One of the things that LEGI has stimulated in ‘deprived areas’ all over England is a renewed interest in Enterprise Centres.

Many of them have a very wide remit to:

• Provide serviced workspaces for social enterprises as well as more traditional ‘for profit’ businesses
• Make available hot desks in open plan environments to encourage ‘start-up’ entrepreneurs to network and support each other
• To provide access to business advisers and other professional sources of advice and support
• Community Cafes/Restaurants
• Conference facilities and meeting rooms
• Crèche facilities

This breadth of focus should provide a real strength – a business community that is diverse in terms of goals (making profits AND making progress) and stages of development (start-ups mature businesses and high growth all under the same roof) and from a variety of business sectors. However it is also a potential Achilles heel as it easy for the various market places that the centre sets out to serve can become confused.

For example in Leeds this was recently written about one of the Enterprise Centres being developed in the city:

‘Shine Harehills offers flexible and high quality serviced accommodation for Leeds growing companies’

‘The space, being marketed to the city’s growing creative industries includes 14 office units, each around 600 sq ft, plus spaces from 50 sq ft.’ – ABOUT LEEDS – Summer 2008

Now this makes it sound ideal for a small but growing business looking for space in a professional, high quality and creative ‘for profit’ cluster, but perhaps not an ideal choice for a small social enterprise start-up.

The new generation centres are usually located in the heart of some of the most deprived communities in the country. It will be interesting to see what the ‘creative professionals’ make of the location of SHINE! Especially if they follow the local media and buy into their characterisation of the community.

The fact is that not everyone will be keen to situate their office in the middle of one of the most challenging and diverse neighbourhoods and the third most deprived ward in the city. This may sound like a horribly middle class mind-set. Middle class or not – it matters. I recently suggested meeting a client of mine for a curry on Harehills Lane. However she was not happy about parking her lovely Audi TT convertible down there so we ended up in the Shadwell Tandoori (again). Audi TTs are the ‘runarounds’ in that part of the city. Finding entrepreneurs who want to make a profit and play a part in community life will help to ensure success.

The nature of the local communities could result in the new Centres being put behind large fences, surrounded by CCTV and feeling more like Secure Units than open and welcoming centres for community enterprise. Working effectively with local people, councils and the media to change community narratives from ‘impoverished and problem filled’ to ‘optimistic and full of potential’ will be critical to the successful development of new generation enterprise centres and the transformation of the communities themselves.

Being able to develop and market a cost effective and diverse ‘new generation enterprise centre’ will depend on engaging the right balance of different tenants – and helping each of them to quickly realise the benefits of being part of such a diverse community rather than looking for a more homogenous business environment.

They will also need to very carefully learn the lessons from previous generations of enterprise centres, few (if any?) of which have managed to stay close to achieving their social objectives as they have had to pursue almost ANY tenant who can reliably pay the rent and cover the additional operating costs associated with high quality managed workspace. When faced with the reality of developing a sustainable business plan, that is not dependent on long term subsidy, sometimes the quality slips as does the range of additional services and support.

These ‘first generation’ centres sometimes do little more than offer cheap office accommodation for entrepreneurs that live elsewhere, enabling them to generate additional profits that are spent in other more affluent communities. These centres often then provide only a handful of jobs in security, office administration and caretaking to local people. The actual regeneration potential of the centres for providing business incubation for local entrepreneurs to help to transform the enterprise culture of the local community is largely missed.

If this new generation of centres is not to fall into the same trap then passionate and skilful management will be required – as well as a strong nerve – to ensure that they do become powerful centres of regeneration for local entrepreneurs and not simply low cost profit machines for the already entrepreneurial classes. The centres will need to have strong boards that are held to account as much for their role in the regeneration of the local community as they are for the financial performance of the Centre. And, believe me, when centre managers report to their boards the first thing they talk about – sometimes the only thing – is the financial security or otherwise of the centre.

I hope the new generation centres are massively successful. I do believe that they can achieve both commercial and social objectives. I just hope that they are able to attract the executive and non-executive management teams that they need to keep a balance between their commercial and the social objectives and to keep funders and other stakeholders on board for what could be a long, bumpy but incredibly worthwhile enterprise and regeneration journey.