Local policies for new types of working and microbusinesses

We investigated policy responses to the rise of self-employment and micro-scale business activities (businesses with fewer than ten employees) in the South of England. The survey used a standardised questionnaire which was distributed to all departments of local authorities dealing with economic development or planning and regeneration in the South East of England, South of England, the London Boroughs, and the Local Economic Partnerships (LEPs) in these areas were contacted. A total of 68 local authorities and LEPs were asked to participate in the survey of which 34 filled in the questionnaire. This equals a response rate of 50%.

Priority Objectives

Asked for the priority objectives, economic growth, housing and employment were most frequently ranked as highest priority policy objectives. These broad areas included reference to affordable housing, business growth and investment and improving the skills of the local population.

The retention or attraction of Small- and Medium-Sized Businesses (SMEs), start-ups and the growth of microbusinesses were mentioned in a few cases, mostly by the London Boroughs. The provision of suitable ‘workspaces’ or ‘commercial spaces’ were mentioned in responses relating to attracting new businesses, supporting SMEs, start-ups and microbusinesses to grow.

Industry sectors most targeted

Creative and Cultural Industries were the industry sector most targeted in local areas (14% of responses), followed by Information and Communication (10%), Retail (8%) and Health/Life Science/Pharmaceuticals (7%). Other sectors included professional services and construction.

Demand for flexible office space in local area

In response to the question ‘To your knowledge, what is the level of demand for flexible office/workspace or premises for in your local area?’

  • 70% said there was a high level of demand
  • 85% said there were co-working spaces in their local area.
  • Another 85% said that they know of informal meeting spaces (e.g. cafes, hotel lobbies, community centres) in their local area that self-employed/freelancers or microbusinesses use for their work/business.

Of the local authorities who responded, only two councils said there were no co-working spaces in the local area.

Support for micro-enterprises, small businesses and the self-employed

86% of responses indicated support for microbusinesses and/or one-person businesses or the self-employed in the local area. When asked to specify the different activities provided for micro and small businesses and the self-employed, these were the most common responses (in order): flexible office space, business advice, premises, training, networking and finance.

Those selecting flexible office space were based in a variety of geographical areas: London Devon, Dorset, Bath and North East Somerset, Canterbury, Bristol, Cheltenham, West Berkshire and Maidstone. Notably, all London Boroughs that participated in the survey said that their council provided flexible office space.

Targeting the provision of flexible office space included both, to bring vacant office back into use as enterprise space and to encourage private sector provision of coworking space, for example in the case of a coastal town, but also to provide affordable workspace in areas of high demand for vacant business premises (London).

We found creative approaches to provide flexible work and office spaces in rural councils or those outside large employment centre. In particular, initiatives included to support and set-up coworking networks so that microbusinesses can meet, network, and learn; or the provision of space within the local libraries to be rented by the hour, and collaborations were sought with railway providers to create “incubator” space in local railway facilities.

Barriers to provision of workspace

The most often mentioned barriers to the provision of workspace identified by the local economic and regeneration stakeholders are (in order):

  • Competing land use demands and availability of land
  • Cost of land
  • Cost of office space
  • Suitability of available space (e.g. size, location)

The most often mentioned problem of competing land use demand relates to the competition between small commercial spaces and residential uses:“We spend a great deal of time working with developers to try and deliver more commercial space. This is extremely difficult due to the comparatively low returns generated compared to residential uses.”

“Our planning authority struggles to protect employment and workspace, particularly following the permitted development change for retail/office to residential uses.”

Supporting local businesses

Several responses regard the provision of affordable, flexible workspace and business premises for businesses of different types and sizes as an important aspect of supporting businesses in their local area. One key issue is that the “Provision of workspace (both office and workshops) for microbusinesses under 1000 sq. feet generally is unviable for developers to build commercial space smaller than this.”

In this context, the promotion of mixed-use housing/industrial (including workspace) as seen in USA, Holland and others (and rare in UK) is regarded as an option including to focus beyond the High Street and extend development focus to residential neighbourhoods.

Important is equally the access to training, skills, mentoring and networking opportunities in combination with business space.“We have recognised that there is a correlation between our business survival rates and providing a local start-up support programme. This has been more important for new businesses than workspace. However, we have also found that open planned co-working space is still not vibrant in this area; instead businesses are requiring small offices within collaborative environments.

For council in rural areas, broadband provision is very important and often still needs to be improved in their area.

Summary

In summary, the provision of flexible and suitable business and working spaces is recognised as a key issue in local economic development as expressed by the surveyed local authorities (including LEPs). This applies to councils located in economically vibrant areas as well as sea side towns and rural local authorities, although pathways to promote small businesses and the provision of flexible businesses and working spaces are clearly different in these areas. It is likely that councils that see the provision of flexible office spaces and suitable business premises for a range of businesses as key issues of economic development, planning and regeneration, were more likely to answer the questionnaire. The response rate, however, was high and the responses covered different areas in terms of their economic performance and location. Essentially, while growth areas have to target land use to provide sufficient spaces for small-scale business activities, outside growth areas, the promotion of networking in the local area and the reuse of existing spaces are viable options.

The survey was supported by an ESRC IAA grant.

If you seek more information on the survey findings, please, contact Darja (d.reuschke@soton.ac.uk)

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