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A note from the director: growth for growth’s sake?

Published on March 22, 2018

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For the second in our series of ‘witness statements’ as to why we’re doing what we’re doing, I’m going to talk about Growth. Economic Growth. Our view is that we can help create a growing economy, but that economic growth is only really valuable in a place if it benefits those in that place, so that means as many people as possible should play a part in it.

If we create good quality employment that is accessible to a broad range of people, and those jobs are filled by people with different skillsets, perspectives, and backgrounds then those businesses are likely to be more profitable (according to McKinsey) and so those jobs are likely to be more sustainable. A virtuous circle. This does not describe utopia by any means, but Engine Shed finds itself with levers that it can pull that can, we believe, make a positive contribution to this, in perhaps a different way than other organisations.

On one hand we host a business incubator (SETsquared) and an accelerator (Oracle Startup Cloud Accelerator) both of whose missions are to grow good quality businesses. On another hand, we are working on long-term inclusion activities (see last month’s newsletter) and finally (on our third hand?), we are working on creating a vibrant ‘ecosystem’ that allows companies to scale easily – i.e. grow.

We have learned from our business incubation experience over the last 15 years and can translate the things which have worked well at that level – such as being an honest broker, focusing on the people in the business, and not being distracted by arbitrary targets which risk distorting behaviour.

The SETsquared team sit alongside the Engine Shed team, within the same company (which is owned by the University of Bristol) and work to the same values and principles. Not surprisingly, they have done exceedingly well at producing good solid businesses with very low failure rates, high revenue levels, and good quality management. In fact over 1,300 people are employed by the current membership of the Bristol SETsquared Centre (and there’s another SETsquared incubator, equally as good and working to the same model and values, in Bath), and given the very low failure rates of the businesses, these are typically sustainable jobs. While there’s some work to do in making more of those jobs more accessible to a broader range of people in the city-region (and thus tap in to its rich diversity) some of that is underway, and we will be announcing more of that soon.

We are helping create good quality jobs. We are helping raise aspiration levels of young people. We are trying to make those jobs as accessible as possible, and so what else can we do?

While it’s hard work to start a business, the next stage, “scaling up”, is different, and can be even harder. We have done a lot of work to understand what the strengths and weaknesses in the local ‘ecosystem’ are and then do what we can to fill the gaps. Our aspiration is that we don’t fill those gaps ourselves, but nudge, persuade, or fund others to do so. That is more likely to create a sustainable ecosystem – one that feeds itself rather than relying on state intervention to sustain. Arguably, an ecosystem shouldn’t require continual stimulus. Otherwise it’s a ‘farm’.

We can, and do, also talk about and promote the ability of growth businesses to develop values-driven cultures, inclusive employment practices, and delivery of social impact. We are never short, for example, of generosity from companies in all sectors to support the various projects (like our work with primary school students). For example, our next Scale Up Briefing will be on keeping people in your business happy – and values and culture are key to that.

You can read up on how we have approached the growth agenda here and the various pieces of work that we have explored, shouted about, and nudged into action here. You’ll see that our style is to bring people together to talk about issues and then go away and solve a problem. Such an example is our support of PwC and BusinessWest to initiate their ‘Scale South West‘ program. By lending our name to that, we believe we have helped it connect in some really great tech companies that otherwise might not have seen the program.

An example of where we have seeded a project (which we hope someone else will pick up and run with) is our Scale Up Ecosystem Map.

Next month I’ll talk about Innovation – what it means to us and where we think we can add value, and, importantly, where we think we will need help identifying where we can add value.

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