Where's The Value?


Posted by MalcolmEvans on Monday 4th of April 2011 | 0 Comment(s)

It can seem very abrupt, when confronted with beauty and brilliance in an attractive and clever tech/digital project, to ask Where's The Value?

When your chief professional focus, like mine, is on monetary value, you sometimes risk coming across as a Philistine, or worse still, a good old-fashioned Northern Luddite.

But Where's The Value? is a question to which we need to return time and again.

Without value in the sense of realisable returns on investment, there is poor sustainability and limited re-investment.

I've been around for quite a while. I've seen the portals through which no-one wished to enter, the tools no-one was going to take up, middleware that was never going to get between anything and WAP that so easily rhymed with “crap”.

More recently I am seeing apps for everything (but often paid for by next to no-one), enough content management systems to accommodate the output of all the ages and more, and a general shunning of reuse that would be subject to major psychiatric research were it as remotely prevalent in any other significant field of human endeavour.

I heard from a wise man over the weekend. He acquired his knowledge in the heady frontier days of the 1980s, in the gold rush of major systems software and the early days of the web.

He and some of his friends have a pot of investment gold, gathering dust, awaiting the appearance of some top end IP in the North West. They are growing sceptical of being able to use it in their own lifetimes.

There are a number of things going on in this region:

1. We are largely design-led, a result of Manchester's fantastic creative culture merging with the explosion of deeper business migration to the web. The tendencies are heightened by Manchester's role as both regional capital and de facto nationwide second city.

2. But the above point of being a creative hub is linked to our pretence of being a true innovation hub. There is a myopic and self-limiting conflation of the terms “creative” and “innovative”. The questions of Is It Nice? and Who Will Gain Benefit Using It? stem from different mindsets

3. And whatever of our status within the UK, we are not a Barcelona, or a Tel Aviv, or a Singapore, still less a Palo Alto. There is an isolation in the NW of England from both deeply embedded tech culture and resource and, even more critically, from proximitous customer connection. There develops a self-limiting concept of reach within such a region's business. For example, I was in Cumbria the other day, assessing extra value possibilities within some of the county's companies. There was one consumer goods operation which may well have international potential: the existing aspiration horizon went fuzzy around getting the products into the local supermarket chain. Manchester and the NW used to look to the world: they need to do so again.

4. A key part of the equation is the need for serious academic research to address major and fundamental IT issues. At the moment far too much of the agenda is geared up to pushing through students on pre-pack degrees and subventing staff costs with tedious and unchallenging grant streams. Research has become part of the internally-focused higher level industry – it does not look outwards and engage anywhere near sufficiently with real industrial needs. This point really matters: firstly, the downgrading in recent decades of the vocational element of much of third level education restricts our relevant skills base. Secondly, universities are demanding funding and attention for their “enterprise agenda” but are, in the majority, failing to follow through with much that is genuinely useful.

Lest all of this seem too negative, the region's emergent tech winners must be acknowledged. But the proportion of such businesses against the scale of the engaged labour resource is far too small.

In order of need, these things need to be addressed: mindset, culture, education, research collaboration, research support, seed funding, expansion capital and a massive step-change in export support.

It summarises in a simple question we need to keep asking until the changes are made: Where's The Value.

The author is Techcelerate member Malcolm Evans. He is the founder of Funding Enterprise, an organisation which aims to improve the corporate finance abilities of business builders and to stimulate choice and capacity in the funding markets.

Malcolm is holding a free seminar in Manchester on April 28 on Investment Readiness.