04Investing in local strengths

Case study 5: Teesside University and DigitalCity Innovation (DCI)

Teesside University has a growing reputation as a leading business-facing University,29 leading Vince Cable, Secretary of State for BIS, to describe it as “Britain’s best university for working with business” in 2010.30 This support of local high-tech firms shows how a university can use sector specific expertise to collaborate with high-growth businesses in a relatively weak economy (Middlesbrough ranks 59th/64 cities for employment).31 By the end of 2013 the University was credited with helping to create around 250 companies and 450 jobs.32

Cities should target their funding at supporting collaborations where they have a comparative advantage.

Teesside University’s courses in digital media and technology, including animation and computer game design, have a long standing international reputation.33 The University also has connections with industry experts globally through its hosting of the International Festival of Animation and Computer Games since 2000.

Middlesbrough has relatively few knowledge intensive jobs (47th/63 cities) and relatively few graduates living there (48th/64 cities).31 However it does have relatively high concentrations of digital businesses.35 The North East LEP also found digital technologies had the potential to be a growing sector in the region but identified that there was little infrastructure to support growth beyond its existing level.36

To address this, the university has built on its research expertise to develop DigitalCity Innovation (DCI), a partnership-based initiative to increase the number and productivity of digital and creative businesses in the Tees Valley.

Cities should support their infrastructure with ongoing measures that removes barriers for collaborations that are identified.

Teesside’s digital businesses identified a lack of a clear contact point to be a barrier in establishing relationships and engaging with other businesses in the DCI. DCI reacted by appointing a Community Engagement Coordinator to ensure a single contact who works with each business to improve their efficiency. This is further complemented by specialist workshops that offer networking opportunities for growing firms in the region and introduce attendees to new developments in the digital sector.

DigitalCity offers support for firms growing locally and uses fellowship scholarships in a bid to retain graduates in the area. These fellowships offer support to graduates of the university living in North East England to develop innovative ideas and start up a business; including £4,00037 to cover living expenses. Recipients are given access to specialised university equipment and mentoring support from industry experts. DCI also organises subsidised graduate and postgraduate industrial placements (often leading to job offers). These are offered with the aim of giving students industry experience and firms the chance to apply graduate level skills to particular business issues. Such placements can lead to increased productivity (from access to new skills) and create strong links between businesses and the University.

Cities must ensure they have long-term funding in place to support their infrastructure.

Given the economic challenges Teesside faces, community and Government support is viewed as being essential to the continuation of DCI. Government support comes in the form of funding, including from the European Regional Development Fund.  Currently, this funding is vital to the success of DCI but some funding does come from the private sector and the University itself. The aim is to become sustainable although it is acknowledged this will take time and is unlikely to be possible in the next five years.38 This puts the long-term future of DCI at some risk, if stable funding cannot be guaranteed, businesses might lose confidence in the scheme, therefore formalising its financial arrangements should remain of paramount importance.

Case study 6: Engine Shed Bristol

The Engine Shed incubator space spun out from the successful SETSquared partnership of six universities across the South West of England.39 It supports specified key knowledge intensive industries and is primarily funded through a long-term (15-year) loan from Bristol city council. The founders of Engine Shed chose to locate away from a University campus to be more ‘approachable’ to businesses whilst maintaining very close ties with the SETSquared universities.40

Engine Shed shows how the city can have an active role in providing long term stable funding and build up the scale of established successes.

Engine Shed provides a dedicated networking space located outside of any single university. By locating in Bristol’s Temple Meads railway station, the business hub benefits from good transport links as well a ‘neutral space’ for businesses and university researchers to build working relationships. It provides a dedicated networking space located outside of any single university. This gives it a more commercially oriented feel than ‘council initiatives’ tend to achieve and removes it from the ‘ivory tower’ image that businesses often associate with universities. This was in part due to a decision as to the design of the space and also the arm’s length nature of support.40

Part of the attraction for businesses is that the incubator space is not located within a university campus. Businesses visit the centre because it provides a desirable, useful space for meetings/events and is close to transport links. But as the design of Engine Shed encourages networking, individuals often make new contacts when there, innovating and adding value to their businesses. The initiative is regarded as being successful because it builds on an existing network of key players and focuses on establishing and sustaining relationships between those working in growing industries that have a comparative advantage in Bristol (8th/ 64 cities by KIBS jobs and 14th/64 cities by growing SMEs).42

In areas where successful businesses are closely aligned with their university strengths, providing stable funding can build on existing university-business links.

Many of the most successful relationships happen when individuals from across sectors and industries are given the chance to meet, therefore cities should consider how to best engage different partners. Effective networks need to ensure they have a diverse set of users. In some cities, establishing a networking space outside of any particular university can help engage different patners. This can present the opportunity for more collaborations through providing a meeting place based in one particular university (which may only attract businesses looking to collaborate in areas that university is regarded to have strengths in).



Case study 7: USE Sheffield – Networks’ success relies on their members

Cities should consider the success and appeal of their networks, as success depends on the will and calibre of attendees.

While the networking opportunities from SETSquared were considered so appealing to businesses that it chose to start Engine Shed outside of the university ‘bubble’ the University of Sheffield Enterprise (USE) program has a different approach.

Alternatively, some networks can capitalise on the brand of the university and by bringing representatives within the campus, break down perceived barriers to university collaboration.
USE supports an environment where start-ups and high-growth firms in the city can make relationships with each other and university departments outside of what entrepreneurs were calling an “unappealing” networking scene.40

Whereas Engine Shed had an existing networking brand and wanted to break free of a campus, USE wanted to create fora where business people can meet within the university, breaking views of an ivory tower and encouraging collaboration. USE identified a disinterest in their networking evenings to the extent they were no longer attracting a range of businesses and therefore compromising their benefits.

USE combines an offer more typical of incubator spaces (funding, workshops, business coaching and advice) with informal networking evenings and brunches aimed at engaging staff, students and graduates alongside businesses from outside of the university.44

Alternatively, some networks can capitalise on the brand of the university and by bringing representatives within the campus break down perceived barriers to university collaboration.




  • 29 The University has won a number of awards including: Times Higher Education Awards for 2009 University of the Year and Best Employer Engagement; 2013 Entrepreneurial University of the Year runner-up
  • 30 Teesside University, NCUB. Available at http://www.ncub.co.uk/members/teesside-university.html
  • 31 Centre for Cities (2014), Cities Factbook 2014 London: Centre for Cities
  • 32 Teesside University Employee Awarded for Helping Businesses to Succeed, NCUB, 2013. Available here http://www.ncub.co.uk/news/teeside-university-employee-awarded-for-helping-businesses-to-succeed.html
  • 33 Winning the Queen’s Anniversary Prize 2013 for Growing digital business start-ups by  graduates and creating entrepreneurship and opportunity in the local economy
  • 34 Centre for Cities (2014), Cities Factbook 2014 London: Centre for Cities
  • 35 NIESR (2012) Measuring the UK’s digital economy
  • 36 The North East LEP Independent Economic Review, available as http://www.nelep.co.uk/media/3003/final-evidence-base.pdf
  • 37 Applications invited for DigitalCity Fellowships. DCI. Available at http://digitalcityinnovation.com/applications-invited-for-digitalcity-fellowship/
  • 38 Centre for Cities interview
  • 39 University business incubators. Named best incubator outside of North America in the UBI Index. Available at http://ubiindex.com/global-top-list-2013/. SETSquared universities are: Bath, Bristol, Exeter, Southampton and Surrey
  • 40 Centre for Cities interviews
  • 41 Centre for Cities interviews
  • 42 Centre for Cities (2014), Cities Outlook 2014 London: Centre for Cities
  • 43 Centre for Cities interviews
  • 44 Centre for Cities Interviews