Published: 27th February 2020
Published: 27th February 2020
A recent report from independent company Ash Futures shows positive impact of EU funding in Cornwall and Isles of Scilly businesses. Our Innovation Centres were a case study featured on page 45 of this report, which can be found here. Below is what was found from this study.
Three Innovation Centres have been supported through the EU programmes over the past decade, creating a high quality innovation infrastructure within Cornwall. In 2010, Pool Innovation Centre was opened, supported by £9m of ERDF funding. This was followed by the opening of Tremough Innovation Centre in 2012 (circa £9.8m ERDF support) and the Health and Wellbeing Innovation Centre in Truro during 2014 (circa £10m ERDF support). The Centres are owned by Cornwall Council and operated and managed by the University of Plymouth. In the first 3 years of operation, the Centres were underpinned with revenue support to allow them to develop on a more sustainable model. As well as the core accommodation offer, the Centres also host a range of events.
The University of Plymouth – as operator of the three Centres – is quite clear that without the European programme support the Innovation Centres would not exist, certainly not at the same scale. The financials associated with developing and operating such facilities in an area such as Cornwall means that the level of return against the scale of capital investment required would not attract sufficient private investment. The EU programme support effectively means that Cornwall can offer high quality commercial space at a scale not afforded in other areas of the UK. Cornwall is seen as ‘punching above its weight’ in terms of its hard innovation infrastructure – certainly outside London and the South East.
The latest figures show that each of the three Innovation Centres run at 85%-90% occupancy, currently providing accommodation to 150 local businesses. Typical churn rate averages around 10% per year across all three Centres. That is lower than anticipated given the flexibility of the offering due primarily to the lack of affordable alternatives. According to the latest estimates, the businesses support circa 1,000 FTE jobs, and with an associated turnover of £43m. Tenant businesses continue to experience strong job and turnover growth. Whilst there are a range of reasons why businesses have experienced growth, good quality accommodation is cited by many as an important factor.
A recent evaluation estimated that since 2012 the three centres have supported a gross increase in Gross Value Added of circa £28.5m, increasing strongly in most recent years.
The importance of revenue funding alongside the capital funding should not be underestimated. Without this revenue support the centres would not have been sustainable in their early life, as occupancy built. The Centres have become sustainable since 2017 and have benefited from an alignment of management in terms of operational, marketing and
business relationship across the three Centres.
Whilst the European funding allowed the development of high-quality space, the high building specification present issues in terms of facilities management. The associated costs to the high specification – largely driven by the requirements of the EU programme itself – raises questions in terms of sustainable business models. A private developer would simply not see the returns against the level of investment. In the future, a compromise on building quality for commercial spaces may not have a detrimental impact on their ability to attract tenants. This needs to be considered for any future publicly backed schemes.
If you would like to know more about our three Innovation Centres, please read our Blog on ‘Five things that make an innovation centre different from other workspace’.