Business Premises: Honey Pots & Hives- Maximizing the potential of rural enterprise hubs - Dr Paul Cowie, Research Associate, Centre for Rural Economy, Newcastle University
Business Premises: Honey Pots & Hives- Maximizing the potential of rural enterprise hubs - Dr Paul Cowie, Research Associate, Centre for Rural Economy, Newcastle University
1. Honey Pots & Hives: Maximising the
potential of rural enterprise hubs
Dr Paul Cowie
Rural Enterprise Support Workshop
Enterprise Research Centre
27th February 2014
2. • The CRE/RGN partnership
• One of five UK Government pilot programs
funded from 2012 -2015 to pilot new ways to
overcome barriers to economic growth in rural
areas
• NE RGN theme was ‘rural enterprise hubs’
• Part of the CRE research project was to
establish what a rural enterprise hub was and
what it should do.
3. • Building on the rural economy knowledge base
already out there:
– Dominated by atomised microbusinesses
– Significantly higher levels of home-based businesses
– Difficulty in gaining access to extra-local markets and
networks
– Overcoming dominant preconceptions of rural
businesses: lifestyle businesses, low-tech and no-
growth.
• How do rural enterprise hubs fit into this picture?
4. • Overview of hubs
– There is a mix ownership: 50% private (most large estates); 33% not-
for-profit; 17% local authority
– Smallest hub (Amble 4ways) 7 units
– Largest (Berwick Incubator) 35 units
– Range of units from 9m2 to 473m2
– Not as much physical flexibility as expected – only 2 were able to adjust
the size of units and mainly by letting two adjacent units
– Not much flexibility in relation to tenure. Only 1 allowed
subletting/sharing and 2 worked on ‘easy in, easy out terms’
– Fear of unknown and lack of legal capacity to accommodate flexible
arrangements
– They are under financial pressure: higher overheads, more empty units
and longer re-let times.
– Significant amounts of cross-subsidy within property portfolios
5. • Hubs are spread
thinly across the
region
• Most are focused on
accessible rural
locations
• However this is not a
complete picture
6. • Building a typology:
• Two dimensions to
differentiate hubs:
– X–axis relates to the
provision of services and
support – traditional
incubator differentiation
– Y-axis relates to nature of
hub: honeypot or hive – the
rural dimension.
• Gives 4 broad typologies
of hubs
A destination
hub which is
only lightly
managed
A destination
hub which
wide ranging /
intensive
support’
A hub with
mainly B2B
occupiers
which is only
lightly
managed
A hub with
mainly B2B
occupiers with
wide ranging /
intensive
support’
7.
8. • The stakeholder engagement with hub owners/managers
revealed a number of issues:
– Hubs are businesses in their own right.
– They feel as isolated and disconnected as the businesses the
host.
– Most have little or no experience of managing this type of
premises.
– They needed to be networked as much as the businesses within
them.
• The NE Hub network has now been founded.
– Links rural and urban hubs in the NE
– Shares best practice
– Helps business move to grow-on space.
– Still finding its feet and developing
9. • Hub Occupiers
• General statistics
– Younger businesses in
hubs than general pop.
– Average FT employees =
4.9 (4.5 in RBS)
– Average PT employees =1
(2 in RBS)
Rural Business
Survey (2009)
Hub Occupier
Survey (2013)
0 - 2 years 8% 41%
Over 2 - 5 years 16% 6%
Over 5 - 10 years 20% 29%
Over 10 - 20 years 20% 12%
Over 20 - 50 years 25% 12%
Over 50 years 11% 0%
10. • Customers
– More likely to be B2B
than B2C
– More likely to serve a
market which is
regional or national
than general rural
business pop.
11. 0%
20%
40%
60%
80%
100%
120%
Factors influencing move to hub
Of no
relevence
Not
relevant
No opinion
Relevent
Very
relevant
0%
20%
40%
60%
80%
100%
120%
Barriers to growth - Hub
Occupier Survey
Strongly disagree
Disagree
Neither agree nor
disagree
Agree
Strongly Agree
12. • This seems to suggest a two
stage process. Possibly a
transition.
• 58% of businesses in hubs
had moved there from home.
• This suggested rent and
flexible letting terms can be
used to help ease the
transition to a more
commercial business outlook.
• Later support can be included
to foster collaboration once
they are settled in the hub.
13. • The final chart shows the
networking activity
currently taking place in
the hubs.
• Again in contrast to
expressed wishes very
little collaboration taking
place.
• Lots of informal
networking but not clear
what added value this
brings
0%
20%
40%
60%
80%
100%
120%
Networking Activity within
hubs
Daily
Weekly
Monthly
Less than Once a
month
Never
14. • RGN has supported the development or
improvement of 5 hubs in the first round
and [ ] in the second round
• Strong demand for space in the new hubs,
a number were filled by word of mouth.
• In one case the return of a home-based
business started locally now international
• Still much to do in terms of networks and
support
15. • Conclusion
• Need to take into account the differences between hubs i.e. the Hub
Typology and the nature of the hub occupiers.
• Hubs seem to offer an affective bridge between early stage/home based
businesses and a more commercial mature enterprise:
– This offers opportunities for the hub to create a wider network of home-based
businesses as a pool of potential occupiers
– Offers opportunities to deliver targeted businesses support to these businesses.
This could be both hard (business skills) and soft (mentoring)
– A two stage approach may be needed. Concentrate on the bottom line issues,
rent and tenure, and later develop the other elements, networking and
collaboration
• Hubs are businesses themselves, they need to network and
collaborate just as much as the businesses they support.
16. • Thank you
• The full report can be found at:
http://www.ncl.ac.uk/cre/publish/researchreports/Honey%20Pots%20and%20HivesFINAL
.pdf