Hubs help create an enabling environment in cities, regions and countries for creative entrepreneurs to thrive – but what can cities, regions and countries do to create an enabling environment for hubs to survive?
In reflecting on our new Creative Hubs Academy, it seems to me that there are four key areas required for a creative business, hub, or ecosystem to thrive. I think of these areas as legs to a table: spend a lot of time building up only one or two, you will end up with a wobbly table and all the things you put on will fall right off.
The four key areas that creative entrepreneurs and hub leaders need are:
Often, policymakers, funders, endorsers and support providers design programmes that might involve one or two of these key areas. Think of policy dialogues. Grant programmes. Grant programmes with a skills or network development aspect. These often ignore the landscape – the enabling environment – in which creative businesses operate.
Creative hubs are another type of creative business, with the main differentiator as a place (physical or virtual) for collaboration: hubs build communities. How the community is managed and served is fundamental to the hub's success. It could easily be argued that hubs are an attempt for the community to forge a strong enabling environment.
Creative hubs and their leaders provide a wide range of support for creative communities and entrepreneurs at various stages, often made up of:
Hubs offer benefits that can be much broader than their membership and their immediate community. By supporting creatives and, in turn, strengthening the creative ecosystem, the vibrancy of the city and attractiveness to residents and potential relocators increases.
Hubs are, as we've seen above, an enabling environment in cities, regions, and countries for creative entrepreneurs. Hubs, however, benefit significantly from low resource-intensive policy that supports their enabling environment.
If you are a city planner, funder in the creative economy, politician or policymaker, community organiser, or another kind of influencer who can shape the environment, you will want to support creative hubs in your local area. If you ask hub leaders what they need, they'll probably ask for money – but an enabling environment can support their vision. So, what does an enabling environment look like for creative hubs?
There are a range of policy areas that can be looked at to help develop this environment – from tax relief to accessing a physical location.
What opportunities can be created for the use of empty spaces?
An opportunity is around physical space, and in particular, what people are allowed to do with space. For example, are there zoning restrictions that mean that empty warehouses sit derelict because they can only be used to produce goods? Can this zoning be changed to make it easier for spaces to be used for different purposes, such as hosting events? In the case of 826 Valencia, they got round the fact that they were in a retail-only zoned space by opening a shop but also teaching children creative writing in the back room.
Buildings that are between uses – termed ‘meanwhile spaces’ – are another opportunity to be leveraged. These buildings may be slated to be torn down, rebuilt, or rethought. Policies that promote the use of meanwhile spaces – both state and privately owned – have encouraged the growth of creative hubs (think: Peckham Levels, Camden Town Unlimited and Granby Space in London, Meanwhile Creative that manage spaces in Bristol, Cardiff and Manchester, and Meanwhile in Leith in Scotland). These policies might come in the form of government encouraging the use of meanwhile spaces through an open tender process (possibly generating revenue) or offering tax advantages or other policy-based initiatives to private sector companies offering meanwhile spaces.
How easy is it to start and wind up a business?
Starting a creative hub or creative business is a risky venture, made even more so if the process of becoming a legal entity and registering for tax is difficult. Put yourself in the shoes of someone starting a new business and see if there are simple changes that can be made to decrease the time and simplify the process. The World Bank's Doing Business reports can advise on some areas.
Secondly, and sadly, how difficult is it to wind down a business if things don't turn out? Are founders left on the hook or does the limited liability work properly? Can you make it easier for companies to close their doors? Japan and China are infamous for having zombie companies that sit dormant and suck up skills and resources but can't shut down.
Are there tax implications on small businesses and can they be made a positive?
Tax is a worry of small businesses. In the UK, different governments have put in tax incentives for starting a business including lowered tax rates on exits or R&D Tax Credits.
Policy goals are easy to announce but harder to implement. The most important thing is ensuring that policy changes are clear and agreed. It's no good if policy requires multiple approvals from multiple departments who may, or may not, have awareness of or information about the new policy.
What type of funding mechanisms can help?
Too often both entrepreneurs and funders get stuck in thinking that funding in the creative industry should be grants. The Arts & Culture Finance team at Nesta have been experimenting with using repayable finance, in the form of affordable loans, as a way of providing funding for the creative economy. Creativity is the key here – without needing to reinvent the wheel. There are different types of funding mechanisms as outlined in our Funding Innovation Practice Guide.
Hubs, for instance, offer a great opportunity to use asset-based loans for equipment. These loans allow hubs to borrow money to buy equipment, and the purchased item then secures the loan and becomes the collateral. Taking this approach means that equipment can potentially reach a much wider audience – a laser cutter, sewing machine or 3D printer that's accessible to a whole community via a hub is a more valuable asset from an impact perspective than those owned by individual businesses.
Match funding is another good approach, and again, one to get creative with. Here, a primary funder will release its support when additional funding that matches theirs is secured. This approach can incentivise recipients to be proactive in securing more funds, and de-risks the investment for the funder if they are only required to put in a percentage. Funders might match with not only grants but with loans, in-kind, equipment, value donations or equity investments.
Open up your networks: skills alone aren't enough
Funders and policymakers often reach for skills. Training is effective in one regard: we can say that we "trained" a given number of creative hub leaders. What's more difficult is saying what difference that training has made. Skills give the ability for a team or individual to make the most of opportunities they have, but those opportunities need to come up.
Formal and informal introductions can really matter. When we were setting up the Accelerator Assembly and running on a tight budget, an introduction to the European Commission secured us sponsorship far above what we would have managed had we gone alone.
Whether you are a funder, successful creative entrepreneur, volunteer, policymaker or an employee at an interesting organisation, you can help by opening up your diary and your contacts.
If you are offering a skills-based programme, then it's critical that there are opportunities for networking, perhaps over breakfast or lunch, a pitching event, or formal one-to-one mentoring sessions. You'll need to find out what suit your audiences and this can only be done by experimenting.
Whichever approaches are chosen, helping to build the enabling environment is a crucial role for any city, region or country to play if they want creative hubs to flourish. Any hub will struggle to survive in an inhospitable environment, and so the importance of creating this support shouldn’t be underestimated.