The UK economy has changed immeasurably since Napoleon called us a ‘nation of shopkeepers’.
Yet, in many respects, the phrase still rings true: small and medium-sized businesses made up an astounding 99% of all private sector firms at the end of 2016, accounted for almost half of all private sector turnover and two-thirds of all employment.
For some time now we have seen small and medium-sized enterprises and disrupters knocking on the doors of well-established brands and industry giants to gain expertise, contacts and ultimately bolster their own growth. However, a more interesting trend has emerged in recent years…
Larger, more well-established, brands are turning to start-ups and challenges for an injection of fresh ideas
For example, Sir Richard Branson recently launched his Platform X project through which he lured smaller brands and entrepreneurs to train his own employees and stay ahead of the curve when it comes to tech and digital innovation.
Universities are now realising that they need to be more attuned to the needs of business than previous generations of academia and connections are forming between these sectors.
And this shift towards collaboration is at the heart of Here East’s ethos as we actively curate a campus where, through ‘co-location’, our different tenants’ talents and ideas can collide and thrive together.
This is a wise move as smaller brands are often more agile, forward thinking and innovative than their larger competitors and less wedded to the cumbersome processes that develop as companies grow. These processes may protect the existing brand but they are rarely conducive to driving it forward.
Smaller brands are frequently in a better position to support innovation
As we look towards a very different economic future, the ideas that can be sparked by the collision of large and small brands are needed more than ever. It was for this reason that car giant Ford recently announced
the opening of its Smart Mobility Office at Here East.
According to Steven Armstrong, Ford group president and president for Europe, Middle East and Africa, the company wanted the “greater collaboration and the out-of-the-box thinking needed to tackle the urban transport challenges of tomorrow”.
Increasing numbers of incubators and innovation centres, where large and small brands can work and learn together side by side, are opening up across the UK too. The majority of these facilities are based in the capital. For instance, London Mayor Sadiq Khan recently opened London’s largest innovation centre, Plexal, on the Here East campus on the Olympic Park – a home to 800 start ups and organisations.
Interestingly, Nesta has found that the majority of the funding for these new facilities comes from the private sector, an indication that larger businesses have recognised the need to support the challenger brands that follow them, in return for advice on innovation. In return, small and medium-sized enterprises are supported with training, mentoring, HR and legal advice and networking skills.
Start-up corporate collaboration holds the key to unlocking business confidence
According to recent research from the Close Brothers Business Barometer, 57% of businesses aren’t confident about the state of the economy over the next year. This rises to 64% of start ups.
Collaboration is one of the ways to offset these concerns. The more that large and small brands continue to innovate – to share ideas and to learn from one another’s expertise, partner and generate revenue – the stronger they will be.
In spite of these concerns with the economy, there are of course reasons to be cheerful: London remains a top global city, the economy has performed better than many expected in the past year – particularly in areas like manufacturing – and the capital attracted more tech investment in 2016 than Paris, Berlin and Amsterdam put together over the last five years.
However, continued innovation and collaboration between large and small companies remains the one of the best ways to secure future success in the years ahead. At Here East we will be playing our part in this.