An Analysis of Business Growth Potential in Lewes District On behalf of: Lewes District Council by Step Ahead Research Greenacre Court Station Road Burgess Hill West Sussex RH15 9DS Tel No. 01444 259185 790 Innovation Buildings Sittingbourne Research Centre Sittingbourne Kent ME9 8HL Tel No. 01795 438827 Suite 7, Third Floor Adamson House 65 Westgate Road Newcastle upon Tyne NE1 1SG Tel No. 0191 2612453 An Analysis of Business Growth Potential in the Lewes District 1. Executive Summary 1.1.1 The report presents an analysis of economic and business forecasts and trends in the Lewes district undertaken by Step Ahead Research. The study was commissioned by Lewes District Council to gain a better understanding of the likely demand for employment land space and to develop possible scenarios of future business needs to inform the Local Development Framework. 1.1.2 This study uses the methodology in guidance produced by the Office of the Deputy Prime Minister to inform employment land reviews. The study derives demand for floorspace by translating employment forecasts from the Sussex Economy Forecasting Model to floorspace requirements using floorspace per employee ratios. A series of interviews with informed stakeholders were undertaken to test these findings and to provide local context. We also undertook desk research and an analysis of the key drivers and dynamics of the district’s economy. 1.2 The Dynamics of the Lewes District Economy 1.2.1 The Lewes district economy is relatively dependent upon public sector and manufacturing employment and has a weak financial and business services sector, but its close proximity to Brighton & Hove and the two universities and its high quality rural environment present opportunities for it to broaden its economic base. The rural parts of the district have undergone major changes as agricultural employment has contracted and been replaced by a growth in remote home working and rural tourism, whilst the three major employment centres of Lewes town, Newhaven and Seaford, have experienced differing fortunes since the mid-1990s. 1.2.2 Of the three main employment centres, Lewes town is the most affluent and accounts for nearly half the district’s employment. The high level of public sector employment in the town has protected it from losses in traditional manufacturing and its strong cultural heritage has attracted high earning residents, which has expanded the growth in the retail and hospitality sectors. If the County Council chose to relocate to another part of the County, this may have a significant negative impact on the town, particularly as the business services sector is under-developed. 1.2.3 Newhaven, which is relatively dependent upon traditional manufacturing employment, has suffered significant job losses and has not shared in the economic prosperity of recent years. The town has a weak retail offer, little business services employment and has yet to capitalise fully on its port side location. Deprivation in Newhaven is relatively high, making disposable incomes low compared to other parts of the district and compared to Lewes town, the educational profile of Newhaven does not suggest that it has a high skilled workforce. Recent quayside developments and initiatives such as the Enterprise Gateway suggest that Newhaven may be beginning to broaden its appeal and develop a stronger economic profile. 1.2.4 Stakeholders suggest Seaford is a close-knit town, which relies on local retail and a high proportion of health and education employment that supports an older population. It is not seen by stakeholders to be economically dynamic Step Ahead Research 1 An Analysis of Business Growth Potential in the Lewes District and whilst it continues to be fairly inward looking the business community is likely to be mainly made up of companies providing intermediate services to local markets. It does not have a strong visitor economy and there is little in the way of incoming businesses to the town. 1.2.5 The rural parts of the district have undergone sustained restructuring, as agricultural businesses have had to diversify and the sector has become a less important source of local employment. The rural economy in Lewes district benefits from the high quality physical environment in the district and the role of agricultural businesses has changed to become custodians of the countryside, building on the growth in rural tourism. Changes in technology have also facilitated the development of remote working, which has allowed people in rural areas to work from home, providing services to people electronically. 1.3 Forecast Demand for Business Space 1.3.1 The quality of the employment sites and the existing business stock is not fit for purpose and this may have suppressed the growth in financial and business services businesses in the district. Stakeholders reported unoccupied employment sites and high levels of empty units in different parts of the district, but there was a widely held view that there was pent up local demand for small, high quality business units. Business growth in the district is unlikely to come from large inward investors, but instead from the ability to make the most of the district’s existing assets and growing local businesses. Only 2% of all commercial property development in Sussex between 1987 and 2002 was in the Lewes district1, which means that much of the stock is ageing and unsuitable to meet the needs of modern businesses. 1.3.2 Forecast employment data shows that growth in the service sector is likely to continue with a reduced demand for B2 (general industrial) and B8 (storage and distribution) floorspace. Overall demand for floorspace is forecast to be negative, mainly as a result of falls in manufacturing employment, which require a large amount of floorspace. Employment forecast data estimates that demand for B1 (office and light industrial use) accommodation is likely to be slightly positive. Stakeholders report that demand is mainly for office space, particularly for smaller units and move-on accommodation and mainly for Lewes town, which reflects its strength as an employment centre and for Newhaven, as a result of its space and potential for development. 1.4 Future Development Options 1.4.1 The success of the local economy is likely to depend on how it manages to diversify away from the public sector and traditional manufacturing employment and its success in retaining and attracting modern outwardlooking businesses that provide higher skilled jobs and additional local income. There may also be a need to address the economic imbalances within the district, so that the skills base and the urban environment in the poorer areas make them more attractive to a different mix of residents, businesses and visitors. Five development options are presented in this 1 Room to Grow – SEER Consulting – 2002. Step Ahead Research 2 An Analysis of Business Growth Potential in the Lewes District report, they are not mutually exclusive and different ones may be more appropriate to some sub-areas than others. 1.4.2 Option 1. Do Nothing No action is taken and the development of the district would be left to the market. Based on recent economic changes and future forecasts, this may mean that there is further polarisation of the local economy, with Lewes town and the rural areas continuing to benefit and the coastal towns struggling to adapt to changing economic circumstances. 1.4.3 Option 2. Developing a High Quality Visitor Economy There is significant potential to develop and promote the towns in the district as high quality tourist destinations to longer stay visitors if the South Downs becomes a National Park. 1.4.4 Option 3. Re-Balancing the Benefits of Public Sector Employment Public sector employment is not distributed evenly, which has contributed to the unbalanced economy within the district. A more equitable distribution of public sector employment could help to generate more employment opportunities in its less affluent areas and act as a catalyst to further business development in the areas that need it most. 1.4.5 Option 4. Upgrading Existing Accommodation to Support and Attract New, High Growth Businesses Stakeholders suggest that there is pent-up demand from small and growing businesses, which is suppressed because the existing accommodation stock is unsuitable to meet their requirements. The district will fail to capitalise on the potential benefits of these companies who will move to other areas, if it does not create a range of high quality commercial premises and move-on accommodation. 1.4.6 Option 5. Attracting High Spending Residents Continuing the development of high quality residential accommodation could begin to regenerate Newhaven town centre. High spending residents may support and develop local amenities as they emerge, which could also support the town’s development as a visitor destination. 1.4.7 The district should take a multi-layered approach to future business growth and development. This means capitalising on its physical environment, having a co-ordinated and strategic approach to developing the visitor economy; identifying ways to expand the financial and business services and advanced engineering sectors and improving the quality of business accommodation. Maintaining existing employment sites will improve opportunities to expand the business base in the future, so long as creative solutions are identified to bring derelict sites back into use and there is sufficient flexibility to allow their Use Class allocations to reflect the changing profile of local businesses. Step Ahead Research 3 An Analysis of Business Growth Potential in the Lewes District Contents 1. Executive Summary .................................................................................. 1 2. Introduction................................................................................................... 5 2.2 2.3 2.4 Policy Context................................................................................................ 5 Methodology .................................................................................................. 6 Structure of the Report .................................................................................. 8 3. The Dynamics of the Lewes District Economy .............................. 10 3.2 Employment Change in the Lewes District 1990-2005 ................................. 11 3.3 Key Sectors ................................................................................................. 12 3.4 Start-Ups and Self-Employment................................................................... 13 3.5 “Knowledge Employment” ............................................................................ 13 3.6 Job Losses and Diversification .................................................................... 14 3.7 The Dynamics of the Sub-Areas .................................................................. 15 3.8 Commuting .................................................................................................. 18 3.9 Employment Forecasts – 2005 - 2010 ......................................................... 19 4. Forecast Demand for Business Space ............................................ 21 4.2 Demand for Employment Floorspace ........................................................... 21 4.3 Low Rental Values and a Localised Property Market ................................... 22 4.4 The Likely Nature of Demand ...................................................................... 23 4.5 Summary of Findings ................................................................................... 25 5. Development Scenarios ........................................................................ 26 5.2 Option 1. Do Nothing ................................................................................... 26 5.3 Option 2. Developing a High Quality Visitor Economy .................................. 27 5.4 Option 3. Re-Balancing the Benefits of Public Sector Employment .............. 27 5.5 Option 4. Upgrading Existing Accommodation to Support and Attract New, High Growth Businesses.............................................................................. 28 5.6 Option 5. Attracting High Spending Residents ............................................. 28 6. Conclusions and Recommendations ................................................ 30 Annex ......................................................................................................... 32 Step Ahead Research 4 An Analysis of Business Growth Potential in the Lewes District 2. Introduction 2.1.1 In early 2005, Step Ahead Research was commissioned by Lewes District Council to undertake an analysis of economic and business forecasts and trends in the Lewes district in order to gain a better understanding of the likely demand for future employment land space and to develop possible scenarios of future business needs in the district. The findings of this research will be used to inform the Local Development Framework and underpin the strategy being developed at present by Lewes District Council. 2.1.2 The Local Development Framework (LDF) will provide a spatial dimension to other local strategies and programmes, such as the Economic Development and Community Strategies and will complement the South East England Regional Assembly’s (SEERA) Regional Spatial Strategy and South East England Development Agency’s (SEEDA) Regional Economic Strategy. The LDF will streamline the local planning process and promote a proactive, positive approach to managing development, which will enable Lewes District Council to respond to changing local circumstances and ensure that spatial plans are prepared and reviewed more quickly than development plans under the old planning system. 2.1.3 There is considerable pressure for employment land sites to be converted to other uses within the Lewes district, but there is a need for a greater understanding of the dynamics of the local economy. Both residential and commercial development in Lewes is restricted by its topology, surrounded as it is by the sea to the south and the South Downs running through the middle. The re-designation of the South Downs as a National Park may further restrict development. Furthermore, the high value of land for residential use, compared with commercial use, acts as a major incentive for individual site owners and developers to pursue housing opportunities unless the development plan clearly states otherwise. 2.1.4 In many cases planning proposals have been for otherwise vacant or degraded employment land. Although the reallocation of this land would result in potentially cleaning up and improving areas, if a substantial proportion of employment use land is reallocated to residential use, there will be a declining number of sites for businesses to locate to. This may mean that the district fails to retain expanding businesses and that future inward investment opportunities are missed. Once land has been reallocated into residential property it is unlikely to be converted back to business use. 2.2 Policy Context 2.2.1 Regional development in the South East is guided by the South East England Development Agency’s (SEEDA) Regional Economic Strategy, which sets a vision of a “prosperous region delivering a high quality of life and environment for everyone, now and in the future”.2 It calls for a sophisticated approach that recognises the differing needs and opportunities of different parts of the region and sectors of the economy, but most importantly growth that is sustainable. Sustainable growth involves creating competitive businesses 2 SEEDA – Regional Economic Strategy – 2002-2012. Step Ahead Research 5 An Analysis of Business Growth Potential in the Lewes District and successful people, developing communities that are vibrant and supported by effective infrastructure and using the region’s natural resources efficiently. 2.2.2 Within this context the South East’s Regional Spatial Strategy, The South East Plan is currently out for consultation and will provide a statutory regional framework for sustainable development until 2026 for local authorities in the region. The document will guide how the future business premises needs in the Lewes district are met and how space is prioritised. 2.2.3 The Government’s definition of sustainable development includes the requirement to maintain high and stable levels of economic growth and employment. The regional policy for sustainable development and use of employment land is covered by policy RE1 described in the box below. “Local development documents will allocate employment land to…meet the needs of new business start-ups, growing businesses and inward investors based upon a set of criteria: Locations that minimise commuting and where the maximum use of public transport can be made Locations which intensify the use of existing sites Prioritisation of previously developed land Focus on urban areas Promotion of mixed use development Locations which promote more sustainable communities Locations which promote a closer relationship between jobs and existing and proposed labour supply Locations which minimise loss or damage to environmental capital” Policy RE1: Sustainable Economic Development The South East Plan, Draft for Public Consultation, January 2005, Section D2 2.2.4 The draft plan encourages local authorities to carefully examine the needs of their local economy and to make provision for employment land that meets the needs of the current and future business base and workforce (both in terms of quantity and quality). Both factors are important for the Lewes district. First, there is pressure for residential development on employment sites, which should not compromise the future needs of the local economy. Second, stakeholders who we spoke to for this project report that the quality of existing premises in the district is affecting business growth and retention and there is not enough quality office stock to attract high growth service sector companies. Data analysis in this study shows that the current stock is restraining the local economy’s growth potential and that this needs to be addressed in the Local Development Framework so that the economy is able to diversify and benefit from the region’s fastest growing sectors. 2.3 Methodology 2.3.1 The Office of the Deputy Prime Minister (ODPM) produced guidance to inform work on employment land reviews – Employment Land Review: Guidance Notes – December 2004. To model the demand for employment floorspace the guidance outlines three commonly used methodologies: Step Ahead Research 6 An Analysis of Business Growth Potential in the Lewes District a) Sectoral economic and employment forecasts and projections (labour demand techniques) b) Demographically derived assessments of future employment needs (labour supply techniques) c) Analysis based on the past take-up of employment land and property and/or future property market requirements. 2.3.2 Step Ahead Research and Lewes District Council agreed that of the three approaches, the Labour Demand approach outlined above was the most appropriate for the analysis of B1, B2 and B8 employment land demand in the district for the following reasons: Analysing the past take-up of employment land was not possible, because a comprehensive database of this information does not exist; The labour supply approach, based on population projections, is not as appropriate to the Lewes district as it might be to other areas because of the high levels of commuting to and from the district and because migration rates are likely to be constrained by house building rates; The data sources to carry out the Labour Demand method are readily available. 2.3.3 While this approach is valuable, using forecast data means that the following limitations should be taken into consideration: They are to some extent reliant on historic data and are less useful in dealing with new and emerging sectors, such as Digital Media; They are dependent on generic ratios to translate these forecasts (in terms of employment) into land and property requirements; They are most useful when dealing with sectors like manufacturing or financial services, where the sector is substantial and has reasonably homogenous property requirements in terms of location and types of building. 2.3.4 The ODPM, therefore, cautions against an over-reliance on quantitative approaches to local employment land use requirements and recommends that the adopted approach is “supplemented by consultation with informed stakeholders, studies of key and emerging business sectors and by the monitoring and analysis of published business, economic and employment statistics”3. This ensures that the data is fully tested and set within an informed local context. 2.3.5 The demand for floorspace has been derived from translating employment forecasts from the Sussex Economy Forecasting Model to floorspace requirements using floorspace per employee ratios designed by Roger Tym and Partners and Arup Economics, both of which are used as examples in the ODPM Employment Land Review Guidance Note 2004. These estimates of floorspace requirements have been used in conjunction with a review of other 3 ODPM – Employment Land Use – Guidance Note – December 2004. Step Ahead Research 7 An Analysis of Business Growth Potential in the Lewes District economic and business reports relating to the Lewes district, analysis of national datasets and interviews with a series of informed stakeholders. 2.3.6 2.3.7 2.3.8 Other studies that have been used to inform this report include: Vail Williams report on land use in East Sussex and the District The State of East Sussex Economy report Sussex Enterprise Annual Business Survey information Sussex Enterprise Annual Economic Review The retail audit currently commissioned by Lewes District Council East Sussex Area Investment Framework documents National and local datasets that have been analysed include: Annual Business Inquiry, Local Area Labour Force Survey, VAT registrations, de-registrations and survival rates, 2001 Census, Sussex Economy Forecasting Model and Population data from the Office for National Statistics. Eleven face-to-face and telephone interviews were conducted with informed local stakeholders. The interviewees were nominated by Lewes District Council for their knowledge of business dynamics in the Lewes district and included representatives from: Lewes District Council East Sussex Economic Partnership Locate East Sussex Action in Rural Sussex The Sussex Innovation Centre The Investor Development Manager for East Sussex Newhaven Chamber of Commerce Seaford Chamber of Commerce Enterprise Works, Newhaven The Newhaven Enterprise Gateway 2.3.9 Lewes District Council also held four Local Development Framework workshops for a range of local stakeholders, including local employers, planners, employers’ representatives; learning providers and Parish and Town Councillors. Each of these workshops had a discussion group on the Economy and Learning and Skills. 2.4 Structure of the Report 2.4.1 The remainder of this report is structured as follows: Section 3 explores the dynamics of the Lewes district economy. Section 4 uses the ODPM method to estimate future demand for employment land space. Step Ahead Research 8 An Analysis of Business Growth Potential in the Lewes District Section 5 explores the possibilities for developing the district using a range of scenarios. Section 6 outlines the main conclusions and recommendations from the report and explores future options for supporting the local economy. 2.4.2 Where the study refers to the whole district it will be referred to as “Lewes district”, when discussing the sub-area of Lewes it will be termed “Lewes town”. Step Ahead Research 9 An Analysis of Business Growth Potential in the Lewes District 3. The Dynamics of the Lewes District Economy 3.1.1 The geography and economy of the Lewes district is diverse. The district covers a strip between the coastal urban areas of Newhaven, Seaford and Peacehaven, Telscombe and East Saltdean, through the South Downs Area of Outstanding Natural Beauty (AONB) and the County town of Lewes, to the rural villages in the north of the district. While situated within the county of East Sussex, Lewes district borders Sussex’s high growth central corridor from Mid-Sussex to Brighton & Hove, which influences employment patterns and the dynamics of the economy. 3.1.2 As is the case with all areas, the Lewes district economy is affected by international, national and regional trends and many of the changes that have occurred in the district are not peculiar to the local area. Traditional manufacturing and agricultural employment have continued to contract as a result of technological change and global trends to locate businesses to parts of the world where labour and land costs are cheaper. Companies increasingly have to compete on quality, rather than cost and to be outward looking to identify new markets if they are to expand and grow. These changes are driving the demand for higher-level skills across the workforce, whilst the shift from production industries to the service sector has changed the nature of skills that are required to compete effectively in the workplace. At lower and intermediate levels of the labour market, it is increasingly communication skills and customer service skills that are in demand, rather than the manual dexterity skills that are more closely associated with employment in the production industries. 3.1.3 In the UK, income distributions have widened both at a spatial level and between households within local areas.4 In desirable areas, such as Lewes town, property prices have been driven upwards by in-migration from higher earning households and people with high disposable incomes now support a growing number of quality bars and restaurants and a service sector that has successfully offset the loss of manufacturing employment in the town. 3.1.4 In other parts of the district economic changes have had a less favourable impact. Low levels of skills amongst the workforce, poor educational attainment, higher levels of unemployment and less success in attracting new businesses into Newhaven have meant that lower household incomes have been unable to support the growth of service sector businesses to compensate for the contracting manufacturing employment. 3.1.5 The rural parts of the district have undergone sustained restructuring, as agricultural businesses have had to diversify and the sector has become a less important source of local employment. The rural economy in Lewes district benefits from the high quality physical environment in the district and the role of agricultural businesses has changed to become custodians of the countryside, building on the growth in rural tourism. Changes in technology have also facilitated the development of remote working, which has allowed people in rural areas to work from home, providing services to people electronically. 4 Hills, John (2004), Inequality and The State, Oxford University Press. Step Ahead Research 10 An Analysis of Business Growth Potential in the Lewes District 3.2 Employment Change in the Lewes District 1990-2005 3.2.1 The Lewes district has a population of 92,200 and has a demographic profile that is older than that of England & Wales, though this is less marked than in other East Sussex districts. Just under one quarter (23%) of the population of Lewes district in 2001 was aged 65 or over, with older people likely to live in the sub area of Seaford and rural areas than other parts of the district. This compares to 16% of the population aged over 65 nationally. The large older population has a major impact on the structure of the local labour market and the dynamics of the Lewes district economy with economic activity rates lower in the Lewes district than in the South East or nationally. 3.2.2 Lewes district has a low proportion of 20-44 year olds (28%) compared with England and Wales (35%). This group of the population is generally considered to be the most economically dynamic and innovative of all population groups and is likely to be the group that embraces and applies new technologies most effectively.5 A low proportion of residents in this age group may have an inhibitive effect on economic growth and influence the types of businesses and employment most prominent in the district. 3.2.3 Table 1 below shows the changes in the structure of employment within Lewes district between 1990 and 2005. Table 1: Employment Structure in Lewes District – 1990 - 20056 1990 Count % Agriculture, Mining and Utilities 1700 Metals, Minerals & Chemicals 900 2005 Location Quotient Count % 1.2 3.6 1100 0.5 1.9 1000 1990-2005 Change Location Quotient Count % 1.3 -500 2.3 0.9 200 2.1 -31.3 21.1 Engineering 1200 2.7 0.6 2100 4.2 1.2 800 65.6 Other Manufacturing 3700 8.2 1.2 3000 6.0 1.1 -800 -21.6 Construction 2800 6.1 0.9 5500 11.4 1.9 2800 100.8 Distribution, Hotels & Catering 8100 17.9 1.0 7500 15.4 0.8 -600 -7.5 Transport & Communication 1600 3.4 0.7 1800 3.7 0.7 200 15.0 Financial & Business Services 4100 9.0 0.7 4400 9.1 0.5 300 7.7 Other (mainly public) Services TOTAL 14000 37900 30.7 1.4 1.0 15100 41500 31.0 1.2 1.0 1100 3500 8.2 9.4 100.0 100.1 Source: Sussex Economy Forecasting Model 2003 Experian/Business Strategies. NB: Numbers may not sum due to rounding. 3.2.4 There were over 3,500 more jobs in the district in 2005 than there were in 1990. Employment growth over the period was marginally faster than in the South East region and in the United Kingdom and occurred in most sectors. However, the position is dependent on two sectors and excluding growth in public sector employment and employment changes in the construction industry, employment growth between 1990 and 2005 would have been negative. Public sector employment is dependent on Government policy, and employment in the construction industry depends on the strength of the 5 The State of the East Sussex Economy, SEER Consulting, 2004. Location Quotients indicate the relative strength of the sector in the district. An LQ of more than 1 signifies that the district has a higher concentration of employment in the sector relative to the UK as a whole. An LQ of less than 1 indicates that the district has a lower concentration than the UK as a whole. 6 Step Ahead Research 11 An Analysis of Business Growth Potential in the Lewes District property market and although based in the district, workers are likely to be contracted to work in other areas of the region. This leaves the district dependent on two sectors to provide employment growth, both of which could be vulnerable and this highlights the need to diversify the economic base. 3.3 Key Sectors 3.3.1 Table 1 illustrates the dependence that Lewes district has on the public sector to generate new employment opportunities, but also its dependence on employment in the public sector overall. The district also relies on the public sector for economic output, nearly one third of Lewes district’s economic output (30%) comes from the public sector compared to just one fifth (22%) nationally. Nearly one in three jobs in the district are in the public sector – nearly 3,000 more jobs than could be expected. 3.3.2 The location quotient shows the proportion of employment in the Lewes district relative to that in the United Kingdom. In 1990, Lewes district had a higher proportion of employment than the United Kingdom in the following sectors: Agriculture, mining and utilities Other manufacturing Other (mainly public services) 3.3.3 Both agricultural employment and other manufacturing employment have both been vulnerable to wider economic restructuring, whilst public sector employment can be highly dependent upon Government policy and is generally outside the control of local people. The structure of the Lewes district economy in 1990 has made it more vulnerable to changes in the wider economy than many other areas, with job losses most likely to occur in sectors where Lewes district has had a disproportionate share of employment and job gains being most likely to occur where the district has a lower share of employment. These changes have been most felt in Newhaven and Seaford, where the financial and business services sector is particularly weak. Lewes town, on the other hand, has benefited from being a County town and having a high proportion of public sector employment at the County Council headquarters, Sussex Police headquarters and the County courts. 3.3.4 The strongest employment growth sectors have been in transport and communication (+15%); engineering (+66%) and in construction (+101%). Whilst the growth in construction employment has been stronger locally than nationally, this sector is notoriously cyclical. The increase in employment in this sector has been largely driven by the buoyant housing market. This rate of growth is not likely to be sustainable over the longer term and, depending on the fortunes of the property market, could be more vulnerable to a severe correction than many other sectors. The growth in construction employment in the late 1980s was short-lived and employment gains were soon lost when the national economy went into recession in the early 1990s. Much of the future success of this sector might depend on the district’s capacity to bring forward the development of key sites and to secure local contractors. Step Ahead Research 12 An Analysis of Business Growth Potential in the Lewes District 3.4 Start-Ups and Self-Employment 3.4.1 The sectors that are concentrated in the district are less dynamic and tend to make up a lower proportion of new businesses. This may partially explain why the business start-up rate in the Lewes district (32.5%) is lower than in Sussex (36.0%) and the South East (37.9%)7. Other factors contributing to a lower start-up rate include the older population profile and that many of the district’s “start-ups” are likely to be self-employed or free-lancers and therefore may not be captured by VAT start up data. The threshold for VAT registration is a turnover greater than £56,000. 3.4.2 There are a greater proportion of self-employed people in Lewes district than the South East (18% compared to 14% of the economically active population). Freelancers tend to be slightly older, well educated and experienced. The population profile of the district reflects these qualities; the district has a good quality of life and is within easy commuting distance to London and Brighton & Hove. Over 4 in 10 of self-employed people in the Lewes district are in managerial or professional occupations, compared to 3 in 10 in the South East, which suggests that a large proportion of selfemployed individuals are high skilled.8 These are more likely to be residents of Lewes town where a third of the population is qualified to first degree level or equivalent (Level 4), than Newhaven or Seaford where only 19% and 11% of residents hold a Level 4 qualification. 3.4.3 High earning free-lancers are likely to have high levels of disposable income and have been one of the key drivers of the local economy, particularly in Lewes town, helping to support and grow the service sector. There have been an increasing number of cafes and restaurants opening to meet the demands and habits of higher earners and employment in this sector increased by just over 100% in Lewes town, or nearly 2,000 jobs, between 1995 and 2002. 3.4.4 The hotels and restaurant sector also supports tourism in the district and just under one fifth (17%) of tourism spending in 2002 in the Lewes district was in this sector.9 The retail offer in the district is also important to tourism, particularly antique shops and galleries, and contributes over one fifth to total tourism revenue (22%). The district’s creative industries, such as Charleston Farmhouse and the Star Gallery, add to the district’s uniqueness and tourist offer. Just over one in twenty visitors to the district stay overnight in paying accommodation and tourism is predominantly from day visitors, or visitors staying with friends or relatives. Although an unreliable service at present10 the Port at Newhaven provides the district with a gateway to Europe and has the potential to become more central to the way tourists enter the district, visitors that have travelled further are more likely to stay overnight. Trying to increase the proportion of visitors that stay over night in the district would help to increase the economic impact that tourism has on the local economy. 7 Start-up rate is the number of VAT registrations per 10,000 population. Census 2001. 9 STEAM data – Provided by Lewes District Council. 10 www.lewestoday.co.uk - Cross Channel Ferry Service Axed. 8 Step Ahead Research 13 An Analysis of Business Growth Potential in the Lewes District 3.5 “Knowledge Employment” 3.5.1 Nationally and regionally, most employment growth has been driven by an expanding financial and business services sector, a trend that is forecast to continue over the coming years. However, this has not been the case in the Lewes district where “knowledge businesses” and “knowledge employment”11 are less prevalent than in Sussex as a whole – 31% of businesses in Lewes district compared to 41% of businesses in Sussex. From a relatively low base the financial and business service sector has seen below trend growth compared to all employment in the district and well below the growth in financial and business services employment nationally. Nationally the financial and business services contributes one quarter of economic output (24%), in the Lewes district it is estimated to contribute just over one tenth (13%). This has been one of the fastest growing sectors and Lewes district has not been able to benefit from it as much as it might. 3.6 Job Losses and Diversification 3.6.1 There have been a number of job losses in traditional manufacturing between 1990 and 2005, which reflects the general perception that there are a number of empty industrial units in the district. However, these jobs have been replaced by growth in higher level engineering occupations, which are likely to demand different skill-sets from workers and may have different employment site needs to traditional manufacturing businesses. The growth in engineering has been more significant in the Lewes district than in the United Kingdom as a whole and Lewes district now has a higher share of engineering employment than the UK. 3.6.2 The greatest falls in employment were in agriculture, which now provides less than 1,000 jobs in the district. Although employment in agriculture has been declining, the agricultural sector has a vital role in the Lewes district economy and a direct and indirect role in tourism, maintaining the quality of the countryside. In recent years the rural economy has diversified with an increasing amount of rural accommodation, such as bed and breakfasts, and converted barns for business premises. Employment in rural parts of Lewes district increased above trend - by a third between 1995-2002 and the role of the countryside in the local economy is likely to continue to increase, as the whole district is broadband enabled, creating more opportunity for homeworking from rural locations and the potential for further development of highquality business accommodation. 3.6.3 The future of the Lewes district economy will depend on how effectively it manages to diversify away from more traditional areas of employment and whether it is successfully able to broaden its economic base to replace the lost manufacturing and agriculture jobs. The data shown in table 1 shows that the district has had some success in doing this, but evidence from interviewees undertaken for this study suggest that this has not been the case in all parts of the district. 11 Using the Local Futures definition of “Knowledge companies” – for definition see annex. Step Ahead Research 14 An Analysis of Business Growth Potential in the Lewes District 3.7 The Dynamics of the Sub-Areas 3.7.1 The recent economic experience of each of the sub-areas has been very different, some sub-areas have felt the decline in manufacturing employment more keenly than others and some sub-areas have been buoyed by public sector employment. Table 2 below shows how the patterns of employment changed in the sub-areas of the Lewes district between 1995 and 2002, and reflects the different fortunes of the sub-areas. Table 2: Employment Change in the Lewes District by Sub-area – 1995-200212 1995 Count 2002 % Count 1995-2002 Change % Count % LEWES 9,400 36.2 13,500 41.7 4,100 NEWHAVEN 5,600 21.4 5,500 16.8 -100 -2.2 PEACEHAVEN 1,500 5.9 1,700 5.3 200 11.7 SEAFORD 4,000 15.5 4,400 13.7 400 10.0 REST OF LEWES DISTRICT 5,500 21.0 7,300 22.4 1,800 43.8 33.5 Total 26,000 100.0 32,400 100.0 6,400 24.6 Source: Annual Business Survey 1995 (Rescaled Analysis) and the Annual Business Inquiry 2002 ONS via NOMIS. NB: Numbers may not sum due to rounding. 3.7.2 Lewes town has always been the source of the most employment, providing more than one third (36%) of jobs in the district in 1995. Newhaven (21%) and the rest of Lewes district (21%) accounted for around two in five jobs. Seaford and Peacehaven are comparatively small employment centres providing just 16% and 6% of jobs in the district respectively. Whilst there was strong overall jobs growth in the district between 1995 and 2002, this was not shared evenly between sub-areas. From an already strong employment position, Lewes town strengthened its dominance and by 2002 provided 44% of local employment. Only the rest of Lewes district, which accounts for most of the rural areas, had above average employment growth. In Newhaven there was actually a small fall in overall employment, whilst both Peacehaven and Seaford failed to benefit from growth to the same extent as Lewes town. 3.7.3 These changes reflect the industrial composition of the sub-areas and demonstrate the different challenges that exist for different parts of the district. Table 3 shows the sectoral distribution of employment in each of the areas within the Lewes district in 1995. Table 3: Proportion of Employment by Broad Sector in the Sub-areas - 1995 1995 Annual Employment Survey LEWES Proportion of Employment by Sector (%) Financial Public Distribution, and Administration, Hotels & Transport & Business Education & Other Manufacturing Construction Restaurants Communications Services Health Services 10.8 5.0 18.9 3.2 15.0 41.7 5.4 NEWHAVEN 48.0 1.6 20.1 10.2 4.0 12.4 3.5 PEACEHAVEN 13.8 4.7 25.7 3.6 12.3 35.8 4.0 4.4 3.0 31.5 1.3 9.7 43.6 6.4 17.3 5.6 20.1 2.3 11.2 33.8 8.7 19.3 4.1 21.8 4.2 Source: Annual Employment Survey 1995 – Rescaled Analysis ONS Via NOMIS. 10.8 33.7 5.7 SEAFORD REST OF LEWES DISTRICT Total 12 Although 2003 ABI data is available it is not comparable with the AES for wards in the Lewes district. Step Ahead Research 15 An Analysis of Business Growth Potential in the Lewes District 3.7.4 Newhaven was far more dependent upon manufacturing employment than other parts of the district. Nearly half (48%) of all employment in the town was in manufacturing. Conversely, the town had a very low proportion of people employed in financial and business services and public administration, education and health. The transport sector is more important to Newhaven than other areas of the district, primarily because of the port, yet it only provides employment for one in ten people. This very narrow economic base means that Newhaven has been particularly vulnerable to wider economic changes and even the port activities have not been able to compensate for this. During periods of economic change Newhaven has not had the advantage of being able to fall back on significant public sector employment in the way that Lewes town, Seaford and the rest of Lewes district have been able to. 3.7.5 One of the most revealing aspects of the local economy is the low level of financial and business services overall. In the mid 1990s, Seaford was reliant upon public sector employment – particularly health and social work activities - and retail, but had less than 10% of employment in financial and business services. This lack of business dynamism and the fact that none of the Lewes district coastal towns have been developed as significant tourist towns has meant that towns such as Seaford have become dominated by low and intermediate level businesses, primarily serving local markets. 3.7.6 The 2002 Annual Business Inquiry data in Table 4 shows how the structure of employment has changed in each of the Lewes district sub-areas and demonstrates how some parts of the economy have thrived, whilst others have continued to struggle. Table 4: Proportion of Employment by Broad Sector in the Sub-areas - 200213 Proportion of Employment by Sector (%) 2002 Annual Business Inquiry LEWES Public Distribution, Financial & Administration, Hotels & Transport & Business Education & Other Manufacturing Construction Restaurants Communications Services Health Services 6.8 2.0 27.1 3.6 12.6 43.7 4.2 NEWHAVEN 36.9 1.6 26.5 9.2 5.3 16.3 3.8 PEACEHAVEN 11.1 8.3 25.9 3.2 11.3 33.5 6.7 2.7 6.2 27.8 2.8 10.6 41.1 7.0 12.4 11.0 18.0 4.8 13.2 31.0 8.2 12.8 4.9 25.0 4.7 Source: Annual Employment Survey 1995 – Rescaled Analysis ONS Via NOMIS. 11.2 35.4 5.5 SEAFORD REST OF LEWES DISTRICT Total 3.7.7 13 The decline in the importance of manufacturing in all parts of the district is clear, but it is Newhaven that has had to undergo the most significant readjustment, because of its dependence on employment in the sector. There were 670 less manufacturing jobs in Newhaven in 2002 than there were in 1995 – three quarters of all the manufacturing job losses in the Lewes district were lost in Newhaven and because it had such a narrow economic base, it was not in a position to replace these adequately with service sector employment. Losses in manufacturing employment have been buoyed by increases in public sector employment in other sub-areas. Only 16% of employment in Newhaven is in the public sector, compared to over a third of employment (35%) in the district as a whole. Distributing public sector Although 2003 ABI data is available it is not comparable with the AES for wards in the Lewes district. Step Ahead Research 16 An Analysis of Business Growth Potential in the Lewes District employment more evenly throughout the district’s sub-areas may help the regeneration and restructuring of Newhaven. 3.7.8 Whilst there were employment gains in Newhaven in public administration, financial and business services and distribution, hotels and restaurants, the amount of employment in these sectors was so low in the mid-1990s, the actual number of new jobs was relatively small. By 2002, manufacturing still accounted for over one third (37%) of jobs in Newhaven. It seems likely that the Newhaven economy will need to continue to restructure if it is to develop and grow in line with the more prosperous parts of the district. Newhaven’s natural environment could provide an opportunity for its development. The sub-area benefits from its coastline, historic Fort and is surrounded by the South Downs. 3.7.9 Lewes town, which already had the largest share of employment in the district, benefited from having a broader economic base, a strong cultural heritage, relatively close proximity to London and the two universities in Brighton & Hove and its position as the County town of East Sussex. Public services employment continued to be significant to the town, whilst the popularity of Lewes town as a location for affluent households has resulted in a significant expansion of the hospitality and retail trades, in which employment has more than doubled in recent years. The much lower level of manufacturing in the town has meant that the general contraction of employment in this sector has had a much less significant impact. 3.7.10 Whilst the town clearly benefits from its strong public sector, the very high proportion of employment in this sector suggests over dependence upon employment in a small number of organisations, such as the County Council. The location decisions of a small number of individuals or decisions made by central Government could have an impact on the town’s economy. Despite this, the town has natural assets, in terms of its location and its heritage. Its physical environment means that it is able to position itself as a high quality visitor destination and can attract high earning residents from other areas, whose spending patterns can foster the growth of a strong service sector economy. However, the financial and business services sector in the town remains fairly small and will need to continue to grow to ensure that the town’s economy is sufficiently diverse to withstand any potential losses in public sector employment. The qualifications of people in Lewes town are generally higher than those of people in the rest of the district, so there is the knowledge and potential to grow and support high-tech businesses. 3.7.11 Like Lewes town, Seaford is also dependent upon public sector employment, but the jobs are mainly in the health and education sectors, which support the town’s families and older residents. Changes in the Seaford economy have been far less marked than in either Lewes town or Newhaven. These sectors, along with the retail sector continue to be the main sources of local employment. However, the demographic profile of Seaford is likely to influence the structure of the town’s economy. Nearly one third of its residents are over the age of 60 years – much higher than in Newhaven or Lewes town. Whilst Seaford remains an attractive location for older people to retire to, the demand for health and social care services is likely to remain high, whilst the ability to attract a critical mass of innovative high growth businesses that serve external markets may be limited. There is demand from the population profile, with its high proportion of families and older people, for local services and who affect the dynamism of the workforce Step Ahead Research 17 An Analysis of Business Growth Potential in the Lewes District creating a low proportion of businesses in the sub-area that supply other businesses. These types of businesses tend to be more outward looking and serve a wider range of markets. 3.7.12 The range of businesses and employment opportunities in the sub-areas affect the capacity of the economic base to support people travelling into work from other locations. Seaford does not have a strong enough economic base with a range of high-level employment opportunities to attract people to travel to work in the sub-area. The business profile and range of employment opportunities in Lewes town, particularly in the public sector, and in the manufacturing sector in Newhaven, attract workers resident in other parts of the district. 3.8 Commuting 3.8.1 The dynamism of the sub-areas is influenced by commuting patterns, which affect disposable income in the district. Table 5 compares the number of people who commute out of the district to work in other parts of Sussex with the number of people who commute into the district to work. Table 5: Commuting Patterns in the Lewes District Lewes residents working People working in Lewes Net in the area living in the area Commuting14 Area % Count % Count 41080 - 35830 - Live and work in Lewes 5250 23570 57% 23570 66% 0 Brighton & Hove 7700 19% 4000 11% 3700 Non-Sussex areas (inc London) 2980 7% 690 2% 2300 Mid Sussex 2090 5% 1440 4% 650 Wealden 1560 4% 2920 8% -1350 Crawley 1060 3% 110 0% 950 Eastbourne 950 2% 1340 4% -400 Adur 360 1% 390 1% -30 Horsham 290 1% 270 1% 20 Arun 50 0% 150 0% -100 Chichester 30 0% 40 0% -10 Hastings 90 0% 320 1% -220 140 0% 340 1% -200 Worthing 200 Source: Census 2001. NB: Numbers may not sum due to rounding. 0% 260 1% -50 Rother 3.8.2 Count Total Two in five (43%) Lewes district residents in work are employed outside the district. The proximity of Brighton & Hove has a considerable impact on employment patterns of local residents. Nearly one in five (18%) of all Lewes district residents in work are employed in Brighton & Hove, with a high proportion coming from Lewes town itself. 1,700 people commute out of the district to work in London. However, two thirds (66%) of people who work in A positive figure indicates that less people in work are employed in the district than live there – i.e. people travel out of the district to work. A negative number indicates that more people come to work in Lewes from the other area than vice versa – i.e. Lewes district is a source of employment for their residents. 14 Step Ahead Research 18 An Analysis of Business Growth Potential in the Lewes District the district also live there. People who commute to work are generally employed in higher-level occupations and the high level of people commuting out of the district to work, compared to those travelling in to work suggests that the district may have a relatively low proportion of higher paying occupations compared to some neighbouring areas. The financial and business services are a high paying sector and the lack of employment opportunities available in this sector in the district may contribute to the number of talented residents that work in other areas. 3.8.3 More highly paid people, such as managers and professionals are likely to commute out of the district to work – these occupations are likely to earn an average of £10,000 to £15,000 more than the average for all occupations. The majority of commuters’ earnings are spent where they live15, and therefore, out-commuting to higher paid jobs can be beneficial to an area and bring new money in. Out-commuters who are able to earn more money working outside the Lewes district have supported the growth in service sector employment. It is notable that residents in Lewes town, where the range of facilities is much greater are much more likely to travel further to work than residents in Newhaven and Seaford, where the range of facilities are generally weaker and businesses are more inward-looking. 3.8.4 Many Lewes town residents reportedly work at the universities in Brighton & Hove, which also provide a rich supply of higher quality labour for Sussex businesses. Stakeholders suggest that the two universities offer an opportunity to develop and diversify the Lewes district economy, particularly with respect to increasing the proportion of knowledge based and financial and business services employment. By supporting activities that link local high growth businesses with the universities, the district can develop a base of knowledge businesses that will drive its future economic development. 3.9 Employment Forecasts – 2005 - 2010 3.9.1 Employment is forecast to rise by 2,000 between 2005 and 2010, particularly in the public service sector, with overall employment growth mirroring the regional trend. Table 6 shows the forecast changes in the structure of employment within Lewes district between 2005 and 2010. Table 6: Forecast Changes in Employment - 2005 - 2010 2005 Count Agriculture, Mining and Utilities 1,200 Manufacturing 6,200 Construction Distribution, Hotels & Catering Transport & Communications Financial Intermediation & Business Services Other (mainly public) services Total 2010 % Count 2005-2010 % Change Growth 3% 1,500 3% 300 25% 14% 5,600 12% - 600 -10% 6,100 14% 6,900 15% 800 13% 7,600 18% 7,500 16% - 100 -1% 1,900 4% 1,900 4% 100 3% 4,500 10% 4,500 10% 100 1% 36% 17,200 45,100 38% 1,600 10% 15,600 43,100 100% 100% 2,000 5% Source: Sussex Economy Forecasting Model 2003 Experian/Business Strategies/ Skills Insight and Step Ahead Research. NB: Numbers may not sum due to rounding and due to data availability engineering is a sub-sector of manufacturing. 15 Oxford Economic Forecasting - London’s Linkages with the Rest of the UK – May 2004. Step Ahead Research 19 An Analysis of Business Growth Potential in the Lewes District 3.9.2 The proportion of employment in the manufacturing sector is forecast to continue to diminish. Public sector employment is forecast to grow slightly and with it the local economy is likely to become more dependent on Government spending. Employment in the growth sector of financial and business services is forecast to remain static and the district is unlikely to benefit as much as it might from employment in this sector. Future employment forecasts are based on a continuation of established trends, which can be changed by unforeseen events, such as inward investment or via public sector intervention and while useful they should be interpreted with caution. 3.9.3 Looking at how employment between sectors is currently distributed across the sub-areas, it is likely that Newhaven will continue to suffer most acutely from the continued restructuring of the manufacturing sector and that growth in hotels and catering and public sector employment will be mainly in Lewes town. Left unchallenged the economic differences between the district’s subareas are likely to further diverge. 3.9.4 Lewes district needs to build on the advantages of its close proximity to Brighton & Hove and to increase the range and quality of employment opportunities, which may help to retain out-commuters and diversify its economic base. Stakeholders currently report that high growth businesses from the Sussex Innovation Centre, for example, are naturally drawn to Brighton & Hove, rather than looking east to Lewes district. However, Lewes district can benefit from the success that Brighton & Hove has had in becoming a centre for the creative industries. 3.9.5 It will be necessary to attract other types of businesses to the area to counterbalance manufacturing losses and for the area to benefit from growth in financial and business services. The continuing decline in manufacturing employment is likely to impact on demand for employment premises suitable for this industry – with less being required and more space becoming vacant. Stakeholders suggest that changes in technology are likely to continue to affect the way the sector works and the amount of floorspace it requires. In the service sector, information and communications advances are likely to increase remote and home working, and rural areas are likely to continue to see an increase in employment. The stock of commercial premises needs to reflect the needs of modern businesses, particularly in the financial and business service sector, if the district is to attract companies of this type and diversify its economic base. Step Ahead Research 20 An Analysis of Business Growth Potential in the Lewes District 4. Forecast Demand for Business Space 4.1.1 The rental values and the dynamism of the local commercial property market will affect the extent and nature of the demand for employment land in the Lewes district over the coming years. Analysis of employment projections suggest that overall demand for B1 (office space), B2 (light industrial) and B8 (storage and distribution) floorspace is likely to be negative, largely due to losses in manufacturing employment. However, there is evidence of positive demand for B1 office use, smaller spaces and move-on accommodation, stakeholders suggest that demand is particularly for Lewes town and Newhaven. The main issue is the quality of existing stock, which is largely unable to meet the needs of modern businesses and does not attract businesses to the area, rather than a lack of suitable sites. 4.2 Demand for Employment Floorspace 4.2.1 To assess the scale and nature of demand for commercial floorspace, employment forecasts are used by sector to 2010. The techniques outlined in the ODPM document are applied to translate the employment forecasts into floorspace projections using proxies for Use Class and estimates for floorspace per employee. 4.2.2 When translating forecast employment into land requirements there are a number of relationships, which need to be clarified and a number of assumptions need to be made. The rules of thumb are by no means perfect, and they do not necessarily match local circumstances. However, given that forecasting is an imperfect science, the data can be used to indicate overall trends and provide broad information to be tested against local stakeholders’ experiences of the types of premises businesses require in the district. The method uses projects employment forecasts, translates SIC codes into planning use class proxies and applies standard floorspace per employee ratios to estimate required employment space. A detailed explanation of the methodology is in the Annex. 4.2.3 The data shows that it is likely there will be a slight increase in the demand for office accommodation and a decline in the space required for general industrial, and storage and distribution. This is broadly in keeping with the trend of a declining manufacturing sector and an increase in office based service sector employment shown in Table 6 in the previous chapter. Table 7 shows how the forecast changes in employment translate into likely demand for floorspace. Table 7: Estimated Business Floorspace Requirements in Lewes District - 2005 2010 Use Class B1 B2 B8 TOTAL Employment Change in Lewes District 2005-2010 +100 - 600 - 300 - 900 Roger Tym Estimate – Floorspace per employee m2 17.9 29.7 40.1 - Arup Estimate– Floorspace per employee m2 19 34 50 - Roger Tym Estimate (m2) 900 -18,900 -11,200 -29,200 Arup Estimate (m2) 900 -21,600 -14,000 -34,600 NB: numbers may not sum due to rounding. Step Ahead Research 21 An Analysis of Business Growth Potential in the Lewes District 4.2.4 Overall it is forecast that demand for employment floorspace in Lewes district between 2005-2010 will be negative. This is mainly because of predicted falls in manufacturing and warehousing employment, which have large employee floorspace ratios compared to B1 office use. These forecasts do not take account of any pent up demand from existing businesses, home workers or the self-employed. They also fail to capture demand from new or emerging industries that may not be reflected in the SIC code proxies, such as elements of Digital Media16. The recommended proxy for B1 office use is financial and business services and the Lewes district has a low proportion of employment in this sector. Office accommodation in the district may be required by other sectors, such as the public sector, and it does not take account of any aspirations to diversify the business base. 4.2.5 It may be necessary to try to attract other types of businesses to the area to counter-balance manufacturing losses and benefit from growth in financial and business services, potentially by upgrading and renovating existing stock to make it suitable for modern “knowledge businesses”. The floorspace estimates do not take account of potential inward investment or overspill from businesses in neighbouring areas, such as Brighton & Hove. The universities in Brighton and Sussex Innovation Centre offer a potential source of growing knowledge businesses in need of move-on accommodation – space for growing recent start-ups. Forging strong links with these organisations and their businesses may help the Lewes district increase its proportion of “knowledge employment” provided that suitable premises are available. Good quality employment space needs to be made available to create demand and to attract businesses from neighbouring areas. Businesses will not be attracted to the area unless the quality of the stock is right. 4.2.6 Forecasts can be changed by unforeseen events, such as a large inward investment or via public sector intervention. The SIC code – Use Class proxy is less useful when dealing with new or emerging sectors, such Digital Media, which may not be captured fully by the B1 estimation17. This should be borne in mind when interpreting the data, which may underestimate demand for B1 office space, the data is indicative and therefore should be treated with caution. 4.3 Low Rental Values and a Localised Property Market 4.3.1 There is some evidence that the property market in the Lewes district is localised, and that demand for commercial property is mainly from the growth and start-up of indigenous firms rather than businesses looking to locate from elsewhere18, “East Sussex has a localised market with negligible inward investment activity. Nonetheless, there remains the view that land is required for local firms”19. 4.3.2 The small size of the commercial property market, low rental values and a lack of dynamism have led to a lack of investment in the commercial stock, which is now ageing and much of which is unsuitable to meet the needs of DCMS Creative Industries Official Definition – Digital Media covers SIC codes in 92, a sub-sector of ‘other (mainly public) services’. 17 ODPM – Employment Land Reviews – Guidance Note. 18 SEER Consulting - Room to Grow. 19 Vail Williams – East Sussex – Small Business Units and Employment Land – December 2004. 16 Step Ahead Research 22 An Analysis of Business Growth Potential in the Lewes District modern businesses. Stakeholders report that the poor quality of business premises and stock has been affecting business retention and contributing to vacancy rates. Empty sites and property were perceived to be because of a lack of the right quality of stock rather than a lack of demand. 4.3.3 Several of the stakeholders interviewed for the project supported the finding of the Vail Williams research - that the district does not attract significant inward investment, particularly in sectors that are cost sensitive, such as manufacturing. This is part of a wider national trend of economic restructuring. Indigenous demand does not provide a strong enough incentive for commercial property development, which is risky because the district lack’s a “critical mass” of businesses. 4.3.4 Partly as a result of a lack of inward investment and other property market factors, only 2% of all commercial property development in Sussex since 1987 has been built in East Sussex.20 Therefore much of the stock of business premises in the county is ageing and has few of the benefits of modern business accommodation. Financial and business services, which has been a key driver of the UK economy in recent years, require good quality office space and more needs to be done to ensure the district doesn’t fall further behind in its proportion of employment in this fast-growing sector – the district currently has proportionately 10% less employment in this sector than Sussex. 4.3.5 This starkly highlights the need to improve the quality of the stock of business premises in order to not only attract new businesses, but to retain existing employers. Stakeholders mentioned that business retention also suffers as a result of inappropriate and ageing premises and that if a company relocates out of the district premises are often left empty for long periods. This is detrimental to the attractiveness of the urban environment and compounds the unlikelihood of inward investment. Vacancy rates were also suggested by several stakeholders to be a symptom of the quality of the stock rather than lack of overall demand for premises, especially in Lewes town itself. Empty property in the district does not necessarily indicate a lack of demand for business premises, but rather that there is a need to renovate existing sites and develop high-quality new accommodation to meet demand and to help to retain businesses. 4.3.6 The South East Plan requires more efficient use to be made of existing sites and premises that are not used because they are unsuitable for modern business needs. Creativity and flexibility is required in finding ways to bring forward sites and a proactive approach is needed to return vacant sites into use. All stakeholders agreed that although housing development may bring mixed-use sites into use more quickly, it was vital that the medium to longterm economic needs of the district are not compromised and employment land reallocated to other uses. Employment land has to meet the needs of the current and future business base, both in terms of quantity and quality. 20 SEER Consulting – Room to Grow. Step Ahead Research 23 An Analysis of Business Growth Potential in the Lewes District 4.4 The Likely Nature of Demand 4.4.1 The outcome of the data analysis in Section 3 would seem to be broadly supported by information gathered from stakeholder interviews – there is a trend for manufacturing companies to relocate due to high operational costs relative to international locations, and there is some demand for quality B1 office accommodation. Stakeholders identified some general trends in the likely nature of future premises demand, including demand for smaller units, and particularly for move on accommodation. They reported demand was mainly for Lewes town, which reflects its strength as an employment centre and Newhaven, as a result of its space and potential. 4.4.2 The provision of move-on accommodation – space for expanding recent startups - was seen as particularly important for the local economy to retain indigenous start-ups and to reap the benefit from growing “knowledge businesses” moving-on from the Sussex Innovation Centre, the Newhaven Enterprise Gateway and the local universities. To try to meet this demand it was suggested that vacant larger sites could be converted into a number of smaller units, which would make them more suitable to meet demand. 4.4.3 There were perceived differences in the attractiveness of the district’s subareas for business location, which are likely to affect where the positive demand for office accommodation needs to be met. In general stakeholders did not refer to the sub-area of Peacehaven. Perhaps this reflects the fact that only 5% of the districts employment is in this sub-area. It was not viewed as an attractive location for modern businesses and was perceived to lack a “business centre”. This suggests that there is unlikely to be significant demand for employment space in the town and the development needs of the Lewes district may have to be met in other areas that are perceived to be more attractive business locations. 4.4.4 The business community in Seaford was perceived by stakeholders to be “close-knit”, with many family-run businesses serving the needs of the local population. It was reported that there was little inward investment and the draw as a wider centre was limited for both businesses and consumers. Indeed Seaford has little draw for in-commuters and the majority of workers in the sub-area live locally21. This suggests that there is unlikely to be significant demand for business space in the town and that demand may have to be met in other sub-areas of the district. 4.4.5 Overall, stakeholders commented that the preferred business locations within the Lewes district were Newhaven and Lewes town. Lewes town is attractive to businesses because of the quality of life it offers and ease of access to London and Brighton, both by road and rail. Newhaven’s strengths include its potential, particularly on the waterfront, with space and opportunity for development. It was the opinion of the majority of stakeholders that the demand for business premises in the district was in Lewes town and Newhaven. Therefore it is likely that new or upgraded office accommodation would be best placed in these sub-areas to meet demand. 4.4.6 Stakeholders commented on the general difficulties in developing sites and bringing them forward. These difficulties included fragmented ownership, and Census 2001 – over 70% of residents work in the area, with only 23% travelling to work in the town from other areas. 21 Step Ahead Research 24 An Analysis of Business Growth Potential in the Lewes District contamination, particularly in manufacturing sites, and access, which are by no means only common to the district, but face developments across the country. It is vital to tackle these difficulties creatively in order to meet business premises demand and to ensure quality of the urban environment. Investigating ways in which other Local Authorities have worked around these common issues would be one way of the district learning from other areas experiences and perhaps finding appropriate innovative solutions that are tried and tested. 4.5 Summary of Findings 4.5.1 All areas of the Lewes district have been affected by international, national and regional trends and many of the changes that have occurred in the district are not peculiar to the local area. Traditional sectors, such as agriculture and manufacturing have been contracting, while service sector employment has increased, particularly in the public sector. The area is overreliant on the public sector, which accounts for nearly one third of employment and economic output. Growth in public spending has helped to mask structural weaknesses in the district’s employment base - financial and business service sector employment and output is particularly low. 4.5.2 Nationally financial and business services contributes one quarter of economic output (24%), in the Lewes district it is estimated to contribute just over one tenth (13%). This has been one of the fastest growing sectors in the UK and Lewes district has not been able to benefit from it as much as it might. Diversifying the local economy should be a priority, particularly trying to attract and retain companies from the universities, Sussex Innovation Centre and Newhaven Enterprise Gateway, with the provision of quality office accommodation. 4.5.3 The imbalance of public sector employment between the sub-areas has helped Lewes town to ride the change from manufacturing to service based employment more successfully than Newhaven. Lewes town has been able to attract well-qualified, high earners to live in the area who have high disposable income and have helped to build a café and restaurant economy in the town. These businesses are also supported by daytime spending of public sector workers. 4.5.4 The structural changes in the economy have affected the stock of business premises. The data shows a decline in space required for B2 and B8 uses. There is a small positive demand for B1 office space, but this is likely to be an underestimate of the overall requirements, particularly if Lewes district is to diversify. Step Ahead Research 25 An Analysis of Business Growth Potential in the Lewes District 5. Development Scenarios 5.1.1 Using the analysis of the strengths, weaknesses and potential of the economy developed in this report a series of scenarios is presented in this section, each of which could be implemented over the coming years to try to improve the position of the district. They are not mutually exclusive and different scenarios may be more appropriate to different sub-areas. The scenarios include maintaining the status quo, focusing on developing a high quality visitor offer or stimulating business growth and creation through residential led development. 5.1.2 The benefits of each scenario are likely to be district-wide as there is movement around the district, with residents working, visiting and shopping in other sub-areas. Some of the scenarios focus on particular parts of the district, where development needs are reported to be greatest. However, area based approaches should not be overly prescriptive so that benefits do not accrue to people living in neighbouring areas. Greater linkages between Seaford, Peacehaven and Newhaven, in particular will mean that the benefits of current and future development in Newhaven are spread beyond the town’s residents to other parts of the district. 5.1.3 The rest of East Sussex, which includes most of the rural parts of the district has been relatively successful in diversifying its economic base. Stakeholder evidence suggests that this has been driven in part by greater use of technology in rural areas, which has fuelled the development of remote and home-based working. Encouraging greater use of ICT and broadband throughout the district is likely to further strengthen the growth of rural and home-based businesses and support the development of diversification of Lewes’s rural economy. 5.2 Option 1. 5.2.1 Under the “do nothing” option no action would be taken and the development of the district would be left to the market. Based on recent economic changes and future forecasts, this may mean that there is further polarisation of the local economy, with Lewes town and the rural areas continuing to benefit and the coastal towns struggling to adapt to changing economic circumstances. The favourable physical environment and the relatively high value of residential developments to landowners means that there is likely to continue to be pressure to reallocate employment sites for housing, particularly on those that have become vacant due to economic restructuring. 5.2.2 Existing commercial stock may not be upgraded to meet the reported latent demand from smaller high growth service sector businesses. Without upgraded stock the district could be in danger of stifling its long-term economic development by losing its small businesses with growth potential to areas that have more suitable business accommodation. This may mean that the range of employment opportunities in parts of the district remains narrow, incentives to develop skills amongst local people are suppressed and that future business growth opportunities are restrained by a lack of employment land. Derelict sites that cannot be brought forward without a pro-active approach to development may compromise the attractiveness of the physical Step Ahead Research Do Nothing 26 An Analysis of Business Growth Potential in the Lewes District environment and impact upon the ability of the district to strengthen its tourist offer. It may also mean that the district fails to take advantage of opportunities to diversify and strengthen its economy and continues to be over-reliant upon public sector employment and sectors that are most vulnerable to economic restructuring. 5.3 Option 2. 5.3.1 The physical environment of the Lewes district is one of its key assets. In 2002, the visitor economy attracted 2.2 million visitors, contributing £66 million to the local economy. The profile of visitors is reported to be mainly middle aged and middle class and the STEAM Tourism Impact Study reports that four out of five visitors to the district are day visitors. There is significant potential to develop and promote the towns in the district as high quality tourist destinations to longer stay visitors if the South Downs becomes a National Park. The district already has a number of existing high quality attractions, including Glyndebourne, Anne of Cleaves’ House, Lewes Castle, Charleston Manor, and Newhaven Fort and access to sporting venues, such as Hickstead and Plumpton Racecourse. 5.3.2 Parts of the district already benefit from the visitor economy, but this could be extended to other areas. The expansion of the visitor economy will mean developing Newhaven into a real destination that people want to visit, providing a co-ordinated approach to the development of the district’s cultural activities, making the towns more accessible for visitors, developing quality visitor accommodation and promoting strong customer service skills amongst the workforce. The development of Newhaven as a destination, with cafes, bars and a strong evening economy, will increase the importance of having a regular and reliable ferry service to Dieppe, so that the town can capitalise on its position as a gateway to Europe. 5.3.3 However, the benefits of this option would not come without risks. Overreliance on the visitor economy makes locations vulnerable to changing tastes and recent history has shown that economies that rely too heavily on rural tourism can be badly affected by specific “crises”, such as Foot and Mouth Disease. In addition, many of the jobs that the visitor economy supports are seasonal and low paid, making it difficult for local workers to live in the areas where they work. 5.4 Option 3. 5.4.1 The district as a whole is highly dependent on employment in the public sector, which has eased its transition from a manufacturing to a service based economy. However, public sector employment is not distributed evenly in the district. As the County town of East Sussex, the most affluent town in the district, Lewes, is home to most of the districts public sector functions, including the County Courts, Lewes Prison, Sussex Police, East Sussex County Council, Sussex Ambulance Service, Sussex Fire Brigade, and Lewes District Council. 5.4.2 By contrast, Newhaven, which is widely acknowledged to have greater regeneration needs, has had little public sector employment to offset its more significant losses in manufacturing employment. This uneven profile of public Step Ahead Research Developing a High Quality Visitor Economy Re-Balancing the Benefits of Public Sector Employment 27 An Analysis of Business Growth Potential in the Lewes District sector employment has contributed to the unbalanced economy within the district. A more equitable distribution of public sector employment could help to generate more employment opportunities in its less affluent areas and act as a catalyst to further business development in the areas that need it most. 5.4.3 There are likely to be significant political, as well as practical challenges to moving public sector functions from their existing locations and any benefits may be offset by losses to Lewes town centre. Any major employment developments need to be supported by improvements in access and the wider geographical distribution of public sector functions may add to transport pressures in the district. 5.5 Option 4. Upgrading Existing Accommodation to Support and Attract New, High Growth Businesses 5.5.1 Nationally the financial and business service sector has seen the fastest growth in economic output in the last fifteen years, and this sector is forecast to continue to be a key driver of future economic growth. Strong performing areas tend to have a large proportion of employment in this sector, whilst those that are economically weaker tend to have a lower proportion. Nationally, the financial and business services sector contributes one quarter of economic output (24%), whereas in the Lewes district it is estimated to contribute only just over one tenth (13%). Of all the Sussex districts only Hastings has a lower proportion of financial and business services sector than Lewes district. 5.5.2 Stakeholders suggest that there is pent-up demand from small and growing businesses in this sector, but that this is suppressed because the existing accommodation stock is unsuitable to meet their requirements. The future estimated demand for B1 floorspace shown in the forecasts support this view. Given the district’s close proximity to the high growth corridor in central Sussex, Brighton & Hove and London, and its capacity to attract higher skilled managers and professionals as residents, it is likely to have the capacity to develop and attract a body of relatively high growth small businesses if business units in the right locations are upgraded to meet the needs of modern business use. Despite the loss of traditional manufacturing in the district, there is some evidence of a growth in higher-level advanced engineering in the district, which will need to be supported by the development of appropriate business accommodation. 5.5.3 The two universities, the Sussex Innovation Centre and the Newhaven Enterprise Gateway all offer a potential source of growing companies that are likely to require high quality move-on accommodation. The district will fail to capitalise on the potential benefits of these companies who will move to other areas, if it does not create a range of high quality commercial premises and move on accommodation. 5.6 Option 5. 5.6.1 A common criticism of Newhaven among stakeholders interviewed for this project was that the quality of the town centre was poor with few amenities, a weak retail offer and little evidence of a developing café, restaurant and bar Step Ahead Research Attracting High Spending Residents 28 An Analysis of Business Growth Potential in the Lewes District culture to support local employment. Furthermore, the ring road blocks off the town centre and means that there is no passing traffic, which reduces the flow of pedestrians. In contrast to the more affluent Lewes town, the relatively low disposable incomes of residents in Newhaven and the difficulties that it has had in attracting high spend visitors, have inhibited the development of local facilities. More recent residential developments at West Quay have managed to attract higher earning professionals to Newhaven and this may continue with the development of Railway Quay. 5.6.2 Continuing the development of high quality residential accommodation could begin to regenerate the town centre, as amenities emerge in response to the changing residential make up in the area, which could also support the town’s development as a visitor destination. Residential growth would require the development of supporting infrastructure, such as roads, schools, healthcare, water and sewerage, to ensure the development is sustainable. Focusing on attracting higher earning professionals into the area may only result in the “gentrification” of the area, with existing local residents seeing few benefits. Furthermore, residential led growth may encroach on employment use sites and reduce the range of employment sites for development. Step Ahead Research 29 An Analysis of Business Growth Potential in the Lewes District 6. Conclusions and Recommendations 6.1.1 Although there is pressure on land for housing development and there are a number of vacant business sites, protecting employment land for future development is important to ensure that the district has sufficient scope to broaden its economic base and respond effectively to wider national and international economic changes. 6.1.2 Employment in the district is relatively dependent upon the public sector in Lewes town and Seaford and traditional manufacturing in Newhaven, but the district has opportunities to broaden its economic base by expanding its tourism offer, supporting higher level creative and business services and making more effective linkages between its indigenous businesses and the universities and colleges in the area. Business growth in the district is unlikely to be driven by significant inward investment, as it is too far away from the South East region’s arrival destinations. Economic growth is much more likely to be achieved by building on the district’s existing assets and natural resources, developing the skills of its people, supporting the growth of existing companies and attracting small high growth businesses from neighbouring areas. 6.1.3 Both the data analysis and interviews with stakeholders suggest that there may be pent-up demand for business premises in the Lewes district particularly smaller units and move-on accommodation - but the quality of the current stock is often poor and inappropriate for modern businesses. The lack of appropriate stock may have affected the way in which the district’s economy has performed and inhibited the growth of a strong business culture. 6.1.4 The District Council needs to work closely with developers and landowners to identify creative solutions to bring forward and renovate sites, particularly for B1 use in Newhaven and Lewes town where there appears to be most demand. 6.1.5 The physical environment and quality of life in the Lewes district is one of its key assets. In 2002, visitors spent £66m in the local economy and the district has the opportunity to capitalise on the designation of the South Downs as a National Park and the districts position as a gateway to Europe. There needs to be a clear and co-ordinated strategic vision for the development of a high quality visitor economy across the whole district to maximise its maritime, rural and cultural assets as the ‘raw’ materials of the tourism industry. Such a vision also would need to develop Newhaven as a real visitor destination, address transport and access issues (including parking), improve the customer service skills of local residents and co-ordinate the cultural and creative events in the district. A reliable and regular ferry service from Newhaven would further add to the depth of this offer and help to ensure that the sub-area also benefits. 6.1.6 The economic benefits of bringing forward employment sites for development are often marginal for landowners and this adds to the pressure for residential development. On some sites, mixed-use developments may be the only way in which employment sites can be brought forward profitably, where there are no other ways for upgrading employment sites. Limited and well-targeted residential developments could help to cross-finance development of high Step Ahead Research 30 An Analysis of Business Growth Potential in the Lewes District quality sites for employment that cannot otherwise be brought forward, but these will need to demonstrate that there is no other option and that they will improve the availability of modern business units to support the changing local economy. 6.1.7 Six key recommendations from the analysis and conclusions in the report have been developed. 1. Lewes District Council should ensure that there are adequate and suitable employment sites to meet current and future demand as the employment structure and dynamics of the local economy continue to change over the coming years. These are likely to be mainly for B1 office developments, rather than for B2 and B8 uses. 2. Lewes District Council should seek to diversify the economic base of the district so that it has a greater proportion of employment in strong growth sectors, such as financial and business services, cultural and creative sectors and advanced engineering. The local economy is dependent upon public sector employment and traditional manufacturing, the latter of which is vulnerable to continued economic restructuring and international competition. High growth businesses will be difficult to retain and attract if quality commercial premises are not available, so development should focus on high quality B1 office space and move-on accommodation. 3. Lewes District Council should take a cross boundary and district-wide approach to developing a high quality visitor economy and develop a coordinated approach to marketing the district as a gateway to the South Downs National Park, if it is designated by the Secretary of State. 4. The regeneration and diversification of the economic base in Newhaven should be a priority and will involve renewing the physical environment of the town and developing the town as a genuine destination that people choose to visit. 5. Lewes District Council should work with public sector partners to identify ways in which the high levels of public sector employment can be distributed more evenly throughout the district as a catalyst to support economic and employment growth in the more deprived parts of the area. 6. Lewes District Council needs to continue to work with partners to develop the skills of local people so that the district has the human capital to respond effectively to the changing needs of the modern economy and to attract higher-level businesses to the local area. Step Ahead Research 31 An Analysis of Business Growth Potential in the Lewes District Annex A1. The Sussex Forecasting Model predicts employment by industrial sector on the basis of Standard Industrial Classification (SIC) codes a standard classification system for business sectors. Therefore the first part of this method is to translate SIC codes into the Use Class codes used for planning. Table A1 below shows the proxy used by Greater London Economics to translate SIC Codes into Use Classes. Table A1: SIC code to Use Class Proxy Use Class B1 - Office B2 - General Industrial B8 - Storage and Distribution SIC Sector Financial and Business Services Manufacturing Wholesale and Distribution Source: Greater London Economics in the ODPM – Employment Land Review: Guidance Notes. A2. The SIC code to Use Class proxy is not expected to be a perfect match. For example, there are a number of office occupiers that are not in the financial and business services sector and a proportion of businesses service companies that are not office based. However, it will provide a reasonable estimate for the purposes of this study. A3. The next step is to use the forecasting model to estimate employment change between 2005 and 2010 by planning Use Class using the SIC code-Use Class proxies in Table A1. Table A2 shows the forecast total employment, absolute change and likely employment growth between 2005 and 2010 in the Lewes district. Table A2: Total Forecast Employment Change and Growth in Lewes District - 2005 2010 Use Class B1 B2 B8 TOTAL Employment 2005 4,500 6,200 5,900 16,600 Employment 2010 4,500 5,600 5,600 15,700 Absolute Change +100 - 600 - 300 - 900 Growth 1.1% -10.2% -4.8% -5.2% Source: EBS and Step Ahead Research. NB: numbers may not sum due to rounding. A4. Table A2 shows that it is likely there will be a slight increase in the demand for office accommodation and a decline in the space required for general industrial, and storage and distribution. This is broadly in keeping with the national trend of a declining manufacturing sector and an increase in office based service sector employment. A5. The employment estimates in Table A2 can be translated into floorspace requirements using average floorspace ratios per worker. Floorspace per employee ratios – how much space each employee needs to work - vary from company to company and between locations, so no estimate is perfect. However, Roger Tym and Partners and Arup have developed standard national proxies, which are applied to the Lewes district in Table A3 below. Step Ahead Research 32 An Analysis of Business Growth Potential in the Lewes District Table A3: Estimated Business Floorspace Requirements in Lewes District - 2005 2010 Use Class B1 B2 B8 TOTAL Absolute Change +100 - 600 - 300 - 900 Roger Tym Estimate – Floorspace per employee m2 17.9 29.7 40.1 - Arup Estimate– Floorspace per employee m2 19 34 50 - Roger Tym Estimate (m2) 900 -18,900 -11,200 -29,200 Arup Estimate (m2) 900 -21,600 -14,000 -34,600 NB: numbers may not sum due to rounding. Local Futures SIC code Definition of Knowledge Employment 1110 : Extraction: crude petroleum/natural gas 1120 : Service activities:oil & gas extraction 2211 : Publishing of books 2212 : Publishing of newspapers 2213 : Publishing of journals and periodicals 2214 : Publishing of sound recordings 2215 : Other publishing 2221 : Printing of newspapers 2222 : Printing nec 2310 : Manufacture of coke oven products 2320 : Manufacture: refined petroleum products 2330 : Processing of nuclear fuel 2411 : Manufacture of industrial gases 2412 : Manufacture of dyes and pigments 2413 : Manufacture: other inorganic chemicals 2414 : Manufacture: other organic chemicals 2415 : Manufacture: fertilizers 2416 : Manufacture of plastics in primary forms 2417 : Manufacture: synth. rubber primary forms 2420 : Manufacture of pesticides etc 2430 : Manufacture of paints, varnishes etc 2441 : Manufacture of pharmaceutical products 2442 : Manufacture: pharmaceutical preparations 2451 : Manufacture of soap/detergents etc 2452 : Manufacture of perfumes/toilet etc 2461 : Manufacture of explosives 2462 : Manufacture of glues and gelatines 2463 : Manufacture of essential oils 2464 : Manufacture of photographic chemicals 2465 : Manufacture of prepared unrecorded media 2466 : Manufacture of other chemicals nec 2470 : Manufacture of man-made fibres 3001 : Manufacture of office machinery 3002 : Manufacture of computers etc 3210 : Manufacture of electronic valves etc 3220 : Manufacture of TV/radio transmitters etc 3230 : Manufacture of TV/radio receivers etc 3310 : Manuf: medical/surgical equipment etc 3320 : Manuf: instruments for measuring etc 3330 : Manuf: industrial process control equip. 3340 : Manufacture of optical instruments etc 3350 : Manufacture of watches and clocks 3530 : Manufacture of aircraft and spacecraft 4010 : Production/distribution of electricity 4020 : Manufacture/distribution of gas 4030 : Steam and hot water supply 4100 : Collection/purification etc of water 6210 : Scheduled air transport 6220 : Non-scheduled air transport 7220 : Software consultancy and supply 7230 : Data processing Step Ahead Research 7240 : Data base activities 7250 : Maintenance/repair: office machinery etc 6230 : Space transport 6412 : Courier activities 6420 : Telecommunications 6511 : Central banking 6512 : Other monetary intermediation 6521 : Financial leasing 6522 : Other credit granting 6523 : Other financial intermediation nec 6711 : Administration of financial markets 6712 : Security broking and fund management 6713 : Activ. auxil. to fin. intermediation nec 6720 : Activ. auxil. to insur./pension funding 7210 : Hardware consultancy 7220 : Software consultancy and supply 7230 : Data processing 7240 : Data base activities 7250 : Maintenance/repair: office machinery etc 7260 : Other computer related activities 7310 : Research: natural sciences/engineering 7320 : Research: social sciences/humanities 7411 : Legal activities 7412 : Accounting/book-keeping activities etc 7413 : Market research/public opinion polling 7414 : Business/management consultancy activ. 7415 : Management activities: holding companies 7420 : Architectural/engineering activities 7430 : Technical testing and analysis 7440 : Advertising 7450 : Labour recruitment etc 7460 : Investigation and security activities 7481 : Photographic activities 7483 : Secretarial and translation activities 7484 : Other business activities nec 9211 : Motion picture and video production 9212 : Motion picture and video distribution 9213 : Motion picture projection 9220 : Radio and television activities 9231 : Artistic and literary creation etc 9232 : Operation of arts facilities 9233 : Fair and amusement park activities 9234 : Other entertainment activities nec 9240 : News agency activities 9251 : Library and archives activities 9252 : Museum activities etc 9253 : Botanical and zoological gardens etc 9261 : Operation of sports arenas and stadiums 9262 : Other sporting activities 9271 : Gambling and betting activities 9272 : Other recreational activities nec 33