Small enterprises are more likely to employ, buy and invest locally, thereby contributing to local economic and social development.
However, small businesses with alternative ownership structures face a range of barriers when starting up, such as access to start-up capital, business support and premises. A number of levers are available to anchor institutions to create a more nurturing environment for these types of enterprises, so that they can play a greater role in local economic life.
Rent for premises represents a major cost for many start-ups who often struggle to access traditional forms of start-up capital. Anchor institutions can use their power in the local economy to provide affordable workspaces and to incubate businesses with alternative ownership forms. Anchors can also help to develop alternative sources of finance to catalyse new generative ventures, as well as providing tailored business support and advice on funding and investment.
Case study – Islington Council’s affordable workplace strategy
Islington’s over-heated property market means that space is in high demand, with rising land values and rents increasingly locking out local businesses. To tackle this, Islington Council has adopted a policy of leasing office space from developers at peppercorn rents (negotiated as part of the planning process), to then be managed by a variety of affordable workspace providers. Instead of paying rent, these providers are responsible for delivering a series of well-defined social value activities, such as business mentoring, apprenticeships, employability programmes for local residents, childcare provision, or networking. This process has incubated a number of socially virtuous businesses, including the expanding digital worker cooperative, Outlandish.