How can universities help unlock business growth in the Liverpool City Region?

Dr Fiona Armstrong-Gibbs, Reader in Enterprise and Inclusive Growth at Liverpool Business School, has produced a report on the Business Scale Up ecosystem in the Liverpool City Region. We asked her how Liverpool was doing and about the contribution of skilled graduates …

Q. Fiona, how do you assess the appetite in Liverpool City Region to join the Government’s drive for growth?

We’ve seen some big changes in 2024 -  Labour into Westminster and the re-election of Mayor Steve Rotherham to the LCR Combined Authority, so politically the region should be aligned with central government’s growth strategy. It is a key moment because we are also at the end of a long phase of European funding strategies which were fundamental to driving regional economic, industrial and regeneration policies. So, whilst there is some trepidation about what’s next, I think there is a collective will and an understanding that it is an absolute necessity that we must create a responsible approach to growing our regional economy and opportunities for people who live and work here.

Q. What were the key findings of your report?

We focussed on six key areas to build a baseline understanding of the LCR ecosystem. While there are some challenging findings, we have received a really positive response and identified a real need for this information – so as a region we know where the opportunities are to grow.  

From a cultural perspective there are successful scale ups in the region, but the publicity of these and what we can learn and be inspired by is limited. There are willing micro entrepreneurs and small firms, but they struggle to harness the benefits of a scale up ecosystem and established firms are traditionally risk averse.  The finance and funding landscape is bleaker post-Brexit there are some, albeit limited replacements of EU funds, such as UKSPF. There is an emerging appetite from venture capital funds and angel investment coming to the region, but more diverse funds and their visibility is needed. Government policies and initiatives are evident but would benefit from good communication to foster more engagement, because they are well received when businesses are made aware of them. We need better collaboration that supports human capital between schools, skills training providers, further and higher education and industry.  Post EU funding meant that many business support programs closed which a gap and a need for new support initiatives. Access to physical space is limited as businesses grow, tempting them to move elsewhere prompting more investment that is needed for regenerating old spaces and building new spaces. Post pandemic and post Brexit we now need to harness those with international aspirations. A focus on networking opportunities specifically for scaling businesses is also very much needed.

It is clear there are challenges in the regional scale-up ecosystem, including cultural attitudes, access to talent, finance, policy, and infrastructure. However, this presents huge opportunities to create the ecosystem we really need particularly from the perspective of the support services and our education institutions as well as policy makers driving the Freeport and Liverpool City Region Innovation Zone in supporting scale-ups. This is the time for a confident and courageous vision, improved collaboration, clearer pathways, alignment of education with industry needs, comprehensive solutions to bridge the financing gap, and the appropriate infrastructure to retain and nurture scaling businesses in the region.

Q. The LCR economy suffers from some key disadvantages but also faces some excellent opportunities, how are these evolving?

We need to nurture organisations that have a growth mindset, a culture that is open to taking responsible risks to reward many people’s efforts – not just a few. Share the positive stories and retain successful ventures that grow inclusive economies. It takes time to develop trust, and we need to avoid professional jealousies when we see others succeed. Opportunities to develop skills and build confidence is also really coming through at the moment – school, colleges and universities can really play a critical part in developing people with the skills that businesses need as well as developing networks that create opportunities and connections. 

Q. Can you give some examples of where the region has growth potential and what the potential is for fast-growth scale-ups?

The key sectors in the region include Advanced Manufacturing, Clean Growth, Digital and Creative Industries, Healthcare and Lifesciences, and the Visitor Economy. The Liverpool City Region is a £33 billion economy with an average annual economic growth rate of 3.2% from 2001-2021. Micro and Small Sized Enterprises make up 97.7% of the LCR economy, with a slightly below-average business start-up rate.  There is no prevailing or dominant industry that drives growth in the region so our successful scale up businesses are diverse and have grown in different ways. (The Growth Platform website hosts examples and most recent news https://growthplatform.org/news/)

Q. How would you assess local/national government’s capacity to support business growth?

The approach to supporting businesses is constantly emerging, particularly as governments identify where their priorities are, however the purpose of this report was to capture a baseline understanding, raise awareness and focus the conversation on all the ways we can support businesses to grow.  Notably, the funding landscape is changing fast and initiatives such as the £100m Northern Powerhouse Investment Fund II and the British Business Bank are concentrating on the LCR and the North West.

Q. How can an organisation like LJMU support business growth?

Anchor institutions are well positioned to convene discussion and facilitate collaboration between universities and industry. Through engagement and knowledge exchange we can get to know the focus and needs of growing businesses, create networking and learning opportunities, spaces for conversations and listen to business owners. As their needs and priorities change, be able to adapt to that.

As educators we can better prepare students for employment in scaleups and support them in starting businesses. There is also opportunities for utilising technology for entrepreneurial and explore potential spinouts. They called for improved collaboration, clearer pathways, and alignment of education with industry needs to better support students and scaleups alike.

Q. And what about the role of skilled graduates. Did you assess their importance?

There are approximately 63,000 higher education students enrolling in courses in the Liverpool City Region per year. Approximately 62% of LCR graduates were still living in the north west five years after graduating. This compares to around 50% of all graduates from English universities staying in the same region as their university.

Our graduates want to stay in Liverpool and work for companies here, so its really important that we work with businesses to co create programmes that equip grads with the skills those businesses need.   We need to identify clear pathways for graduates so they can access opportunities in scaling businesses and work with scale-ups to really understand what human capital they require. Our MBA in Business Scale-Up is designed to develop confidence and leadership skills as well as the knowledge for people to scale their organisations and to date we have had 40 successful graduates who have grown a variety of orgs – CNC Robotics, Hi Impact Consultancy, Blum Health Ltd, Glen Affric Brewery, Kittys Laundrette and Cycle for Life are just a few examples.

Read the Report

Dr Fiona Armstrong-Gibbs collaborated on the report with The Growth Platform, LCR CA, BDO and Form with support from the Scale Up Institute.

You can read the full report here.