The advantages outweigh the disadvantages of running a business based in South West Wales. That was the consensus of some of those shortlisted in the Swansea Bay Business Awards, brought together to debate the issue at a round table discussion hosted by Bevan Buckland LLP.
In attendance
- Adrian Sutton, managing director, Vortex IoT
- Paul Streater, chief executive, Netcrate
- Huw Rees, chief technical officer, Vizolution
- Ian Ross, managing director, Whitehead-Ross Education and Consulting
- Chris Stokes, head of human resources, Coastal Housing
- Harri Lloyd Davies, partner, Bevan Buckland LLP
- Alison Vickers, managing partner, Bevan Buckland LLP
- Matthew Denney, partner, Bevan Buckland LLP
“We are business owners too; your challenges are our challenges,” said Harri Lloyd Davies, partner, Bevan Buckland LLP, at the started of the event. “Gatherings like this are critical to find out what is happening in the region from those at the coalface of this region’s economy; we want to find out about the positives and negatives of being based here.”
Adrian Sutton, managing director of Vortex IoT, said that the company, which is 18 months old, chose to be based in the region for a number of reasons but specifically because of the support available in Wales from the Welsh Government.
He said that programmes such as the Accelerated Growth Programme have been very helpful to the business as have some of the trade missions run by the Welsh Government that allow it to travel to new markets and meet potential clients at a fraction of the cost and with the support of the Welsh Government.
In February, the company secured a six-figure investment from the Development Bank of Wales, which it will use to continue its trajectory of international growth. With offices in Swansea and Singapore, the company employs 15 at the moment but this is projected to double by the end of 2019.
Vortex IoT designs and builds sensors and networks for harsh environments where are hostile, power supply is limited, AI is needed and data security is critical. Its clients include Tata Steel, Dell Technologies, Network Rail, BT and Hitachi.
Its growth plans include collaborating with engineers and scientists at a Centre of Excellence located close to Swansea University’s Science and Innovation Bay Campus, where innovative ways to boost the company’s productivity will be researched and implemented. It also has high hopes for the Swansea Bay £1.3 billion city deal giving it a big boost.
“The nature of our business means that we could have set it up anywhere in the world,” said Sutton. “However, the funding environment in Wales is extremely positive and conducive to encouraging SMEs in the tech sector to thrive which was a real incentive for us when we were making the decision about where to locate our head office.”
Huw Rees, chief technical officer, Vizolution, a software-as-a-service provider whose clients are mainly financial services companies, utilities firms and telecoms companies, says the main reason the business is based in Swansea is because he is from the area. But it has also benefited from support from the Welsh Government in its evolution.
It has grown steadily in recent years. The company, which employs 130 people in the Bay Studios offices, off Fabian Way, Swansea, secured £10 million in funding last year from investors Santander, the Royal Bank of Scotland and HSBC. The company also has offices in London, New Hampshire, US, and Toronto, Canada. It has been enjoying rapid growth in North America.
Paul Streater, chief executive, Netcrate, explained that the decision for the company to base itself in Wales was also very deliberate and based on the fact that Wales is at the cutting edge of embracing the concept and ideology of the circular economy.
Netcrate, which was only formed in 2018, is creating a B2B e-marketplace where sustainable and circular companies, will be able to trade in a way that embraces these principles. It aims to make trade more transparent, fairer and socially responsible. “Our passion is the circular economy; we want to be the Amazon for the circular economy where companies can find, buy and sell products.”
The company explored the possibility of locating in Amsterdam and Singapore but selected Wales partly because it was one of the first countries in the world to formally commit to a sustainability charter. Streater said some of the other reasons included the lower cost of labour in Swansea and support from the Welsh Government in the form of the Accelerated Growth Programme. “And let’s be honest, it is also a very idyllic, stunning part of the world,” he said.
The business, which employs four at the moment, is seeking investment at the moment having just launched its first products. Based in the Techhub in Swansea, Streater admits it may grow out of the building soon but believes that Swansea will remain an attractive place to base the company long term.
Ian Ross, managing director and founder, Whitehead-Ross Education and Consulting, said that he studied in Swansea University and ended up staying in the area. After initially training as a teacher, he benefited from a £6,000 bursary from the graduate business start-up programme run by the Welsh Government. “That was enough to get me going,” he said.
Whitehead-Ross Education and Consulting, which employs 27 staff across three offices in England and two in Wales (in Neath and Swansea) was formed in 2012. The company offers a range of training courses and social welfare programmes designed to upskill individuals and help people get back into the workplace.
Ross added that though the company ended up in Wales partly because of circumstances he has found the labour costs more affordable and has also benefited from some of the business networks available such as the Federation of Small Businesses (FSB).
Chris Stokes, head of human resources, Coastal Housing, explained the company is different to the others in that it is intrinsically tied to the region. Coastal was formed in 2008 through the merger of Swansea Housing Association (formed 1978) and Dewi Sant Housing Association (formed 1991). With 260 staff, it is responsible for some 5,500 units in the region, operating on a non-profit basis for the benefit of local communities.
Coastal Housing is also the landlord of the TechHub Swansea where several of the companies are based. Stokes stressed the importance the company also puts on doing everything it can to boost the local region and economy. “We want a sustainable and vibrant local economy generating jobs that will help our tenants,” he said.
A common theme through the companies attending the event was the support they had received, both financial and otherwise, from the Welsh Government. In some cases, this was the main reason they had ended up based in Wales. “This is an advantage of being in Wales; that sort of support is much more dislocated and harder to access in England,” said Alison Vickers, managing partner, Bevan Buckland LLP. “There is no equivalent of the Development Bank of Wales.”
Rees echoed this. “We found Finance Wales as they were then to be very reasonable and supportive, much more so than a typical venture capital investor,” he said. “They were very helpful.”
The panel also discussed the importance of tapping into some of the education providers in the region, working closely with them to ensure people with the right skills come out of the various higher education facilities. They agreed more coordination would help, something Lloyd Davies said was starting to happen through the Regional Learning Partnership. “How does the education sector and businesses better communicate?” he asked.
All the companies said they worked with education providers in some capacity but agreed that more could be done to make this process more streamlined and helpful for businesses.
The panel also debated the quality of the infrastructure and communications in the area. Rees said that, as an employer of 130 staff, many of which are skilled, it is important it can draw from a wide geographical area. “Where we are based, they can commute from as far east as Newport and as far west as Carmarthen. The location works for us,” he said.
But most of the participants agreed that better infrastructure was needed in terms of the road network, rail links, and access to an airport. They noted that while the £1.3 billion city deal will do many good things for the region, it may still be very difficult to move people around.
Matthew Denney, partner, Bevan Buckland LLP, also stressed the importance of good advice for businesses looking to raise money, especially around tax. He noted that schemes such as the enterprise investment scheme, which gives qualifying investors tax relief of 30% on investments, can represent a major benefit for companies. Equally, R&D tax credits are often underused by companies because they do not understand them fully and need good advice.