We spoke with David to get an understanding of how recent political changes are impacting the property market and the ability of Science Parks to secure funding. Broadly, we grasped David’s perspective on the future of Science Parks and their role in digital innovation.
Insightive.tv: Has Brexit affected the Science Park in any meaningful way, or affected your plans for the future?
David: In the short terms, it hasn’t had much effect. The real consequence of Brexit is the uncertainty. Currently, this is because of the “Phony War” we are in. But, as time goes on, and we get closer to exit, uncertainty will create problems with investment. From our perspective, these investments are in form of grants associated with business support.
The challenge is that this has actually brought forward, with greater clarity, the need to look for other routes of funding for both revenue and capital projects. This discussion, however, has been going on for quite some time. Since the death of the Regional Development Agencies, a lot of Science Parks have been looking around for alternative funding, particularly capital project. This is leading to significant changes in stakeholder and ownership structures. Universities are repurchasing their own Science Parks, the public sector is divesting and there is greater collaboration with private sector partners. This is also leading to partnerships between science parks.
Insightive.tv: Can you go through the current structure of the various entities that exist across Innovation Birmingham?
David: Currently, we are entirely owned by Birmingham City Council. This ownership has gone through several transformations. It started as a partnership between the University, the Council, and Lloyds Bank. It changed to the current situation in 2008. But next year we will become a majority-owned private sector business — whether the Council will remain in a stakeholder position is still to be decided. But, basically, we need to bring in capital finance that is not based on debt finance. We are just starting a process to go out and find equity support.
Insightive.tv: What are your fundraising efforts earmarked for? Expansion?
David: That is certainly part of our goal. But the other side of things is the objective of creating a business that generates sufficient surplus to pay a dividend and create the funds to conduct business support without the need for grants. This is not to say that we will not utilise grants. However, our aim is to underpin our knowledge economy business with property assets and generate enough surplus to continue our business support and growth activities.
Insightive.tv: What types of funds and investments are you exploring?
David: Private investment, almost definitely. What form of private investment remains to be seen. Setting up the operation as a social enterprise that would be the ideal.
Whatever structure we put in place, we want to set it up in a way that means that it doesn’t get stripped back to the bottom line, becoming a maximum profit focused industry. We need to maintain the difference of a place that promotes digital start-ups in Birmingham. Our focus is the growth of the community.
Insightive.tv: How broad is the service portfolio that you provide?
David: It basically comes down to two types — business start-up and growth services. This includes everything from business plan writing to finance support. We have two incubator programs — one that offers nine months free everything, another one that offers six months free everything. The idea is to grow the business and grow our tenants.
The other side of our operation is about driving the community. We have about 140 events a year. We have a PR and marketing team that are there to promote what we do, what the businesses do, and create a focal point for digital entrepreneurs in Birmingham.
Our current property portfolio is about 93% full. It has risen and fallen at various stages. But we have gotten better at filling gaps with innovative companies. Our community focus makes sure we give as many opportunities as possible to new tenants.
Insightive.tv: How are the demands from your tenants changing? Are you undertaking any innovative strategies to engage the new generation of digital entrepreneurs?
David: Things are changing slowly, but I think this is going to accelerate. The Gen Zs are going to want to do things in a very different way. Indeed the opening of the iCentrum Building was designed with the sort of things that the social and mobile generation want to have. Open work spaces with very good internet connectivity allow the ability to network when needed and hid away when not — creating that interconnected centre where we bring people together both physically and virtually.
We also do events with schools and colleges. We are putting together a video connected network from here for the five universities in Birmingham — promotion of cross talk, collaboration and knowledge exchange.
The real innovation looking forward is the creation of a less rigid concept of what we do. Part of this is even dropping the word “Science Park” for something more inclusive, such as Innovation Campus that goes beyond the classical view of the kind of tenants we engage with. We are interested in the application of digital technologies across every sector. We are looking at digital art, theatre and music — and how we could bring those sorts of people and mindsets into a melting pot. One of our incubators is called Serendip — we are interested in the serendipitous interactions that we can create by bringing people together.
I think it is an interesting time for Science Parks, there are lots of challenges that have come as a consequence of the continual change in local and regional politics. Brexit will have its bit, but so will the local agenda — “the Powerhouse, the Engine, Combined Authority Agendas.” In some ways, these changes could play to the strengths of Science Parks because I think their impact is more regional than it is national. But there is a need for the Science Parks themselves to engage in those discussions.
David Hardman has been CEO of Innovation Birmingham for the last eight years. He has overseen a complete restructuring of the Park’s business strategy and has recently secured funding for two new buildings within the facility. Dedicated to the Park’s incubator projects and community focus, David aims to expand the prospective tenants of the organisation.
Innovation Birmingham is a Science Park dedicated to creating an innovative start-up community located in Birmingham City centre. They provide office space, conference facilities and co-work capabilities to digital entrepreneurs.
Part of THE FUTURE OF COMMERCIAL PROPERTY series
Trends, Challenges, and Opportunities An Inside View