| Ladies and Gentlemen, it gives me great pleasure to be here to formally open the Isle of Wight Enterprise Hub on behalf of the South East England Development Agency. And I am particularly delighted to see so many of you here today - I know that another important event is about to kick-off several thousand miles away (England vs Argentina in the World Cup) so I was expecting to address an empty hall!
This impressive hub - one of the 20 Hubs that SEEDA is planning to launch within the next five years - is a good example of how to encourage business to innovate within a supportive and creative environment.
We all realise that the growth of new businesses is vital for this country's economy. Already SMEs account for 99.8% of all UK firms, and a recent study by the DTI's Foresight programme predicted a rise of nearly one million small businesses over the next decade. These small organisations will drive the economy of the 21st century.
But, as you know, start up businesses face many barriers to survival and growth. A lack of access to suitable premises, business advice and other help such as finance can all hinder the chances of development for start-up and early stage companies - at a time when they are most vulnerable. One of the solutions which has proved successful in addressing and overcoming such barriers is the process of business incubation.
Figures show that, on average, 75 per cent of businesses that start in business incubation projects are still in business after 5 years, compared with only 33% which do not have such support. In some incubators which focus on particular clusters or sectors, there are even higher rates of survival. I am therefore delighted that SEEDA, like many of the RDAs, see business incubation as a key regional priority.
But Enterprise Hubs are more than just buildings. Each Hub provides entrepreneurs with direct access to business support, a knowledge base of research and development, flexible work space, early stage business finance and business to business mentoring and networking. Over 300 companies are already incubating in the SEEDA Enterprise Hubs and a quarter of a million sq ft of floor space has been created. These Hubs will harness the drive and ambition of local business people and benefit the communities which they serve.
And it is pleasing to see that here in the Isle of Wight, this Hub is working in partnership with other support organisations to enhance the prospects of its occupants - such as the specialist support on composites from the Universities in Portsmouth, Southampton and Cambridge together with generic business information and advice from Business Link Wessex. Already this hub is almost three-quarters full and it is a valuable feature of the Hub that follow-on space for incubated companies will be available elsewhere on the site, enabling them to grow without moving away from the support network.
The Government is also doing much to support business incubation. Last October the £75 million SBS Business Incubation Fund was launched to help increase the provision of business incubation and widen access to all those who need and will benefit from it. In partnership with other providers of finance, the Fund will ensure that:
- new incubation projects are created;
- workspace premises are refurbished into incubators; and
- an effective technological infrastructure, including broadband communication links, is provided.
Many of the existing business incubators and incubation projects - managed by the RDAs and various other parties including the private sector, universities, and research institutions - have tended to focus on key sectors and high-tech businesses. The SBS Business Incubation Fund will provide opportunities for business incubation for all members of society, including those in disadvantaged groups and in deprived areas.
This is a very important issue and I am therefore particularly delighted that SEEDA have also seized upon it with the establishment of Enterprise Gateways. Between six and eight of the next phase of Enterprise Hubs to be developed by SEEDA over the next two years will become Enterprise Gateways, and will focus more strongly on potential entrepreneurs working outside high-tech sectors and in areas of lower economic growth.
The Government has introduced a number of schemes to improve the transfer of knowledge from our universities into industry, such as University Challenge (which provides seed corn funding to universities), Science Enterprise Centres (which provide access to entrepreneurial skills to undergraduates and graduates in science and engineering), and the Higher Education Innovation Fund (which provides funding to universities to encourage them to do knowledge transfer).
These are already beginning to show impressive results. Last year there were 199 spin-off companies from universities, compared to an average of 70 each year for the previous 5 years. There has also been a sharp increase in the number of patents filed, up 22% between 1998/99 and 1999/2000, and the proportion of research income funded by companies in the UK is also up and is now at a higher level than even the USA.
It is also encouraging that the UK is now getting more than its fair share of fast growth high tech businesses. Recently, Deloitte and Touche published a survey of the 500 fastest growing European high-tech companies - 150 are in the UK, compared with 97 in France, 51 in Germany, and 43 in Ireland.
The Government is determined to create the best possible environment for innovation in the UK. We have already introduced R and D tax credits for large and small businesses, and the recent re-organisation of the DTI has seen the creation of a new Innovation Group in the department which will be managed by a new Director General with commercial, scientific and technological skills, recruited from industry. The mission of the group will be to create a world-class climate for innovation in the UK.
I want the DTI to become an influential agent for innovation and change in the UK economy and to be international "best in class" for the quality of its people and the depth of its knowledge.
Initially we have targeted six main objectives:
- a faster take-up of emerging technologies by business;
- more rapid adoption of best practice and new business models;
- a significant increase in knowledge transfer;
- a better-skilled workforce;
- increased business investment in innovation; and
- the use of more innovative approaches to regulation.
There is much that the Government - and the RDAs - can do to help ensure that small and growing businesses have the best opportunity to prosper. The opening of the Isle of Wight Enterprise Hub today will provide an excellent opportunity for entrepreneurs and small businesses in the area to grow and develop in a supportive environment. I therefore have great pleasure in declaring this Enterprise Hub formally open.
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