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If you search ‘incubator’ online, you will be met with some very literal responses: devices to keep eggs warm to hatch them; or designed to provide a safe, controlled space for infants to live while their vital organs develop.

Yet if you spend five minutes in the start-up world, the word incubator pops up almost every day, and every time in a somewhat different context. Some organizations define incubators in the context of a physical space, somewhere start-ups can rent desks, work collaboratively, and have access to resources. For example, UCL’s Hatchery is a dedicated space in King’s Cross providing facilities, mentors and access to workshops and training events for start-ups. Other incubators are designed as structured programs, which often involve an intensive acceleration period to take a start-up idea to an investment-ready business. Some of these notable programs have gained global traction, including Tech Stars and Y-Combinator, with impressive alumni, such as Class Pass and Airbnb, respectively.

As part of Gate One’s ‘Think beyond’ series, we have been researching innovation and entrepreneurship in the UK, speaking to accelerators, universities and start-ups along the way. We believe that local councils and universities can benefit from innovation and entrepreneurship programs as a key tool to support the levelling-up agenda, which is focused on creating equal opportunities across the UK.

What’s happening in the UK?

StartupBlink’s Global Start-up Index (2021) found the UK to be the world’s 2nd highest ranked start-up ecosystem. This strong and dominant innovation scene tends to be primarily focused in London, the only UK city to make the top 20 city ranking, with Manchester taking 68th place, Cambridge in 76th and Bristol in 90th.

As London continues to maintain its global position in the start-up ecosystem, competing with San Francisco, New York, Beijing and Los Angeles, it is unsurprising that most UK unicorns (companies worth over US$1 billion) have their headquarters in London.

Regionally based incubators offer a way to promote the creation of high-quality jobs in the wider ecosystem and UK cities outside of London have accelerated their own growth. Bristol, the leading south-west hub for a strong cohort of start-ups and home to two leading research universities, has benefited from many innovation grants. Findings by Beauhurst show that more than 31 start-ups have been spun out of Bristol’s academic institutions, representing 6% of the city’s high-growth companies, twice as many as the wider UK.

Support from the public sector

Similar to Bristol, other local councils around the UK have started setting up incubators of their own, often partnering with universities or charities to deliver these successfully. For example, Loughborough University recently partnered with Charnwood Borough Council to launch a two-year program for start-up founders. There are currently 20 similar incubator programs around England that are supported by the £20.9 million University Enterprise Zone, funded by the Department for Business, Energy and Industrial Strategy (BEIS) and the Research England Development Fund.

There is clearly a push to establish programs and encourage innovation. A 2019 BEIS report recommends that public funders invest in pilot programs and further research to understand the longevity of the impact of business accelerators and incubators in the UK, suggesting that they can be a useful tool for driving regional economic development. This research concluded that incubators can help promote the creation of high-quality jobs in the wider ecosystem.

The role of start-up incubators going forward

Our research has left us with an interesting opinion, which brings us back to the purpose of an incubator in its original form. All incubators and programs – despite their structural and definitive differences – have something in common with an infant’s incubator, and it’s all about the environment they intend to create. This is an environment that fosters innovation, sparks creativity and growth, and encourages people to think ‘outside the box’. We believe start-up incubators can be anywhere, at any time, and do not need to be confined to a physical space, as long as the environmental conditions are correct.

Our Gate One Incubator is driven by our innovation values, realising that there is no better way to live our entrepreneurial values than by becoming real-life entrepreneurs. We have created an environment that fosters entrepreneurship, encourages creativity and sparks innovation.

Our research into incubators has demonstrated an inevitable link between councils, universities and the wider start-up ecosystem, one that excites us. We believe that if these institutions do not confine themselves with physical spaces or points in time, but create a similar entrepreneurial environment, the opportunities for innovation across the entire UK, and consequent start-up growth and success, will be epic. This is particularly pertinent given the levelling-up agenda and the need to address the regional disparities of the productivity gap. Harnessing the potential of business accelerators and incubators is a way to drive local economic growth, and to support and overcome some of the economic adjustment and recovery in a post-COVID-19 world.

Tash Grossman
Rob Bradshaw

We are passionate about working shoulder-to-shoulder with the public sector to transform outcomes for citizens.