< PreviousPROPERTY 10 Business Link www.blmforum.net Tech city Our region is a growing nexus of digital industries with Leeds hailed as tech city, but in order to capitalise of this growth, investment is needed to ensure suitably innovative workspace is in place. 10-13.qxp_Layout 1 07/05/2019 13:31 Page 1www.blmforum.net Business Link 11 PROPERTY B etween them, Yorkshire and Lincolnshire have a long and storied history of innovation, providing the world with such marvels of engineering as cat’s eyes, stainless steel, the world’s first commercially viable locomotive and, of course, the tank. This pedigree of invention and creativity continues to this day and although our region is still critical to the steel industry and heavy manufacturing, it’s with the digital and creative industries that we’re truly flourishing in. The latest ‘Tech Cities’ report from real estate specialists CBRE reveals that Leeds is a major regional hub for the creative industries in Yorkshire. Loosely defined, creative industries is an umbrella term used to capture the creative economy that included theatre, dance, music and film. With the advent of digital technology, it has evolved to encompass industries such as IT, cloud computing, and video games – an industry that last year reached a record £5.7 billion. For years, however, London has long been the flag-waver for these industries, while the north went largely neglected. Fortunately for our region, the times are changing, and investment is moving away from the capital. Yorkshire has enjoyed a long history with the TV and film industry having featured as a shooting location for myriad movies – such as The Woman in Black, The Full Monty and, more recently, Phantom Thread – as well as acclaimed TV shows including Happy Valley, Downton Abbey and Emmerdale, and boasts an impressive number of production companies. And with Channel 4 selecting Leeds as its new national headquarters, this will only continue to grow. Yet over the last few years, there’s been an exposition in the digitally-focussed companies across our region, cementing the area as a hub for the creative industries. Indeed, the CBRE report, which ranks the top UK locations outside of London for tech businesses, revealed that Leeds has risen from tenth to sixth position. Using the same methodology as observed in the company’s original report, it identified various shifts in the creative and tech profiles of 13 Á The Platform building has been an important part of Leeds’ skyline 10-13.qxp_Layout 1 07/05/2019 13:31 Page 2Armstrong house Offering a prime position in Grimsby, Armstrong House on Armstrong Street is ideally located. Close to the ports of Grimsby and Immingham, motorway links and the town centre, off-street parking is also available for all staff and visitors, meaning it’s convenient too. Our spacious, welcoming offices are located on the ground floor and are both secure and CCTV- monitored, giving you the ultimate peace of mind. At Armstrong House, the flexible in/out terms of contract mean confidence when it comes to affordability and with a range of office sizes there are opportunities for all types of business. If you require virtual office services, prices start from just £15 per month. For more information, or to discuss your office requirements, give Scotts Property a call today on 01472 267000 and ask about Armstrong House. Last remaining office suites Prime location in Grimsby Superb Location - - Close to the ports of Grimsby & Immingham - Great motorway links - Close to the town centre Secure off street parking High speed internet availability Easy in/out terms A range of affordable office sizes 3 3 3 3 3 Armstrong House, Armstrong Street, Grimsby DN31 2QE Tel: (01472) 310301 • Email: s.fisher@blmgroup.co.uk www.shutterstock.com/terekhov igor www.shutterstock.com/Yentafern 10-13.qxp_Layout 1 07/05/2019 13:31 Page 3www.shutterstock.com/Yentafern www.blmforum.net Business Link 13 PROPERTY various cities in the UK over the last two years. All markets were analysed, scored and ranked on criteria including level of education, concentrations of tech businesses and employment, as well as cost of living, cost of office space and wage levels. Viewed through these criteria, it’s clear that Leeds has plenty of offer, with good transport links, a highly educated talent pool and strong university research ratings. It also offers attractive business rates and office rents, as well as competitive labour costs and relatively low costs of living compared to London and much of the South East. “It’s fantastic to see Leeds recognised as a major regional hub and a UK tech sector destination,” says Alex Hailey, Director of CBRE’s Office Agency team in Leeds. “Take up from the tech sector has grown year on year in Leeds since the end of the financial crisis and we envisage this growth to continue.” Of course, it’s all well and good pointing to the present and highlighting the city – and, by extension, the region – for its current status as a tech hub, but the future must also be secured. So as well as ensuring a talent pipeline remains in place, the city must also ensure that there is plenty of high-quality workspace available as much for local companies as for encouraging relocation. One of the most promising properties is the University of Leeds’ Nexus building, which aims to connect businesses with its academic research expertise, talent and facilities. As well as specialising in health, environment and engineering, there will also be an emphasis on data with the £40 million building including office and lab spaces alongside meeting and conference facilities. It aims to become a hub for the local innovation community as well as national and international organisations looking to innovate, be more productive and grow. Impressive, certainly, and timely too, but it’s not the only building servicing the growing tech industry. For the last few years, the Platform building has been an important part of Leeds’ skyline, offering office space for tech and digital businesses of all sizes right in the heart of the city. Launched by commercial real estate company Bruntwood in November 2017, the building is a community that mixes entrepreneurial start-ups and national names. The latest addition to the building will be a new co-working and digital innovation space designed to help transport the delivery of health services. Dubbed Co>Space North and based within the tech incubator at Platform, the new 4,995 square foot facility aims to foster collaboration and will focus on developing new digital tools and services. Based within the tech incubator at Platform will enable connections between the digital health community and other sectors such as digital marketing, gaming and fintech. The not-for-profit initiative has been launched by mHabitat – itself based at Platform – in conjuncture with Leeds City Council and NHS in Leeds. “Being based right at the heart of the tech incubator, which is home to some of the most exciting and innovative start-ups in Leeds and the North will be hugely advantageous to us, as will the collaborative culture that permeates throughout Platform,” says Andy Mobbs, Co>Space North Development Manager. “We’re confident that by being based in the building we will help to establish Leeds as a world-class player in digital health solutions.” Our region’s flourishing digital sector isn’t limited only to Leeds, with Lincoln, Hull and Sheffield all home to innovative tech companies. In order to truly capitalise on the sector’s potential, however, more investment is needed in digital infrastructure and commercial property. Follow the example of Leeds, yes, but these cities must forge also their own paths. Photos courtesy of The University of Leeds/Nexus 10-13.qxp_Layout 1 07/05/2019 13:31 Page 414 Business Link www.blmforum.net PHARMACEUTICAL SPOTLIGHT Prescription for innovation © Shutterstock/Zapp2Photo Healthcare and pharmaceuticals form one of the most profitable sectors in the UK, generating £6.1 billion in profit between Q2 2017 to the same period in 2018. Business Link explores challenges facing the sector and how necessity is driving innovation. Healthcare and pharmaceuticals form one of the most profitable sectors in the UK, generating £6.1 billion in profit between Q2 2017 to the same period in 2018. Business Link explores challenges facing the sector and how necessity is driving innovation. 14-17.qxp_Layout 1 07/05/2019 13:45 Page 1www.blmforum.net Business Link 15 PHARMACEUTICAL SPOTLIGHT This complex and strictly regulated sector is constantly in flux, responding to changes in legislation and governance, developments in our understanding, and meeting public need. We’re at a tipping point with the spectre of antimicrobial resistance hanging above our heads along with anti-vaxxers driving cases of measles up in the US and Europe, the obesity crisis, drug pricing and end of life care among the world’s most pressing healthcare challenges. One of the most immediate threats is with the swelling global population. Forecasts predict that by 2050, there will be as many as nine billion people on the planet. Data shows that by 2045, the population of the UK will reach seventy-six million, driven by an ageing population and immigration. It’s not without precedence, with figures from the Office for National Statistics (ONS) revealing that the UK has recorded more births than deaths in every year since 1976. A similar upward trajectory can also be seen in the UK’s life expectancy with ONS data showing that life expectancy improved every year since its records began back in 1982. National life expectancy as of 2016 stood at 80.96, almost ten years higher than 1960. But with an ageing population comes specific healthcare requirements and necessities driving overall advances in the pharmaceutical and healthcare sectors. This includes the proliferation of health supplements over the last few decades, which have now become commonplace. More recently, there’s been a trend for nutraceuticals which, simply defined, are foods or fortified food products that act as dietary supplements and assist in treating or preventing disease. For example, foods enriched with lecithin or omega 3. As the population continues to grow, it becomes more and more apparent that there’s no such thing as a ‘one-size-fits-all’ approach to treatment. Every individual is different so while there are height, weight and other physical attributes to consider, there’s also 16 Á 14-17.qxp_Layout 1 07/05/2019 13:45 Page 216 Business Link www.blmforum.net PHARMACEUTICAL SPOTLIGHT tolerability and the impact on mental health. So instead of standardisation of healthcare and treatment, doctors, researchers and clinicians are working towards making the widespread use of personalised medicine a reality. As one might be able to extrapolate, personalised medicine is treatments and prescriptions that have been tailored to an individual’s specific needs. This approach would help to ensure that a patient receives exactly the right mix of pharmaceuticals needed and at exactly the right dose. In cancer treatment, for example, personalised medicine classifies tumours not according to where they grow in the body, but rather their genetic make-up. It’s no wonder that Professor Peter Johnson, Chief Clinician at Cancer Research UK, describes personalised medicine as “the most exciting change in cancer treatment since the invention of chemotherapy”. And chemotherapy was invented in the forties. This approach combines and analyses information about our genome and combines it with other clinical and diagnostic information to identify patterns than can help to determine an individual’s risk of developing disease, as well as detecting illness earlier and determining the most effective interventions to help improve health. This might refer to medicines but could also mean changes in lifestyle such as diet and exercise. Part of achieving widespread personalised medicine will hinge of these other clinical and diagnostic information which will be increasingly gathered by medical and healthcare apps. We’ve already seen the rise of wearables such as the Fitbit and other health trackers and with the market forecast to surpass $40 billion by 2022, the trend doesn’t show any signs of slowing down. These devices, though still in their infancy, can be used to build a unique picture of a person’s health and requirements. For an ageing population, these devices could be literal life savers. It’s part of the wider digital revolution taking place in the healthcare and pharmaceutical sector. Although companies working in this space have 14-17.qxp_Layout 1 07/05/2019 13:45 Page 3www.blmforum.net Business Link 17 PHARMACEUTICAL SPOTLIGHT historically been slow to adapt to change with pharma companies slow on the uptake when it comes to social media and thousands of fax machines still in use across the NHS. But the sector has embraced the massive possibility offered by disruptive digital technologies such as artificial intelligence and blockchain with gusto. AI has myriad uses in the pharmaceutical sector such as in drug development, creating more affordable drugs, tackling difficult-to-treat diseases, and predicting the effect of new treatments thereby making it a potential important early step for clinical trials. In 2018, investment from venture capital firms into the UK’s AI sector reached a record £998 million. But it isn’t only investor that are cottoning on the benefits and profitability of AI, with Business Secretary Greg Clark last year announcing the opening of five new centres of excellence for digital pathology and imaging. The new centres aim to bring together doctors, businesses and academics to develop more intelligent analysis of medical imaging which, it is hoped, will pave the way for better clinical decisions for patients as well as freeing up staff time for the over-burdened NHS. As well as AI, blockchain is becoming of increased importance to pharmaceutical companies. A recent survey from non-for-profit organisation The Pistoia Alliance found that more than half of pharmaceutical companies and life sciences professionals are either using ore are already experimenting with blockchain. Compare this to the twenty- six per cent when asked in 2017 and the impact the technology is having in the industry becomes apparent. Necessity is the mother of invention. Major healthcare challenges including an ageing population, traceability and drug pricing are all driving innovation in the pharmaceutical, healthcare and medical industries with the sector at large embracing digital technologies, paving the way for personalised medicine and, it is hoped, a healthcare system that works for everyone. © Shutterstock/LeoWolfert 14-17.qxp_Layout 1 07/05/2019 13:45 Page 418 Business Link www.blmforum.net CORPORATE FINANCE Despite being vital to the economy, securing finance continues to be a difficult task for businesses and a key blocker to expansion. EY’s 2018 Fast Growth Tracker found that 51% of founders and executives pointed to funding as the biggest hindrance to expansion and over a third of businesses owners are struggling to find suitable investors for their enterprise. Meanwhile the FSB stated in its report Going for Growth that the struggle to access finance is only emphasised for those outside of London and the South East, such as our region, as well as BAME and female business owners. The report also found that only one in seven small firms are applying for external finance and 73% of businesses would rather grow at a slower pace than borrow money. Meanwhile 68% of SMEs have no awareness of equity finance. The issue of equity is perhaps no surprise to our region’s businesses, as the Yorkshire and Humberside area has been highlighted by the University of Leeds and Imperial College London as the region with the second biggest equity gap, with potential demand for equity investment from businesses at £661m, but actual investment at £96m. While it remains difficult to receive finance, the positive news for businesses is that the number of sources for capital are multiplying, which has seen business owners implement hybrid funding models - for instance supplementing venture capital with crowdfunding. When looking at options for finance, the eye quickly finds the usual sources for loans, both secured and unsecured. RBS, HSBC, Lloyds and Barclays, the UK’s largest banks, control 80% of the commercial loan market. Though these loans are a considered a decent source of finance for the medium to long term, a declining number of small businesses are applying for them. A reason for this, highlighted by the British Business Bank (BBB) is that SME confidence in receiving a bank loan is decreasing. Expecting long wait times and difficult criteria, deep rooted negative opinions of business bank loans are pushing SMEs to alternative finance options and non-traditional sources. Crowdfunding is one option that has gained serious traction. Through well- established websites like Seedrs, Kickstarter and Funding Circle, businesses can ask a large number of people to invest smaller amounts of Turning away from the traditional Deep rooted negative opinions of traditional business bank loans have pushed SMEs to alternative options. 18-21.qxp_Layout 1 07/05/2019 13:47 Page 1www.blmforum.net Business Link 19 CORPORATE FINANCE money to achieve a financial goal. There are four main forms of crowdfunding: reward, donation, debt and - often recognised as most useful by growing businesses - equity. While crowdfunding has primarily been acknowledged as a source for start- ups, many larger companies have used the online platforms to their benefit. According to Statistica, in 2018, the transaction value of crowdfunding campaigns increased to £58.2m (up 12.6%) and is predicted to continue rising. Despite this, according to EY’s Fast Growth Tracker, 75% of business owners said they favour equity financing through venture capital (VC) firms next to crowdfunding, although the tracker did find that crowdfunding was now considered a more viable source of funding by entrepreneurs than traditional bank financing. VC is useful for businesses in need of more finance and has a higher capacity for risk than other options. It usually comes from a group of private investors or a specialised financial institution who see the potential for high returns. The money is raised in exchange for equity in the business, and funding can be received in rounds, making it a good option for long-term finance for growing businesses. Venture capitalists expect representation on a board and offer advice to support business growth plans. It is worth noting however that the number of UK VC investments made in the first quarter of 2019 decreased by 57% in comparison to the first three months of 2018. © Shutterstock/Syda Productions 20 Á 18-21.qxp_Layout 1 07/05/2019 13:48 Page 2Next >