THE North East’s biggest digital business group Codeworks is shutting down after a decade following the loss of its public sector funding.
Codeworks, which has been a support agency, networking group and organiser of big industry events including Thinking Digital, has been an increasingly important part of the region’s private sector since it was founded by One NorthEast as one of five Centres of Excellence which included Blyth windpower centre Narec and Newcastle’s life science group CELS.
But now the Gateshead-based organisation has decided to break itself up after the closure of the regional development agency which last year gave it much of its £2m annual funding. Its six staff are to be made redundant.
Its networking operation Connect is to be taken over by Gateshead Council which is merging with its own digital creatives network The Hub Gateshead.
And Codeworks chief executive Herb Kim, the New Yorker who became the voice of the region’s digital industry, is taking over the rights to the Thinking Digital Conference. Talks are ongoing for other events such as the DIBI web design conference.
“It is sad, especially for the employees. But we had looked at a lot of options, such as alternative funding from the Regional Growth Fund or councils or increasing commercialisation but we could not be sure we were delivering the best quality service for our members.
“When One North East finished, we had about seven months worth of working capital to keep us going. By winning contracts for initiatives such as Imagine Cup and CultureCode, we’ve been able to keep it going for 15 months. That’s an achievement, but right now it’s just getting too close to the danger zone.
“For me too it is sad but I am glad we could find a place for Connect and I am confident for Thinking Digital and that we can find a good home for the GameHorizon conference.
“I think over the last 10 years we have seen and played a part in the digital sector becoming very strong up here and because a lot of the work is carrying on, I am confident in the future of the digital sector here.”
The business will be run down over the coming months and a decision made over how to distribute the five- figure sum which is likely to be left in the community interest companies accounts when it is closed.
Kim said: “Whilst much may change structurally in the coming weeks, it is my and the board’s intention that the vast majority of the activities of Codeworks continue as seamlessly as possible. Our dedication and enthusiasm for the digital and creative community of North East England remains unchanged.”
Gateshead Council said the union of The Hub and Connect would offer new opportunities for their 350-plus members.
Leader of Gateshead Council Mick Henry said: “We’ve worked closely with digital creative business for some years now. We’ve supported many and seen some real success stories; both from those that have been founded here and those that have chosen to move here.”
University of Sunderland vice chancellor Professor Peter Fidler said: “The University of Sunderland has helped create Digital Media Network which itself was the foundation of Codeworks Connect.
“As a Codeworks board director it’s been wonderful to see Connect grow and grow and I think this union between Codeworks Connect and The Hub Gateshead is great news for all of the North East. I know Sunderland Software City is already looking forward to finding ways in which to collaborate in the future.”