Creative industries need financial support to improve region’s economy
South Yorkshire’s growing expertise in the creative industries can play a pivotal role in steering the region’s economy out of a recession if it receives sufficient financial support, according to a latest survey.
Creative industries in Yorkshire and Humber, which includes design, software, and publishing companies, have enjoyed significant growth in the last five years with a combined turnover of £11billion.
In Yorkshire and Humber there are some 23,000 companies in this sector - a growth rate of 23 per cent since 2006 - with approximately 90 per cent employing less than 10 people.
To help continue the growth, the need for appropriate sources of finance and investment has increased.
South Yorkshire Investment Fund has looked at ways to specifically address the finance needs of the creative industries in Yorkshire and Humber.
The research included a review of the sector and SYIF’s methods for interacting with the creative industries, to help plan a strategy for when the new successor fund, Finance Yorkshire begins in 2010.
Tony Goulbourn, chief executive of South Yorkshire Investment Fund, said: “The creative industries are an uncommon sector profile from an investment perspective. However it is the growth and future potential which makes it a worthy focus for investors going forward.
“It is only in the last few years that the creative industries have achieved recognition for their contribution to the economy and that in depth studies of the business models, sector profiles and regional specialisms have been undertaken.
“Therefore it has been difficult for us, until now, to identify the size and scope of the opportunity and risk and return profiles of the various sub-sectors.”
The research highlighted a need for more sector specialist mentors and business advisors to identify the types of investment available and the means by which investment may be used to grow a business.
It also suggested for investors to work more closely with broad based business development organisations, such as Yorkshire Forward and Business Link Yorkshire, sector specific organisations including Screen Yorkshire, Game Republic, the Creative Industries Development Agency, Inspiral and Creative Sheffield as well as leading sector organisations such as Just-B, QUBA and Zoo Digital.
The report added: “Unlike many of the sectors which SYIF has worked with to date there are very few corporate financiers or advising accountants firms who have specialist knowledge of the creative industries and their needs.
“There are now a greater number of profitable, substantial businesses with the management expertise to successfully manage the growth and return on investment that investors such as SYIF require in return for their investment.”
SYIF’s report identified companies in the £300-750,000 turnover range as one particular area of need which would benefit from a concerted joint effort and provide a focus for harnessing both equity and loan methods.
It recommended existing activities in micro-finance could be extended through improved connections to a wider range of sector development organisations. And as the number of larger firms increases, the scope for larger scale equity and loan investments will improve, as proved with SYIF’s recent investment in Zoo Digital.
Tony added: “There is clearly a desire to align programmes to investment approaches and a willingness to explore how these relationships could be developed to mutual benefit.
“Few require substantial financial resources to implement them successfully though most require time to be committed and that commitment sustained over months and years in order to achieve results.”
SYIF can provide seedcorn, loan and equity linked investments, ranging from £15,000 to £2.5m, specifically to help small and medium businesses meet the gaps in funding they need for growth and development.
For more information about South Yorkshire Investment Fund, please visit www.syif.com or ring 01709 386377.
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About South Yorkshire Investment Fund
South Yorkshire Investment Fund provided seedcorn, loan and equity linked investments, ranging from £15k to £2.5m, specifically to help small and medium businesses meet the gaps in funding they need for growth and development.
Created as part of the Objective 1 programme, the Fund is a private and public sector business finance provider. The European Regional Development Fund and Yorkshire Forward are investors in the Fund.
South Yorkshire Investment Fund also provided access to Business Angel investments from the Yorkshire Association of Business Angels and Microloans through BiG Business Loan Fund and Donbac Microloan Fund.
Finance Yorkshire has now taken on responsibility for providing gap finance in Yorkshire and the Humber.
For further details please contact Suzanne Tinkler, on 0845 649 0000.
South Yorkshire Investment Fund Ltd is a company limited by guarantee (Registered No 3936065). South Yorkshire Investment Fund comprises three sub funds, the South Yorkshire Investment Capital Fund, the South Yorkshire Investment Development Fund, which are each managed by YFM Venture Finance Limited, and the South Yorkshire Investment Small Business Fund, which is managed by Finance South Yorkshire Ltd. YFM Venture Finance Limited (Tel 0113 294 5000) and Finance South Yorkshire Ltd (Tel 01709 386 377) are each authorised and regulated by the Financial Services Authority. South Yorkshire Investment Fund also provides a number of services, which are not regulated by The Financial Services Authority. These include the pilot Seedcorn Fund, BiG Business Loan Fund, Mentorbank and access to the Donbac Microloan Fund. BiG Business Loan Fund is managed by Donbac Ltd (company registration No. 01925556) and Key Fund Yorkshire Ltd (Tel 0114 242 8900).