It is no surprise that straight after the coronavirus pandemic hit, those who adapted quickly reaped the benefits. Just as it helped drive the recovery post-2008, tech has been the great enabler in locked-down 2020, giving firms the agility to change how they work, quickly. More business are now allowing – or even asking – employees to work remotely. The age of the virtual office is upon us.
London’s start-up and business scene is world-leading but it is not a zero-sum game. Bristol, Manchester – and smaller cities like Exeter, among others – are thriving and offer entrepreneurs and business owners alternative options in terms of lifestyle and work-life balance. So, what do you need to consider before leaving the city?
Slow internet is still one of the biggest obstacles to productivity. The government has committed to providing superfast broadband connections to 96% of the UK by 2026. The roll-out of 5G is perhaps even more important, because it brings superfast internet without the need for a physical broadband connection; more than 80 cities currently have it with more on the way. For those planning to move – whether to a new office, or a new home – understanding connectivity is crucial.
With this in mind, former outlier locations can become frontrunners with the addition of decent internet. The benefits of country life pale into insignificance if it takes 20 minutes to download a presentation, so make sure you do your research.
The marketplace of ideas and goods
So, you know you can get connected, but what are the physical logistics like? Yes, you can order goods online, but can they get to you and your customers quickly? This is of particular importance if you’re using time-limited or specialist products. A few days missed here and there could be crucial, particularly with the complications arising from a potential no-deal Brexit. It’s worth a thorough look at how robust your supply lines will be and your contingency plans should things not go to plan.
With your superfast 5G/internet connection, you have unlimited access to the marketplace of ideas. You will have business connections in your current location and staying in touch is always good, but getting involved in seminars, discussions and business groups in your new location is vital for two reasons: Having connections across the country is an important diversification of the ideas and perspectives you surround yourself with; secondly, making local connections will help you understand the part you play in your new business ecosystem.
Capital and finance
Historically, London has been the European centre of Venture Capital (VC), at times connecting as much capital as the rest of the continent put together. London also provides access to extensive venture capital (VC) networks and the investors making the decisions. Pre-covid, these meetings would take place face-to-face; there was no substitute for entrepreneurs sitting in front of the right investors to tell their story. But the widespread use of digital tools that have replaced analogue meetings means that an entrepreneur no longer needs to be physically in the same place as a potential investor when pitching; you can attract capital remotely. We have also seen the rise in regional unicorns (privately held start-ups valued over $1bn), such as Graphcore in Bristol or Gymshark in Birmingham. This used to be the exception, but could well become more normal. While London’s pre-eminence will remain, it will certainly become easier to raise finance elsewhere through the diversification of capital access.
A tentative look at house price movement over the past five years will tell you that demand in certain areas outside of London is moving faster than in the capital. Places like Manchester, Cardiff, Birmingham and Liverpool have all seen impressive increases in average selling price.
Surveys of recent graduates also suggest that the allure of London is waning. Many of those leaving higher education with significant debt don’t fancy the sky-high rents and property prices of London; attracting junior talent is becoming easier. As more people work from home, this geographic democratisation of talent is likely to expand further, from the chief executive officer to the intern. Crucial still is the need to make sure the culture of your business matches your new destination. We all speak the same language, but the UK is as culturally dialectic as it is linguistically.
The future is remote
According to a recent study by TotalJobs, 1.6m Londoners are now working outside of Greater London, 43% said that they wanted a significantly different working pattern and relationship than before, and 27% do not want to return to a physical workplace at all.
Millions of those lucky enough to keep their jobs during the covid-19 pandemic had to react at short notice, turning their living rooms and spare rooms into makeshift offices. They’ve allowed their work life to take up residence in their homes and while many can’t wait to get back to the office, many have adjusted to the transition and are enjoying the benefits.
Many now expect remote working as a pre-requisite and attracting the best talent means being at the forefront of the inexorable march towards new ways of working. We’re still in the learning phase and there are some important questions to answer: How do you ensure consistent levels of productivity? How do you keep people engaged? How do you foster a sense of company identity if people can’t meet face-to-face? How do you make sure you include those who are not digital natives?
Does this mean that big cities are no longer centres of innovation, expertise and business growth? No. But we can expect talent and entrepreneurialism to continue to spread across the regions, increasing productivity, creativity, and efficiency. This stands to benefit entrepreneurs, business owners and young talent and ultimately, the UK’s competitiveness on the global stage. London is still calling, but so are the regions.
Further reading: When is a property investment eligible for Business Property Relief?