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Winds of Change

The University of East London was the first university in London to create business incubation and hot-desking units on its campus. Knowledge Dock, which hosts up to 65 businesses and 150 jobs at a time, came into being in 1999 and subsequently joined the European BIC(Business and Innovation Centre) Network.

Knowledge Dock was created in response to a massive economic shock. The industrial economy in the area had declined and in many cases disappeared completely. Change of many kinds - automation of production, privatisation of major public businesses, globalising supply chains, cheaper locations, new international competition – radically altered east London’s economy. Hundreds of thousands of jobs were lost and the human impact was tremendous. Earlier in its history, UEL had research relationships with companies that were operating locally such as Ford and Thames Water, however these were exceptions. In practice, East London was strong in terms of production locations, but ?t lacked R&D infrastructure, so as the economy changed, starting points for rebuilding a knowledge-based economy were few. Simply stated, east London was not an ‘intelligent place’.

The last three decades

Over the last 30 years though, there have been tremendous efforts to create a new economy. Attracted by very large UK Government investment in new transport infrastructure, international investors have created new business locations such as Canary Wharf, O2, Westfield Stratford City and the ExCel event and exhibition centre. The knowledge and visitor economies have together moved eastwards as London’s core economic strengths in financial and business services, creative industries, tourism and retail expanded. This brought perhaps 150,000 new jobs to this once-struggling area. This new economy now demands higher levels of skills and makes extensive use of new technologies. However, it is an open question as to whether the change is creating a new, strong, local knowledge base or whether it represents talent recruitment or technology purchase from wider and more fluid global markets.

The games

The London 2012 Olympic Games add a new dimension to this evolving picture. By regenerating 2.5 km2 of land close to the City of London (rather than London’s periphery), that are as close to the City as fashionable districts like Knightsbridge, the Games have opened up a completely new development area and intensified commercial interest in London’s east. The Olympic Park’s permanent venues, in combination with the existing infrastructure of O2 and ExCel, create one of the largest concentrations of sports spectatorship in Europe. Served by Stratford’s International Passenger Station, London City Airport and in 2019 by London’s new rapid Crossrail link to Heathrow, this area’s development will most certainly serve to enhance and expand the scope of London as an international business and leisure destination.
While the Olympics will change London significantly, it remains to be seen what its impact will be on the knowledge base of the London economy. Part of the answer will lie in business activity attracted to the Park.

There are two main contenders to occupy the 100,000m2 of space in the press and broadcast centres. The first is a dedicated fashion and textile manufacturing centre aiming to create a destination for wholesalers, buyers and the creative industries. The bid involves a fashion centre with offices, an incubator, manufacturing and creative uses, plus a fashion college and fashion e-tailing, as well as media centres. The second is an ‘innovation city’ accommodating a cloud computing centre, research labs, post production, graphic designers, digital education and an innovation and research centre with links to higher education showcasing technology. The latter potentially links to the UK Government’s “Tech City” development agenda which is focussed on growing the new digital business cluster to the east of the City of London. The latest development in Tech City, for example, is the business campus created by Google.

What next?

These bids suggest a new stage in economic development. The big ventures in London’s east over the last 30 years, such as Canary Wharf, have been about locations for large corporates or multiple business. Their supply chains are in the mainstream of office building requirements, office technology, retail procurement, catering, and so on. They have not been great generators or attractors of new, innovative small business so far, especially in the tech or creative space. Companies in these sectors are mushrooming in the east – hence Tech City - but until now the reasons have been cheaper location and proximity to the rest of London. UEL’s Knowledge Dock and similar facilities have grown new businesses, but there has not been a rich sense of connection to a wider developing local economy with a strong knowledge component. This may now begin to change.

The Olympic Park bids and parallel ambitions for major sites such as the Royal Docks where Siemens is about to open. The Crystal and its global sustainability centre... these could be the drivers of a new wave of development. A successful focus on creative, technology, sustainability and biotech sectors would provide UEL and other local higher education institutions with a business milieu that excited and promoted the demand for start-ups.

The UEL stance

UEL has created a haven for start-ups in an economic environment that has not been historically fertile. We are now looking to broker opportunities as the local economy diversifies and in particular becomes friendlier to small innovative companies. Google is not investing in Tech City just to make friends with the UK Finance Minister. A key form of business development for very large companies is to buy small, innovative ones. Google has therefore created a magnet for fast-moving commercial ideas and it isn’t the only big company interested in doing this. What UEL has in common with Google is that it has invested in physical space to be part of an ‘intelligent place’. In the last century, incubation had to be justified as an appropriate activity for higher education. That battle has been won and now, incubation is coming of age as a place-making activity.

Our challenge in this new environment is not incubator management, but stimulating the supply of innovative ideas, particularly from the student body, which can then populate our business space. Our flagship intervention is an annual competition called e-Factor launched in 2006. The difference is that this is a business idea challenge, not a conventional business plan competition. The winning students get cash and support for development. The aim therefore is not a plan, but a working business.

An intelligent future

We are not claiming to have mainstreamed this approach or to have a pipeline of hundreds of students coming through. That would be fantastic – but not true! However, what is true is that this couldn’t have happened 15 years ago - none of the above combination of factors was available. But it can now – we have developed and grown and innovated through our experience of running an incubator. UEL is now rethinking its concept of business incubation – there is a shift from operating a business location that needed to be unlike its wider environment to one that is convergent with a sense of ‘intelligent place’.

London 2012 is going to make a big difference to us, over time, but it is not certain what that will amount to. We are very clear that there are great challenges here. Commercial development, for example, is not just a matter of economic concern, but a question of the quality of social life in terms of promoting business interaction. Active academic alignment with such development ambitions is not achieved by simple policy decisions. It would be very interesting to harness the unique experience and expertise of the global incubation networks to share understanding of how business incubation interacts with the evolution of the digital economy in different places. We may learn a lot from each other.

e-Factor

The 2012 winner of e-Factor, Alex Oviawe’s Precision Sports Performance Systems, is a GPS-based sports performance measuring device using cloud computing and mobile telephony to give smaller-sized clubs and teams the real-time performance measuring capacity currently only available to affluent elite in the sports arena. Alex is currently doing an MSc in Sports Strength and Conditioning and he also works at the new SportsDock sports centre (the largest of its kind in London), which will be used by Team USA during the Games. Alex will take his business into Knowledge Dock as part of the winner’s package. He has the opportunity to grow his company as a sports tech business: operating in the UK’s largest sports hub in London’s east and reaching into new markets. If he succeeds, the incubation concept that supported him will have been a combination of study, relevant work, stimulation to innovate, initial investment, profile (the London Games, Team USA), and a sense of this being the place to do business. All of these were provided by or through UEL – the university acting as the incubator.

Clusters

The ‘cluster’ as a concept has gone in and out of vogue in UK politics. Policy-based attempts, as opposed to market-evolved actions to create business clustering, have not been successful at scale. Too often, the rationale has been ‘we want this to happen’ not ‘the conditions are right for this to happen’. However, if a new wave of business formation is in prospect, in the kinds of sectors identified, then conditions for new clustering are better in London’s east than ever before. The Higher Education sector itself is more aligned. There is demand from students and crucially the market will be there.






Martin Longstaff is Head of Research and Development Support at the University of East London. He is responsible for external research and knowledge exchange project funding and developing external relationships to enhance the role of the university as a key driver for local and regional economic development. Martin has a particular interest in developing new business clusters in Knowledge Dock, the university’s business incubator.

www.uel.ac.uk/knowledgedock
Published on 23-05-2012 09:59 by David Tee. 1072 page views

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