Inward investment into the West Midlands 2009/10 – a local analysis

In 2009/10 there were 84 inward investment successes in the West Midlands and another four knowledge-based investments. These investments created over 1,500 new jobs and safeguarded another 4,300.

Although these 88 investments represented the lowest number of jobs created or safeguarded since 1992/93, they also represented the 7th highest total number of projects since 1991.

Pie chart shows 38 inward investments in West Midlands metropolitan areas and 49 inward investments in the shire counties over 2009 to 2010Inward investment is usually spread reasonably evenly between the West Midlands metropolitan areas and the shire counties. In 2009/10 the shire counties attracted the majority of inward investment projects (55%). See left.

However, the metropolitan areas of Birmingham, Coventry, Solihull, Dudley, Sandwell, Walsall and Wolverhampton have attracted perhaps just over half of the projects over the years – see below. The number of jobs created and safeguarded also generally follows a similar pattern.

Stacked bar chart shows percentage of inward investments into West Midlands metropolitan areas versus shire counties between 1991 and 2010

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The multiple risk factors of worklessness

By isolating the ‘risk factors’ and certain combinations of ‘risk factors’ associated with a person’s chance of being out of work, new analysis from the West Midlands Observatory can help decision makers get to grips with the complex interplay of issues behind the current high rate of worklessness across the West Midlands.

The research is already informing the Department for Work and Pensions in its review of welfare policy, as it provides insights into the major factors influencing a person’s chances of being in or out of work. It shows that these chances can vary greatly according to the individual’s background and personal characteristics. The research demonstrates how combinations of factors such as having no formal qualifications or a long-term health problem or disability, or being a lone parent, affect a person’s chance of being out of work.

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Observatory is regarded more highly than ever by customers

Customer satisfaction with the West Midlands Observatory is at its highest ever level according to a recent customer survey. Satisfaction with the Observatory has been rising year on year since 2006, and this year reached its highest ever score (3.19 on a scale of 1=low to 4=high).

Rosie Paskins, Chief Executive of the Observatory, said:

With current turbulence in local and regional governance, it is easy to lose sight of the role of evidence in overcoming the deep-seated problems and challenges faced by the West Midlands.

We are encouraged by this endorsement of our work by our customers, and I urge partners to realise the increased importance of evidence based decision-making in a time of increased budgetary pressure.

The Observatory will continue to provide authoritative and high quality research to help decision makers target limited resources and do more with less.

Other highlights of the survey included the highest ever ratings for the awareness and reputation of the Observatory. And over 93% of users said they regard the Observatory’s research to be independent and objective.

The high customer rating follows on from the Observatory being recognised as an “Excellent” organisation by independent assessors Investors in Excellence earlier in the year.

Jerry Blackett, Chief Executive of the Birmingham Chamber of Commerce and Industry, said:

We are in desperate need of hard facts and a cool assessment of what the facts tell us. It is too tempting to manage by anecdote and the Observatory helps stop this. In a world of Local Enterprise Partnerships, we still need the Observatory output.

Read a summary of the Observatory’s work over 2009-10 (pdf, 750kb)

Up-skilling and diversification are key to growth and job creation across the West Midlands

Targeting investment on higher value added sectors such as digital media and medical technologies, and developing a workforce with the right skills to service those sectors would significantly increase job growth and the prosperity of the West Midlands according to new research.

The research (pdf, 498kb), undertaken by the West Midlands Observatory, shows that the potential benefits of targeting investment are substantial. If workforce skill levels in the West Midlands were increased to match the England average, growth in Gross Value Added (GVA) — the measure of economic output per head of population — over the next 5 years would increase by 2 percentage points from 10% to 12% and net new job creation would nearly double from 11,000 to 21,000. If in addition more businesses in higher value added sectors and clusters were attracted to the West Midlands, so that their share of economic activity reflected the position nationally, GVA would grow by some 23% by 2015 and more than 200,000 net new jobs would be created.

Local authorities, business groups and other key partners across the West Midlands are looking to achieve sustainable economic growth in jobs and GVA over the next 5 years. This new research shows how, in a time of austerity and funding cuts, the Observatory can provide authoritative and objective research to help decision makers target limited resources and do more with less.

The research (pdf, 498kb) provides an insight into the region’s existing and likely future skill needs. It has been produced to inform the development of skills and investment priorities that focus shrinking levels of public sector investment in areas that will maximise  impact.

A range of key investment locations across the region, including Longbridge and Eastside in Birmingham, Ansty Park in Coventry, i54 in Staffordshire, Coventry and Wolverhampton city centres and Dudley, Telford, Walsall and West Bromwich town centres, can play a key part in diversifying local economies.

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A tough year for inward investment in the West Midlands

In 2009/10 there were 84 inward investment successes in the West Midlands and another four knowledge-based investments. These investments created over 1,500 new jobs and safeguarded another 4,300.

Of these 88 successes, Advantage West Midlands were involved with just under half but this assistance helped create over 60% of the new jobs.

Some of these inward investments were high-profile including Kraft’s acquisition of Cadbury in Bournville, Birmingham affecting nearly 3,000 employees at their head office as well many more around the country.

Other investments in the news included the acquisition of Birmingham City Football Club by Far Eastern businessman Carson Yeung’s Grandtop International, the continued expansion of the ex-Longbridge car plant by SAIC of China where a new engine test facility is to be built and the taking on 50 skilled engineers by Indian Tata Group’s Jaguar Land Rover.

Some other notable inward investments included:

  • Expansion of Japanese tool-maker Makita‘s manufacturing facility in Telford, which created 70 jobs
  • Expansion of TK Maxx‘s distribution depot in Newcastle-under-Lyme, Staffordshire, which created 100 jobs
  • FourStar from the Netherlands is to open a new UK headquarters in Birmingham employing over 250 people to provide employment and skills training to the unemployed

Two other investments from the United States also catch the eye. Remotec in Coventry, a subsidiary of Northrup Grumman, expanded its facility designing and manufacturing robotic bomb disposal units.

But it’s the opening of a new computer games design studio in Digbeth, Birmingham by Microsoft-owned Rare Games that’s hoped will give a boost to games design in the Midlands. 90 new games designers will be employed there.

Analysis of West Midland inward investment

Further analysis of the inward investment figures show that, with 88 investments, 2009/10 saw the fewest number of investments in the  West Midlands since 2005/06 when investment numbers were still recovering from the falls in global investment since 2001. This highlights the fact that the global economic crisis began to seriously affect investment decisions.

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NESTA offering local authorities £30k to spend with digital businesses on open data projects

Cutout figures connected by green light

Brian MacAulay, Director Innovation Index at NESTA, mentioned the Make It Local initiative to encourage collaboration between local authorities and digital media developers. It’s timely in the light of our open data: challenges and opportunities event last week and the government’s consultation on underlying data publication announced today.

Make It Local, the NESTA initiative, aims to:

…encourage collaboration between local authorities and digital media developers, to provide innovative, web-based services for their communities.

Make it Local is encouraging local authorities to release publicly-owned data in a linked way which allows developers an opportunity to build new services using the information.

Local authorities hold significant amounts of public data– such as transport, carbon emissions, population and crime data – which may help to power a range of useful, digital services. In developing partnerships between local authorities and digital media businesses, NESTA wants to show the value to local authorities of releasing their data to developers who can make use of it.

NESTA is calling for digital agencies with ideas for new applications to approach their local authority and encourage them to enter.

NESTA is offering three local authorities up to £30,000 to spend with a digital media business in their area.

The criteria for applications, application process and application form are available on the NESTA website.

Speakers and slides: roundup of ‘Open data: challenges and opportunities’

The Observatory and Andrew Mackenzie co-produced an event called Open data: challenges and opportunities, held in Birmingham on 15th July.

Oliver summarised the event and asked for comments on practical steps, particularly ‘ways that the more able authorities and organisations might be able to help the less able, through sharing tools and techniques with the wider public sector.’

The hashtag for the day was #wmod10 – there’s an archive of tweets available.

In this post below, we’ve shared all of the presenter’s slides and, where available, provided the presentations with audio.

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