Enterprising the coastline

Developing enterprise: challenges and opportunities

The above review of the limited data highlights a somewhat uneven geography of enterprise development across the group of coastal towns in England, with a net change in the business stock varying from 14 per cent in towns such as Brighton and Bournemouth, at a rate well above the national average, to 4 per cent in places such as East Lindsey and Clacton and a net decrease in Southend.

This pattern of enterprise further reinforces the proposition that coastal towns are not a homogeneous group, with similar experiences in coping (or struggling) with enterprising and regenerating the area. But there is evidence of a degree of similarity in the responses of the supply side in supporting enterprise across this group of towns. On the one hand, this may be because they face the same challenges and opportunities in supporting enterprise. On the other hand, it may reflect a lack of innovation in enterprise support and provision.¹¹

There are a number of well-rehearsed debates surrounding the challenges and opportunities currently faced by coastal towns seeking to in regenerate. Such challenges can be grouped into a number of bundles related to:

• a lack of opportunities for economic diversification;
• a weak local labour market;
• above-average levels of worklessness;
• high levels of incapacity in the population;
• a deteriorating physical infrastructure;
• an unbalanced housing market;
• an ageing and transient population;
• a lack of capacity building and leadership in public services

A number of these challenges and opportunities are reinforced by a recent survey undertaken by the Coastal Communities Alliance. There are a bundle of explicit challenges related to encouraging and supporting business development, particularly around attracting investment and support from the business community in regenerating resorts. In part, this is rooted within wider concerns about the lack of funding and attracting public and private investment in the light of negative perceptions of coastal towns. This is related to a perceived image problem and subsequent unattractiveness as a place to work, live and learn.¹²

Experiences from elsewhere highlight the role of enterprise development in addressing the set of challenges and opportunities outlined above. For example, a number of the local authorities who were successful in gaining LEGI funding have developed programmes that provide opportunities for a degree of innovation and new thinking in delivery of enterprise support – such as around enterprise coaching – which has enabled different approaches to be tested. Therefore, there may be benefits from using emerging structures such as the Coastal Communities Alliance as a route to exchanging experiences around the development of enterprise and entrepreneurial activity as a regenerative tool in coastal towns.

A number of studies have explored the challenges and opportunities faced by localities in developing enterprise and entrepreneurial activity, reviewed in 2003 by Bridge and associates.¹³ These range from a lack of aspirations and attitudes of the community towards enterprising activity, to minimal accessible role models and a lack of awareness of business opportunities in the wider external environment, to a lack of finance and people with the right abilities and skills to support in starting and managing the business. A number of these themes are supported by the outcomes from the CCA survey of local authorities.

Lack of business development and growth

About one in three of the surveyed local authorities noted that a lack of business development and growth was a barrier to regeneration. There were a number of aspects to this barrier, including traditionally low levels of business start-ups and development activity, which the analysis of patterns of enterprise above suggests is a key characteristic of a specific group of coastal towns – but not all of them. There was also a lack of commitment and low levels of investment from the business community in the area. One local authority noted that a barrier to regenerating the area was ‘insufficient commitment, enthusiasm and active involvement from local private enterprises’. The experiences of areas such as Scarborough and North Tyneside suggest that there is a need for key stakeholders to adopt a proactive or entrepreneurial approach in understanding the needs of aspiring entrepreneurs around starting a business in a coastal town, the challenges and opportunities and the associated responses required from business support organisations and other regeneration agencies.

The economic performance of the area

The level of business start-up and change in the business community will be influenced by the opportunities available within the external environment. Two-thirds of the surveyed local authorities identified some element of the performance of the economy as a barrier to enterprising and regenerating the coast. Specific issues related to the low level of wages offered by businesses, the commercial viability and sustainability of new businesses (particularly in tourism-related sectors), peaks and troughs in demand reflecting the seasonality of coastal towns, and the reliance on tourism-related activity. A number of studies have highlighted that this reliance and the subsequent lack of diversification of economic activity is a key barrier to regeneration.¹⁴ Support to assist individuals in managing the journey into self-employment in different sectors, thereby reducing reliance on specific sectors such as tourism in coastal towns, will have a role to play here in improving the performance of the local economy. Gibb has noted that this will require an investment in education and training in order to broaden horizons around the opportunities in the external environment which can underpin sustainable enterprise activity, whether on an individual or community basis.¹⁵

A lack of employment opportunities and investment in skills development

About half of the surveyed local authorities identified a set of issues related to the lack of employment opportunities and skills development. One respondent commented:

In many towns the run-down nature of the resort needs to be addressed at the same time as creating hard employment opportunities by capturing opportunities to respond to tourism trends towards activity and short-break holidays, web-based businesses, etc.

There were a number of factors at play here including: - a decline in traditional industries such as fishing, engineering and manufacturing; - a lack of aspirations and resistance to change among the population; - a lack of – or limited awareness of – opportunities outside the immediate area; - a mismatch between the demand and supply in education and training provision and low levels of educational attainment in comparison to national averages.

Archer and Davison note that a number of these challenges require structural changes in the priorities of education and training providers in order to meet the changing requirements of employers.16 Hartshorn and Sear suggest that there is scope to encourage greater levels of employer engagement with 14- to 19-year-old employment and learning opportunities, to support businesses in contributing to the development of people and skills which effectively address business development needs.17

Transport and communication links

The survey reinforced challenges identified by other studies related to issues of transport and communication linkages. There were a number of comments from the surveyed local authorities related to ‘lack of transport infrastructure investment’ and ‘poor transport links’. The survey identified a set of specific issues including investment in transport linkages, levels of car ownership and the communications connectivity of coastal towns.

However, there are opportunities for promoting entrepreneurial responses to the issue of transport and communication linkages which may develop greater levels of connectivity. For example, a number of areas have successfully supported community-owned transport businesses to plug gaps in routes, while a number of the local authorities noted that there may be opportunities from the development of businesses within the cultural and creative sector, particularly around digital and media technologies, which would enhance the connectivity of coastal towns.

The development of new forms of economic activity not reliant on demand from the local area will be a key tool in enhancing the linkages and connectivity, through exploiting ties and relationships with other national markets. This need to develop the market scope of existing and new businesses in coastal towns will be critical in the sustainability of entrepreneurial activity as well as providing points of exposure to new ideas and ways of running and managing businesses.¹⁸

A lack of access to finance and funding

A number of the surveyed local authorities highlighted that a lack of finance and funding from central government and regional development agencies was hindering attempts to regenerate coastal towns. One authority noted:

The remoteness of many resorts and their distance from main centres of population and business has resulted in a lack of private sector investment in basic employment infrastructure. This market failure has to be addressed by public sector investment in these facilities, but many small resorts have found this challenging.

This lack of investment resulted in local authorities either not implementing anticipated plans and priorities and/or introducing activity on a smaller scale. In addition, it was noted that there was an emphasis on funding innovative as opposed to existing activity. This pattern is characteristic of the systems failure in the provision of small business and enterprise support.¹⁹ Such experiences raise a couple of issues. First, a large number of non-coastal towns and cities would highlight a lack of funding and investment as a barrier to regeneration, which raises an issue as to the funding priorities attached to regeneration vis-à-vis other policy areas by government departments and agencies.²⁰ Second, there may be a need for local authorities to adopt a more enterprising or proactive posture in sourcing funding to address some of the challenges and opportunities.21

A number of coastal towns have been successful in gaining additional funds from programmes such as LEGI and WNF to support enterprise development and regeneration. If coastal towns do face specific challenges and opportunities in regenerating their areas, in comparison to other types of localities, it is unlikely that they will be able to access monies from targeted funding streams. Given the current national financial situation, the possibility of providing such targeted funding is somewhat limited existing commitments under the truncated SeaChange initiative.²² A key issue here is the ability of the local authority and key stakeholders to develop an entrepreneurial posture and mindset in exploring ways of funding planned programmes of business support and regeneration. Therefore, there may be opportunities for coastal towns to exchange experiences around how such a posture can be developed.