Andrew Corbett

About Andrew Corbett

Membership Development Director for the Skillfair tender and contracts alert service, the UK IT Association and Business Advisers Direct - drop me a line on acorbett@skillfair.co.uk or ring for a chat on 0844 445 7071

Say ‘Hello’ to Business Link Mini!

Tender and contracts insights from January 2013 – some headlines:

  1. The LEPs are in full swing to create Business Support schemes in their areas
  2. They all have basically the same idea. Say ‘Hello’ to Business Link Mini!
  3. Tell us about what fun and games are going on in YOUR LEP area

One of the interesting things about wading through dozens of sources of
consultancy and business support tenders and contracts each week is the
fascinating insights it gives you into what the public sector is
currently spending your money on. (disclosure: it’s not ME that wades, you
need an adult with an attention-span that’s counted in more than seconds
for this work).

Lately we have seen a crop of LEPs going out to tender for services in
the SME Business Support arena. They all have basically the same idea:
20th Century business support models built on the activities you previously
knew and loved from the Business Links.

Examples:

A Northern Metropolitan LEP has bagged over £4 million of EuroMoney for
financial assistance, mentoring etc and is out to tender for marketing and
PR for this project. The budget is a little under £35k.

Another LEP is looking for project support to create a sort of Support
Brokerage directory – embedded in the LEP’s premises the lucky
contractor will get paid ‘if the project completes successfully’.

(Members of Skillfair or Business Advisers Direct will, of course,
already know the full details of these contracts from their daily Tender
Alerts)

I’m not saying that ‘putting the Business Links band back together’ is
a bad thing necessarily. Something similar worked well in the popular
1980 motion picture ‘The Blues Brothers’. I mean, anyone who made use of
the Business Links will know that it was perfectly possible to have a
good experience with a business link process or adviser and indeed, I
experienced that myself on more than one occasion.

No, what I find mildly depressing is that all the schemes seem to have
been designed mainly by studying the rear-view mirror.  Recreating the
models of the past, whether or not the elements actually worked. I do see
that we pay the public sector people NOT to have imaginative or innovative
ideas and I thank them for living up to that challenge, but surely the
private sector part of the LEP coalitions could be having some new ideas?

I’m sure I am wrong on this but what it conjures up for me is the image
that the LEP boys and girls having finished all the jelly and
sandwiches, have next taken the opportunity to ‘dress up in Mummy and
Daddy’s old clothes’.  (hint: for Mummy and Daddy, read Business Links
and RDA schemes)

Please tell us what has been going on in this market place where YOU
are.  Tell me why I’m wrong (please!). Most of all, please tell me that
we aren’t really going back to the future, I know I can’t still get into
my tank top and my platform boots are up in the attic.

Andrew

Calling the Digital Nation

The invisible SME IT majority

As a member and board director of the UK IT Association for the past 7 years, I have had the opportunity to observe at close quarters the private sector IT industry at all levels as well as the public sector organisations which seek to help them and improve their performance.

I would like to put forward my view that the IT ecosystem in the UK is fractured. There is a glass ceiling between the IT businesses that are known to and have accessed help from things like RDA growth project funds and the huge number of IT businesses who are not on the radar of the policy makers and funders.

IT is an SME sector

How many times have we heard of household names in IT that started out as one or two people working in their back bedroom or garage? IT is essentially an SME industry.

Looking at the Office for National statistics 2010 figures, we see that 96% of the 153,000 IT and communications businesses in the UK employ fewer than 20 people.

UK IT Companies

This rather skewed distribution comes into perspective when we estimate the number of employees by doing some rough calculations with the midpoints of the ranges. Nevertheless, we still see that nearly 50 percent of the employment in IT is generated by companies below the size of 50.

UK IT Employees

In terms of employment, moving people from the public to the private sector; the over 50’s who find it impossible to get interviews or people returning to work after a career break; instead of consigning these people to the career scrap-heap we should be looking at recycling them into our IT sector. We are also told that there is a national IT skills shortage. IT graduates are finding themselves working in supermarkets and not in the supermarket’s IT department either!

This is a situation that UKITA is looking to address with our own Recycle Me! project.

Small does not mean ‘lifestyle’

Many ‘ordinary’ looking businesses around the country are involved in high-value activity that one might not expect.

Examples from the UKITA membership include 3 apparently ‘ordinary’ website development companies in the West Midlands who present themselves to the world as providing standard content-managed websites and ecommerce for local SME businesses. One of them recently did some significant technical work for a dominant search engine company at their offices in Switzerland. Another husband and wife team has just started a contract delivering a year-long business intelligence project for the investment arm of a high street bank. While a rurally-based 5-person business has delivered specialised project collaboration extranets for several international household names in insurance, telecoms and broadcasting. These are 3 companies all innovating and mostly not on the radars of the agencies who would like to find them.

What is distinctive is that these companies are most often not funding the R&D and development of their IP through the familiar access to finance routes but by bankrolling their development out of the bread and butter activities.

This may be caused by reluctance to take on the risk of investment and possible diluting of equity and some control or because they simply aren’t aware of what is available out there and how to access it.

Growth and development not synonymous

Often development is not synonymous with growth, which is the favoured metric of improved performance. Growth means employment and as such is highly desirable to policy-makers. Yet if you ask these companies what their priorities are they are more likely to say “sustainable profit margins and new products and markets’ than the simple desire to be bigger. The trend towards looser working structures, collaborations and subcontracting may push commercial space in the IT sector more towards occupying flexible hubs, mobile and home working – the practical and commercial opportunities of this is an area that UKITA’s future workplace project is looking towards.

Putting it all together

Each of the Regional Development Agencies (RDAs) created projects which went a good way to providing a rallying point and a critical mass to attract together those IT businesses in its region who wanted to raise their game and had the time and personnel required to get involved. With the loss of the RDAs much of that will be lost and the RDAs’ critical mass will fragment into Local Enterprise Partnership (LEPs) areas. This represents a problem for the goal of creating a single UK IT ecosystem but it also creates a possibility driven by need in which science parks, incubators, LEPs, local authorities and educational institutions can each play a part.

A major contributing problem is that the off-the-radar IT businesses and those who would like to reach them are insufficiently visible to each other. As a grass-roots IT sector business promotion and collaboration organisation, UKITA is already talking to these ‘lost’ businesses, they are our bread and butter. We are private sector funded from membership fees and subscriptions which makes us very energetic in our mission to engage, talk to and listen to as many of these companies as we can and to find out what their commercial and development needs are.