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Introduction
A Place To Live
Retail in The City
Physical Regeneration
The Liverpool Image
Realising The Opportunities
Recommendations
Museum of Popular Culture
About Downtown Liverpool
About The Management School
Realising those opportunities for enterprise
One of the most attractive ideas is that which suggests that cultural or artistic quarters can be created within an urban landscape. This has led many city officials in the UK to designate parts of their town as a preferred area for certain types of activity that come to be seen as ‘cultural’.6 Yet pursuing policies of this type is fraught with difficulties, the major one being that entrepreneurs prefer to find their own location to set up in business for a range of reasons, only one of which is proximity to markets.
Nevertheless, there are certain generic aspects of the business environment that can help entrepreneurs realise those opportunities that are emerging in our downtown setting. Apart from the obvious, such as finance, premises, business concept and support, we look here at local knowledge and social capital, which we believe to be two important, but often intangible parts of the downtown business environment. Local knowledge and social capital are essential for organic social and economic growth.
James Barton, for example, had an excellent ‘feel’ for the City. He was part of the buzz and excitement that was made up of music and ‘spirit of the night in town’ all of which made up the overall passion and experience that he built his business on. When he began Cream it was this passion and experience that led him, rather than a carefully crafted business plan, which would have seemed at odds in a local environment that at the time was bereft of opportunity.
When the first Cream album was released consisting of a compilation of music from the nightclub, there was no concept of how well it would sell, but it sold over 300,000 copies. Barton was and is a modest new Liverpool entrepreneur, but he understood well the local markets that engaged youth and provided a certain type of entertainment. This brought together a certain ambience within a Liverpool context, and a music genre that became highly popular among mainly young people, expanding way beyond our own City. In establishing Cream as a global brand Barton first demonstrated excellent local knowledge.
“Liverpool is the sort of place that regardless of anything else people will spend their last £20 going out on a Friday night and having a good time. So I think Liverpool has always had that sort of spirit.” James Barton, formerly Cream and now Babycream
This feel for the market, for the product and demand is vital in setting up a new venture. Yet local knowledge is also essential for other reasons. The supplier base for example is crucial for all types of business, but can also have impacts on the local economy through the multiplier effect. Policy officers need new and existing enterprises to think about how they might sell globally, but source locally. This would have a twofold effect of bringing in money from outside Liverpool, and Merseyside, and then circulating that money within the local economy. At the best of times, with the best of organizations, this is difficult to achieve. It is unrealistic to expect businesses to source their supplies from anywhere other than where they see as getting the best value. The challenge therefore is to ensure that the goods and services that are available in Liverpool are as competitively priced or of better quality than anywhere else. This is one area where intervention can make a difference.
The social capital of our local entrepreneurs is also crucial. When we speak of social capital in this sense, we refer to those institutions, the relationships, and norms of behaviour that shape the quality and quantity of our local economy. The social interactions that exist, as our local economy trades, are important to ensure sustainability. The social capital of local enterprises and associated institutions become the glue that holds together the local economy. How strong that glue is, the strength of the bonds which tie them together, depends on the strength of our local social capital.
This places a huge responsibility on our local business support infrastructure. Even by the mid 1990s there were over 200 generic and specific initiatives in the UK aimed at supporting enterprise. Owner managers have continually regarded the system of business support as having too many different organizations. A recent study by the Bank of England suggested that many local support agencies tend to compete rather than to collaborate, with public sector support bodies often driven by targets that encouraged such competitiveness.
This has led to situations that discourage new enterprise. Barton for example notes that there was little support for his initial ideas. The reasons for this are many with access to support often seen to be burdensome, or even a weakness of the entrepreneur. It is also true that the support services prioritise certain sectors and business concepts over others, a particularly difficult challenge for enterprise in the cultural industries. Then of course, there is always the difficulty associated with segmenting the small business market and the wide range of needs for support in this sector. Many of our local business support agencies perform well and provide a good service. The question is whether or not as a holistic group, they add more than the sum of their constituent parts. Do they add to our social capital?
While larger firms can afford to spend on research and innovation, on specific marketing projects and training for employees, the smaller firm often lacks these resources. Yet through collaboration and networking, through sharing information and knowledge together small firms can overcome barriers caused by their size in a relatively efficient way. The emphasis here is on our existing and emerging entrepreneurs to engage in a process of reciprocity, trust and exchange for their own overall benefit. Our local entrepreneurs need to develop their networks and relationships while at the same time taking care not to be ‘locked-in’ to an over dependent set of connections or narrow range of business contacts. We need to ask whether the small firm sector will enable this or if there can be intervention, and assistance to enable the development of social capital in the City, and if so, who will facilitate.
