The Shadow Business Secretary Chuka Umunna today visited the site of Croydon's new business incubator, Sussex Innovation – Croydon. The visit coincided with the release of research that shows two thirds (63%) of small business owners in London and the South East are considering leaving central London over the next five years. This rises to 78% for technology start-ups, calling into question the sustainability of East London's 'Silicon Roundabout'.
The incubator, set to open in the summer, is the first off-campus initiative from Sussex Innovation and the University of Sussex. Sussex Innovation – Croydon will provide a base for up to 30 high-growth potential companies with over 300 employees, and support more than 100 local businesses through its network. Over the next three years it is anticipated that the businesses will generate £6million in turnover and raise £1million in investment. The incubator's goal is to catalyse business growth through innovation, driving higher revenues, investment and employment throughout the region.
Like the existing Sussex Innovation Centre, Sussex Innovation – Croydon will be an incubation hub for entrepreneurs, start-ups, growing companies and corporate innovators, offering flexible, professional office space and in-house support services. In contrast to other incubators, which focus on short-term support to help start-ups and small businesses become sustainable, Sussex Innovation works with companies of all sizes to help them grow further. Since opening in 1996, 80% of Sussex Innovation Centre members have gone on to become profitable businesses.
Speaking at the site of Sussex Innovation – Croydon today, Mr Umunna said: "Sussex Innovation's new Croydon Campus has an exciting future ahead, with huge new opportunities being created for the local area by helping spur the creation of hundreds of new jobs and assisting businesses in starting up, growing and innovating.
"This is crucial at a time when more and more people are considering starting out on their own and setting up a business, and when we want to make it easier for everyone to pursue this route, regardless of their background.
"It also provides a fantastic example of the way in which universities can provide huge benefits to the local communities in which they operate, supporting a thriving business and start-up community and driving growth."
During the visit, Mr Umunna attended a roundtable briefing with entrepreneurs, hosted by Sussex Innovation Executive Director Mike Herd, and the University of Sussex Pro-Vice Chancellor for Research, Michael Davies. As well as current Sussex Innovation members One Research and Maker Club, local businesses Natterbox, ICUK and The Be Group took part in the discussion. The minister also observed demonstrations of Maker Club's 3D printed robotics kits, and the imPulse handheld ECG reader, which was developed by Plessey Semiconductors and based on remote sensor technology patented at the University.
The research, commissioned by Sussex Innovation found that the key factors turning entrepreneurs off central London are rising property prices (78.5%), difficulties accessing funding and investment (26.6%), and securing top talent (24.1%). The majority (64.3%) of those thinking about leaving the Capital are specifically considering the South East as an alternative.
Commenting on the research findings, Mike Herd said: "With office rental costs soaring in London, it's no surprise that entrepreneurs are looking to move out of the Capital. At the same time, we've seen local businesses moving away from areas like Croydon due to a lack of flexible facilities designed to support businesses during rapid growth. Incubator hubs such as Sussex Innovation – Croydon are being established to tackle both of these issues head on and to help the next generation of entrepreneurs.
"We know that growing businesses favour good transport links and competitive property rates over the perceived cachet that a central London address provides, but still need access to markets and expert advice, making Croydon the next likely epicentre for entrepreneurs."
The research found that access to support services such as skills coaching, mentoring and advice on funding was important to the majority of businesses (67%), with a similar number (62%) believing that finding the right services was a drain on their resources. Sussex Innovation – Croydon is designed to combat this, providing access to strategic advice and tailored business support, all under one roof.
Mike Herd continued: "Timely access to support services like investment and expert advice can make or break the fortunes of start-ups. Providing all of the facilities at an affordable price means we can be a significant boost for these businesses, and provide another draw for them to be based in Croydon."