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Full steam ahead for the Midlands Engine?

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21 Apr 2016
At a Marketing Derby event in June 2015, the Chancellor of the Exchequer, George Osborne, boldly stated that “for too long the Midlands was overlooked by successive governments in London, and I’m here to tell you not anymore.” It was fitting that he spoke from Garrandales, a UK engineering SME, providing services to the rail industry and more. Whilst Derby is associated with Rolls-Royce, Bombardier and Toyota, it is also home to a plethora of small to medium enterprises that are innovating their way to growth, and providing jobs for the region’s workforce.

Where are we some ten months later? China, one of the two global engines for growth is in financial trouble. A strengthening pound makes it more expensive for foreign nations to import our high-tech products. Low oil prices have made it much more difficult to make a business case for renewable energy. All of these changes got me thinking - how well placed are we to meet the demands of the next one, five even ten years in the face of such uncertainty?

The West and East Midlands were respectively first and second in the Business Activity Index measuring growth in the six months up to January 2016. Since the recession, the Midlands has added 250,000 jobs and a new business begins its fragile journey every 13 minutes. Those indicators are signs of optimism you could say. GDP in both the West and East amounts to £221 billion, and has grown by 30 per cent over the past ten years. There has been an average of 3 per cent annualised growth, which is ahead of UK average, and that growth is mouth-watering for a developed western regional economy in the current economic climate, and somewhat better than the UK average.

We also have a relatively young workforce for a developed economy, which will be vital in the next thirty years as the population continues to age. A biased view that I hold, is that Derby is the most exciting city to watch in the region. It is now considered in the top ten cities in Europe to carry out business, and a £2 billion innovation park will further attract domestic, and more substantially, foreign investment. It has just been voted third nationally in the best cities in which to live. Large multinational technology businesses such as Florida Turbines have rolled in to the city in recent years.

That is not to say there are not similar projects going on in the rest of the East Midlands. Birmingham is clearly much larger than Derby, and it too has been earmarked as a city of the future. Birmingham’s age demographic is young and educated, driven in part by inward migration from the EU and further afield. The quintessential British melting pot outside of London looks well placed to meet the demands of the 21st century, but only if fully supported in the way Manchester is.

We are much more than a high-tech hub; we have some of the best places to study in the world. The University of Nottingham and University of Warwick are global top 1 per cent universities to name but two. There are 25 universities in the region and many of those like Nottingham Trent University and Lincoln University, are making Russell Group stereotypes seem antiquated. Old polytechnics are the region’s future elite universities. Retaining the talent produced in our regions will be key to our success. Some of the lowest house prices in the UK is helping drive alumni of Nottingham’s universities from London back to their cities of study, and Nottingham is a case and point.

Marketing Birmingham, Marketing Derby and other similar schemes designed to attract business to the region are a league above many schemes elsewhere. However, many of our regional universities lack the ability to draw in international students with the exception of the Russell Groups. These second tier universities will also have to compete with improving institutions in countries where many international students come from. International students provide such a boost to local economies because of their disposable income surpasses the average UK student by some distance.

It is refreshing that our big cities are seeing opportunities to work together. The largest cities in the Midlands regularly attend trade fairs as a unit. Devolution under George Osborne’s Midlands Engine is likely (with the exception of Birmingham), to take place in regional inter-city blocs. Traditionally seen in competition to each other economically dating back to the industrial revolution, the 21st century promotes pooling resources and talent in order to stay ahead of the innovation game.

To compete on that stage, the larger the networks, the greater the pool of knowledge and resources, and ability to host the largest multinationals’ thirst for resources and manpower. However, other than providing devolution opportunities, arguably the other exciting tangible to come out of the Midlands Engine rhetoric is the HS2 link which will support the infrastructure connecting us to the rest of the UK. The real problem is that as our regions are competing for attention, and George Osborne has been giving much more of his undivided time on his pet project in Manchester. The Northern Powerhouse has become a household name in a way that the Midlands Engine has not. Much more is needed to put the Midlands on the map.

In truth, the Midlands is well placed to meet the demand of the 21st century. The workforce is young, educated enough and working in high-tech industries or service sectors. The danger is that despite our strengths, the Midlands Engine will be forgotten very quickly if the global economy takes a dive southwards when money will not be available for infrastructure or investment in business. It is vital we continue to push that narrative as citizens of the region, and as a business community, hold the government of the day to account and ensure that this very noble vision is not just mere rhetoric.
For a confidential discussion about your recruitment needs in the Midlands, contact me by emailing or call 01332 542580. Alternatively, browse our latest Practice roles. Browse Vacancies
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