West Midlands skills performance falters

The Observatory has published this year’s review of West Midlands skills performance .

Our summary skills index based on a range of measures (such as GVA per employee, investment in training, and qualification attainment amongst young people and adults) reveals the West Midlands skills performance has begun to widen again, from 1.1 points in 2007 to 2.3 points in 2009. As a result the West Midlands has dropped from 5th to 6th place in the league table of regions.

Research published on prospects for the West Midlands economy post recession

At the end of June, the Observatory published The West Midlands Economy Post Recession: Key Issues and Challenges (pdf, 844kb), a major piece of research exploring the changing needs of the region’s economy and labour market as it emerges from recession.

The research is informing the decisions of employers, individuals, providers and the skills system as they look to focus their investment in key areas to maximise impact.

Firstly, the research considers the region’s recent poor economic performance and the key factors that have contributed to this.

We detail the weaknesses within the region’s economic structure and, in particular, the dependence on public sector and lower value added private sector activities, in terms of GVA and jobs, and the limited representation of high value added, knowledge-based sectors.

We also highlight the low rates of productivity in many of the sectors that dominate the regional economy and assess the skill gaps and shortages businesses in the West Midlands face and the impact on productivity and performance.

Innovation boosts productivity by two-thirds

Innovation is an essential driver for regional economic growth and a new national report has revealed how significant it can be in closing the productivity gap.

Two thirds of private sector productivity growth between 2000 and 2007 was driven by innovation, claims a new report by NESTA.

The findings are revealed in The Innovation Index: Measuring the UK’s investment in innovation and its effects (PDF, 1.59mb), the most ambitious attempt yet to measure the contribution of innovation to the UK’s economic growth.

ONS article investigates economic productivity in urban versus rural areas

Contrasts in the economic productivity of urban versus rural local authorities, and the factors contributing to the varying performance of the economies of English regions, are both the subject of an article in the latest edition of Economic & Labour Market Review.

The article in the ONS publication takes a detailed look at Gross Value Added per filled job (GVA per job) statistics for groups of local authorities in each English region, using DEFRA classifications (PDF, 52kb) which group local authorities according to their urban/rural composition characteristics.

In the West Midlands region and among the six local authority classifications, ‘Major Urban’ local authorities (for example, Birmingham) were found to be the most productive, with GVA per job averaging an indexed value of 90.4 (where England=100) for 2004 to 2006. However, this represented a noteworthy decline from the value of 95.8 recorded in 2001 to 2003.