dynamo north east research project 2014 - policy findings and recommendations

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  • 8/10/2019 Dynamo North East research project 2014 - policy findings and recommendations

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    Dynamo North East research project - policy findings & recommendations

    Dynamo North East research project - policy

    findings & recommendations

    Just get in touch. We'll work it out!

    Headlines:

    1. Bigger than expected enterprise IT cluster

    2. Hidden gem at tipping point for fast-forward growth

    3. Local IT economy actively seeks assistance with collaboration, new business

    development, and recruitment

    4. Dynamo North East can create real value as a rallying point to make this happen

    Executive summaryNorth East England is fortunate to have an unrecognised source of future jobs and a

    foundation stone for future prosperity - enterprise IT. This research and the work of Dynamo

    North East aims to further test our hypothesis and provide a rallying-point for future work to

    build on hard-won successes to date.

    We present the results of our survey, a sample of local IT players, which creates for the first

    time an understanding of the IT economy in the Region. We present various estimates for IT

    and Communications jobs here, which are as high as 32,000. These numbers are set in the

    context of official statistics for these segments of our national economy, along withcomparators from other high profile industries locally, and comparable professional services

    sectors. We estimate 1500 job vacancies in IT, with the potential for up to 2000 opportunities.

    We present an analysis of these findings, summarise with our conclusions, and suggests

    pragmatic next steps to be considered by the Dynamo Board, local industry players, and

    wider stakeholders. Key to this is the establishment of a Dynamo membership organisation,

    run by a skeleton staff who will assist with collaboration, finding new staff, and helping

    members win new business.

    We propose that Dynamo will also coordinate activities in schools organise networkingevents and answer ad-hoc queries and enquiries -- whilst working closely with existing

    players in adjacent markets. Further work could include providing assistance for inward

    investment and business dating services to bring together providers to work on larger new

    business opportunities.

    When we started this research, we had 300+ contacts on our database. We have since

    grown it to 800+ key contacts and we believe we're only part way through a job of work our

    hunch is that there are still significant number of IT experts working as employees in

    organisations whose main objectives are only supported by technology -- rather than being its

    main focus.

    2014 Dynamo North East 1

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    Dynamo North East research project - policy findings & recommendations

    These people are also part of the North East IT economy: if we can successfully create a

    deep and liquid pool of IT expertise and grow the IT 'pie', then we all gain. Moving from a

    situation where individuals are 'cannibalised' from a limited reservoir, to one which we add to

    homegrown talent and combine with those we attract from afar will help rocket-boost our

    existing success stories, and provide the building blocks for new ones.

    A big thank you to research sponsors, Sage

    We would like to thank Sage, our Dynamo 14 Event Partner, for supporting this research to

    help define the North East England IT economy.

    Thank you also to our survey respondents

    In God we trust, the rest must bring data - God hasnt filled out our survey [ok, He could be

    spoofing someone else], but lots of other people have. Were really grateful to them.

    Quotes

    This document is leavened with quotes from our survey correspondents, answering ourquestions What can Dynamo NE help you with? and What else would you like to

    contribute?. We hope these give you a flavour of our successes and can-do attitude.

    2014 Dynamo North East 2

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    Dynamo North East research project - policy findings & recommendations

    IndexRecruitment & Driving profile of region for new staff

    Executive summary

    A big thank you to research sponsors, Sage

    Thank you also to our survey respondents

    Quotes

    Index

    Contacts

    Chairman

    Vice Chairman

    Press contact

    Digital

    Introduction

    Why Dynamo? Thinking and backstory behind Dynamo North East

    Whats Next?

    Document structure

    Sector overview

    Evidence of a boom? Foundations for further success?

    Diversity

    Sector mapping a snapshot of the North East IT economy

    Key research findings

    Quantitative insight

    Headquartered here?What kind of organisation are you?

    What can Dynamo NE help you with?

    Where are your Customers?

    Customer Vertical sector

    Top three customers

    Clusters of customers

    Qualitative insight

    What can Dynamo help you with?

    What else would you like to add?

    Potential growth of the NE IT economySustainability

    Code Clubs and Girl Geeks

    Direct, and Indirect

    Business dating

    Numbers of Vacancies

    Analysis

    Industry-led

    IT cluster-in-the-making

    Skills: fixing our education pipeline

    Working to fix our jobs pipelineGrowing the pie and the Boulder Hypothesis

    2014 Dynamo North East 3

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    Conclusion / summary

    Implications for regional IT cluster

    Impacts/actions/conclusions for Dynamo's service/model/response

    What next?

    Timescales

    Appendix

    Methodology

    Dynamo survey

    ONS dataset

    Social Study 2013 -- The Economic Impact of BT in the United Kingdom

    Our working

    North East Key Points

    Across the North East...

    Board Biographies

    John Hunt

    Charlie Hoult (Chair)

    Stuart Lynn

    Anthony McMenzie

    Mike OBrien

    Bob Paton (Vice Chair)

    Paul Watson

    The Boulder Thesis

    Contacts

    Chairman

    Charlie Hoult - [email protected]| 07973 163784

    Vice Chairman

    Bob Paton - [email protected] | 07770 634447

    Press contact

    Sarah Hall - [email protected]| 07702 162704

    [email protected]

    http://twitter.com/dynamonortheast

    http://www.dynamonortheast.co.uk

    2014 Dynamo North East 4

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    Introduction

    Demonstrate that there are excellent IT capabilities in the North East and that end

    users don't need to look south for the best service in the UK - in fact we deliver some of

    the highest quality capabilities in the market

    Headlines:

    1. Dynamo is an industry-led initiative to firstly, Define, and then Grow - the North Ea

    IT Economy founded by local IT business people and a University academic

    2. This report aims to back up our hypothesis about a hidden capability in enterprise

    IT

    3. This report presents the results of our recent survey, set in a wider economic

    context, and offers suggestions about pragmatic next steps

    Why Dynamo? Thinking and backstory behind Dynamo North East

    Take the managing director of Accenture in Newcastle, Bob Paton, and combine him (if thats

    possible) with Charlie Hoult -- scion of a family with a substantial property business in the

    east of the city -- who had recently returned home to the Region after building a technology

    marketing business in London.

    Add a shared hunch that North East England was not giving itself credit for a hidden

    capability in enterprise IT mix in commercial focus and add informal conversations at the1

    school gate together with Bobs passion for developing the Regions future champions of IT

    and you have the foundations of Dynamo North East, an IT cluster-in-the-making.

    Initial activities brought together a Board (detailed in the Appendix), which has given rise to

    this research and our inaugural conference on May 1st in Newcastle upon Tyne. Dynamo has

    four streams of activity:

    Be a focal point for regional IT growth

    Promote our region externally

    Develop skills and education

    Support regional research and development

    Why now, why this report: Defining the North East IT EconomyWe have all shared the experience of the recent economic downturn. 2014 has fortunately

    brought increased economic and business confidence, and a desire to act on previous

    thoughts of what next?. Dynamo seeks to capitalise on this moment, and also on the

    insights gained over the last eighteen months of preparatory work by the Dynamo founders.

    1Enterprise IT is hardware and software designed to meet the demands of a large organization, including

    greater requirements for availability, compatibility, reliability, scalability, performance and security, among

    other things. We use enterprise IT to mean a broad swathe of software and services (cloud computing,healthcare and industrial control systems) cf

    http://searchcio.techtarget.com/definition/enterprise-IT-enterprise-class-IT

    2014 Dynamo North East 5

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    The goals of this report are reflected in the strapline, Defining the North East IT Economy --

    to put the flesh on the unifying vision of Dynamo, which is Growing the North East IT

    Economy [our emphasis]. We encourage readers to consider afresh a quiet success story,

    and what it means for prosperity, local planning, and inward investment decisions for the

    Region, and further afield. Now is the time to step up to the challenge of delivering on our

    streams of activity.

    This report is offered as a benchmark for future activity, in the knowledge of the hard but fun

    work to be done to continually define and grow the enterprise IT capability in the Region.

    Whats Next?

    So, what would Dynamo need to do and become, to deliver value to its membership and

    wider stakeholders to make a difference to the lives of local people to build even greater

    innovation so that we become recognised for excellence and become a magnet for inward

    investment and high calibre people.

    Even if what gets measured gets managed is an imperfect goal, our present lack of visibility

    is arguably far worse with a longer-term time horizon and goals, we are confident that -- by

    bringing people together around a shared vision that attracts passionate support from across

    the local IT spectrum -- we can build something we can all be proud of.

    Document structure

    We set the wider context through a pen-portrait of the NE IT economy

    Present our findings from our online survey both in graphs and in quotations

    Set out our computations of growth opportunities and associated reflections

    Provide an analysis of these findings, combined with insights gathered during the

    survey process

    Draw these strands together in a conclusion, and propose pragmatic steps forward

    2014 Dynamo North East 6

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    Sector overview

    Regional Pride - we have a very healthy IT delivery and support capability in the

    region. Would be good to expose and share that.

    Headlines:

    1. The North East has a wide and diverse IT capability spread over IT, digital, and

    University sectors, with a long-established track record. Examples are provided.

    2. Increasing business is being won outside the Region and overseas

    3. A 2x2 matrix is provided to give a feel to the players in our space

    Many people come to consider North East England in a new light when they learn of the

    sheer diversity, scope, and quiet success that characterises our IT economy. Our data tell us

    there are 32,000 ICT jobs in the Region, and the potential for up to 2,000 more -- one majorglobal IT player alone contributing 2,500 heads averaging 35k p.a., on career paths of

    growth and dynamic prospects. BTs regional impact study claims 4,100 staff live in the

    region. Please see the Appendix for details of our methodology.

    The local IT ecology has a good distribution of firms from large, medium and small

    including representation from global IT firms, through stable mid-size firms (100-200

    headcount), as well as small firms (20-50 headcount), and a lively start-up scene.

    Undoubtedly a strength of the regions cluster which elevates it above other UK regions is the

    density of government work through DWP, HMRC, NHS BSA and other agencies. These

    firms have a support eco-system which has been running for 40 years and has spawned askilled workforce.

    The North East is also known as a branch plant economy. Some of the manufacturing base

    of old has morphed into global shared service centres including call centres which now

    operate multi-channel (highly tech) comms centres. So, a tour of the business parks will

    identify P&G, Tesco Bank, Balfour Beattie, RightMove, British Airways, Convergys, Sitel and

    other corporates that operate significant IT teams in the region.

    IT Systems Integrators serve the most successful global businesses from here, as well as

    major Public Sector accounts supporting the UKs defence, healthcare, and pensions

    systems. HP, Capgemini, Accenture, Fujitsu, Capita, Sapient and Atos all have fast-growingfootprints, and share our stage along with dynamic young disrupters and established

    mid-market players.

    Sage is a leading supplier of business software to 6.3m businesses worldwide, with more

    than 13,000 employees, group turnover of 1.4bn, and UK revenues of 248.1m. Sage is a

    fantastic North East startup success story of 30 years standing with its headquarters just

    north of Newcastle including 1400 staff on site.

    2014 Dynamo North East 7

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    Evidence of a boom? Foundations for further success?

    Collaboration, Training and retention of staff in the North East

    Why has this sector not come to the attention of policy-makers in the past? We suspect this

    is because the growth in the sector has meant that many of these firms are self-financing

    after start-up and this growth has been so strong that the management are focused on

    delivery rather than profile-raising.

    There are many examples of mid-sized firms, often owner-managed, in the region.

    Mi-Cases software underpins a multi-agency/institutional approach to offender management,

    correctional services, drug and alcohol abuse, policing, probation, healthcare and the court

    system. Orchard Systems is the UK's leading independent provider of specialist software

    solutions to the public and social housing sectors, and is one of the North-Easts

    fastest-growing private businesses. Scott Logic develops software for capital markets,energy trading, e-trading, healthcare, oil & gas, and the public sector.

    Smith Electric Vehicles manufactures zero-emission commercial electric vehicles,

    employing 50 IT staff at Birtley, who create and maintain real-time telematics software and

    infrastructure which monitors electric vehicle performance across the globe. Dontyne

    Systems offers software and services aimed at the optimum production of gear components

    and their use in the transmission industry.

    Diversity

    In the digital space, Palringo is a group chat app for desktop and mobile, whose audiencesend 50 to 60 billion messages a month to a global audience of 25 million users. Bede

    Gaming, employing 50 staff, is a leading supplier of software to the online gambling and

    social gaming industries the Performance Horizon Group empowers global brands,

    agencies and publishers to optimize and take control of their performance marketing

    campaigns. PHG was founded by the team who created, grew, and sold the buy.at Affiliate

    Marketing Network to AOL in 2008.

    Startups in the region cluster around Ignite100 in Newcastle, which operates accelerator

    programmes for digital startups in their custom incubator space. Alumni include ScreachTV,

    which allows venue owners to publish rich-media, ads and real-time experiences to screens:its a global market worth over 30bn p.a and ScreachTV have so far played over 100m

    pieces of content on their network.

    Our mobile developers include Gospelware, who created an app which allows US

    paramedics to instantly record patient injuries and their details at the scene of an accident

    and share it with doctors - thus preparing them for the patients arrival at hospital. Digital

    Sparks data collection and performance monitoring platform gives UK doctors, nurses and

    admin staff vital information on patients who have suffered a stroke by charting their progress

    and rehabilitation needs using iPads and tablets, and generating sales of around 400k for

    the year ending March 2013.

    2014 Dynamo North East 8

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    These vibrant success stories give rise to policy issues such as talent recruitment / retention

    and immigration into the Region, either through mature hires or graduate retention. Were

    addressing this through an cluster-in-the-making called Dynamo North East, made up of IT

    employers, technology hubs, education, local government and employer support initiatives.

    Sector mapping a snapshot of the North East IT economy

    Experience of world-class IT development. Experience of taking an idea, building a

    product, achieving sales around the world and winning customers away from the Silicon

    Valley big names.

    The chart below is our best effort to create a picture of the local players we know about. It

    includes services providers and end users, the colours representing different types of

    players.

    We have created our own ranking between digital & enterprise (vertical axis), and startup

    & established. These are offered only as a rough and initial typology, and so capabilities of

    these organisations will be different from our rankings.

    This is offered as a basis for discussion, and to help provide a sense of the dynamics in play

    here.

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    Key research findings

    Promote the image and capability of the North East to attract talent and investment to

    help deliver future growth.

    Headlines:

    1. Many respondent companies are headquartered in the Region

    2. We have a healthy diversity of competences across the IT spectrum

    3. Respondents want to collaborate, win new business, recruit new staff, and big up

    the Region

    4. They serve local customers, and also work nationally and globally

    5. Customers are also diverse. and vertical mini-clusters are apparent

    Mindful as we are that our results are a sample, there is greater detail about our online surveyand methodology in the Appendix.

    This section is split into two: we have been fortunate to receive both quantitative (numerical)

    responses, and also qualitative (information / discursive) responses for our survey

    correspondents.

    Quantitative insight

    Headquartered here?

    We are fortunate that we have many senior decision makers resident in our Region. As well

    as leading individuals working full time here, we have many North Easterners who live here

    and work elsewhere. There is also a thriving North East diaspora to draw upon - and attract

    back to the Region.

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    What kind of organisation are you?

    This pie chart is a representation of responses to this multiple-answer question -

    percentages are of the total number of responses, giving an idea of the spread of capabilities

    in the Region.

    What can Dynamo NE help you with?

    Our results show that there is a latent desire and need to collaborate, where at present there

    is voluntary activity on a purely ad-hoc basis. Our respondents are looking for dealflow and

    new business, and a very keen to develop a more coherent, visible, and dynamic local jobs

    market - from apprentices and loyal company workers, through to technical specialists and IT

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    leaders of the future. They want help retaining graduates in the Region and creating

    opportunities for continuous learning and real-life technical problem-solving skills.

    Where are your Customers?

    This graph shows the organisations in our sample look for more work on nationwide basis

    than local -- and over a third of firms are international in outlook. This offers the possibility that

    local businesses can mentor others to succeed more cost-effectively by exporting their

    wares outside of the Region.

    Customer Vertical sector

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    This 'word cloud' is offered to give readers a sense of the broad scope of our capability in the

    Region, and to also start looking for patterns where players can collaborate at the same time

    when they are competing for business.

    Top three customers

    Clusters of customers

    From this word cloud we can see the following patterns emerging:

    Financial Services

    Healthcare

    Leisure

    Central government, Local government,

    Education

    Construction

    Retail and distribution

    Hospitality

    Automotive and industrial

    FMCG

    Qualitative insight

    This sub-section is drawn from the same pool as other quotes spread around this document.

    What can Dynamo help you with?

    1. Promotion of benefits of independent testing

    Promotion of social enterprises/social impact/social value

    2. Collaboration, Training and retention of staff in the North East

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    3. News story - Innovation - our startup team's experience was gained in local IT and

    web companies.

    Mentors - it would be good to network with people who are ahead of us in building a

    tech business.

    4. Lobby and represent the sector on relevant tech related issues - e.g. roll out andavailability of super fast broadband connectivity in our region

    5. Collaboration-Research projects and funding applications i.e. TSB Horizon 20:20

    Graduate employment

    Student Projects

    Student Placements

    Graduate Retention

    Access to technical expertise, research outputs, training, CPD and new technology

    opportunities from the University

    What else would you like to add?A. I am keen to play a role in supporting Dynamo and promoting the Tech Sector in

    the North East. Particularly in terms of building grass roots skills in both primary and

    secondary education and enabling students based in the North East to find jobs on

    Graduation.

    Similarly I recognize an opportunity to tap into some of the creativity, energy and

    innovation the that NE can bring to bear by creating opportunities to help individuals

    with an interest in technology build those skills through both learning and being a

    practitioner.

    B. Have to come and talk at any occasion on what we do in the University and with local

    schools with regard to Computing and supporting the changes in the nationalcurriculum

    C. The event would be a success if local end users recognise that buying locally is a

    great thing to do. It creates jobs here and they get great service.

    D. Always happy to be part of any mentoring, networking or regionally focused PR that

    highlights and attracts upper quartile jobs and careers in our region

    E. Happy to share the skills and experience I/we have gained:

    Experience of mass market b-b product development

    Customer service, satisfaction and retention

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    Potential growth of the NE IT economy

    When discussing education options do not just think of University graduates, at the Digital Skills

    Academy we produce fantastic talent and a workforce pipeline for employers to inform, mould, and

    develop to ensure they get the employees who meet their needs. They can cherry pick from our ready to

    recruit students and inform the curriculum of the future to ensure the talent does not dry up.

    Headlines:

    1. The local IT jobs market doesnt work as well as it needs to - so lets fix it

    2. There are hundreds of excellent jobs available - lets work together to match

    candidates with life-changing opportunities and grow the pie

    3. Employers will work with educators and invest in skills for the future

    4. We need to engage schools and encourage diversity

    5. Business dating can bring together prime contractors with valued suppliers

    6. We estimate 1500 vacancies for good quality, high value jobs

    Jobs are understandably a priority for the North East, both individually and at the macro scale

    for planning purposes. Indeed, the a recent report from the North East Local Enteprise

    Partnership (NE LEP) was entitled "More and better jobs".

    Based on survey feedback and anecdotal evidence from our information gathering process,

    we are both very positive about the numbers of vacancies, and mindful of the work we need

    to do to make our local jobs market as sustainable as possible.

    Sustainability

    Keep us in the loop of what youre doing, what business needs, and understand our

    connections to schools as we try and fix the computing talent pipeline

    Dynamo is poised to take the lead in helping match recruiter demand with available

    candidates. Employers are seeking a range of skills, and also employees at different stages

    in their development and with a mix of personality types.

    Employers tell us that they want to work with us to train our young people, and employ them

    as apprentices, interns / placement students, and graduates. They actively want to maintain

    their investment in our Region by working to grow our own stars of the future, thus widening

    and deepening the pool of candidates. They are looking for committed corporate employees,

    as well as subject-matter experts, and welcome new thinking and the changes that staff

    circulation can bring.

    I cant hire enough security and information management people

    They already partner with local Universities, although they tell us that they want our

    Universities collectively to make it easier for them to recruit graduates. Instead of having to

    engage individually with each institution (and thus increase costs and effort involved), they

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    are suggesting that Universities consider making the overall process easier by collaborating

    with one another (or through Dynamo) for the greater good: that idea of growing the pie

    again -- replacing a competitive dynamic which has been perceived.

    Code Clubs and Girl Geeks

    Starting early and encouraging diversity are going to be key to our efforts. Our research

    suggests we must work much harder to engage with our local schools and identify

    inspirational teachers to act as our catalysts with their peers. We are exploring Code Clubs

    -- a nationwide network of volunteer-led after school coding clubs for children aged 9-11.

    We must also recognise that women bring balance and a different mindset to what has been

    a male-dominated industry. Again, we must work much harder to nurture and include women

    as technologists, whilst acknowledging their massive contribution as project managers, new

    business winners, customer relationship developers, and CIOs. We are already engaging

    with Girl Geeks, a local organisation which seeks to connect more women with STEM

    subjects through activities, programmes and events.

    Direct, and Indirect

    Come work for us -- and theres an escape hatch

    At the same time, employers are looking outside the Region for skills. They realise in order to

    attract the right candidates, the whole package needs to work: quality of life is acknowledged

    as being high, schools are great -- but the risk of making a family move can be mitigated by

    pointing to a liquid market for good alternative opportunities should the one under

    consideration not meet expectations on either side.

    Business dating

    Were using the term business dating to describe a need that larger employers have when

    bidding for public sector deals. The Cabinet Office has stated Our ambition is that at least

    50% of spend on new government IT flows to SMEs directly and in the supply chain.

    We need to connect these large systems integrators with local SME partners to help them

    win contracts which they can lead from their North East presence, and from which SMEs

    benefit indirectly.

    Numbers of Vacancies

    We have created an estimate of the potential jobs growth in the Region, based on targets

    confided in us by local players, searches of online job boards, and discussions with local IT

    recruiters.

    1. Global systems integrator - 400

    2. Global IT outsourcer and software developer - 100

    3. Financial services software developer - 120

    4. CIO-level IT consultancy - 50

    5. Major Government department - 2006. International digital marketing group - 160

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    7. SaaS project management tool provider - 30

    8. Software provider for housing sector - 20

    9. UK-wide systems integrator - 50

    10. Financial services trading platform provider - 20

    11. Local systems integrator / software developer - 20

    12. Local systems integrator - 30

    13. Digital communications agency - 30

    This works out at 1230 vacancies were aware of, and were rounding this up to 1500 based

    on awareness of an inward investment opportunity of 300 new jobs. That said, when recently

    we suggested the figure of 2000 opportunities to a key player locally, he did not demur.

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    Analysis

    PR and brand recognition is important as we are new in the NE having recently

    relocated our head office to Newcastle.

    Headlines:

    1. Enterprise IT is ready to take prominence as a source of excellent jobs and future

    growth for North East England

    2. Cooperation, collaboration, and co-opetition is needed between providers, local en

    users, schools, recruiters, and the tertiary educators to set us up to thrive

    3. Dynamo is industry-led, and welcomes involvement from senior decision-makers

    4. We must use our new-found awareness to influence constructively for the good of

    all

    Industry-led

    The IT economy in North England historically has been supported through public sector

    initiatives, to create greater cohesion and effectiveness in winning and delivering profitable

    business.

    These activities has focused mainly on the digital sector, with positive results and excellent

    success stories. We are proud of our digital industry, and indeed recent business-led

    initiatives indicate emerging leadership and robust customer case studies and a growing

    sales funnel.

    Dynamo has come together because a growing number of enterprise IT players believe that

    working collaboratively will help solve their pressing business challenges. Dynamo has been

    funded from their own pockets (e.g. this research), and through our generous sponsors. We

    believe this is a sustainable model which can power us to achieve our goals.

    IT cluster-in-the-making

    Our hypothesis that there is an IT economy of note in the Region has been borne out by

    first-hand reports of the hundreds of jobs being provided through global IT and business

    process outsourcing deals, paying very favourable salaries and taking advantage of thegraduate skills and quality of life benefits we enjoy in the Region.

    These outsourcers are often located near their customers, for example in the fast-moving

    consumer goods, chemicals, and the public sectors. Other businesses provide cost-effective

    services to customers based in the City of London, or else operate beyond national

    boundaries via the Internet.

    Skills: fixing our education pipeline

    At a recent Information Economy event in London, the Chairman of Thames Valley Berkshire

    LEP (TVB LEP) ventured that their 'education pipeline' is broken. This was a surprise, giventhe IT-driven powerhouse that is the M4 corridor. However, this analysis appears to mirror

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    much of what has been reported through our survey about our situation here in the North

    East.

    At the event, we were also fortunate to be addressed by Karen Price OBE, Chief Executive of

    e-Skills UK, who introduced us to the Industrial Partnership for Information Economy -

    whose website tell us that Employers have developed ambitious plans to drive faster

    growth. Bob Paton knows well three of the key players at e-Skills UK, and Sunderland

    Software City is already working on the 'Tech Skills Hub' component of this programme.

    This is an exciting, if daunting, agenda to pursue. Arguably there needs to be a Dynamo

    interest group dedicated to this Develop skills and education work stream, with an agreed

    programme plan, budget, governance, deliverables, and goals.

    This would probably also involve other activities such as engagement with local e ducators

    and different parts of our ecosystem sponsoring ambassadors and role models into schools

    through Code Clubs and addressing diversity issues via Girls Geeks - as set out above..

    Steve Lamb of TVB LEP expressed willingness to collaborate with Dynamo on this agenda.

    There is therefore the potential to coordinate directly, or else through our local LEPs, perhaps

    even via The LEP Network.

    Ideally, we will therefore use what material and connections we've got, and engage with

    industry-wide initiatives so we can be smart with our energies / limited resources. We can

    also explore other models of skill acquisition, such as bootcamp courses at Makers Academy

    in London, and online courses via platforms such as Coursera, Udacity, Udemy, Skillshare,

    or even something like Discoverables.

    Working to fix our jobs pipeline

    Biggers players report being constrained by the inefficiences of the local job market, and are

    aware of their impact on even these existing dynamics by seeking to grow their workforce

    rapidly. They are concerend about being perceived as overwhelming competitors and gain an

    unwelcome reputation - perhps through factors beyond their control.

    Dynamo can take the lead in initiatives to attract and retain good people, and provide a

    mechanism through which careers fairs and wider job-canvasing initiatives can be run.

    Growing the pie and the Boulder Hypothesis

    Being industry-led means we can focus on enterprise IT whilst working closely with existing

    digital entrepreneurs to grow our IT economy, and work closely with those who are vital parts

    of the wider ecosystem / value chain.

    In turn, we can also learn a great deal from our digital brethren: Brad Feld is an entrepreneur

    and investor who has played a major part in the thriving startup scene in Boulder, Colorado.

    He views this community as a network, rather than a hierarchy, and arguably Dynamo should

    focus on creating and nurturing our network.

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    http://www.google.com/url?q=http%3A%2F%2Fwww.discoverabl.es%2F&sa=D&sntz=1&usg=AFQjCNGupHTo8QicVSdBdpYkKb2fqRM9fQhttp://www.google.com/url?q=http%3A%2F%2Fwww.skillshare.com%2F&sa=D&sntz=1&usg=AFQjCNGgseKQdrHG-AASUL5MyjS7eX2W-whttps://www.google.com/url?q=https%3A%2F%2Fwww.udemy.com%2F&sa=D&sntz=1&usg=AFQjCNF7vkDavVXgWF8o3jZQlPtIkK08gwhttps://www.google.com/url?q=https%3A%2F%2Fwww.udacity.com%2F&sa=D&sntz=1&usg=AFQjCNFie85tTLegCdahZSNmLGsG9tWGbQhttps://www.google.com/url?q=https%3A%2F%2Fwww.coursera.org%2F&sa=D&sntz=1&usg=AFQjCNHFcjGbVY9IWJEE9VeqgnZnYuOkcwhttp://www.google.com/url?q=http%3A%2F%2Fwww.makersacademy.com%2F&sa=D&sntz=1&usg=AFQjCNHQhzOyJ4OMgx0PkNuOoJDSABDnEQhttp://www.google.com/url?q=http%3A%2F%2Fwww.lepnetwork.org.uk%2F&sa=D&sntz=1&usg=AFQjCNEhruzRC1yMvjTUJKjD1mUg74MF_whttps://groups.google.com/forum/?fromgroups#!forum/northeastenglandcodeclubhttp://www.google.com/url?q=http%3A%2F%2Fwww.techskillspartnership.com%2F&sa=D&sntz=1&usg=AFQjCNHxnbDw6FPuAh4a-ZOzAvg9aaE7Jg
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    Substituting IT for startup, we can adapt Brads four key ingredients to help give us a

    balanced approach to our work:

    Entrepreneurs as leaders

    A long-term view

    A philosophy of inclusiveness

    Events that engage the entire entrepreneurial stack

    More information about the Boulder Thesis is is set out in the Appendix.

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    Conclusion / summary

    Collaboration! We can specialise in some very complex back-end stuff, and do

    databases and APIs in our sleep, and would love to get more involved in taking on

    sections of much larger projects. It frustrates me when I talk to people who say, "we

    couldn't find anyone local, so went to and they kind of

    delivered something that kind of works

    Headlines:

    1. We are where we are, and we must take bold and timely action to lay our route to

    future prosperity

    2. Regional / national decision-making needs to take into account what has been

    hidden in plain sight

    3. Dynamo North East is proposed as an initiative with a skeleton staff to provide a

    rallying point and mechanism for the latest demand we have found

    Implications for regional IT cluster

    Drawing on our research, we believe there is significant capability in the Region - based in

    software development infrastructure provision and management digital and taking into

    account customer vertical sectors we have identified.

    Players in the Region of all types are keen to come together under a common banner and

    independent brand which will serve the needs of providers, end users, and the Community at

    large - providing a recognisable go to partner to help with inward investment, and answer

    incoming enquiries.

    Our survey responses indicate that there is a requirement for activities to support the growth

    and cohesion of the IT economy in the Region, through networking, new business

    development, and collaborative problem-solving

    By working together and creating a united story, much value can (and will) be created to

    attract the right calibre staff, develop them, and retain skilled graduates in a growing and

    self-sustaining pool of talent in the Region

    Providers to public sector customers recognise the need to engage with the local SME

    ecosystem to procure niche skills on an affordable basis, and in turn SMEs need to

    understand and value the opportunities presented by larger contracts providing guidance and

    practical assistance to learn from any teething issues will help everyone.

    By working together, Dynamo can engage with a single voice with local and National

    politicians, administrators, and those responsible for allocating resources and connecting

    inward investment to the most appropriate places.

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    Impacts/actions/conclusions for Dynamo's service/model/response

    An ideas platform.

    The networking events work really well and spark several interesting topics of conversation. If there were

    'panel' organisations / companies looking for support could be steered in some shape or form.

    It's all very informal at the moment which is great but some infrastructure moving forward could aid

    things further.

    If the HMRC want to establish a 50-strong digital centre of excellence, and global systems

    integrators are seeking 50 / 100 / 120 new heads in the next six months, Dynamo should be

    there to make it happen.

    Calculating Return on Investment on this should be reasonably straightforward - numbers of

    new jobs created, percentage retained of first rate school and college leavers / Universitygraduates - not only first rate in terms of intellect, but a balanced workforce of committed

    corporate employees, apprentices, rocket scientists, and our leaders of the future.

    Dynamo should work with players in the North East (and knowledgeable parties outside of it)

    to establish straightforward ways for the sector to collaborate to: attract and retain the right

    people to work here to develop skilled and experienced staff and win new business through

    local businesses working together.

    What next?

    Still not quite sure what this is achieving / aiming to achieve (sorry).

    We believe the time is ripe for us to recognise what we have achieved in the North East IT

    economy, to give credit to the hard work and inspiration which has got us here, and take this

    credit as a starting point for future fast-forward phases of growth.

    That said, our initial research has shown that we need to knuckle down to make this happen.

    The following are our suggestions about how to crystallise and capitalise on what our IT

    economy represents.

    1. Annual Conferencea. Put on Dynamo 15 etc., based on successes and lessons learned from 2014.

    2. Engagement

    a. Ongoing public relations activity and public affairs engagement are needed to

    generate sustainable momentum, so we can build a cluster backed by

    credible success stories for all participants

    b. This would also involve ongoing publicity work such as newsletters, monitoring

    and interaction online, and so on.

    3. Interest groups

    a. We will encourage and support the creation and running of interest groups

    focusing on topics such as skills, business development, cyber-security, bigdata / data science etc.

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    4. Regular events - networking and topic focus

    a. We will run monthly events for members networking, and also to focus on

    particular topics highlighted by our Interest groups.

    5. Careers Fair

    a. Organise regular careers fairs with players right across the Regions IT

    economy taking part. Although in competition, these organisations realise that

    having committed themselves to delivery here, they need to work together to

    create a deep and broad jobs pool so the cluster as a whole hits critical mass

    and sustainable momentum. That way, everyone wins.

    6. Business dating

    a. We need to have a better way to identify local service providers. There is no

    easy way that we know of at present to identify all of the NE companies that

    provide mobile application development services for example.

    b. Our plans include evolving our careers fairs to become a showcase of firms

    so they might connect partners and win new business. We will also

    investigate maintaining a register of local players - perhaps with

    commendations so that we can give feedback on performance and

    improvement opportunities.

    7. London careers outreach

    a. Once this integrated approach is presented to the outside world, high-calibre

    job candidates can be attracted into the Region, who can see that moving their

    families here can be sustained through follow-on opportunities for growth and

    other options for similar roles

    b. In order to get them here in the first place, Dynamo must engage directly with

    candidates on behalf of employers, who are seeking to fill hundreds of

    vacancies. Having a neutral banner means that North East employers can be

    seen to be working for the community, and help achieve their business goals

    at the same time.

    8. Dinner / Awards

    a. Recognising success is important, and having a canny time doing it is always

    a winner. Celebrating our successes, and giving awards to our best and

    brightest means they can use it to win new business, and give our future stars

    something to aim for.

    b. These are also important networking events and chances to have informal

    conversation, and opportunities to include loved ones -- further helping

    connect together friendships and sustainable businesses

    c. We will also develop a Hall of Fame and take our lead from Baseball in

    "Preserving History, Honoring Excellence, Connecting Generations."

    9. Show & tell

    a. By pooling local expertise, insight, and knowledge, we can turn customer

    headaches into case studies. We need to draw together by creating an

    impartial space to create a pay it forward culture where all help others in the

    agreed expectation that they will receive assistance when they need it.

    b. Connections with local tech user groups can be deepened and expanded, and

    corporate encouragement can be given to complement the work of SMEswhich are already involved.

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    10. Research

    a. Our stories need to be backed up with research, and it is research which

    persuades others to view us favourably.

    b. Research gives journalists and policy makers hooks on which to base their

    articles and decisions - headlines shape the perceptions of busy people.

    c. In 2014, we have started with a clean sheet - future research will build on initial

    methodology and rigour, to broaden our coverage and expand the detail and

    accuracy of our findings.

    11. Advocacy / secretariat

    a. Inward investment is crucial to our Region, as is exporting beyond our

    borders. We will work with NewcastleGateshead Initiative, the LEPs and other

    inward investment bodies to connect interested parties with the most

    appropriate contacts.

    b. Creating the glue holding this all together will be a Secretariat which will

    administer the day-to-day running of Dynamo, and support the founders /

    steering group, taking account of representations from across the Regions IT

    economy.

    12. Membership

    a. Membership and sponsorship will provide a mechanism to get practical things

    done, track progress, and report to key decision makers.

    b. We will implement a cost-effective membership tracking system, which

    interoperates with our communications tools, and also take further steps to

    safeguard our members contact information and comply with the Data

    Protection Act.

    13. Measures of success

    a. Continue growth of the Region as monitored in research

    b. Fill all 2000 vacancies weve computed

    c. Change perception of NE as backward to forward

    d. Achieve National recognition

    e. Develop our focus on enterprise IT

    f. Sign up 50 paying members to join Dynamo in our first full year of operation,

    and then double that within eighteen months

    g. Establish and expand the Dynamo brand, value being delivered, and network

    regionally, nationally, and internationally.

    TimescalesWe encourage readers to read, mark, and absorb our findings -- and the Board of Dynamo to

    work with its stakeholders to take decisive action and create Dynamo by late summer 2014.

    Please refer to the document Dynamo North East - next steps, which is offered to stimulate

    discussion about our proposed way forward.

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    Appendix

    Methodology

    Our approach has been to conduct our own research, and set it in the context of publiclyavailable data.

    Dynamo survey

    An in-depth audit of the IT capability in North East England has not been conducted before.

    Therefore, we have set out to gain an initial understanding of how things are here, with the

    intention to learn from our experiences with this investigation, and review and update our

    methodology in future years.

    We used an online survey has sought to quantify the size of the

    Regions IT economy, and to take its pulse through qualitative insight into the thinking of keyplayers. We have made strenuous efforts to reach IT players in the North East of England --

    however we recognise that our responses are a sample of the whole picture.

    At the time of writing, we have received 57 responses from a wide variety of service

    providers, educators, and end users. The bulk of our respondents have been service

    providers, primarily because they are easier to identify and contact. We have been fortunate

    to make contact with many public sector IT users, as they are already organised into a trade

    body, which is the local Chapter of the Society of Information Technology Management

    (Socitm). We recognise that many other organisations have an IT capability, and we will seek

    to gather data from them going forward.

    Our hypothesis is that our research underestimates the true impact and value to the North

    East for a number of reasons.

    Firstly, because our survey is a sample (as already mentioned) and our respondents have

    mainly been IT companies and public sector / university IT departments.

    Secondly, because we believe there are many IT departments in non-tech organisations who

    have not be counted -- recording these will be a key aim of future research.

    Thirdly, full service delivery to customers requires a rounded capability of service desk, client

    engagement, project managers, business analysts and consultants, mobile workforce

    management, and so on. Quantifying this whole product will be another ongoing activity,

    along with other ways to continually improve our methodology and accuracy of our results.

    One financial services software provider employs 1400 people locally, only 450 are classed

    at Tech headcount.

    ONS dataset

    As part of the 'Annual Return' which companies send to Companies House, they are asked to

    classify themselves according to a Standard Industrial Classification (SIC) code -- and are

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    able to choose multiple options, according to their capabilities. Sole traders are not included

    in this classification, which would exclude some otherwise valuable capabilities.

    Based on our focus of IT and communications businesses, we have chosen the SIC codes

    62 and 63:

    1. 62 - Computer programming, consultancy and related activities

    2. 63 - Data processing, hosting and related activities web portals

    We are fortunate to have the appropriate access to the 2012 dataset, which tells us that there

    are 13,400 heads for SIC codes 62 & 63 in the North East.

    It is worthwhile setting this in the context of other major sources of private sector employment

    here, such as automotive (#29 - 11,200), chemicals (#20 - 7,600), and pharmaceuticals (#21

    - 3,300). Comparable professional services sectors include financial services (#64 & #65 -

    18,200), legal and accounting activities (#69 - 16,000), and activities of head offices

    management consultancy activities (#70 - 9,400).

    As a whole, the North East has a total number of jobs of 1,021,823 in a population of

    2,602,300 souls.

    Social Study 2013 -- The Economic Impact of BT in the United Kingdom

    In their report "Social Study 2013 -- The Economic Impact of BT in the United Kingdom", the

    telephone company claims that they employ 1 in every 8 employees working in the IT and

    Communications sectors (and that "BTs full employment impact is larger than the regions

    civil engineering sector").

    http://www.btplc.com/Thegroup/BTUKandWorldwide/BTRegions/England/Factsandfigures/S

    ocialStudy.htm

    Our working

    If 1 in 8 of employees working in North East IT & C sectors works out at 4100 people, and if 1

    in 8 = 12.5% then 4100 x 12.5 = 32,800 total employees in IT and Communications in NE

    England.

    North East Key Points

    4,100 - BT employees live in the region (FTE)

    4,060 - BT employees work in the region (FTE)

    125 million - Total income of BT employees working in the region

    88 million - Spend with suppliers based in the region

    523 million -Total GVA impact (including indirect and induced effects)

    Across the North East...

    BT employs 1 in every 140 employees working in the private sector, and 1 in every 8

    employees working in the IT and Communications sectors

    1 in every 120 of GVA is generated directly by BT

    BT supports 1 in every 80 employees working in the private sector and 1 in every

    80 of GVA as a result of the firms full economic impact BTs full employment impact is larger than the regions civil engineering sector

    2014 Dynamo North East 26

    http://www.google.com/url?q=http%3A%2F%2Fwww.btplc.com%2FThegroup%2FBTUKandWorldwide%2FBTRegions%2FEngland%2FFactsandfigures%2FSocialStudy.htm&sa=D&sntz=1&usg=AFQjCNGw_nUtOv2j73CJWW-gcY8F8J6EGghttp://www.google.com/url?q=http%3A%2F%2Fwww.btplc.com%2FThegroup%2FBTUKandWorldwide%2FBTRegions%2FEngland%2FFactsandfigures%2FSocialStudy.htm&sa=D&sntz=1&usg=AFQjCNGw_nUtOv2j73CJWW-gcY8F8J6EGg
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    Board Biographies

    From http://www.dynamonortheast.co.uk/bios/

    John Hunt

    John is a native North Easterner who returned to Newcastle in 2011 to work in his familyssoftware business, Orchard Information Systems. Having started life working in consumer

    goods in far flung places such as Nigeria, Malaysia and Indonesia John returned to the UK to

    undertake an MBA at London Business School. A two year stint in the city working for

    Goldman Sachs followed until the call of the North East became too strong. John is a director

    at Orchard with a specific focus on Business Intelligence and Reporting, as well as exploring

    international opportunities to expand Orchards geographic reach.

    Charlie Hoult (Chair)

    Charlie operates as an investor & entrepreneur in the IT industry. He built up his own

    marketing agency, Loewy Group, which grew to 400 staff and 50m turnover. He exited in

    2009 to take over his family property business in Newcastle.

    He has a number of tech interests including Opencast Software

    (www.opencastsoftware.com), Futureheads digital recruitment specialists

    (www.wearefutureheads.co.uk), Tomorrow People (www.tomorrowpeopletoday.com) and

    Hoults Yard (www.houltsyard.co.uk).

    Stuart Lynn

    Originally qualified as a Mechanical Engineer, Stuart moved into software engineering in 1988

    and has held a number of positions across the public and private sectors. Since joining Sage,

    one of the great success stories of the North East in 1998, he has held a variety of roles and

    is currently the Chief Technology and Information Officer.

    Stuart is a native of the North East and is proud about the success of the region. He would

    like to see the North East recognised as a centre of excellence for Information technology,

    and has a passion for education and skills development.

    Anthony McMenzie

    Recently taken up a new role with Mi-Case, a Tyneside based provider of case and asset

    management software solutions across the globe. A 30 year career in technology has seen

    Anthony in sales roles for the worlds largest mobile telecommunications business(Vodafone), largest insurance market (Lloyds) and largest independent integration business

    (Dimension Data). Hes spent much of his working life away, including seven years in

    Australia, before returning home to his native North East.

    Mike OBrien

    Currently MD of Opencast Software Limited, formerly Capgemini (VP Capital Markets) &

    Strategic Systems Solutions (Chief Sales / Marketing Officer). As part of the Exec Board,

    built SSS (specialist Capital Markets SI) from 10 to 800 staff with offices in UK, US, China,

    Manila, Singapore

    2014 Dynamo North East 27

    http://www.google.com/url?q=http%3A%2F%2Fwww.dynamonortheast.co.uk%2Fbios%2F&sa=D&sntz=1&usg=AFQjCNEWRZBuviAoWol80YmLztUjSJTNAA
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    Mike has a pretty credible client list including Deutsche Bank, JPMorgan, Citi, Credit Suisse,

    Morgan Stanley, Nomura, Daiwa, RBS, HSBC, Barclays and Northern Rock.

    Bob Paton (Vice Chair)

    Bob Paton is Managing Director of the Accenture Delivery Centre in the North East, located at

    the Cobalt Business Park, North Tyneside.

    Bob has worked for Accenture for twenty one years, during this time he has specialised in the

    implementation of large scale IT systems, including managing delivery projects for both

    Government and Private Sector clients. Previously he was Operational Director for all

    Accenture Outsourcing Units within Europe and South Africa. He is responsible for the

    Accenture apprenticeship programme and is a NAS Apprenticeship Ambassador for the

    North East.

    Prior to joining Accenture Bob spent 20 years as a Civil Servant, 13 of which were spent

    working in IT, again mainly on major system implementation and delivery.

    Paul Watson

    Paul Watson is Professor of Computer Science, and Director of the Digital Institute at

    Newcastle University. He graduated with a BSc in Computer Engineering from Manchester

    University, followed by a PhD. In the 80s, as a Lecturer at Manchester University, he was a

    designer of the Alvey Flagship and Esprit EDS systems. From 1990-5 he worked for ICL as a

    system designer of the Goldrush MegaServer parallel database server, which was released

    as a product in 1994.

    In August 1995 he moved to Newcastle University, where he has been an investigator onresearch projects worth over 40M, almost all in close collaboration with industry. Professor

    Watson is a Chartered Engineer and a Fellow of the British Computer Society.

    The Boulder Thesis

    According to this blog post:

    in his book, "Startup Communities," Feld outlines his "Boulder Thesis," a formula for

    building what he calls a "sustainable, vibrant startup community anywhere in the

    world." [...]

    Feld cites four ingredients as essential to startup communities: Entrepreneurs as leaders - Feld divides a startup community into two

    groups: Leaders (entrepreneurs) and feeders (everyone else). "The feeders

    have very important roles," he says. "They become part of the fabric of the

    startup community. But the feeders can't be leaders. The leaders have to be

    entrepreneurs."

    A long-term view- A successful startup community must be filled with

    people who are making a long-term commitment of 20-plus years and are able

    to weather the successes and failures of entrepreneurs in the community,

    Feld says.

    A philosophy of inclusiveness. It takes all kinds of people to make a startup

    community. "If everybody contributes energy into the startup community," Feld

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    http://www.google.com/url?q=http%3A%2F%2Fwww.amazon.com%2FStartup-Communities-Building-Entrepreneurial-Ecosystem%2Fdp%2F1118441540&sa=D&sntz=1&usg=AFQjCNEzwgeGstCWiDM3jvGfF6vt_Xpy0whttp://www.google.com/url?q=http%3A%2F%2Fwww.siliconprairienews.com%2F2012%2F10%2Fbrad-feld-outlines-boulder-thesis-in-kauffman-sketchbook-video&sa=D&sntz=1&usg=AFQjCNGmCXxjJ-LNhgcSN2g6Iw5Dw9HrIQ
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    says, "it will get bigger and grow faster and be more successful and be more

    fun."

    Events that engage the entire entrepreneurial stack- Feld cites things

    like TechStars and Startup Weekend, which he notes are more substantive

    than awards dinners or cocktail parties, as vital to allowing the entire

    community to help startups.

    "It's just this sort of network chaos of entrepreneurs doing what entrepreneurs do,

    which is create things," Feld says in closing. "That force of the entrepreneurs to build

    something bigger than just themselves and their company is so incredibly powerful."

    http://www.google.com/url?q=http%3A%2F%2Fstartupweekend.org%2F&sa=D&sntz=1&usg=AFQjCNHp287kOYBXix0fvneERvQXFEWQeQhttp://www.google.com/url?q=http%3A%2F%2Fwww.techstars.com%2F&sa=D&sntz=1&usg=AFQjCNEuxr0F8MW_Pmr6f0X7JqgCTNNsaA