ADD338 Evidence base for fast growing digital companies

Type of decision: 
Assistant Director's decision
Code: 
ADD338
Date signed: 
27 August 2015
Decision by: 
Mark Kleinman, Assistant Director of Economic and Business Policy

Executive summary

Start-ups/spin outs and other Small to Medium Enterprises (SMEs) are a vital part of London’s innovative knowledge economy. They are critical to the capital’s and UK’s continuing economic success.  Anecdotal evidence suggests that the UK’s visa system, in particular Tier 2, is challenging for certain types of start-ups/fast growth SMEs needing to recruit or retain skilled staff from outside of the European Union.  The GLA wants to test this anecdotal evidence and assess the value of a third party sponsorship model(s) to support start-ups/SMEs in London’s knowledge economy innovate and grow.  This specification (Appendix A) outlines the main requirements for a short piece of mainly primary research. The focus will be on life sciences and technology sectors but the models should also have the potential to support fast growth SMEs. The budget of £50,000 has been agreed as part of the £130,000 agreed for the Economic Development Agenda and funded from the London Enterprise Panel’s Strategies budget. The LEP’s Economic Development Working Group agreed the work and budget) on 27 July 2015, and the funding confirmed under the LEP Urgency Procedure on 7 August 2015. 

 

Decision

The Assistant Director, Economic and Business Policy, approves expenditure of up to £50,000 to procure and commission research to assess the value of a third party model(s) to spin outs/start-ups and SMEs in the science and technology sectors, but ensuring wider applicability to fast growth SMEs, to access the skills, knowledge and experience necessary for innovation and growth.

 

Part 1: Non-confidential facts and advice

Introduction and background

London’s economic success has, in part, relied on its ability to attract and retain skilled and talented individuals from around the world. In two of London’s maturing sectors, technology and science, the London Enterprise Panel has identified a supportive immigration system as integral to their growth.  These sectors have a high prevalence of SMEs and, particularly in life sciences, the role of universities is central, not least because this research/knowledge intensive sector requires a highly educated skills base. GLA internal analysis of the visa system indicates that visa routes introduced by the government to ensure a supply of talent are not employer-led and are focused on leading experts in their fields, mainly academics. Anecdotal evidence from start-ups/SMEs in these sectors suggests that the current employer sponsored visa route (tier 2) for recruiting skilled workers from outside the EU imposes unreasonable risks and costs onto start-ups/SMEs which potentially restrict innovation and growth. The GLA wants to test this anecdotal evidence and assess the value of a third party sponsorship model(s) to support start-ups/SMEs in London’s knowledge economy innovate and grow.  

 

Objectives and expected outcomes

The piece of work will assess the value of a third party model(s) to spin outs/start-ups and SMEs in the science and technology sectors, but ensuring wider applicability to fast growth SMEs, to access the skills, knowledge and experience necessary for innovation and growth. It will identify whether the current visa system imposes costs and risks onto start-ups/SMEs which restrict their innovation and growth. The final report will recommend other models of sponsorship support that could mitigate the risks identified. The tender document is attached as Appendix A.

 

Equality comments

Officers confirm that there are no adverse implications under the public sector equality duty in relation to the procurement and commissioning of the activities described above. The GLA will ensure that businesses interviewed are sourced through a range of networks. 

 

Other considerations

The piece of work is a key part of the LEP’s and Mayor’s work to maintain London’s competitiveness as a world city. The initial submission to the LEP for this piece of work had a budget of £40,000. An additional £10,000 was requested on the basis that the GLA will not be making potential suppliers aware of the budget and want to avoid delays to the work/additional requests to the LEP in the event of the strongest bid coming in over the £40,000. 

 

Financial comments

5.1    Assistant Director’s approval is being sought for expenditure of up to £50,000 to commission research to provide policy makers with evidence that a third party sponsorship model(s) could better support innovation and growth in spin outs/start-ups and SMEs in science and technology sectors, but ensuring wider applicability to fast growth SMEs. 

5.2    This expenditure has been recommended by LEP to be funded from the £130,000 budget earmarked for Economic Development Agenda from LEP’s Strategic Plans and EU fund 2015-16 budget.

 

 

Planned delivery approach and next steps

Tender opens

27 August 2015

Tender closes

16 September 2015

Bids evaluated

17-18 September 2015

Clarification session (if required)

w/b 21 September 2015

Contract awarded

w/b 21 September 2015

Project management meeting

w/b 28 September 2015

Interim report

Completed by 23 October 2015

GLA feedback on interim report

By 27 October 2015

Final report submitted

4 December 2015

Final meeting and report agreed

w/b 7 December 2015

Appendices and supporting papers

Appendix A: Tender Document