The North East is a Great Place for Enterprise
Posted on the 5 July 2018
James Robson MBE, Chairman, Entrepreneurs’ Forum
Anyone who reads the pages of the Journal, scrolls through Chroniclelive.co.uk or is, indeed, in business in the North East will endorse the belief that that the region is a great place for enterprise.
We have some very talented entrepreneurs, a motivated workforce and diverse industry base with companies, such as Ineos, Barbour, and Greggs, that are leaders in their field.
However, the region is often seen as a poor relation to other parts of the country. Perhaps we are a victim of geography, not only in terms of our distance from the country’s so-called beating heart of business in London and the South East, but also due to our relative size.
The most recent Business Population Estimates, published by the Office of National Statistics at the end of 2017, reported that, of the five million private businesses in England, the North East is home to 142,000 firms compared to London and the South East with a combined two million businesses.
We also have the lowest business density rate in the UK, with 657 businesses per 10,000 population, again with London topping the charts at 1,519. This probably has a lot to do with the historical structure of employment in the region being dominated by large employers in ship building, steel making, coal mining & chemicals.
But, while geography may be an issue, I do believe there are some challenges, which if overcome, could boost those numbers. I was recently asked by the Journal to comment on a report from the British Business Bank that stated less than 0.5% of Business Angel investments were in the North East, which is hampering growth.
I honestly believe, as I said previously, there are many angel investors in the region and perhaps even that figure is likely to be under representative of the true picture. It does, though, demonstrate that more can be done to attract high net worth individuals into angel investing.
Part of this is down to educating SMEs that are often reluctant to relinquish equity in their businesses, particularly in family firms, to someone with no direct connection to the enterprise. However, for what could be a relatively small investment, they would bring in considerable experience and expertise that would support their business growth ambitions.
The report suggests that initial investment average around £20,000, which is a lot lower than I expected, and maybe a more comfortable figure for owner managers considering their first steps towards working with an angel.
I myself am working with businesses such as GRN Sportswear and Ojee Golf, which are benefitting as much from my insight and advice as they will from the financial investment I’ll be making in the near future using a Crowdcube fund raising round.
For the North East to succeed there are a number of elements to pull together. This includes greater collaboration between businesses and our excellent universities and maximising on the financing opportunities that come with schemes like the North East Fund, but also to generate more relationships between investors and SMEs.
With these elements influencing our eco-system then perhaps the region will be better recognised, anecdotally and through statistics, for being an enterprising environment.