YEP is the pan Yorkshire offering for the proposed LEP (Local Enterprise Partnership) structure with the main strap line of being "the voice of business in Yorkshire".
In this body there are many respected business leaders and major players in the region. Banks, Lawyers, Accountants, Manufacturers and even the Chamber of Commerce is represented. They feel that there are 4 key areas that should be promoted on a regional (i.e. Yorkshire wide) scale. These are Innovation (in their words exploiting new ideas), Intelligence, Finance for Business and Promotion. I have just spent my morning pawing over their manifesto and here is what I think.
Let me start from the top. Innovation. How many times have I heard this word and still some of the brightest people I meet haven't got a clue what it really means and neither do I. What I do know, however, is that in a positive document aimed at developing the region, Exploit, is a not a word to use. The document goes on to explore our University offering in Yorkshire and how we need to pool resource and enhance our offering. Interesting idea if each of our regions universities weren't already competing against each other for research funding, undergrad and post grad applications and funding for spin out companies. The idea of them working together is a long way from reality and if you look outside of a city region to Yorkshire as a whole that issue becomes all the more problematic.
The other challenge here is what innovation they are looking for. Is this innovation of a new product that will make a mutli-million pound business or is it innovation in how we live our lives and how we do business. This raises the challenge of innovation, what is it?
Secondly they move on to the points of intelligence and promotion. Regional data is invaluable in understanding the dynamics of a region. Areas of growth, poverty, unemployment etc... But is a regional picture of this nature too diluted. Does this average out our strengths or bolster some of our more local weaknesses. There are a range of businesses in Yorkshire, PLC's, sole traders, importers, exporters, distributors. Each of these businesses face their own challenge. A business in Whitby in one sector could be bracketed with a business in Barnsley. Very different socio-economic spreads, and differing local business communities. Whitby is surely more aligned to Middlesbrough and Sunderland than it is to any other part of Yorkshire. To be effective and provide solid facts for policy direction these figures need to be brought down a level. The whole reason for city regions is the economic unit of the region. Yorkshire is not a coherent economic unit, it is simply too varied and broad to be truly effective for the benefit of the business community.
This leads nicely on to promotion. Whilst Yorkshire is a strong brand for tourism with all the qualities the area has, it is not suitable for business connections. Whilst Yorkshire Forward have done some great strategic planning around inward investment, local authorities still compete, and under any pan Yorkshire body this would still take place. Sheffield LEP, Hull LEP and Leeds LEP would still argue they are the best site for any business. This in itself is destructive in terms of any business getting a clear idea of location. They argue that Scotland and Wales promote themselves as a whole but with all due respect there are two major cities in Scotland and only one in Wales. Yorkshire has at least 5 and could be argued there are more if you include Huddersfield and Wakefield. To tell a Chinese investor that Yorkshire is the best location for their business and then try to sort out the bun fight between city regions or even individual cities is just ridiculous. A nice idea but if you look at the German model who are one of the strongest inward investment magnets in the world, they work on a city region level.
Finally they talk about my biggest issue, Finance for Business. How can you tell a Bank to lend more money. The answer is simple. You can't. Banks need to lend money to make money. I saw an article today from an association of business owners, complaining that banks were charging more for unsecured lending than secured lending. Where is the shock their. Also they complained that banks were undervaluing property. As anyone will know banks work on market value and sorry to point out the obvious but we are in recession and property is worth less now than it was 3 years. Sometimes I think I'm the only one who sees this.
The plan talks however about attracting Private Equity investment into Yorkshire, developing Finance Yorkshire as a private equity tool and lifting restrictions on growth for businesses. One section talks of the biggest reason for SME and start up businesses failing to grow is the lack of finance. In reality its not the lack of finance, it is the management of the business. Not once in this document and through most of the comments throughout the recession do people in business look at lack of skills in management and financial acumen. If the business is viable and ready for investment then they can borrow and can raise capital for growth. If they aren't viable they won't. Until businesses look at themselves and stop blaming other people, namely the banks, then we won't move on from the doom and gloom that surrounds us. Yes capital is important in the region, investment in transport, schools, hospitals and growth business is required, but we need to help our region's step up to the plate. Very few SME's will have a grasp or care about the LEP's, for them the issues are cash flow and bottom line. Keeping their business moving forward, looking to new markets, restructuring in the changing climate. All this requires skill. Not in the manual sense but in the business leadership sense.
Again, can this be delivered Yorkshire wide? I would argue strongly that this is a no. City region's have an economic make up that will be unique with differing challenges and these need to be addressed locally. Will Finance Yorkshire understand market challenges in Scarborough and Whitby better than Leeds city centre or Barnsley. Does a business in Hull share the same needs and challenges as a business in Skipton? The answer to both of these questions is no. Whilst there will be some similarities the main differences in the businesses will be local. Banks do not have major regional offices they have a network across the regions for exactly this reason.
On the point of equity and fund raising from venture capitals. we have a string record in the region already. There is some need to work on investor readiness and support for local business to keep that flow going but if you try and sell the whole of Yorkshire to a fund manager do you not dilute each city regions offering. There are great tools already in place and these need to be developed city region by city region to maximise their impact and generate competition in the region. Mediocrity cannot be an option for Yorkshire.
All in all there are many areas where a set of eyes joining the dots between city regions or even local authorities is critical, of that I have no doubt, but suggesting that one company/organisation can be an effective voice for all businesses across the whole of Yorkshire is simply ridiculous. We are trying to develop the areas where we live and work as more sustainable, safer, fairer and vibrant centres. So lets focus on those areas. OK economic units or city regions aren't the best terms and we get very protective if its says Leeds, Sheffield, York or Bradford in the title, but at the end of the day these are centres where we live and work. We are proud to live in Yorkshire and have Yorkshire businesses but realistically we are challenged in these businesses on all levels and the one's we can overcome ourselves should the one's in our own locality.
P.S. I'll get to the use of sustainability in this and other documents another time.
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