Regional focus: How the North East can nurture scaling businesses

The North East has a rich industrial history, from mining to shipbuilding and steelmaking - with some of the world’s most iconic structures having originated in the region.

Comprising Teesside, County Durham, Tyne & Wear and Northumberland, the area has a varied geographical and economic landscape, and has in recent years become the focus of post-industrial regeneration efforts.

Bdaily spoke with local businesses and organisations to get their take on what the North East can offer scaleups, as well as some notable success stories.

Paul Lancaster, founder and director of Plan Digital

“I personally think the North East is a fantastic place to start and scale a business, and regularly encourage entrepreneurs based outside the region to consider expanding their company by opening another office here.

“There’s also an abundance of talent from the five North East universities and colleges, and a lot of talent living here but who work remotely for companies in places in London.

“From a business support perspective, I think the North East LEP has been doing a great job of educating people about the need for, and benefits of more scaleups to the regional economy over the past few years.

“There are lots of genuinely successful businesses from the North East… However, one of the potential dangers of pushing too hard to get more startups, micro businesses and SMEs to ‘scale up’ is that it could force them to run before they can walk.

“‘Scaling up’ requires a completely different mindset to ‘starting up’ and isn’t right for everyone.

“Just because a company receives a big injection of funding or investment, doesn’t mean they have a solid business, and I personally believe there is still too much focus on this area in the local, national and international media.

“More money should mean you have an increased chance of success… But only if you can get the business model, team, systems and processes right.

“If you have a big injection of cash but no paying customers, that is not a good business in my humble opinion.”

Craig Huntingdon, scaleup partner at Scaleup North East

“The number of startup businesses in the North East is growing at one of the fastest rates in the country, according to new research.

“There were 45,498 startup businesses in the North East at the end of the 2017/18 financial year, an increase of 20.8 per cent compared to the previous year.

“Across a range of sectors, we’re seeing some fantastic startups being developed and ambitious firms scale up what they do.

“Driving this growth has been a shift change in the entrepreneurial outlook across the region and the ambitions in the business base. Showcasing those that have started up is also encouraging more to take the plunge.

“This is being backed up by a wide range of support whether in the form of investment funding like that of the North East Finance funds or programmes focusing on mentoring and peer support.

“Our region is a great place to do business, with universities providing access to talent and lower costs of doing business for startups compared to elsewhere in the country.”

Chris Reed, founder of ParkingPerx and ProxiSmart

“We have a fantastic tech scene in the North East, which is close to my heart and a number of companies that are proving to be leaders in scaling up.

“I believe that green solutions will be the next big area for scaling opportunities.

“Its high on the agenda politically and the funding is there for those companies that can exploit opportunities in environmentally beneficial solutions.”

Steven Rawlingson, CEO & founder of Samuel Knight International

“It’s fantastic to see that the business community is working together, it’s a hive of activity - fuelling growth and enabling economic prosperity.

“As a region, we have a rich history of industrial innovation which has paved the way for new sectors to emerge – boosting employment whilst promoting the North East as a business force to be reckoned with.

“There’s so much talent here, across sectors – it’s time to celebrate, support and highlight just how fruitful the region is, both for work and as a place to live.

“As an adopted ‘Geordie’ originally from Stoke-on-Trent, I established our Samuel Knight International HQ in Newcastle upon Tyne, it’s now a 50-strong team with increased hiring plans in the pipeline for 2020, including an office expansion.”

Gary Mutimer, founder at Rebel Rebel XR

“The North East remains to be a hot bed of creative ambitious talent, with its hard-rooted work ethic and approach.

“This, accompanied with cheaper running costs for businesses in comparison to say London, makes the North East a place to do and operate businesses.

“Here at Rebel Rebel XR, ‘scaling up’ is something we have been doing for sometime now. We are introducing a couple of new products to market, and to date they have been incredibly well received. These will create jobs both here in the North East, UK and abroad.

“However, this left us with a staffing crisis and this bore witness to huge skills gaps here in the North East.

“To address the skills gap head on, we have introduced our very own Rebel XR Academy & are currently in the process of creating some key and exciting collaborations that will also create new jobs and opportunities.

“To add to the new products and Academy, we will be introducing two new studios here in the North East - Newcastle and Sunderland to be precise. Both of our studios will be open to market. 2020 will also see us enter into both the energy and automotive sectors.”

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