN) Pilot Initiative to help rural areas overcome the barriers they faced.  This included projects in Cumbria, Heart of the South West (HotSW), North East, Swindon and Wiltshire, and Warwickshire. In practice, this involved creating a network of ‘enterprise hubs’, offering rural businesses a mix of premises, business, and infrastructure support.

An evaluation of the initiative highlighted that introducing enterprise hubs brought several benefits to rural entrepreneurs. 70% of start-up founders surveyed reported an improvement in their business skills and half reported that they improved their networking with other firms. In financial terms, the net economic impact of the RGN pilots, in terms of Gross Value Added (GVA), was estimated to be around £16.5 million, with £56.6 million expected over a further three years. And, for every £1 invested by Defra, £1.50 was created in net GVA.

Researcher Anupriya Misra concluded the seminar by suggesting that the rural economy could be improved by following Defra’s evidence and creating a new network of rural enterprise hubs, which provide business skills and support that meets the needs of local communities.

Follow us on Twitter to find out which topics are interesting our policy research team.

You may also be interested in Research Online, a valuable resource for research and analysis, covering topics such as entrepreneurship, employment, learning and skills, and careers education. 

New year, new high street: it’s time to reshape our town centres (part one)

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Wigtown town centre © Copyright Jim Barton

“One thing is certain. The high street landscape has now irrevocably changed and there is no point clinging on to a sentimental vision of the past. We have to start planning for a bold new world.”

This was the conclusion of the Grimsey Review in 2013.  Five years on and the challenges facing the high street remain – now with the added economic complexities presented by Brexit.

Yet there remains optimism.  In the last year, a number of reviews have been published, illustrating how we can bring town centres and high streets back to life.

In summer last year, an update to the Grimsey Review was published. Its title – ‘It’s time to reshape our town centres’ – is something of a call to arms.

It sets out 25 recommendations to help support the high street to transform “into a complete community hub incorporating health, housing, arts, education, entertainment, leisure, business/office space, as well as some shops, while developing a unique selling proposition (USP)”.

In November, Lichfields also published a number of recommendations for high streets, based on their own research.  Their conclusions echo that of Grimsey: “Town centres and operators within them should embrace online, promote themselves better and develop their own unique selling point(s). They must broaden their offer and attract new anchors and other uses, which make them more family friendly, and improve the overall ‘experience’ for visitors”.  It also highlights a number of examples of innovative practice.

In addition to these, at the end of December, the Ministry of Housing, Communities and Local Government published the findings and recommendations of the High Streets Expert Panel, and a related report by the Institute of Place Management (IPM) – ‘High Streets 2030’.

The IPM report gathered the opinions of local people, including young people, about their town centre, what they would like to see developed, and the related challenges that they perceive.

Over the next two blog posts, we will look at some of these reports’ key recommendations, and highlight some innovative examples of good practice.

A diverse high street

A recent tweet by Fountain Bookstore in the U.S. highlighted the difficulties presented by ‘showrooming’ – where people visit high street stores to view items which they subsequently purchase online, often only for a marginally cheaper price.  The tweet went viral and sparked much debate.

However, realistically, online shopping is not going away – and in recognition of this, it has been widely recommended that high streets should diversify their offer, placing greater focus on services and experiences that cannot be replicated online – including food and drink uses, and leisure facilities, such as cinemas and gyms.

There does appear to be some evidence of this happening in practice – barbershops and beauty salons were ranked first and second respectively in terms of their number of net retail openings in 2017.  And Fountain Bookstore may be pleased to learn that there has been a small increase in the numbers of indepedent booksellers in towns across the UK.

A unique high street

Another key recommendation is for town centres to identify their own unique selling points (USPs).

Wigtown, in Dumfries and Galloway, is a fantastic example of a town that has developed a USP in order to regenerate the community.  In 1998, Wigtown was designated Scotland’s national book town, and it has since become home to a wide range of book-related businesses, including both new and used booksellers, and an annual book festival that attracts many people to the town.

Other towns have sought to capitalise on their heritage to bring people back to the town centre – such as through the relatively new Heritage Action Zones programme and the £55 million fund announced in the 2018 budget “for heritage-based regeneration, restoring historic high streets to boost retail and bring properties back into use as homes, offices and cultural venues”.

A digital high street

While the ubiquitous growth of technology has presented high streets with some of its key challenges – in the form of online shopping and showrooming – it also presents a number of opportunities.

As well as making the most of click and collect services, many town centres may also be able to capitalise on the ‘clicks to bricks’ phenomenon – where online retailers open physical stores in order to provide their customers with an enhanced experience, such as being able to trial goods before purchasing.

Grimsey 2 also outlines a number of other ways in which high streets can capitalise on technology – from providing free wifi and spaces for freelancers to work/come together, to becoming involved in digital marketing campaigns and gathering/using local datasets.

In Scotland, a number of ‘Digital Town’ pilots have been set up with a view to improving the high street’s digital infrastructure and skills, and supporting high streets to take advantage of these in order to boost tourism and local economies. Related guidance on the development of ‘Digital Towns’ has also been produced.

A well-supported high street

There is also a range of innovative supports for high streets – some more traditional, like business improvement districts, and others more unconventional – such as the growth of popup shops and other supports for local entrepreneurs.  We have discussed the many benefits of markets for town centres in a previous blog post. There have also been various awards and awareness-raising campaigns, such as Love Your Local Market, and the Great British High Street.

Another approach is to use the planning system.  One particularly innovative example of is that of the Renfrew Town Centre SPZ – Scotland’s first Simplifed Planning Zone (SPZ) focusing on town centres.  It was set up in 2015 and built on the success of Glasgow’s award-winning Hillington Park SPZ.

The SPZ aims to support existing businesses, encourage new businesses, and increase the number of people living within the town centre by supporting the re-use of vacant property on upper floors.

The scheme has been hailed as an excellent example of the Town Centre First principle. According to Scottish Planner: “The scheme has been well received and offers simplicity to businesses who can invest in the town centre knowing that they can change the use of premises and upgrade the shop front without having to apply for planning permission”.

Renfrewshire Council have published a ‘how to’ guide detailing their experience.

To be continued…

These are but a few of the many innovative ideas and experiences that have helped town centres across the country.

In our next post, we will continue this theme and outline some additional ways that town centres can help to address their challenges and increase footfall – through community involvement, good quality, inclusive urban design, the promotion of healthy environments and the creation of homes on the high street.

Follow us on Twitter to discover which topics are interesting our research team.

Opportunity or necessity… what’s fuelling the growth in self-employment?

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With unemployment reaching its lowest level since 1975, it may seem like the state of the labour market has improved in recent years. However, a closer look at the statistics suggests that this is not necessarily the case.

The strong performance in the labour market in part reflects the growth in self-employment, which has been a distinguishing feature of the labour market’s recovery since the last recession.

Growth in self-employment

There were almost 750,000 more self-employed in the UK workforce at the end of 2014 than at the start of the global financial crisis in 2008, representing a high proportion of the total net growth in jobs over this period. Self-employment accounts for over 15% of those in work in the UK – 4.8 million of a workforce of around 32 million. Between March 2008 and March 2017, self-employment accounted for almost a third of total employment growth.

The significance of the contribution of self-employment is highlighted in a recent article published in Regional Studies, which notes that of the 920,000 net new jobs created between quarter 1 of 2008 and quarter 2 of 2014, 693,000 were in self-employment.

There has also been a rise in the share of female self-employed and those that work part-time, in addition to growth in a broader range of industries and occupations among the self-employed.

Recent ONS figures also show that the growth in self-employment between 2001 and 2016 has been driven mainly by those who have a degree (or equivalent), leading to the share of the self-employed with a degree or equivalent increasing from 19.3% in 2001 to 32.6% in 2016 as a share of total self-employed. As a share of total employment (self-employed and employed), the figures show that relatively highly-qualified individuals are becoming more concentrated in the self-employed.

Earnings growth?

The reasons for this growth has been the subject of much debate, particularly as research suggests “many fail to earn a decent living”. This recent analysis by the New Economics Foundation found that 54% of all self-employed people are not earning a decent living. It also found that the percentage of the labour force in ‘good jobs’ had decreased from 63% in 2011 to 61% in 2016, suggesting that the quality of jobs is perhaps declining.

Similarly, the ONS figures suggest that the self-employment labour market remains financially insecure for its workers. They show that the distribution of self-employed income appears centred around £240 a week, much lower than that for employees, which is centred around £400 a week.

And, according to a recent report from CIPD, their real incomes have fallen more since 2008 than those of employees.

Perhaps, then, the self-employment growth has been driven by necessity rather than choice due to a lack of opportunity in the full-time labour market.

However, the evidence suggests it is not this simple.

Despite the widening gap in earnings between the self-employed and employed, the self-employed continue to have higher levels of job satisfaction than employees. The ONS figures also indicate that self-employed workers were more likely to supplement their income from elsewhere.

This would suggest that choice probably plays a large part in self-employment.

‘Push’ or ‘pull’ effect

There has been much discussion over whether the growth in self-employment is predominantly a result of choice or necessity.

It is often seen as a sign of labour market weakness, with self-employment perceived as a ‘last resort’ where a regular job can’t be found. The evidence suggests that this motivation accounts for just a small proportion of the change, however, with most of the rise in self-employment appearing to be out of choice rather than necessity.

Indeed, the recent analysis in the Regional Studies article, which examined the extent to which self-employment was associated with local ‘push’ or ‘pull’ effects, found little or no suggestion of any net ‘recession-push’ effect on self-employment. It suggests that:

  • ‘pull’ factors are more significant in driving transitions into self-employment;
  • self-employed business ownership appears not to function as a significant alternative to unemployment where paid employment demand is weak; and
  • entrepreneurial activity prospers where local wages are higher and unemployment lower.

The uncertainty surrounding Brexit could also be having an effect as declining employer confidence has contributed to a growing number of short-term contracts – potentially making self-employment appear the better choice.

Final thoughts

As the CIPD report highlights, there are probably more opportunities for self-employment now than there were a decade ago. And the self-employed are more likely to value highly aspects of the work, such as its variety, and choice over their working hours and pay.

Across the range of job-related characteristics, it is shown that the self-employed are as satisfied or more satisfied with their working life than employees, resulting in higher levels of overall job satisfaction – a finding that is consistent both over time and from different data sources.

In a time where work-life balance is of increasing importance, it is perhaps no surprise that self-employment is the path of choice.

If you enjoyed reading this, you may also be interested in our previous blogs on the gig economy, ‘the self-employment boom’ and ‘olderpreneurs‘.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

The rise in youth markets – “transforming town and city centres with the creativity of young people”

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Credit: National Market Traders Federation (NMTF)

By Heather Cameron

As we recently reported, despite being around for centuries, and following a decline during the recession, traditional retail markets have experienced something of a revival in recent years, with a new generation of innovative young traders coming to the fore.

Latest figures indicate the sector has a collective turnover of £2.7 billion a year from around 32,000 market traders – a gradual increase of around £200 million year on year since 2013.

The last five years has also witnessed the emergence of youth markets and ‘The Teenage Market’ initiative, which are generating income for young people and teaching them valuable entrepreneurial lessons, as well as transforming town and city centres.

Specialist market boom

But this revival is not wholly in the traditional sense of the market sector. Young people entering the sector tend to trade at festivals, fairs and shows rather than traditional markets, contributing to a specialist market boom.

According to a recent survey of the sector by the National Association of British Market Authorities (NABMA), new trends in the most successful product lines – hot and cold food and drink, baked goods, handmade crafts, fruit and vegetables and mobile phone accessories – have fuelled this growth.

Festivals and shows, which are popular with a younger demographic, are increasing in both size and frequency across the UK. Many of these events also take place out of the traditional season.

Such new trends do not come without their challenges, however, as NABMA’s survey also highlighted. Traders reported escalating pitch fees, poor pitch locations and never-ending paperwork. But despite these drawbacks, traders have reported huge returns at such events, where they can turn over tens of thousands of pounds.

Both NABMA and the National Market Traders Federation (NMTF) agree that the sector needs to embrace these new trends and act to engage this new generation of entrepreneurs.

Youth markets

Indeed, national initiatives in support of youth markets have emerged in recent years to do just that.

This September will see the fifth National Youth Market take place in Manchester, an annual event run by the NMTF in partnership with Manchester Markets. Young people between the age of 16 and 30 from all over the UK trade at this event, showcasing their entrepreneurial talent.

The NMTF also supports traditional market organisers to run specialist markets aimed specifically at young people. Many towns and cities from across the UK have launched their own youth markets, such as those in Manchester and Cambridge, with over 100 such events taking place every year.

Also in its fifth year, is The Teenage Market – “a fast-growing national initiative that’s transforming town and city centres with the creativity of young people”. This initiative provides a free platform for young people to trade at specially organised events. In addition to the retail offer, it also provides a platform for young performers to showcase their talents

Created by two teenage brothers from Stockport to support their town’s large population of young people, The Teenage Market initiative has quickly expanded across the country with thousands of young people taking part in events. Following the success of the first event, it was quickly recognised that the initiative could play an important role in the town’s regeneration strategy; a role which was highlighted by Mary Portas in her 2011 review of high streets.

Revitalising town centres

According to Portas, “Markets are a fantastic way to bring a town to life… I believe markets can serve as fundamental traffic drivers back to our high streets.” And one of her recommendations was to build upon current successful initiatives “to help attract young entrepreneurs to markets and really start building the innovative markets of the future.”

Indeed, the positive benefits for the towns and cities running The Teenage Market events include a rise in footfall, an increase in spend in the local area and a rise in the number of visitors to their local market.

Not only this, but the fusion of retail and live performances has succeeded in attracting a new generation of shoppers and visitors to local markets, helping to breathe new life into town and city centres.

Final thoughts

In an era of online shopping and declining high streets, the fact that local markets led by a new generation of traders are flourishing can only be a good thing.

And with an ageing population of traders, it is arguably now more important than ever to encourage young traders in order to secure the future prosperity of the markets industry.

If you enjoyed this blog post, you may also like our previous post on street markets.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

Supporting markets to survive and thrive

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For around a thousand years, the London Borough Market has existed in one form or another.  It has survived fire, flood, plague and war – and on the 3rd of June this year, a terrorist attack.  The market has since reopened, with traders determined to continue their work and serve the local community.

Although many markets are a historic part of their host towns and cities, they are far from being relics.  Indeed, in recent years markets have experienced something of a revival.  In London alone, since 2010, the number of street markets has grown from 162 to over 250.

There are clear reasons for this – markets offer consumers and traders a number of benefits, and they make significant contributions to the economic, social and political health of towns and cities.

Economic impact of markets

Indeed, in 2015, the Institute of Place Management (IPM) conducted a comprehensive review of the impact of markets and found that markets not only have a significant turnover, they also impact indirectly on the wider economy – meaning that the £3.5 billion turnover directly attributable to retail markets is actually worth around £10.5 billion to the UK economy.

The Portas review in 2011 hailed markets as a potential saviour of the high street.  Indeed, the IPM review supports this, reporting that markets can help to increase town centre footfall by up to 25%.  This has significant economic potential.  In London, market visitors spend around £752 million per annum in nearby shop-based retailers.

Markets were also found to:

  • act as a significant employer, both nationally and at the local level
  • support intergenerational economic mobility (through family-owned businesses)
  • support the development of entrepreneurial skills in young people through ‘youth markets’
  • act as business incubators and support business formation due to their low barriers to entry, for example, enabling migrants to set up their own businesses
  • enable small businesses to reach larger businesses whom they can supply, and support other local businesses, such as farmers.
  • encourage high street diversity and create a distinct ‘identity’ for high streets
  • promote high street resilience, as they are flexible and able to respond quickly to changing demands.
  • help to utilise vacant and underused spaces within high streets
  • attract tourists, who are drawn to them because they are “unique, quirky, unusual”

Wider benefits

Markets also have a number of social purposes.  They are important places of social interaction, which facilitate community cohesion and social inclusion.  Markets can also help to improve public health and quality of life through the provision of fresh, quality produce at lower price points, which may be particularly beneficial for low-income families.

From an environmental perspective, there are also a number of benefits arising from the sale and purchase of locally produced products, including reducing pollution associated with high ‘food miles’ and reducing the need for consumers to travel to out-of-town sites, such as large retail parks, in order to make their purchases.

Challenges

Although there is overwhelming evidence that almost every street, food and farmer’s market is an invaluable asset to its local community, markets still face a number of very real threats.  These include:

  • the rise of out-of-town shopping centres, the dominance of big supermarkets, and the popularity of online shopping
  • planning and regulatory regimes that do not allow for, or restrict, the expansion or establishment of markets
  • a lack of support for markets or poor management by local authorities
  • high land values making it difficult for markets to be established

As many markets are a lifeline for areas experiencing deprivation, it is important that they receive the support that they require to survive and flourish.

Promoting and supporting markets

So, what can be done to support markets?  Earlier this year, the Mayor of London, Sadiq Khan, announced plans to establish the London Markets Board – a team of experts tasked with delivering a London markets strategy, and work to preserve and promote London’s increasing number of markets.

On a wider scale, NABMA (National Association of British Market Authorities) and the National Market Traders Federation recently published a ‘five-year manifesto’, which made a number of recommendations for ways to support markets.

A key recommendation is that local authorities work to raise the profile of markets.  There are many market-focused national initiatives such as Love Your Local Market, the National Youth Market, and the Great British Market Awards, which local authorities can become involved in.

The Love Your Local Market campaign, for example, is an annual event, established in 2012, which brings together markets across the UK.  It aims to build affection and support for markets in local communities, and offers free or subsidised pitches to start-ups to test trading conditions.  In 2013, it increased footfall in participating town centres by 10%.

Other recommendations to support markets include:

  • greater recognition of the role of markets in local economies, jobs and growth, as well as in civic local society
  • ensuring that retail markets have a voice in policy making that affects them, including planning and town centre management
  • further lifting the current burden of business rates for SMEs
  • supporting greater awareness of the sector’s employment opportunities including apprenticeships, platforms for self-employment and training hubs
  • developing and supporting sector-led initiatives that aim to support entrepreneurship and increase the amount of businesses on markets, and support them digitally
  • encouraging schools and further education establishments to work with market operators to enable people entering the labour market to embrace markets as a possible career

There are some promising signs.  Around £90 million has been invested into improving markets since 2014, and an increasing number of local authorities are making them central to town centre plans and regeneration activity.

By promoting and supporting markets in this way, the economic, social and environmental benefits can be maximised. As the 2015 review of markets underlines: “markets are an important asset to a location, and their future cannot be left to chance.”

Scotland’s space sector: a launchpad for economic growth

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Discovery space shuttle on launchpad

By Steven McGinty

In March, the UK Space Agency announced it had awarded £50,000 to the University of Strathclyde’s Scottish Centre for Satellite Applications (SoXSA) for its work with Glasgow City Council to attract entrepreneurs and start-ups to Glasgow’s innovation hub, Tontine.

Six companies will benefit from the support, which includes space industry specific business support, dedicated workshops and expertise, and administration and accommodation costs for two years.

The award is another sign of faith in Scotland’s burgeoning space industry, which has seen it become a global leader in the ‘New Space’ economy.

The development of New Space

The space industry, like many other technology fields, has been traditionally dominated by nation states, often in terms of national security.

But now, a new space industry is emerging, where private companies and entrepreneurs are developing innovative products and services in or for space. Reasons for this include reductions in funding to national space agencies, such as Donald Trump’s recent cuts to NASA, as well as the private sector’s success in innovation. For example, the company Space X has managed to launch rockets that had previously been into space – a practice which has been estimated to reduce the first stage of space flight from $60 million to $500,000.

Scotland’s role

Within a few miles of Glasgow’s city centre, a small number of research groups and private companies have gained international reputations for their work on space technologies.

For instance, Glasgow – a city more known for its heavy industries and shipbuilding – has found a niche in manufacturing low cost nanosatellites. This has led to Glasgow being crowned ‘Europe’s Satellite City’.

Glasgow’s first satellite company, Clydespace, has been tremendously successful over the past decade by developing CubeSats (a satellite the size of a wine bottle). These have been used in a range of missions, including UKube-1, the first mission to be commissioned by the UK Space Agency as a demonstrator for space technologies.

The city has also seen investment from Spire Global – a satellite powered data company headquartered in San Francisco. Spire’s satellites, which are used to gather data on weather, maritime, and aviation, were built by Clydespace. Peter Platzer, CEO of Spire, explains that:

“We have up there about 20 satellites, all exclusively built here in Glasgow.”

Mr Platzer highlights that Scotland’s confidence in Spire was one of the reasons that they opened their European office in Glasgow’s Skypark. The company received a £1.5m Scottish government grant through the agency Scottish Development International (SDI).

Scotland’s low cost base and universities with strong interests in engineering and space technologies were also highlighted as key selling points.

Young innovators have also sought to get involved in Scotland’s space sector. For example, Tom Walkinshaw, founded Alba Orbital from his bedroom when he was unable to secure a job in the space industry. His company provides PocketQube satellites (based on a design of one or more 5cm cubes) and now employs 10 skilled employees. Alba Orbital’s first satellite, Unicorn-1, is backed by the European Space Agency and is due for launch later in the year.

In academia, the University of Glasgow’s LISA Pathfinder team won the 2016 Sir Arthur Clarke Award for “Space Achievement in Academic Research or Study”. The award was given for the team’s work on developing the Optical Bench Interferometer (OBI) for the European Space Agency’s LISA Pathfinder spacecraft – a demonstrator aimed at measuring gravitational waves in space.

The future of Scotland’s space economy

A report by London Economics investigated the potential benefits of a spaceport in Scotland.

Prestwick Airport in South Ayrshire and Machrihanish, near Campbeltown, are currently competing to win a licence from the UK Government.

London Economics have set out three main advantages to having a local spaceport:

  • Spaceport operations – The activities associated with a spaceport will lead to the direct creation of jobs in commercial spaceflight or providing satellite launches, as well as indirect benefits for local suppliers.
  • Space tourism – Tourists visiting space stations or taken part in space travel are also likely to spend money in the surrounding areas and on other attractions.
  • Space-related education – Spending will increase on research and development due to the creation of a spaceport.

Tom Millar, managing director of DiscoverSpace UK, has also stated that sending small satellites into space would be a ‘viable revenue stream’. A local spaceport would reduce the costs for Scottish satellite companies as at the moment they currently have to ‘piggyback’ onto launches with larger satellites.

The report concludes by finding that a spaceport in Scotland would increase growth from 9% to 10% of the UK’s space economy in 2030.

The implications of Brexit

The results of the 2016 EU Referendum has caused uncertainty for the Scottish space sector. For example, many companies will be concerned for the rights of EU national employees, as well as their ability to recruit from this workforce in the future.

The Financial Times has also reported that changes in terms could keep UK companies out of lucrative European space contracts, such as the €10bn Galileo satellite navigation system. The European Commission are looking to change the terms of the Galileo project so that contracts can be cancelled if a company is not based in a member state. They also require companies to pay the costs of finding a replacement. If these terms are approved, it would effectively rule out UK-based companies bidding for EU projects, which would have a negative impact on the sector’s growth.

Final thoughts

Scotland’s space sector is estimated to be worth £134 million and accounts for 18% of all UK space industry jobs. Its success has been built on a combination of government support, talented entrepreneurs, and a supply of skilled engineers.

As the industry continues to grow, there will still be an important role for government, particularly in supporting innovation centres and granting licences for UK spaceports. The promotion of STEM (science, technology, engineering and maths) subjects will also be crucial, as we look to develop a new generation of space entrepreneurs to keep us ahead of this new industrial space race.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

If you found this article interesting, you may also like to read some of our other articles:

‘Olderpreneurs’ – the new generation of start-ups?

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By Heather Cameron

Entrepreneurs are often portrayed as bright young things launching start-ups, but does the reality of start-up demographics paint a different picture?

Changing demographics

The UK has certainly witnessed a boom in young entrepreneurship in recent years – the number of under-35s starting businesses in the UK rose by more than 70% between 2006 and 2014.

However, recent research suggests that the boom in young entrepreneurs may be waning. According to research commissioned by Google earlier this year, the majority of young people are “not interested” in starting a business, with four out of five young people surveyed saying they would rather work for a well-established company. Particular concerns were also highlighted over risk and instability.

The UK is, however, still ranked in the top 10 countries with the most favourable conditions for entrepreneurs to start and scale new businesses. And official data suggests that the UK continues to see record numbers of business start-ups, exceeding 600,000 in 2015, up on the previous two years.

So if it isn’t the younger generation heading up this record number, who is it?

‘Olderpreneurs’

Despite media coverage of the entrepreneurial spirit of the younger generation, the average age of an entrepreneur in the UK has actually been estimated at 47.

And according to the latest data from the Global Entrepreneurship Monitor (GEM), the most notable increase in entrepreneurial activity has been amongst the over 50 age group.

Referred to as ‘olderpreneurs’, this group could arguably be the new start-up generation.

There has been a 46.5% increase in freelancers over 50 since 2008, an age group that accounts for 72% of all self-employed people. According to official statistics there are around 1.8 million self-employed people over the age of 50 in the UK.

With an ageing population that is also becoming healthier, perhaps this shouldn’t be such a surprise.

Motivations

Motivations for people starting up their own businesses include redundancy, retirement, family circumstances, growing older and life stage milestones.

As life expectancy increases, many don’t want to give up work at the traditional retirement age, as they still lead active lives. Retirement has been cited as an ‘important tipping point’ for some, with the main motivation not to make money or grow their business, but rather something to keep them occupied or earn some extra money while doing something relatively easy.

The introduction of pension freedoms last year has also led to more over 50s using their pensions to fund new business ventures. The over 55s cashed in more than £4.7billion of their pensions in the first six months after pension freedoms were introduced.

Economic impact

And such activity is good news for the economy. It has been suggested that if the employment rate of 50-64 year olds matched that of the 35-49 age group, the UK economy could be boosted by £88 billion.

Older entrepreneurs have also been shown to be more successful than their younger counterparts. It has been highlighted that businesses run by owner-managers over 50 drive up revenues at their companies three-and-a-half times faster than GDP growth – 11.5% compared with 3.1%.

And older entrepreneurs create jobs at a rate more than seven times faster than the UK economic average.

It has also been suggested by the Prince’s Initiative for Mature Enterprise (PRIME) that start-up failure rates in this age bracket are remarkably low. It recently revealed that 95% of its members were still in business a year or more after starting up, compared to the national average of just 66%.

Final thoughts

A significant percentage of the UK population is past retirement age. And the number of people aged 50 to State Pension age is expected to rise by 3.2 million, while the number aged 16 to 49 will have reduced by 200,000 over the next 10 years.

As a result, keeping this group economically engaged surely has to be a priority.

If you found this article interesting, you may also like to read our previous articles on entrepreneurship and self-employment. 

Follow us on Twitter to see what developments in public and social policy are interesting our research team. 

The pop-up reality for youth on the urban fringe

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How do young people feel about the places where they live? And how do the spaces available to them, constrain or shape their activities?  Last week, Margaret Robertson, Professor of Education at La Trobe University in Melbourne presented a seminar at the University of Glasgow which explored these questions. The event was hosted by Glasgow University’s Urban Big Data Centre (UBDC), in collaboration with the Centre for Research & Development in Lifelong Learning.

Margaret has long-standing research interests in youth studies and cross-cultural differences, and a particular focus is on “student voice” and young people’s views and visions of their future lifestyles.

She began with an overview of Melbourne, whose population of 4 million is being swelled by 2000 new arrivals every week. This growth, she explained, is pushing the urban fringe further and further out, and this movement is transforming Melbourne into a global city.

At the same time, Margaret pointed to dramatic changes in the cultural landscape, largely due to increased mobility and technological advances. These changes are presenting particular challenges to young people, many of whom are using travel and social media to create their own “social spaces”. This “pop-up” culture can include everything from websites to impromptu skateboard parks.

Margaret’s research has found that the lived experiences of young people growing up in new housing estates on the fringes of Melbourne have, until recently, been unexamined. Among her own findings:

  • Large houses with small backyards create ‘sedentary landscapes’ for children.
  • Youth mobility is diminished with cars increasingly used for children’s travel.
  • Transport issues, especially in outer suburbs of cities contribute to a loss of independence for young people.

She explained that her findings underline the importance of personal space and special places in the lives of young people.

Above all, Margaret stressed the importance of giving young people a voice – and a real voice, not a token voice. Only by asking young people for their views, she argues, can local and national government learn to encourage the creative, entrepreneurial youth counter-cultures now possible through increased mobility and technology.

Margaret’s wide-ranging and well-informed presentation offered plenty of food for thought, although she stressed that part of the researcher’s journey was to acknowledge that there are no clear solutions to the problems affecting society.

Follow us on Twitter to keep up-to-date with developments in public and social policy currently interesting our research team.

The self-employment boom … a challenge for government?

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By Heather Cameron

There are around 4.5 million self-employed people working in the UK – 1 in 7 of the total workforce. And based on the current rate of growth, it is expected that the self-employed will outnumber public sector employees by 2020. But what impact is this shift in the labour market having on the economy and on government policy?

Growth

Earlier this year we wrote about the rise in female self-employment and entrepreneurship. And generally, jobs recovery in the UK following the recession has undoubtedly been helped by self-employment, which accounts for over a quarter of the growth in employment since 2010.

While the recession has accentuated the growth in self-employment, it is a trend that predates the downturn and it is the significant drop in the numbers leaving self-employment that has been the main driver of growth over the last five years.

Also, as people are living longer and healthier lives, many don’t want to give up working at the traditional retirement age. There has been a 46.5% increase in freelancers over 50 since 2008, an age group that now accounts for 72% of all self-employed people.

This could be seen as a positive outcome of growing entrepreneurialism, contributing to economic growth.  On the other hand, some see it as a move towards more risky, insecure work.

Why self-employment?

There is a definite attraction to being able to work for yourself and organise your own working hours. Most self-employed workers have chosen this path and there is evidence to suggest that job satisfaction is high among self-employed workers.

The freelancing model can also be beneficial to firms as it provides flexibility in access to expertise, helping them to manage peaks and troughs in demand for their services and enabling them to test new ideas with less risk.

A recent study of freelance workers found that a number of factors affect their wellbeing. When working hours are higher than their normal working pattern, freelance workers were found to be calmer and more enthusiastic. However, when the demands they face are difficult or conflicting, then anxiety increases and enthusiasm declines, potentially leading to depression.

Self-employment is therefore not without its drawbacks.

Challenges

Self-employment is often associated with a lack of stability in terms of income and employment benefits such as holiday/sick pay and pensions, and difficulties in accessing financial products and housing.

A particular issue recently has been ‘bogus self-employment’ where workers who would normally meet the legal definition of an employee are registered as self-employed, therefore not receiving any of the employee benefits afforded to registered employees. The government also loses tax revenue and responsible businesses can be undercut.

Access to training is another big challenge for the self-employed as they can only treat training that improves existing skillsets as tax deductible, meaning training for new skills is not covered. As a recent report by Demos argues, this contradicts the aspiration of policy makers to promote entrepreneurial behaviour.

Worryingly, the number of self-employed people receiving training in the UK has fallen in recent years while other European countries have seen a rise. Limited access to training could become a real concern and contribute to the problem of low pay and poor progression rates for self-employed workers and across the wider labour market.

A recent report by IPPR highlights data suggesting that the earnings of the self-employed across Europe are falling relative to employee earnings, and many are looking for more hours or another job, raising concerns over living standards among this group.

As the UK is unique in its self-employment led recovery, this may be of particular concern. According to IPPR, the growth in self-employment could be driving a rise in in-work poverty alongside the jobs recovery.

Support

With a record number of self-employed people now working in the UK, it has been argued that the government needs to better support this growing section of the workforce.

Self-employment has surpassed growth in permanent employment by 3 to 1 in the last decade, but, as Demos has recently reported, government policy has yet to catch up with this structural shift.

There have been moves towards providing support for self-employment, such as the New Enterprise Allowance (NEA), set up by the previous government, which provides people on certain benefits with support to start their own business. Figures published at the end of 2014 show that the NEA has helped to set up over 60,000 new businesses.

Nevertheless, more needs to be done to bring policy in line with the current situation.

The report by Demos makes 18 recommendations for policy to protect the flexibility that self-employment offers, while addressing power imbalances within the marketplace. These include:

  • reducing red tape for firms and the self-employed;
  • providing greater certainty over employment status;
  • creating a tailored pension scheme for the self-employed;
  • aligning the tax treatment of training for employees and the self-employed;
  • and protecting the self-employed from loss of earnings.

In July, the government launched an independent review of self-employment which will consider how those who want to work for themselves can be better supported.

Due to be published in early 2016, perhaps the outcome of this will herald a shift in policy which is in line with the shift in labour market structure.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

The Idox Information Service can give you access to a wealth of further information on labour market policy. To find out more on how to become a member, contact us.

Further reading*

Neither one thing nor the other: how reducing bogus self-employment could benefit workers, business and the Exchequer

Self-employment and ethnicity: an escape from poverty?

Policy brief on sustaining self-employment: entrepreneurial activities in Europe

Business start-ups and youth self-employment in the UK: a policy literature review

Making sense of self-employment in late career: understanding the identity of olderpreneurs, IN Work, Employment and Society, Vol 29 No 2 Apr 2015, pp250-266

Self-employment: what can we learn from recent developments?, IN Bank of England Quarterly Bulletin, Vol 55 No 1 Q1 2015, pp56-66

The changing workforce (increased self-employment and flexible working practices), IN Business Voice, Jun/Jul 2014, pp20-24

*Some items may only be available to members of the Idox Information Service

Entrepreneurship – the way to drive growth?

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By Heather Cameron

With endless negative reports on the state of the economy over recent years, the findings of a new study by the Enterprise Research Centre (ERC), The UK growth dashboard 2015, should make for encouraging reading.

Start-ups at record level

The report shows that small businesses have finally made up the ground lost since the recession, with jobs, start-up and growth rates returning to pre-crisis levels in 2014 for the first time since 2008.

Professor Mark Hart, Deputy Director of ERC, said:

“The UK Growth Dashboard provides us with the most detailed picture of where entrepreneurial activity and business growth is occurring around the country.

It shows us that small businesses in every corner of the UK are growing at their fastest rate since the Great Recession, while more and more entrepreneurs have the confidence to take the plunge.”

The UK now has the highest number of start-ups in its history. There were 581,173 new business registrations in 2014, representing an accelerated increase on previous years, and figures from the Office for National Statistics show that the number of firms dropping out of the register has fallen by 6%.

According to the 2015 Global Entrepreneurship Index, the UK is the most entrepreneurial country in Europe and ranks fourth overall.

Regional disparities

Despite such growth however, the dashboard reveals that large regional disparities still remain in entrepreneurship and small business growth across the nations, city-regions and each of the 39 English Local Enterprise Partnership (LEP) areas.

In England, a complex picture emerges in terms of LEP geography, which challenges some of the presumptions made about growth hotspots across England.

While London dominates, as expected, there is not a simple north-south divide. Major city regions and more rural LEPs from across the country also have above average rates of start-ups. There are 11 local areas in England with above average rates of start-ups showing early signs of scaling. London tops the list but the local area of Birmingham is close behind, as are the local areas of Newcastle, Leeds, Manchester and Sheffield.

There are also a number of places with above average proportions of fast-growing firms. These include some areas in the South East such as Oxfordshire and Thames Valley. Perhaps surprisingly however Leicester and Leicestershire, Greater Birmingham and Solihull, Northampton and South East Midlands LEP areas as well as Greater Manchester, Liverpool and Leeds City Region LEPs also come under this category – showing that some of the fastest growing businesses in the UK are delivering jobs and revenues as well as wealth for their owners outside London and the South East. Perhaps entrepreneurial activity could therefore help to combat the traditional north-south divide in terms of growth.

Economic impact

Indeed, there is evidence that entrepreneurial activity has a positive impact on economic growth independent of other factors.

A number of benefits recently highlighted include:

  • enhanced economic growth through introducing innovative technologies, products, and services;
  • existing firms are challenged to become more competitive due to increased competition from entrepreneurs;
  • new job opportunities in the short and longer term;
  • raised productivity of firms and economies;
  • and accelerated structural change by replacing established, inflexible firms.

It is argued that such benefits will be greater in economies where entrepreneurs can operate flexibly, develop their ideas, and reap the rewards.

Barriers to growth

Regulatory barriers have been cited as a significant impediment to successful entrepreneurship, such as the need to buy permits or licenses. The above report argues that governments need to cut red tape, streamline regulations, and prepare for the adverse effects of job losses in incumbent firms that fail because of the new competition.

Lack of capital, risk to household income and concerns about lack of skills and impact on future career are also significant barriers to enterprise. A recent report from the Social Market Foundation suggests that these barriers are preventing potential ‘high-value entrepreneurship’, which, it argues, has the widest positive impact on the UK economy. While the UK has record levels of entrepreneurship overall, it lags behind other countries on rates of high value entrepreneurship.

The growth dashboard similarly reports that skills and staff, and finance are in the top four main barriers to growth among clients in England. These are a particular barrier in more rural LEPs.

Way forward

It would seem that policy-makers need to help overcome these barriers and encourage the support of entrepreneurs directly rather than impeding their potential with unnecessary regulatory burdens.

The SMF report recommends:

  • prohibiting non-compete clauses in employment contracts;
  • championing flexible working;
  • introducing a ‘right to return’ for people leaving work to start a new business;
  • and reinstating tax reliefs for corporate venturing.

Perhaps if such barriers can be overcome, we will see record levels of all types of entrepreneurship and thus increased productivity.

The Idox Information Service can give you access to a wealth of further information on entrepreneurship and economic development – to find out more on how to become a member, contact us.

Further reading

Culture, entrepreneurship and uneven development: a spatial analysis, IN Entrepreneurship and Regional Development, Vol 26 No 9-10 Nov-Dec 2014, pp726-752

Business start-ups and youth self-employment in the UK: a policy literature review (2015, University of Brighton)

Policy brief on expanding networks for inclusive entrepreneurship (2015, OECD)

Commercial councils: the rise of entrepreneurialism in local government (2015, Localis)

Self-employment as a route in and out of Britain’s South East, IN Regional Studies, Vol 49 No 4 Apr 2015, pp665-680

Cultural diversity and entrepreneurship in England and Wales, IN Environment and Planning A, Vol 47 No 2 Feb 2015, pp392-411

Activating jobseekers through entrepreneurship: start-up incentives in Europe (2014, European Employment Policy Observatory)

Economic resilience and entrepreneurship: lessons from the Sheffield City Region, IN Entrepreneurship and Regional Development, Vol 26 Nos 3-4, pp257-281

Is entrepreneurship a route out of deprivation?, IN Regional Studies, Vol 48 No 6 Jun 2014, pp1090-1107

*Some resources may only be available to members of the Idox Information Service