‘Churn’ is not growth

Surrey Research Park supports incubation of start ups, SMEs or much reduced corporate offices, such as when a UK world-wide corporation sold out to a European rival on the grounds of maximising shareholder return.  Where is the local economic growth in that? Incubation of start ups is a revolving door. When either they grow bigger and outgrow Guildford, or when they submit to the blandings of UK economic development areas that have larger government subsidies for larger sites when they scale up, or when they fail as do many start ups, their premises become vacant for a new start up or SME. For example, there’s one start-up that likely shall be vacating the Science Park later this year or the beginning of next to set up their new enlarged operations in an area where the regional subsidies handed out by central government simply out-compete what Guildford and Enterprise M3 LEP can ever hope to offer.

In this context, there is no net employment gain, no net Gross Value Added, much beloved of M3 Enterprise LEP, whose plans contain lots of aspiration but no hard delivery.  As we have already seen in the case of an international oral care products company UK office in Guildford, jobs have reduced as cloud technology has removed the need for numbers of skilled on-premise support specialists.  Ask the founder of Bullfrog Productions, Lionheart Productions and 22Cans how many UK-based people it really takes in software R&D and on-going maintenance to design, create and support the software of a popular world-wide computer game and how employment prospects are driven by very short product life-cycles in such a fashion-driven industry as computer gaming.

What we end up with is business and employment ‘churn’, not net employment growth. Where in that environment is the corporate and economic permanence that drives the need for employees to settle in a physical location close to their place of employment?

The council might be hoping that the aspiration of Enterprise M3 LEP in their “Enterprise M3 Delivery Plan 2014-2020” to see hundreds of new companies created in Guildford in the next 5 years might be met but are wrongly interpreting that the majority of these companies shall be permanent, rather than simply a ‘churn’ of micro-start-ups moving through existing business premises with little need for employees to be locally resident in the short/medium term.

That exposes the other key aspiration in the M3 Enterprise LEP ‘Growth Package’ profile for Guildford of high levels of local house building.  If the reality of the economic strategy is business and employment ‘churn’ not growth, the question must be asked ‘who shall live in all these new houses?’.  There is little future in house building per se as a basis for economic growth, as the Spanish know to their considerable cost, but the cabal of local business leaders, local politicians and senior academic institution representatives on the board of M3 Enterprise LEP seem to fail to grasp in their rush for central government handouts.

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