On 5 July, the CBI in partnership with Virgin Media O2 Business, hosted its fourth regional roadshow event.
Held at John Moores University in Liverpool, Hashi Mohamed, Contributing Editor at Tortoise Media was joined by businesses to discuss how clusters can help leverage access to finance at a regional level to drive growth.
Leading business figures from the across the UK came together to share their insights on how clusters can help to leverage the strength of the UK finance sector, build out regional business finance and help firms across the UK access the finance they need. Crucially, there are tremendous unique opportunities which dynamic clusters can provide to drive collaboration between business, finance and investment funds, stakeholders and government for unlocking capital and bringing collective action to places and locations to thrive and succeed.
We have explored the ways in which this can be applied within a place or region at scale through a strategic approach to cluster based activity, led by business.
Read the sense maker guide
The sensemaker guide provides background and an overview of clusters in the UK to help stimulate thought.
Event readout written by Hashi Mohamed, Editor at Tortoise
Clusters ThinkIn: How Can Regions and Nations Access Finance to Drive Growth?
On 5 July 2022, the CBI’s Clusters roadshow visited Liverpool for its fourth ThinkIn. The event – hosted by Liverpool John Moores University and sponsored by Virgin Media O2 Business - brought together leaders from local politics, corporate finance and venture capital to discuss how the UK’s regions and nations can access growth capital.
Professor Mark Power, Vice Chancellor of Liverpool John Moores University, welcomed the group framing the discussion by highlighting the importance of anchor academic institutions to this conversation. He told us that along with the University of Liverpool, his institution contributes 30% into the local economy.
To follow Chris Wilford, Director of Financial Services Policy at the CBI, set the context of the session by framing long term regional growth as one of the largest challenges that is faced by the country today.
Representing the Liverpool City Region Combined Authority, John Fogarty, underlined the importance of local devolution, before highlighting access to finance as a pressing issue in the city region:
“The combined authority has very significant investment potential,” Mr. Fogarty said, “[but] it’s traditional grant funding, it’s gap funding, it’s not sustainable over the long term, and it doesn’t match the scale of opportunities that there are here,” he said.
Part of the problem in accessing funding, attendees agreed, was education. Companies looking to scale up don’t always know where to find funds, while firms looking to deploy their capital can’t always find suitable targets.
In London, the existence of a start-up and scale-up community encourages knowledge sharing, whereas Ehsan Ashraf, Associate Partner for Strategy & Transformation at EY, commented “if you’re based in the Northeast, in Scotland, in Liverpool, there probably aren’t as many resources that you’re aware of that you could go to readily,” he said.
Sue Barnard from British Business Bank was more optimistic about the available opportunities in the region; she explained that “Liverpool does have that gateway, but businesses don’t know what is there [...] We have to do a lot of work ourselves to try and generate interest and awareness of funds.”
Comparisons to London were consistently expressed, with the concern that the pull of the City’s financial power being a major barrier to strengthening regional financing. “Anyone who’s an SME or is looking for capital, they’ll always seek to go to London to raise money, whereas they may not actually necessarily realise there’s lots available to them on their doorstep,” said Ehsan Ashraf.
That said, the landscape is changing. Andrew Horner, Barclays’ Regional Director for SME Banking in Scotland & the North of England, referenced a project to connect Greentech firms in the Northeast to investors in London. Mr. Horner said “certain London VCs have responded to this work by saying, ‘actually, Newcastle isn’t that far from the City.’”
As we’ve heard in previous ThinkIns, clusters with a strong reputation in a specific sector might find it easier to attract attention – and investment. Manchester’s ecommerce companies, like Boohoo, were used as an example of how the success of a cluster can help in making a place desirable to live. For the first time, Mr. Ashraf noted, Manchester now retains more of its graduates than it loses.
Simon Robeson, Co-Founder of North East Capital, emphasised how important case studies are in inspiring other entrepreneurs to seek out investment, but it became clear that there are cultural barriers in Liverpool in particular that hinder the city region’s narrative.
As Sue Barnard put it, entrepreneurs in Liverpool “don’t shout about themselves,” with Maggie O’Carroll, CEO of The Women’s Organisation echoing the lack of a strong narrative in the region by saying: “Part of the problem is the fact that we pick the same companies to talk about all the time.”
On top of businesses’ reluctance to talk about their own success in order to inspire others, Simon Robeson also highlighted how many of the businesses in the North of England are multi-generational family businesses, where a culture of caution and an avoidance to take on risk is heavily entrenched.
Finally, a recurring theme that arose, as with our other ThinkIns, is access to skills, housing, and adequate infrastructure, which the group agreed impacts hugely on regional growth. When taking the Liverpool city region, in particular, a lack of growing space was raised as a key concern.To conclude, the feeling amongst ThinkIn attendees was one of optimism for the region, with an abundance of opportunities for finance being discussed. The challenges that arose in encouraging businesses to capitalise on this are:
- Storytelling - regional narrative that can challenge fostered cultural barriers
- Great partner collaboration - a need for successful case studies within a cluster or region as inspiration
- Strong leadership - the importance of devolved leadership, in particular
- Supportive policy - the right policy levers need to be in place, but also an education as to what is available
We will continue to reflect and assess the success factors as we continue the roadshow to Birmingham next, where we’ll be considering: How can good leadership drive regional & national growth?
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Find out about our event partners, Virgin Media O2 Business
Virgin Media Business and O2 Business have joined forces to reimagine connectivity – as a digital partner that helps UK organisations rise to the challenge of the new working dynamic between companies, consumers and their communities.
Virgin Media O2 Business plays a leading role in supporting the public sector and businesses of all sizes to achieve more, from small and medium organisations right up to large enterprise and wholesale partners. This includes offering a variety of managed connectivity services and flexible working capabilities, security, data insight, 5G private networks and cloud solutions, as well as wholesale services to other operators and partners.
Virgin Media O2 Business is committed to using the power of connectivity to share more with communities across the UK, taking action to close the digital divide and helping to build an inclusive, resilient, and low carbon economy.
For more cluster resources visit the CBI's Clusters Playbook.