Introduction and Background

SQW, in collaboration with and Cambridge Econometrics (CE), City-REDI at the University of Birmingham, Nottingham Trent University and the Black Country Consortium, have been commissioned by the Midlands Engine (ME) to develop the first ever Independent Economic Review (IER) for the Midlands region. This exercise forms part of the wider Midlands Engine Economic Observatory, whose purpose is to provide an accessible and coherent source of evidence across the Midlands as a whole.

The original brief for the IER from the Midlands Engine had a strong focus on understanding and explaining the region’s productivity performance.  During an initial scoping phase, the following underpinning research questions were identified for the IER, in discussion with the Observatory’s Project Board, the Midlands Engine Operating Board and wider partners across the Midlands:

  • Understanding the factors driving productivity performance across the Midlands
  • Exploring the commonalities, synergies, and economic linkages across the Midlands
  • Identifying key pan-ME growth opportunities and evidencing where a genuinely pan-Midlands approach can add most value
  • Assessing what is required to improve the Midlands’ performance over the next 10 years.

Earlier this year, existing evidence was gathered from the IER/Observatory team and via a wider call for evidence across Midlands stakeholders.  In total, c.250 documents were gathered, filtered and prioritised (on the basis of relevance, quality/robustness and timeliness).  These documents were reviewed by the SQW-led team and complemented with a top-down analysis of key economic datasets. A synthesis of the IER findings to date have been collated into a draft Phase 1 report, which will be presented to the Midlands Engine Operating Board at the end of July 2019 prior to its publication.

As part of the existing Midlands Engine Economic Observatory commission, within the IER,  there is a commitment to undertake focused “Deep Dive” research designed to fill specific gaps in the evidence base. Informed by the findings set out in the Draft Phase 1 Report of the IER, it has been agreed that as part of the Deep Dive work over the Summer, a programme of in-depth interviews with influential businesses operating within priority sectors/technology areas across the Midlands should be undertaken. The purpose of these interviews with businesses is to gather evidence that will help to address the core research questions for the IER and fill key gaps within the existing evidence specifically in relation to:

  • An overview of activities undertaken in the Midlands, scale, markets served etc.
  • Opportunities/ambitions for business growth, particularly focused on where the Midlands has distinctive specialisms/strengths and areas of comparative advantage
  • Barriers to improving productivity/growth at a firm level
  • Economic linkages across the Midlands, including supply chain relationships, engagement in the innovation ecosystem/networks/collaborations
  • Wider national/international links
  • Private sector perspectives on key priorities/emphases for the Midlands growth agenda (to inform the new Strategy)
  • Issues/opportunities that should be best tackled at a pan-Midlands level from a business perspective.

 

Business Nominations

We plan to interview c.60 businesses across the region.  We are particularly interested in speaking to:

  • Businesses of significant scale (now and/or those on a clear growth trajectory whereby they have the potential to be significant in scale-terms in the future), and small but rapidly growing businesses
  • Exporting businesses
  • Businesses that are innovative and have embedded a significant amount of R&D activity in the Midlands
  • Businesses that are active in the region’s key/priority sectors, particularly those firms that play a role in bringing together complementary specialisms within the region and/or are involved in technology convergence (e.g. the industrial digitisation agenda etc.)

As part of these consultations, we are also looking to consult with a small number of business representative organisations active in the region, including the IOD, FSB, CBI and Chambers.

We are looking for LEPs to nominate c.10 businesses per LEP area against the criteria outlined above.  In addition, we will seek nominations from the Midlands Engine directly, the Midlands Engine Business Forum and the Observatory team.

Interested in Engaging?

If you would be interested in participating in this research please get in touch directly with Rebecca Pates rpates@sqw.co.uk and Holly Waddell hwaddell@sqw.co.uk.

 

Topic Guide

Priority questions are marked with *

Overview

Q1.       *Please could you provide an overview of your business in terms of:

  1. Products and services offered from site(s) in the Midlands, and types of activities/functions undertaken here
  2. Main sites, including location of the HQ,
  3. Scale of activities in the Midlands (FTE jobs in 2019)

Economic linkages across the Midlands

Q2.       Where do you typically recruit staff from?  Probe on (i) within Midlands, (ii) neighbouring areas, wider UK, overseas, plus types of skills

Q3.       *Thinking specifically about your main site in the Midlands, do your employees commute from other parts of the Midlands?  Are these commuting patterns changing over time? Probe for details on scale

Q4.       *We are seeking to understand the spatial reach of your supply chain – and what drives this.  To what extent are your supply chain relationships (i) within the Midlands, (ii) in the surrounding geography, (iii) elsewhere in the UK or global?

  1. *Specifically for suppliers in the Midlands – where are these suppliers based, what do they supply, what % of your inputs do they account for?
  2. What determines the extent to which you use suppliers in the Midlands?
  3. *Could more be done to increase/strengthen supplier relationships within the Midlands? If so, what/how?

Q5.       What type of innovation/R&D does your business undertake currently, and (if multi-site) where does this take place?  Probe on process and/or product innovation

Q6.       *To what extent does your business engage with research institutions/universities/R&D facilities or RTOs/networks/other business R&D activity within the Midlands?

  1. If engaged:

(i)     *Who do you engage with? (e.g. assets, research centres, other businesses)?

(ii)   *What is the nature and strength of these relationships, e.g. on-going collaborative R&D, research expertise into business-specific R&D projects, formalised or informal relationships, supply of graduates? Please give specific examples of interactions

(iii) Is your supply chain involved in these collaborations?

(iv) Are any of these collaborations particularly innovative and distinctive?  Is it just something that the Midlands can do? Are there complementary relationships with neighbouring areas?

(v)   What factors have been most important in making this partnership work well?

(vi) *What could be done to widen/strengthen your engagement with the wider Midlands research/university base (to foster innovation, skills, growth)?

(vii)                        *Does spatial proximity matter for your innovation or R&D linkages or do you simply collaborate with the best people / institutions regardless of where they are located in the world?

  1. If limited/not engaged, why not?

(i)     *And what could be done to widen/strengthen your engagement with the Midlands research/university base (to foster innovation, skills, growth)?

Q7.       To what extent does your business engage with research institutions/universities/R&D facilities or RTOs/networks/other business R&D activity within other parts of the UK (outside the Midlands)?

Q8.       *Where are your main markets?

Probe on geography (Midlands, elsewhere in UK, international), relative scale of different markets (e.g. % exported), different markets for different products/services (and what drives this), and any change over recent years

  1. Looking forward, are you looking to export more internationally?
  2. *Are there any barriers to this?

Q9.       Beyond any innovation activity/exporting mentioned above, does your business (in the Midlands) engage in any wider international business activity, networks and collaborations etc?  If so, please give details e.g. international R&D relationship has resulted in an FDI project to the Midlands

Barriers to growth and improving productivity within the firm

Q10.  *Are you experiencing any barriers to the following?  If so, please explain

  1. growing your business?
  2. improving the productivity of your business?
  3. Introducing new/innovative processes within the business, including digital technologies?
  4. Developing and commercialising new products/services?

Q11.    *Are there any aspects of the local business environment (focused on the Midlands) that hinder your business’ ability to grow/be more productive?  If so, what? Prompts if necessary

  1. Transport connectivity, both within the Midlands and externally?
  2. Digital connectivity?
  3. Availability/cost of suitable/high quality business premises?
  4. Access to appropriate growth finance on suitable terms
  5. Access to relevant skills including leadership and management
  6. Access to appropriate R&D collaborations
  7. Other (probe for details)

Q12.  Thinking more broadly, what are the most important gaps and weaknesses in the current Midlands’ offer to innovative businesses?

Q13.  *Do you think there is scope to strengthen economic linkages and networks across different parts of the Midlands? Where should interactions (e.g. between industry and the science base or key assets) be strengthened / expanded? Why?  How?

Future growth ambitions

Q14.  In headline terms, what are your future plans for your business activities in the Midlands (where multi-site, set in the context of wider company ambitions)? Explore growth plans, timing/scale, factors driving this

Q15.  *More broadly, what are the most important growth opportunities in this sector/technology area in the Midlands (possibly in collaboration with other Midlands specialisms)?  We are particularly interested in opportunities of national/international significance, where the Midlands has a distinctive/unique offer, and cross-sector synergies

  1. *Linked to this, in which specific areas does the Midlands have the potential to develop nationally or globally competitive strengths and assets in the future? Why do you say this?
  2. *And what are the main areas where the Midlands currently possesses nationally or globally competitive business and innovation strengths and assets?

Priorities for the Midlands looking forward

Q16.  *In tackling the barriers to growth and improved productivity discussed above, what types of interventions would make a substantial difference and why?

Q17.  *What are the top three priority issues (and opportunities) you think need to be tackled in the Midlands to unlock economic growth in region over the next 10 years?

Q18.  *Which of these issues/opportunities do you think should be tackled at a pan-Midlands level?  Why do you say this?

  1. What would be the main added value of addressing these issues at a Midlands engine level as opposed to nationally or at LEP-level?

Q19.  Following on from your previous point, what would be your top three specific investments / action areas for accelerating productivity growth across the Midlands over the next 10 years? Why do you say this?

Q20.  Finally, how ambitious should Midlands Engine partners be in setting growth targets for the next 10 years? Close the gap with the rest of the UK (with or without London)? Match the UK growth rate?

Q21.  Any other comments?

1, Understanding the factors driving productivity performance across the Midlands; 2. Exploring the synergies and economic linkages across the Midlands (in the context of productivity performance); 3. Identifying and evidencing where a genuinely pan-Midlands approach can add most value (to enable growth/productivity improvement); and 4. Assessing what is required to improve the Midlands’ performance over the next 10 years.