Bristol Growth Summit€¦ · trying to wrap in the broader region. “I'll tell you...

0 | Bristol Growth Summit

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© 2019 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Bristol Growth SummitKey takeaways for CEOs

Bristol Growth Summit held at SS Great Britain

kpmg.com/uk

https://home.kpmg.com/uk/en/home.html

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Bristol Growth Summit | 2

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Table of contents

The Times/KPMG Growth Summit 03

Key themes occupying Bristol CEOs: 05

01

TalentA great city, attracts great people … attracting great companies

02

TalentHigh-performing teams need a clear corporate purpose to follow

03

TrustFar-sighted firms are embracing CSV (Creating Shared Value) not just CSR.

04



TradeRegional cities need more local funding

05

Trust Being local isn’t enough. Businesses must actively engage with communities

06

Trade Whether you’re seeking global investors or a global market, Brexit dominates

07

TradeTo sell abroad, YOU have to get out there too

3 | B ristol Growth Summit

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The Times/KPMG Growth Summit

After a decade convening FTSE chief executives at the Times CEO Summit in London, KPMG teamed up with The Times and Sunday Times in a new initiative, bringing together business leaders from around the country at four Growth Summits to plot new routes to a more inclusive kind of growth.

We began at SS Great Britain in Bristol where panellists including local tech founders, media executives, export champions and university heads debated issues around talent, tech, trade and local trends. We also tested business leaders’ views on some of the big issues of the day via a series of instant polls.

4 | B ristol Growth Summit

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B ristol Growth Summit | 4


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Key themes occupying Bristol’s CEOs

1Talent A great city, attracts great people … attracting great companies

Cities like Bristol can resist – and reverse –London’s gravitational pull. Speaker after speaker cited Bristol’s unique vibe, diverse mix of people, beautiful surroundings and all-round ‘special place to live’ as the reason they either stayed in – or had come to – the city.

“For me it's the people, and it's the fact that it's such an amazing environment and city to live in, that it brings a really rich and interesting team to me.”

- Zoe Taylor, CEO Sparkol

Other cities and regions should not underestimate the power of such ‘soft’ factors in attracting people, who in turn bring new ideas, entrepreneurship, investors and ultimately, wealth. In a globalised market place and with improving ICT, it matters less and less which particular point in the UK you find yourself.

“If clients are in Silicon Valley it doesn’t matter if you’re in London or anywhere else.”

- Tom Carter, Founder and CEO, Ultraleap

Aren’t tech firms missing out by not being in Silicon Valley? In fact, says Nigel Toon –Founder and CEO of AI chip maker Graphcore – it’s sometimes an advantage not being there! For a start, talent is about a third of the price by not having to compete with the likes of Google and Facebook. Not being there adds a certain perspective too, he says.

“It's so easy to live in a little bubble in Silicon Valley and you don't realise that China is quite different and you don't realisethat there's a lot of stuff happening in

Europe and there's tons of stuff happening in Korea. Whereas for us, that's our world. The distance forces you to be more outbound.”

- Nigel Toon, Founder and CEO, Graphcore

Being a great place isn’t enough - a city needs a brand. Cities like Bristol often have it, but do they flaunt it? Several speakers agreed that its branding was too diluted by trying to wrap in the broader region.

“I'll tell you unapologetically ‘West of England’ does not work (as a brand). Ask most people in Singapore or San Francisco to put a pin on the map? If there's a gap for us, it is the brand.”

- Professor Hugh Brady, Vice Chancellor,University of Bristol

2Talent High-performing teams need a clear corporate purpose to follow

What is your greatest workforce challenge?

Keeping staff and meeting their aspirations

Creating a more diverse workforce and leadership group

Reskilling staff to thrive in an age of greater automation

Finding and hiring skilled staff

28% 3 0%

3 5%

7%

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18%

21%

4%14%

9%

3 4%

Improving sourcing and sales practices

Connecting with the communities in which you operate

Improving employee happiness and engagement

Safeguarding customer data

Becoming more transparent to customers and staff

Reducing your environmental footprint

56 %3 2

4%2%

6 %

Strongly agree

Disagree

Neither agree nor disagree

Agree

Strongly disagree

“People” was a word that came up constantly at this Summit. The blend of the place and the people attracted to it is brewing something special. But those people need – and demand – a clear purpose. Nigel Toon – Founder and CEO of AI unicorn Graphcore – traced it back to the root of the word “company” itself from “comm” (meaning together) and “panis” (bread). It’s a place where people come together to break bread.

“A company really is just the people and what they're doing together. So you've got to have a very clear idea of what that purpose is that you're working on. It's got to be something that's inspiring for the people. You got to be able to drill it down into what we're trying to achieve … so that people can get behind that.”

– Nigel Toon, Graphcore

And the in-event polling backs that up. Beyond the priority of finding the right talent, the big issue for leaders at the Summit was how to keep them and meet their aspirations. Articulating a common corporate purpose is central to that endeavour.

© 2019 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member B ristol Growth Summit | 6firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

3Trust Far-sighted firms are embracing CSV (Creating Shared Value) not just CSR.

“We've got to move away from a narrative of obligation to opportunity,” said Nick Davies, Founder of social platform Neighbourly in the session on “A Better Bristol”. He struck a chord in the room.

Others cited companies that were quietly making long-term commitments rather than attempting to sell a PR story – the likes of M&S (going carbon neutral in six years) or Amazon pledging to do the same by 2040 (and buying 100,000 electric trucks in the process).

Which of the following is a higher priority for you this year in building trusted brand?

“You have to get this right culturally on the inside of your organization before you try to project an ambition out to other stakeholders in society. Because if doesn't stand up in your own organization, that message won't carry.”

- Nick Davies, Founder, Neighbourly

To what extent do you agree that a company’s purpose is to benefit all stakeholders and customers as well as investors?

%


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12%

52%

7%

5%

7%

17%

A clearer regional development plan

A positive resolution to the Brexit impase

A larger pool of the talent you need

Less regulation

Easier access to funding

A simpler, more incentivised tax system

4TradeRegional cities need more local funding

From panellists and the floor, there was a feeling that Bristol needed more locally-based investors and easier access to capital. Fifty two percent of those at the Summit cited ‘easier access to funding’ as the single measure that would have the greatest positive impact in developing local start-ups.

Monika Radclyffe, from business accelerator SETsquared said she was seeing clear interest from outside Bristol.

“I'm getting regular calls from London-based VC funds saying we want to come to Bristol, can you organize a day for us”.

- Monika Radclyffe, Centre Director, SETsquared Bristol

But Dr Harry Destecroix, who co-founded university spin-out Ziylo, argued that ‘virtual offices’ from London couldn’t fully do the job cities like Bristol needed. And many agreed. The conversation between investors and companies in regional centres feels very different, several said.

“The South West, and Bristol in particular, is a relationship-driven market. We often spend years getting to know businesses that we invest in and they spend years getting to know us. London's different … you don't come across the same person twice”

- Ned Dorbin, investor, BGF

Which of the following would have the greatest impact in developing Bristol’s start-ups?


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5

3 7%

5%3 2%

13 %

13 %

Political risk and social dislocation at home

Increased regulation

A Eurozone slowdown

Sluggish economic

growth at home

TrustBeing local isn’t enough. Businesses must actively engage with communities

Several speakers from both stage and floor highlighted the risk that successful local businesses and start-ups could become islands of wealth with little impact in helping solve social deprivation. A mile from the summit venue was one of the country’s worst performing areas in terms of participation in higher education.

Perhaps the answer was a blend of government incentives to move into disadvantaged areas along with better transport infrastructure?

“Silicon Valley do this really well. They encourage companies who are scaling up to move to more deprived areas. Look at Facebook in what was one of the most deprived areas of the Valley. Twitter too.”

– Dr Tom Carter, Ultraleap

Trade wars

6TradeWhether you’re seeking global investors or a global market, Brexit dominates

Perceptions matter. That was the message from the final session: “Trading nation”. KPMG’s David Slater made the point that in the absence of a clear understanding of Brexit, company boards in Tokyo or Silicon Valley would “play it safe”.

“The government statistics say FDI is holding up, but not in my experience. It's really hard to prove the UK should get an amount of investment versus an Amsterdam or Ireland.”

- David Slater, Director International, KPMG

Charlie Allen, the MD of skateboard distributor Shiner, brought the Brexit issue to life. Half of his sales are into the EU and he said Shiner was splitting some deliveries coming from outside Europe into separate EU and UK consignments in order to avoid a potential 12% duty on goods later travelling from the UK to EU.

However, other Shiner customers in the EU, served direct from its Bristol warehouse, were demanding that consignments arrived DDP (Delivered Duty Paid). His company will have to absorb tariff costs to stay competitive, he said. Longer term, Allen’s team are exploring either a warehouse in the EU or a bonded warehouse in Bristol. They are awaiting the outcome of Brexit before investing.

Which of these is the biggest external threat to your growth prospects over the next three years?

A final answer on Brexit seemed no closer however and with more extensions and delays companies were in danger of becoming complacent. Janis Sinton, MD at food technology business TasteTech, said that in contrast to hefty pre-ordering and stockpiling from customers before the March 2019 deadline, they saw “virtually nothing” ahead of 31 October 2019.


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6 1%

3 9%Your preferred Brexit outcome, but one that will take 18 months

A quick resolution to Brexit, whatever the outcome

Which would you prefer?

Brexit is providing a comparative advantage to some, like TV production firm PlimsollProductions. Founder and CEO Grant Mansfield said despite being “no fan of it”, Brexit was a key reason behind investors backing Plimsoll in a recent round of private equity funding. “The company is largely Brexit-proof and there’s a lot of money around looking for a good home.”

13 %

13 %

44%

4%4%

22% Feeling confident about ‘going global’

Being clearer about the UK’s terms of trade post Brexit

Gaining a better understanding of your potential market

Having in place the right financing structures

Seeing trade tensions cool

Having access to more government trade advice

What would encourage you to begin or accelerate, the internationalization of your business?

7

41%

4%3 1%

4%

12%8%

EU

Africa

US

Middle East

China

Asia (excluding China)

TradeTo sell abroad, YOU have to get out there too

Brexit didn’t seem to have altered business leaders’ desire to export (“We were looking further afield anyway” said TasteTech’s Janis Sinton), but panellists did say that Brexit had made overseas visits and building personal relationships even more vital.

Plimsoll’s Mansfield summed it up and echoed perhaps the two big themes of the Summit: The importance of place and the importance of connecting with people.

“Beware trying to do everything on video calls. You’ve got to get facetime with those people – not just for 3 or 4 days but a month to really live and breathe a place.”

– Grant Mansfield, CEO, PlimsollProductions

Which area represents the greatest revenue opportunity over the next three years?

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© 2019 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member BBririsstotoll GGrorowthwth S Suummmmiit |t | 1010firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.


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Notes


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Bristol Growth Summit€¦ · trying to wrap in the broader region. “I'll tell you...

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