Zeta Economics.

Engine Shed Economic Impact Assessment and Appraisal

Executive Summary 1

Economic Impact Assessment

of the Engine Shed &

ES2 Project appraisal

Executive Summary

Zeta Economics.

Engine Shed Economic Impact Assessment and Appraisal

Executive Summary 2

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thereof is made known. Any such party relies upon the report at their own risk.

© Zeta Economics Ltd 2015

Zeta Economics.

Engine Shed Economic Impact Assessment and Appraisal

Executive Summary 3

1. EXECUTIVE SUMMARY

1.1 Zeta Economics was commissioned by the Science Research

Foundation, a subsidiary of the University of Bristol, which

manages the Engine Shed building, to undertake an

economic impact assessment of Engine Shed’s contribution to

the economy of the West of England to date and prepare an

economic appraisal of the proposed Engine Shed 2 extension

project.

1.2 The report presents economic impacts and other benefits

generated by the Engine Shed during the first year of its

operation (December 2013 - November 2014).

ENGINE SHED

1.3 The Engine Shed represents a core for start-up business

development, small business growth and innovation within

the Temple Quarter Enterprise Zone ("EZ") that provides a

hub for activities, which differentiate from the larger

corporate organisations located in the area and therefore

help the growth of the original and unique business activity in

Bristol with potentially much higher value added in the future.

1.4 The building provides an adaptive, flexible workspace

consisting of the following components:

SETsquared

WebStart

University of Bath’s Digicity

Invest in Bristol and Bath (IBB) – West of England inward

investment agency

West of England Local Enterprise Partnership (LEP)

Bristol City Council's 'Futures Team'

Business Lounge, meeting rooms, ‘Arrivals Lounge’, co-

working space, innovation showcase

EMPLOYMENT AND GVA IMPACTS

Construction phase

1.5 The Engine Shed building refurbishment cost was £1.7 million.

The total gross employment resulting from direct, indirect,

and induced effects was 28 man-years (or 2.8 FTEs), which

had generated £1.9 million of GVA in the UK economy and 16

man-years (or 1.6 FTEs) in the economy of the West of

England. Net additional jobs were 12 man-years (or 1.2 FTEs)

that had created estimated £0.8 million of GVA.

Operational phase

1.6 The core three private sector components at the Engine Shed

comprise the following incubators:

Engine Shed Economic Impact Assessment and Appraisal

Executive Summary 4

Members of SETsquared Bristol – 64 with virtual members

during 2013/2014 - include a wide variety of businesses in

healthcare and pharmaceutical, IT, online, aerospace,

defence and security, finance, and telecoms.

WebStart has assisted and invested in 20 start-ups, of

which 16 are brand new companies. These companies

have already created jobs for 11 employees, as well as for

9 University of Bristol/UWE undergraduates. WebStart

companies have already raised investment worth more

than the initial funds received.

Since commencement of operations in February 2014

DigiCity spaces at the Engine Shed were used by 30

unique users (excluding WebStart users). DigiCity users

are mostly self-employed freelancers or start-up / early

stage entrepreneurs who have already created a self-

employed FTE job and may, in the future, be able to

expand into fully-fledged businesses creating more jobs in

the West of England.

1.7 The Engine Shed supports 315 direct jobs, whereas up to 115

FTE jobs can be considered as completely new to the

economy of the West of England.

1.8 In total Engine Shed businesses generated £25.34 million of

GVA in the West of England with £7.16 million being net

additional.

1 EBN, 2013. Technical Notes #02. The EBN Quality and Benchmarking Services.

1.9 The Engine Shed employs seven people, yet it has so far

accommodated 37 SETsquared businesses, overall supporting

57 (with WebStart start-ups) and two public organisations.

The average EU Business and Innovation Centre (BIC) employs

14 staff members and supports 28 start-ups1. The best

benchmarked BICs, which received ERDF investment, had 35

tenant businesses2.

1.10 .

2 European Court of Auditors, 2014. Has the ERDF successfully supported the

development of business incubators?

Zeta Economics.

Engine Shed Economic Impact Assessment and Appraisal

Executive Summary 5

Zeta Economics.

Engine Shed Economic Impact Assessment and Appraisal

Executive Summary 6

CATALYTIC IMPACTS

Benefits to businesses due to the location

1.11 Overall 68% of respondents (out of 41) benefited from the

Engine Shed’s great location at the busiest transport junction

in the South West region3:

‘(It) gives us a wide catchment for highly skilled staff (one

travelling from Oxford, another from Swindon).’

‘People have found us because of the Engine Shed. Some

companies stayed longer with us here as a result.’

1.12 Many networking organisations, especially those covering

high-tech / IT professionals and businesses, - the Institute of

Directors (IoD), Tech talks, BrisTech, TechSpark, and the South

West Mobile Meetup - have established links with the Engine

Shed and are using the spaces here on a regular basis.

Time savings

1.13 The benefit arising from time savings to 49 survey

respondents amounted to c.a. £55.4 per day or £18,334

during one year since moving to the Engine Shed4.

3 Office of Rail Regulation, 2013 4 Estimated with the value of time from DfT WebTag guidance. 5 Based on DECC non-traded values of carbon 2011 (adjusted).

Approximately 60,000 car miles have been

therefore saved during the first year of Engine

Shed’s operation reducing the roadside

emissions by 25 tonnes of CO2 with the value

of £1,5105.

Co-locational benefits

1.14 Co-location benefits (benefits of having a range of different

businesses and organisations in the same building) allowed

projects to move off the ground and proceed at a much faster

pace with improved and easier access to public sector

funding or private sector investment. One of the bigger IBB

client’s – a business that is forecast to bring more than 200

jobs to the WoE area – was ‘found’ as a result of networking

and chance meetings at the Engine Shed.

1.15 Various business benefits derived by businesses due to co-

locating in one building ranged from new additional business

and contracts to R&D and knowledge exchange (68% of

respondents indicated one or more of such benefits).

1.16 New business generated at the Engine Shed due to

networking as disclosed by some of the business respondents

Engine Shed Economic Impact Assessment and Appraisal

Executive Summary 7

amounted to £94,800, whereas the value of grants received

was £1.68 million6. SETsquared businesses tenanted at the

Engine Shed have also raised £17.5 million of equity capital

during this past year. The value of knowledge exchange

activities with a university was £1.028 million (including grant

funding).

Work with secondary schools and wider

public engagement

1.17 One of the original aims of the Engine Shed concept was

engagement with the public, including with children, to

increase awareness about businesses in the high-tech and

creative digital sectors and raise the interest from younger

generations. A charitable organisation ‘My Future My Choice’

used the Engine Shed as a venue to bring 700 children to

build model boats. The Engine Shed also participated in the

annual Bristol Open Doors event this year with about 60

people coming to see the venue.

Partnership with the WoE LEP Skills Team

1.18 Since its opening the Engine Shed has been actively working

with the West of England LEP Skills Team and its key project -

Creative Skills Hub. Creative Skills Hub and the Engine Shed

partnership has produced five events.

6 This is a sum reported by businesses who answered the survey.

1.19 Benefits to This is It! Conference, Indiegogo, and ‘Pathways to

Professions’ event attendees that may be attributed to the

Engine Shed have amounted to approximately £3,100 in net

additional lifetime earnings.

1.20 Due to successful collaboration with the Engine Shed the

LEP’s Skills Team is considering options for further growth of

Creative Skills Hub this year.

IMPACTS ON SOCIAL CAPITAL

1.21 The Engine Shed allows different activities to take place in the

large business lounge, vestibule area, and the conference /

Engine Shed Economic Impact Assessment and Appraisal

Executive Summary 8

seminar area. The open space and cleverly designed interiors

as well as co-location of so many different organisations and

high-tech businesses makes it work in ways that other

buildings may not be able to achieve.

1.22 All of our interviewees commented that during the past year

they have met many people they wouldn’t have otherwise

who were useful contacts. As a result we have been able to

map the social network and show some of the interactions

that have occurred at the Engine Shed during the past year.

The Engine Shed has allowed at least 1,472 new links to be

established – this is obviously among those who answered

the survey question.

1.23 The Engine Shed itself has also received a lot of attention

from organisations outside the West of England: Cardiff, Bath,

Coventry Universities and the University of Gloucestershire

who wanted to see the space and learn the model, specifically

the co-location and partnerships with the LEP and Bristol City

Council.

Zeta Economics.

Engine Shed Economic Impact Assessment and Appraisal

Executive Summary 9