Bradford scale-ups lead the pack in city region growth programme

Anyone who doubts the UK’s standing as an enterprising nation should have a look at the latest analysis of high-growth businesses. According to most recent ONS data, the UK is now home to 36,510 scale-ups. These are defined as companies growing their turnover or headcount by more than 20 per cent a year. Incredibly, the number of UK scale-ups has increased by 35 per cent since 2013, outstripping GDP growth over the period of just 9 per cent.

This is due to the outstanding efforts of our entrepreneurs, the men and women who never take no for an answer, whose persistence and determination are creating wealth and prosperity. Their contribution is illustrated by their £1.3 trillion in combined turnover and their employment of 3.4m people. These figures, supplied by the ScaleUp Institute, demonstrate the UK truly is one of the best places in the world to grow a business.

We are doing our bit in Bradford. Regular readers will know that our district is home to 48 scale-ups. Together, these account for £1bn in turnover and support 8,000 jobs. Importantly, we are working hard to help more Bradford companies join their ranks through initiatives like the Leeds City Region Enterprise Partnership’s (LEP) Strategic Business Growth programme, a £2.7m package of support for ambitious SMEs with growth potential in the Leeds City Region.

The programme is providing advice, specialist workshops, peer-to-peer networks, online growth content and funding opportunities to businesses across the region. It is being delivered by Winning Pitch, an established coaching company which has worked with the likes of Goldman Sachs, Google, Barclays and British Business Bank. It launched the programme on behalf of the LEPin 2017 and a progress report last week has revealed that two of the top-five performers on the programme are based in Bradford.

The first is a designer and manufacturer of specialist building products and is a market leader in its sector with a great track record of innovation in product development. The company has doubled headcount since 2016, exports to more than a dozen countries, works with the University of Bradford to develop skills among its staff and last year completed a major investment in manufacturing facilities in Bradford to boost productivity. This business is doing everything right to secure growth.

The second is a niche provider of payment services which helps to increase financial inclusion. It has a national client base and last year relocated to new offices in the district to accommodate its expansion plans. Headcount has doubled in recent years. This company continues to develop new products and services for its customers. Again, it is doing everything right to secure growth.

While these two businesses serve entirely different markets, they share similar attributes. Both are led by entrepreneurs. Both have been trading for more than a decade, both are in strategically important growth sectors for our region and both are planning well for the future. It takes a long time to build a successful business and it can be difficult and lonely at times but the message I want to share is that there is support available for mature businesses as well as start-ups.

As is always the case, business support programmes are what companies make of them and the more they put in, the more they can expect to take out. I know the programme managers have approved 37 grants totalling more than £900,000 since the scheme was launched, including four in the Bradford district. Grants have supported growing businesses investing in new capital equipment, and will lead to the creation of over 180 new jobs.

One of the participants said: “The Strategic Business Growth programme has been pivotal in the growth of the company. We’ve been able to access regular support to overcome some of our key growth constraints and this has given us the confidence to set ambitious goals for the future.” Its support included three days of account management, 20 days of coaching, 22 workshop and peer-to-peer events and capital funding towards a new office. Group turnover has risen from £3.3m when it joined the programme in summer 2017 to £7.8m at the year ending December 2018. That looks like a good return to me.

Ambition is everything. Among Bradford’s base of 15,000-plus businesses will be a sizeable number on the verge of strong growth in turnover or headcount. Companies like these are busy creating successful futures for themselves, their workforces, their communities and Bradford in the broadest sense. This is something we can all be proud of.

• Dave Baldwin is chairman of Bradford Economic Partnership and chief executive of Burnley Football Club

Private equity needs to get out of London

Some people need to get out of London more often. I’m talking about private equity guys – they tend to be guys – and I’m mentioning this because of a new report which showed that companies in and around the capital receive three quarters of all equity investments in the UK.

Research from Leeds University and Imperial College London showed 75 per cent of total investment value, including venture capital, private equity firms, crowd funders and local and national government bodies, went into firms in London, the South East and the East of England, including Cambridge. The report revealed a UK equity gap – the shortfall between potential demand and supply of finance – of £10.5bn in 2017, including £565m in Yorkshire and the Humber. The authors point out that while demand for investment is smaller outside London, the supply is much more restricted.

Professor Nick Wilson, one of the authors, said: “Funding continues to be concentrated in London and the South East, which is detrimental to efforts to rebalance the economy. What is particularly concerning is that the concentration of equity investment into the capital is rising – London is dominant and that dominance is further growing.”

There’s no shortage of high-growth firms in our district. In fact, Bradford is home to 48 companies defined as scale-ups. These are enterprises with average annual growth in employees or turnover greater than 20 per cent per annum over a three-year period (and with more than 10 employees at the beginning of the period).

These are just the sort of businesses favoured by private equity. They are productive, they create lots of high quality jobs, they are innovative and international, they can be found across all sectors and they tend to be diverse. In Bradford, they account for combined turnover of £1bn and together employ 8,000 people. For a district with a £10bn economy, you can see just how important their contribution is.

Our new business pipeline is considerable. Latest figures from the Centre for Entrepreneurs show 4,127 businesses were formed in the district last year. That’s 15 new start-ups every calendar working day. This represents growth of 2 per cent from 2017 and made Bradford the 10th most popular place to start a business in 2018, up from 14th the previous year. These start-ups are benefiting from business rate relief, road infrastructure, number of job vacancies, cost of commercial rent, and business survival rate, the key factors analysed by Barclays when it announced that Bradford is the best place in Britain to start a business.

Given the underlying dynamics, I have to say that London private equity is missing a trick. The industry is sitting on enormous amounts of ‘dry powder’: $2.1 trillion worldwide, according to financial information firm Preqin. This money has to be deployed somewhere and certainly there are plenty of deals to be done in our district. The Bradford-based Business Enterprise Fund, which provides finance and support for small businesses across the North, has invested £16m in 780 businesses over the last two years, including more than 200 in the Bradford area, according to CEO Stephen Waud.

Private equity is not for everyone. The industry has been criticised for being too short term in its outlook, typically holding investments for three-to-five years before seeking an exit at a multiple of its original outlay, and for loading companies with debt. And as I alluded to earlier, the industry is male-dominated – just nine per cent of senior roles are held by women – which fosters certain types of behaviours. Family ownership is often better for business. While family firms can be more conservative in outlook, they do take a longer term view.

Companies need access to external finance to achieve their growth ambitions. This is where venture capital, private equity and crowd funders come in. As the report points out, the Government needs to do more to encourage equity firms to invest in the regions. It could offer incentives to private equity firms to open offices outside London and perhaps by extending existing tax incentives schemes. Having a more ready supply of investment would build on Bradford’s business and sector strengths and help the district achieve its growth potential. My message to the PE houses and VCs funds is simple: get out of London and see what we’ve got to offer.

• Dave Baldwin is chairman of Bradford Economic Partnership and chief executive of Burnley Football Club. 

Bradford firms attract international investors

It’s said that you should invest for the long-term. Which is why the reports that NTT Corporation, Japan’s biggest telecoms and tech group, is eyeing Britain for its new global HQ are significant. After looking at cities around the world, the Tokyo titan looks ready to dial into London. As Britain grapples with Brexit, it’s a big vote of confidence in our future.

Words are one thing; investments another. But there’s reason for cheer here too: Britain has knocked the US from its perch as the world’s top investment hotspot. Britain was the seventh-ranked destination in the world for corporate deal-making in 2016 but now – for the first time in a decade – we are top dog, according to an EY report released last week.

The weak pound is playing its part, meaning that overseas buyers get a bigger bang for their buck when buying British. But the fundamentals of what puts the great into Britain’s businesses are clear: openness to foreign investment, the English language, our skilled workforce and our technology.

Foreign direct investments (FDI) – when a business based in one country invests in a business another – tell us a lot about how commercially attractive a nation is seen to be. Companies and investors go where they see the best opportunities. British firms have a reputation for being well-run, profitable and with good prospects. In these uncertain times, it’s proving just the ticket.

Seabrook, the Bradford crisps and snack company, was bought by the UK subsidiary of Japanese food giant Calbee last October. The local business now trades as part of a larger company with a huge international network, meaning more delicious crisps made in Yorkshire will be sold around the world. In 2016, Redfern Travel was acquired by Australia’s Corporate Travel Management after the Bradford business proved attractive to investors Down Under.

If the business making the acquisition takes a short-term view, it’s just about maximising profit. This isn’t always great for the host firm. But when long-term investments are made, the business putting up the cash often brings fresh perspective, investment and enthusiasm which can unlock opportunities. The local business is exposed to new practices, markets and ways of working. FDI brings money and opportunities to the host cities and regions too.

Increasing FDI into the Bradford district is part of our plan to boost the economy. The Bradford economic strategy is making good progress towards the vision of adding £4bn to the economy, generating 20,000 new jobs and improving the skills of 48,000 residents by 2030. But we are facing headwinds along the way.

Council budgets have been hit by austerity. The Revenue Support Grant that Bradford Council receives from the Government to spend locally is being cut. In 2013/14, the council received £183m. In 2020/21, that number will be zero. The Government expects councils to collect funds raised through local business rates instead. This means that we need more corporate activity to raise money to invest back into the region.

We are shouting more loudly about what we have to offer. Last month, the West Yorkshire Combined Authority – which brings together local councils and businesses – attended the MIPIM property conference in France. MIPIM is the World Cup of the property industry, with the best players around the world showing off their wares. The WYCA representatives took every opportunity to tell investors and developers about the fantastic opportunities in our region. Now we need to convert a few more of these chances.

Bradford Council set out plans for the Northern Powerhouse Rail at MIPIM and was well received. NPR is an amazing opportunity for the North: a rail network for the modern age which would connect Bradford to Leeds, Manchester and Liverpool. As part of the plan, a new stop would be constructed in Bradford city centre on a through train line, opening up new opportunities for the region’s residents and businesses.

These plans were also discussed at an event in Bradford this month to promote Transport for the North’s Strategic Transport Plan. Almost everyone I speak to sees clear economic benefits of investment in NPR and High-Speed Rail (HS2) for decades to come. This is game-changing stuff. But to make it happen, the financing needs to be put up.

Overseas investors are happy to invest in Britain. Japan’s biggest telecoms company looks like it will be dialling into the capital. The Government needs to dig deep for the long term and finance a transport network for the future. Words are one thing, investments are another.

Morrisons sets out stall with paper over plastic

If you thought that extricating an advanced economy from a continental union was tough, try cleaning up the vital but polluting business of providing food and groceries to the population. The UK food and grocery sector was worth £190bn last year and is forecast to grow by 15 per cent to exceed £218bn in 2023. That’s a lot of employees, a lot of consumers, a lot of shopping trips and a lot of shopping bags. An awful lot. In fact, global plastics production reached 381m metric tonnes in 2015.

The impact of this is appalling. Most marine litter is plastic. Plastic causes untold problems for marine life and spoils our beautiful beaches. Half of shoreline debris comes from single-use plastics. Single-use consumption is engrained in our society and culture. Plastic is entering the food chain. Nearly one third of fish contain plastic. I could go on. (Thanks to industry charity IGD for the references).

Supermarket groups tried to tackle the issue of plastic pollution with the introduction of “bags for life”. Nice idea, but flawed in the delivery as consumers have been buying a billion of these a year and using them only once. So we have single-use bags which use even more plastic.

Step forward Morrisons, the Bradford-based supermarket group, which is giving customers the option of using large paper carrier bags. The group said the move was in response to customer concerns about reducing plastic. The paper bags will cost 20p each. Morrisons is also increasing the cost of its bags for life to 15p from 10p.

Andy Atkinson, group customer and marketing director, said: “When we listen to customers they want us to help them reduce the amount of plastic they have in their lives. These new paper bags do exactly the same job as standard plastic carrier bags. They are tough, reusable and can help keep a large amount of plastic out of the environment.”

Congratulations to Morrisons for taking this first step. I hope the rest of the industry takes note and follows suit. It takes bravery to be the first to act. I expect there will be a significant cost to this corporate decision. With shareholders in the background, that also takes guts. But it’s the right thing to do and I think shoppers will like the decision.

Times are changing and new consumers have high expectations of big business and aren’t afraid to voice their opinion on social media. Boardrooms know they need to act, especially on a touchstone issue like the environment. Experts like Professor Richard Thompson, the ‘Godfather of plastics research’, argue that the circular economy is an important part of the solution. This means keeping resources in use as long as possible.

In Bradford, we are world leaders in the circular economy. The University of Bradford, its triple-crowned School of Management and charity partner Ellen MacArthur Foundation have been pioneering in teaching programmes and research in the circular economy for years. Professor Amir Sharif, Associate Dean (International) and Professor of Circular Economy, told The Yorkshire Post: “Given the aim of a transition to a circular economy is to eliminate waste and increase the re-use of products and services as much as possible, especially the challenge of reducing plastics waste, Morrisons’ paper bag initiative is an excellent step in the right direction.

“Clearly there are concerns that the energy and hence carbon footprint of producing paper bags is the same or greater than plastic bags. But the reuse potential and net harm to the environment should be lower as paper bags are far more degradable than plastic.

“As our ongoing research in the area, including in food, water and resource waste shows, human behaviours are at the heart of how we produce and consume products and services. I think that the real innovation in shifting from plastics to paper bags, which is great to see, is that the general public are now pushing for and demanding change in consumption and waste behaviours. This is the exciting part. Following Morrisons’ step we should be able to see more resilient paper bags that can have a longer reuse life.”

As we know, the UK food and grocery sector is a behemoth. It is made up of a complex and interlinked global network of suppliers and is prone to pressures from all sides. Achieving positive environmental change in an ecosystem that has evolved over decades, if not centuries, without disrupting flow of food from the farm to the plate is a big challenge. Bigger than Brexit? I’ll leave that for you to decide.

• Dave Baldwin is chairman of Bradford Economic Partnership and chief executive of Burnley Football Club

Bradford’s businesses formenting the 4th Industrial Revolution

What job will you be doing in ten years’ time? Perhaps something similar to your current role, but with more responsibilities and higher pay? What about in 20 years? Running your own business? Management? Or maybe retirement and a hard-earned rest?

One thing is certain – many of tomorrow’s jobs will be nothing like today’s. According to experts like Dr John Baruch, as many as 50 per cent of the jobs we currently do might have disappeared in two decades as robots perform more and more tasks.

Dr Baruch is a distinguished academic and leader in developing ways to educate people about changes in the workplace. His professional life has been spent in Yorkshire, at the universities of Leeds and Bradford and now at Leeds Beckett, where he helped set up the world’s first education centre for the fourth industrial revolution.  More of that in a minute. If you want to know how your grandchildren might be earning a crust, Dr Baruch is one to ask.

He was among the speakers at the ‘4th Industrial Revolution’ event in Shipley’s magnificent Victoria Hall last week. The event was organised by the Bradford Business Enterprise Network to get people thinking about the fast-changing world in which we live, where the internet, robotics, virtual reality (VR) and artificial intelligence (AI) are transforming homes and workplaces. Representatives from RTC North, which helps commercialise new products and services, Cimlogic, a Saltaire provider of manufacturing improvement solutions, and Exa, the Bradford bespoke internet provider, also offered their perspectives.

In the Hall’s beautiful surroundings, Dr Baruch gave a short history lesson. We all know about the first industrial revolution, as horse power was replaced with mechanisms driven by steam power. In the second industrial age, steam power was replaced with electricity and combustion engines. As the third age progressed, computers and automation have transformed the world, with the internet bringing about change which seemed unimaginable 30 years ago. The fourth age – which is already dawning – sees cyber physical systems – mechanisms controlled by computers – become dominant in another leap forward.

What does this mean for Bradford? If you require an operation in 2040, you may be seeing a robot surgeon or doctor rather than a human, although you will probably still need a human nurse to assist you. Robot lawyers will solve our legal woes. I only hope that they won’t charge as much as real ones do now. AI will manage our financial transactions. Self-driving cars, buses and trucks will be on the roads.

For some people, change on this scale is worrying. Finding meaningful work for some can be difficult as it is. If more jobs disappear, what will people do to earn a living? I understand these concerns. But, like Dr Baruch, I am optimistic. Change on this scale will come quickly, but it won’t be overnight. Jobs will disappear, but new ones will be created. While robots will perform some of the roles that people do now, they can only do so much. They don’t have what makes us special – our creativity and ingenuity.

This is about ambition and optimism. It’s about embracing, rather than running from, change. The internet and technology bring huge opportunities for Bradford. But we need to seize them. Bradford has so many fantastic attributes: our young and enterprising population, our distinctive offer, our growth potential and our globally-connected district. Bradford is a diverse place and this is an advantage which we can build upon.

People of all ages need to be ready to retrain and adapt. We need to do all we can to support people in their 40s and 50s to make sure that they are ready to face this change with confidence.  The biggest challenge – which we should see more as an opportunity – is inspiring children to have a positive attitude through school, and to develop their creativity and appetite for technological innovation. They have the creativity and ideas; we need to give them the scientific knowledge to bring their ideas to life.

Bradford Council is working hard to support our young people. The Bradford Education Covenant is a plan to help schools and teachers raise standards; support parents to get children ready for school, work and life; and work with businesses and colleges to boost career options. Industrial Centres of Excellence (ICE) are helping people gain qualifications, skills and experience that employers want. Apprenticeship hubs help firms recruit the apprentices that they need.  

But it is the private sector which will play a central role in helping Bradford meet the challenges and opportunities of the fourth industrial age. The successful firms will be those which learn from the past, see the big picture of the here-and-now and get at the forefront of what comes next.  So if you are wondering what job you might be doing in 20 years, these are the people you should be asking. I look forward to hearing their ideas and seeing where it leads us.

• Dave Baldwin is chairman of Bradford Economic Partnership and chief executive of Burnley Football Club