Why is uni failing businesses? (From Echo)

Why is uni failing businesses?

9:00pm Tuesday 1st September 2009 in

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SOUTHEND'S Business Incubation Centre has gone “severely adrift” according to its first tenant.

The centre was set up to nurture new and growing businesses, but badly needs to be run in a more businesslike way itself, says Simon Swords, of Atlas Computer Systems.

Atlas was the first business to move into the centre, on the fourth floor of the university building in Elmer Approach. At the time, in April 2007, Mr Swords was so impressed by the concept of the incubation centre that, he said, “I acted as unpaid publicist and cheerleader, encouraging others businesses to come in as tenants.”

Two years later, however, a disillusioned Mr Swords has moved out and found premises elsewhere in Southend.

“We didn’t want to go, but we were ground down by the bureaucracy and expense,” he explained. “The centre is simply not meeting the purpose it was set up for.”

Owned and managed by Essex University, the centre was set up to provide affordable premises for new enterprises and companies in the early stages of development.

It also sought to provide a two-way exchange with the university business enterprise school in the same building.

Business people would benefit from having the business school’s expertise on tap and business students would have real life business models to study.

“You couldn’t imagine a better scenario. It’s a terrific idea and I backed it to the hilt,” says Mr Swords.

Mr Swords, who won the Newsquest Essex Entrepreneur of the Year award in 2007, says doubts began to set in when “it became a nightmare to achieve even the simplest task, if it meant dealing with the management.

“We were on the same floor in the same building, yet to get any job done on the premises we had to go through three tiers of bureaucracy.”

He believes these cumbersome processes may be linked to “top heavy staffing levels, which are typical of the public sector”.

Mr Shields’ biggest concern, though, relates to the use of a commercial lettings agency to handle tenancies in the building.

“It has turned the centre from a low-rate facility for new businesses into just another premium office space,” he says. “It undermines the whole concept of a business incubation centre.

“Then, in December, in the middle of a recession, the rents were actually raised.

“In fact, even on a premium level, they are not competitive. We have been able to find a comparable alternative at a fraction of their rate.”

“To see such an incredible facility with such huge potential going to waste, is very sad.”

Responding to Mr Swords, Judy Velden, manager of the BIC, said: “Charging of commercial rents was always a requirement of the funders.

“As a result the first rent increase since the BIC opened, of 5 per cent, was implemented from the start of 2009, due on renewal of tenancy. Tenants were advised in September 2008 of this planned increase."

Ms Velden also pointed out BIC rents, unlike most conventional commercial premises, are “inclusive of all services such as business rates, water, heating, electricity, internet and telephone access and security, as well as use of meeting rooms.”

She added: “Despite the recession, the BIC has enjoyed high levels of occupancy, “Currently 75 per cent of units are let, with two further applications pending. A number of businesses, including Atlas Computer Systems, have grown and expanded from the smaller units into the larger ones within the BIC – four in the last six months.

“Indeed, we have always considered Simon Swords and Atlas to be one of our success stories.

“The BIC’s aim is to nurture businesses in their early stages so they can grow and move on to larger premises, and this is a measure of its and Atlas’ success.

“We wish Atlas every future success as the business expands and moves on.”