Bondholder

By Sarah Downing on 07 March 2017

Innovation was the subject of regional business attention on Friday last week, with a focus on how the Humber is driving innovation to boost productivity.

The event recognised the Humber’s strengths within internationally established industries including energy, manufacturing and engineering and how the bravery of those pioneering within these sectors is contributing to the future growth of the UK. 

From new business investment to the development of pioneering technologies and to the significant job roles they are in turn creating, the Humber was identified as a the ‘one to watch’ set in the context of an emerging city region.

Over 150 delegates engaged in what marked the first Bondholders Breakfast of 2017, held at The Deep in Hull; itself a testament to the area’s success, having won numerous attraction awards, being recognised as one of the most spectacular aquariums in the world and is the most commercially successful Millennium Project.

Following a welcome by Chair Anita Pace and introductions by host Dave Burnby, Centre for Cities Analyst Ed Clarke took the Keynote slot; setting the scene of Hull’s opportunities and challenges.

In a thought provoking presentation that explored the importance of cities to the economy – irrespective of their size within the context of the UK landscape (accounting for just 9% of the landmass), Mr Clarke advised of the need for the government to consider different places ‘differently’, since core strengths such as location, productivity, population, innovation and skills, etc. all vary enormously from place to place.

As the role of Centre for Cities first and foremost is to ‘inform’ in order for us all to make the most of this diverse mix, Mr Clarke went on to share a vast and impressive selection of analysis that highlighted the great work their organisation does; all centred around the topic of the day – productivity, innovation and growth.

Talking of the local profile he said: “Within Yorkshire & the Humber, 75% of jobs lie within cities, whilst making up just 24% of the UK’s landmass. Large cities are important nationally due to their scale, but smaller cities have the opportunity to be more dynamic and diverse. Hull matters to the national economy and we need to review and understand its opportunities and challenges to maximise its potential.”

The place of the wider region was also named in the context of its importance to a cities success, with “the city providing the job opportunities and the wider area providing valuable workers.”

On the subject of ‘success’ and what drives it, Mr Clarke went on to describe the contributing factors to growth in city regions. He said: “Growth lies within those cities that have a higher/increasing proportion of high skilled jobs. This drives innovation, wage growth and the local economy.  People and skills are the biggest indicator of how successful a city is.”

Citing the work of the Bondholder Scheme, Mr Clarke went on to say: “Hull is doing a great job on ‘place marketing’ now; the work that you do is talked about frequently in our offices and is to be commended. More generally though, skills still need greater support and focus. Hull definitely has momentum, but is growing at a slower rate than some other cities. Continued and increased investment in skills and harnessing talent is therefore crucial. The city needs to focus in this area of recruitment to boost high paid occupations”.

In his presentation and in the later panel discussion that followed, Mr Clarke also referred to the need for balance in this area, advising: “A challenge for all places is to ensure that they don’t polarise by creating high wage jobs in isolation. Mid wage jobs are important to bridge the gap between high and lower paid workers. Hull does still have a high proportion of low wage jobs, due to its strengths in manufacturing and processing industries; therefore it needs to remain ambitious to create higher wage opportunities, but should also consider the implications locally whilst doing so”.

Moving on to discuss the place of innovation in driving cities forwards, Mr Clarke shared some fascinating examples of place trends over the last century, where some cities had performed better than others due to economic changes - which in turn has evolved the roles of respective places within the UK.

He said: “100 years ago the main benefit to a business location in a city was lower costs, taking advantage of rivers and ports for transport, fuel sources and the large number of workers. Today it’s the ability to share ideas and information – taking advantage of the large number of workers and knowledge exchange.

But the challenge hasn’t just been to create more jobs. It has been to offset jobs lost in declining industries with jobs in new, knowledge based sectors. Not all cities have done this. Some have replicated their economies - swapping coal mines for call centres and in turn recreating low wage, low skilled jobs. As said, the most successful cities have reinvented themselves, adapting to the 21st century, moving to a knowledge-based economy.”

Of Brexit and the potential implications for the Humber, he added: “The impact of Brexit will play out differently in different places. Hull is the UK’s largest exporter to the US, therefore Brexit deals will be of great importance to the area. However, the Industrial Strategy puts ‘place’ at the forefront, therefore it both requires us to understand and be specific about Hull’s opportunities and challenges. We need to support broad conditions for growth, especially knowledge intensive firm and to welcome a related variety - not simply specific industries.

Poignantly, in demonstration of the Humber’s home-grown expertise, delegates then heard from two exceptional examples of regional innovation in business – Spencer Group and Swift Group.

Richard Burgess, Deputy MD of Spencer Group and leader of their recent Energy Works investment, was first to take centre stage. Due to complete in early 2018, the £200m Energy Works development will be the first facility of its kind in the UK, using a combination of innovative renewable energy technologies to achieve a highly efficient mix of recycling and energy conversion processes. Although awarded a grant of almost £20 million from the European Regional Development Fund, the remainder of the project was financed via a host of private investment sources from as far away as Israel.  

Speaking of Spencer Group’s involvement, Mr Burgess said: “Energy Works is a project that is driven by passion, coupled with an acknowledgement of the need to move in to advanced, cleaner technology driven energy.  We spotted a downturn in construction post 2008 and our MD, Charlie Spencer wanted to do something that showcased the business in the context of doing something that in turn benefited Hull to give back to the area.”

As a specialist engineering business, Spencer Group’s role has been to develop plans to deliver the project and guarantee local employment during construction. Mr Burgess said: “The project involved 12 months of hugely intensive work at contract stage alone before grants and inward investment funding could be sought. Spencer Group invested significantly with our own funds up until financial close; therefore it was an incredibly high risk strategy for us.”

Once operational, the pioneering facility will create enough energy to power 43,000 homes and recycle 250,000 tonnes of waste and create a swell of jobs in the process. As a snapshot of the milestones reached to date, delegates enjoyed a time lapse video which showcased the enormity of the site and the ambitions are now being realised.

Of that challenge, Mr Burgess said: “We bit off more than we could chew as we realised the wider potential to be involved in something so significant. In our role, we have been able to engage with every member of the team involved and act as a bridge to drive the project forwards – this is the difference made by us as influencers and facilitators. Our high-risk, high-reward strategy has carried us through, but with lots of lessons learnt along the way. We’re so proud of what we’ve achieved and the legacy that it will leave for the city.

In summary he added: “Our ambition is certainly to do this again, therefore we would now like to see more support for businesses like ours and a wider strategy adopted to enable us to get involved in similar projects again.”

Closing the event was Swift Group’s Design Manager, Paul Cunningham who gave a detailed account of the companies impressive history, accolades and how their innovative approach to business has seen them go from strength to strength.

Swift Group was founded by the now chairman's late father Ken Smith in 1964. A steady stream of new products, innovations and acquisitions cemented Swift’s position in the caravan sector in the 1980s to see it become the multi-brand business it is today. Serving all levels of the market from budget through to luxury vehicles, the £225m turnover business is a one of the most established market leaders in its field, offering a complex product line of 379 models across three 3 main product lines – Tourers, Motor Homes and Holiday Homes. It has also seen significant growth in market share across Europe, with exports now representing 10% of group turnover.

Echoing Ed Clarke’s earlier commentary on the success of cities relying heavily on a highly skilled workforce, Mr Cunningham talked of Swift’s commitment to its employees and the development future careers within the area.  “We are a major employer in the area, with 1100 personnel”, he said. “Swift Academy is a really important investment for us - growing talent as opposed to just sourcing it. We are investing in people by building skills and experience to drive innovation and quality - using local training providers wherever possible, including Hull University and HETA.”

As an early adopter of new technologies and processes, Swift Group has not only retained its market position in the £6bn UK market, but continues to extended it; with a customer focused ethos and pioneering approach across all aspects of the business.  

Speaking of their recent innovations and investments, Mr Cunningham said: “£8m of investment has gone in to our new manufacturing facility at Cottingham, due for completion mid-2017 and we’ve been working with Bondholder member Houlton in order to deliver project. A multimillion pound bonding line and new equipment has also been purchased - essential to the manufacture of the Smart + and Smart HT models.

Alongside this, we’ve invested in virtual reality equipment CGI brochure imagery, plus a team of specialist staff offering us lots of exciting possibilities going forward. At the moment we’re using this technology for design, but augmented reality is also possible. This coupled with CGI imagery for brochure means Swift now have a truly fully digital workflow.”

Swift’s presentation was bursting with extraordinary examples of product innovation - from their Basecamp product, a cross over camping vehicle packed with tech, luxury and bespoke finishing, to their ‘Smart Construction’ initiatives, which eradicates the need for timber products within the body shell of vehicles and instead uses GRP composite panels.

“With Smart Construction, our goal was to deliver a robust next generation vehicle architecture which all our new products would be built around” he said. Moving towards GRP composite panels meant we had to create a completely new supply chain. Frustratingly we can’t source a lot of these products locally yet, but this is something we are keen to strive for in the future by developing our relationships with local suppliers.”

Uplifted by such illustrations of the revolutionary work being done right here in the Humber region, delegates left giving a glowing report of the breakfast event – some even identifying it as the best yet…. a sign in itself of the energy that’s all around the UK’s the Estuary.

Back to News