Successful local business people often like to put something back into the town, city or region in which they have become – or still are – successful entrepreneurs. Some get involved in charity work or others just want to play golf and network – all might have been getting very slim returns on their investments over the last few years, particularly if they have been trying to play it safe.
Some may have lost money in the crash of 2008/9 and since then may have thought (as I did) that if the wealth managers, stockbrokers etc. in the City of London or other financial centres can make such a mess of investing on my behalf then I might as well have some fun investing in a local business or start-up myself; and in the process help the local economy build back to pre-recessionary times and generate some employment at the same time.
Young businesses and start-ups can often afford to be flexible in the market place and out-manoeuvre established concerns – they can innovate, utilising all of the new marketing tools available and build sustainable, scalable and profitable enterprises into the future.
I consider myself lucky to have been a successful businessman and investor in Sussex, with the vibrant and forward thinking City of Brighton and Hove at its heart. The energy, ideas, innovation and creativity of its entrepreneurial citizens shines through, so putting something back into that community is indeed a smart business move. I always look out for the next wave of business talent – who knows, I might just end up backing the next Anita Roddick!
But, don’t just take my word for it – many leading business people have commented on the benefit of investing locally, wherever local might be.
Celebrity tycoon Doug Richard is launching a new course in Sheffield for aspiring entrepreneurs across the North to turn their creative talents into a business. He says: “The truth is, supporting start-ups is the best investment local leaders can make to increase prosperity in a given region. New business owners make investments in everything from new workspaces to new employees in their first couple of years.”
Firm Age, Investment Opportunities, and Job Creation (a paper by Manuel Adelino, Song Ma, and David T. Robinson) asks whether start-ups react more to changing investment opportunities than more mature firms do. We use the fact that a region’s pre-existing industrial structure creates exogenous variation in the severity of its exposure to nationwide manufacturing shocks to develop an instrument for changing investment opportunities, and examine employment creation in the non-tradable sector as a response to those opportunities. Start-ups are much more responsive to changing local economic conditions than older firms. Moreover, their responsiveness doubles in areas with better access to small business finance, suggesting that financing constraints are an important brake on job creation in the start-up sector. Although we focus mostly on the non-tradable sector for empirical identification, our results extend to other sectors of the economy, indicating that the mechanisms we uncover are economically pervasive. This suggests that factors like organisational flexibility and innovativeness may be important drivers of job creation among start-ups.
Lastly a quote by an inspiring business women Dame Anita Roddick, Human Rights Activist and Founder of The Body Shop: “You’ve got to be hungry – for ideas, to make things happen and to see your vision made into reality.” The very first Body Shop store opened on 26th March 1976 in Brighton, on the south coast of England. By 1978, a kiosk in Brussels became the first overseas franchise, and by 1982 new shops began opening at a rate of two per month.