Birmingham has a digital knowledge economy; but where is our confidence?

The legacy of Birmingham’s noble history of invention, entrepreneurship and manufacture provide the foundations for the future. However, approaches to stimulating its 21st Century economy need to be creative to address the needs and ways of today’s economies and societal norms.

One of the biggest drivers for innovation today is the knowledge economy and its intimate linkage to digital technologies. New industries have been created based on intangible products and services, and as these technologies mature they are increasingly being applied in more traditional businesses. As such ICT is a valuable and successful standalone sector, but it is also an ever increasing driver of innovation across all sectors and needs to be recognised as such.

National and local innovation and growth strategies are focusing on key sectors, business support, skills and access to finance.  All are issues in their own right, but in reality they are components of a complex and interactive ecology. As a consequence, strengthening one component in isolation just moves the factor limiting successful growth to another component.
In order to strengthen the ecology, holistic interventions need to be cognisant of implications for the whole, not delivered as separate components that generate imbalance. Interventions, whether public or private sector led, cannot be directed at short term out-puts, gratification or returns; in such a dynamic environment delivery must be achieved in a sustainable, additive and supportive manner that can move to reflect prevailing needs.

Success in terms of Darwinian evolution determines that it is those most fit for the prevailing conditions that will prosper; this means decisions about component levels that change the local enterprise environment will in themselves drive selection.

For example, lack of skills and expertise in a local community will mean companies requiring those skills either adapt or die. They can adapt by bringing the necessary skills in from outside the region by relocating staff or by utilising today’s digital connectivity to work with remote skills, or they can train up their own people. A longer-term intervention would be to provide targeted skills sets through the educational system.
Birmingham needs its knowledge economies to thrive so we need to promote environments that enable them to operate in a networked, horizontal manner.  This city’s very size is a strength in a knowledge-based economy, but at the same time it is a weakness. The necessary horizontal connections are harder to secure, simply due to the societal and physical complexity of the city. Even in a world where distance is far less of a barrier than it has ever been, local relationships are still required; people want to interact and serendipity is far more likely to flourish when regular face time is an organic occurrence. As is widely quoted, ‘innovation is a contact sport’.

Birmingham must grab hold of the innovators who dream up winning ideas in their academic laboratories, corporate offices, homes or garden sheds and show them that the most rapid and effective way to translate their concepts into commercial reality is to become immersed in a driven community of the like-minded. It is in this context that Birmingham requires ‘urban innovation engines’ to trigger, generate, nurture and so catalyse economic growth in the city.

Birmingham already has a number of focal points, beacons: physical locations within the city that pull together communities, such as the Innovation Birmingham Campus. Here, digital and tech entrepreneurs rub shoulders with their gaming, media, medtech, low carbon and built environment counterparts, along with the professional service providers and supportive services. Consequently, they drive forward their novel ideas, business opportunities and innovate.

More open innovation and cross-fertilisation between our talented entrepreneurs will happen once the different enterprise hubs work more closely together. So, we need to link the businesses on our Campus with businesses in the other beacons of sector-specific communities such as Fazeley Studios, the Custard Factory, Birmingham Research Park and the Longbridge Technology Park; with locations such as Millennium Point and the Library of Birmingham and the city’s universities. Then you have a truly connected knowledge economy and a Smart city.

A critical next step, to further widen the effects, is to connect existing SMEs around Greater Birmingham into these innovation ecologies and help them ‘know what they don’t know’ and so drive innovation.

These SMEs may also be from the knowledge economies, but the real opportunities will be derived from connecting new and old economy businesses. It will drive access to new markets, maximising opportunities arising from our excellent track record of attracting inward investment. It will also further boost our export performance, generate or accelerate new growth in established businesses and create opportunities for start-ups.

Successful beacons are those where management actively engages and understands clients’ needs, and where there is – at the same time – intimate engagement with local economies. Successful beacons understand and build on legacy strengths and help to create complete innovation ecologies. As such, they are very different from general office offerings.

This holistic approach generates local clusters of businesses; the locations are then beacons where next generation entrepreneurs know they can locate to, to mix with expertise and experience and like-minded people in an actively managed ecology, and so gain benefit and more rapidly deliver their businesses.

So where do talented entrepreneurs currently find such holistic support?  The unfortunate answer is that – although a plethora of support is available – it tends to be accessed by the small minority of businesses who are already ‘in the system’. The lack of clarity in the local offering means that many businesses do not find their way into the innovation ecology and so miss out on potential growth to the detriment of the local economy and jobs market.

It seems obvious that Public Sector business support should be simplified, and that a focus on the Enterprise Beacons is a way forward such that they become the access points for this support. In doing this, we take a major step towards addressing the current lack of clarity in such offerings, helping unpack the complexities and drive awareness.

The nature of these beacon-based communities is that they will provide automatic signposting to the support, largely delivered by word-of-mouth from the converted – those that have already benefited from public funding – to those needing it. This is nothing new, the SMART Awards offered by the then Department of Trade and Industry in the 1990s were delivered locally, and previous winners were used to market the offering to the next generation of applicants. The result was a fully subscribed programme and a sense of local pride in achieving an award as a result of the local recognition.

By engaging at the coal face of the city’s entrepreneurial vein, these funds would be readily accessed in a much more timely fashion, and so address the urgency of the start-up and SME needs. Whilst it is important to recognise that a new venture’s market will be global, in the early days its business needs will require very local engagement.

For inward investment and marketing, the Birmingham tech-brand also benefits from the beacon approach. Recognising these beacons provides the visible evidence of what is already happening in the city, and provides tangible activity on which to base the marketing of the city as a true tech-cluster.

Successful economies exude confidence.  False confidence can be delivered through marketing a brand without substance, one without a complete ecology, but knowledge communities establishing in such environs will soon falter and dissipate and the economic benefit will stall. New industries have been developed out of informal discussions literally for centuries but they only become an economic success when the entrepreneurs have stopped talking and started doing.

Birmingham’s streets and coffee shops are as good as those in London or any of the other core cities. We have many examples of highly successful world-leading tech companies in this city – they show it can be done. Indeed, there are over 3,000 tech-companies with a Birmingham postcode. Birmingham has a digital knowledge economy so where is our confidence?

The connected economy approach links the beacons to the existing SMEs and larger corporates in the region providing the magnets with which to attract inward investment. We have exemplified substance behind the marketing campaigns we now need a range of city stakeholders to become actively involved; connecting, communicating collaborating; the reality is developing a digital economy is not a spectator sport………………. so let’s do it.

Dr David Hardman

CEO of Innovation Birmingham