Business Survival and Growth Research Findings

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1 10 July 2014 Business Survival and Growth Research Findings Chris Allington and Jo Willett UKSPA 30 Anniversary Summit

2 Oxford Innovation - Introduction Founded in 1987 Managers of 21 Business and Innovation Centres in UK Providing over 400,000ft 2 of space Currently over 930 companies using our centres Average occupancy at established centres is 87% Part of SQW Group

3 Oxford Innovation - Introduction Business Process Excellence Cost, Quality, Delivery Financial Sustainability and Private Sector risk Innovation Sharing best practise and trialling new ideas Business Support A target driven process with tangible outputs Economic Impact measurable results

4 In simple terms Do companies in an Oxford Innovation Centre: Do better than businesses in the wider UK business community? Do better or worse than businesses in other incubation / Innovation Centre environments?

5 Study Methodology Research Objectives Business survival Based on a sample of graduate businesses, what proportion of businesses that have graduated from ICs are still operating? Has the IC environment made a difference to business survival, if so in what ways? Business growth Have businesses grown during their time at the Innovation Centre (IC)? Has the IC environment made a difference to business growth, if so in what way? Do Innovation Centres provide space for local businesses, do graduates stay locally? Improving business survival and growth How do we make ICs a better environment to promote business survival and growth?

6 Study methodology Key phases and timeline Analysis of data gathered by OI over the past 10 years From July 2013 Surveys and internet research to determine growth and survival From October 2013 Analysis of findings and comparator analysis Report published July 2014

7 Independent Review Data Analysis by SQW Survey design by Oxford Innovation, SQW and UKBI Telephone and online surveys by SQW and Qa Research External ratification and verification of methodology and findings by UKBI

8 Scope of the Study 15 Centres included Between 2003 & ,863 businesses were based in these 15 centres By October 1,242 of these companies had graduated Overall survey response rate 277 (15% of graduates and current customers) 85 companies have agreed to be case studies

9 Innovation Centre Landscape

10 Flexibility (licence agreement) Perception of their business as a result of being based there Access to professional services and networking Main reasons for choosing an IC Convenient Location Cost effectiveness Quality of Service

11 Profile of a Typical IC Customer 94% Have less than 10 employees 62% 58% Have an annual turnover of less than 100k Are local to the Innovation Centre and were previously working from home / had no prior office 29.2 m 2 The average size of office space they occupy when they move in 20 The average number of months a company stays in the centre 60% Stay local to the centre after graduation

12 Use of Services

13 Business Survival

14 Business Growth Current customers are growing more than in previous years (taking more space) The majority of customers grow while at a centre average annual compound growth of 38% Businesses continue to grow after graduation average annual compound growth of 25% 40% of companies recognised that they had achieved increased profitability as a result of being in an Innovation Centre 30% recognised that without the centre the business would not be growing as fast as it has been Based on survey responses we can estimate that 10% of the growth companies experience can be directly attributed to their experience of being at an OI Innovation Centre

15 Business Growth job creation An average Innovation Centre company grows by 1.1 fte jobs p.a. This equates to growth of fte jobs across the 15 centres

16 Benefits of an Innovation Centre

17 Industry Comparisons Most other incubators operate a selection process, where we allow companies to self select. Nevertheless: Our customers are marginally smaller than in other incubators, but are at a similar stage of development Our mix of companies is broadly the same majority are in IT / business services We have a higher turnover of businesses, but maintain our occupancy levels = very efficient incubator management A higher proportion of companies in our centres achieved high growth (>20% growth) Our customers also achieved higher growth than recorded at other incubators 32% vs 24%

18 Conclusions Our centres perform a useful function at a critical, early stage of business growth. For most of the companies based in an Innovation Centre, it is their first office and they value flexibility, cost effectiveness, a professional image and access to services and networks most. Our Innovation Centres increase the growth rate of customers and a large proportion of businesses attribute their success to being at the centre. In the long term survival rates of businesses that were based at our centres were substantially higher than those of all businesses in England which were established in the same year. Businesses based in Oxford Innovation Centres achieve higher growth on average than those in other incubators, even though they employ selection policies.

19 Our Expertise Innovation Centre Management Diverse portfolio underpinned by quality processes, sharing of best practice and empowered centre management teams Delivery of financial and economic outputs Feasibility and Consultancy Range of tools developed as a result of our experience and research Support for policy and planning decisions, funding bids and investment Innovation Centre Design and Financial Modelling Concept IC Business Plan Modelling Tool Economic Impacts

20 For Further Information: Jo Willett e: t: +44 (0)

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