BMM14 – Supporting the March of the Midlands Makers
The third annual Birmingham Made Me Design Expo showed off some great Midlands innovation and design last week, 19th November, at Millennium Point as part of Global Entrepreneurship week.
Professor Mark Hart, Enterprise Research Centre, Aston Business School, reminded us that our key focus should really not be solely around start-ups as much as in scaling up businesses.
The last numbers I looked at on start-ups for the City region in a BIS Standard note (July 2014) suggested there were 20k start-ups but there were also 20k businesses that ceased trading too. So I don’t think we can take our eyes off the start-up ball completely, but as Professor Hart pointed out start-ups are not engines of employment growth.
However we do need to start measuring this activity in a far more business-like manner. We ought to be looking at the start-up funnel and how that is feeding through into businesses making it to £1m turnover – Professor Hart says this is just 4% of start-ups, so let’s aim to take this number higher, through the work of people like Prof Hart who has developed an Opportunity Model and is leading the Goldman Sachs 10,000 Small Business Programme in Birmingham with some great results coming through following tracking. 1000 businesses have so far been through this at Aston, UCL, Leeds and Manchester.
Dr Steve McCabe, Birmingham City Business School, commented on the many and various business support programmes suggesting that our ecosystem required rationalisation. Others agreed: if that meant starting again and building from the ground up then we should set about this task to get it right rather than tinkering with something that required a complete overhaul.
We were lucky, with it being Global Women’s Entrepreneurship day, to have a panel of young women entrepreneurs showing very clearly just how well the women of Birmingham and the Midlands are doing it for themselves!
Pushpa Alexander, Daniella Genas, Olga Militsi and Rebecca Simkiss told their compelling stories with a clear focus around building successful businesses that contributed to and enhanced our local community, with the two going hand in hand.
Marc Reeves, Publisher, Midlands Trinity Mirror Group, explained that digital is not all bad news for local media. Whilst the Birmingham Mail print circulation had dropped from 100k daily some years back to 27,687 last Thursday, this was only a small part of the picture.
e-editions were generating some 1,445 viewers; desktop website 90,055, mobile 193,525 viewings, generating for that one day alone 312,722 readers. TMG had seen +44% growth in digital audience year on year with 23m page views monthly and with this doubling over the past year.
Facebook, he said, had become ‘terrifyingly important to us’. The challenge was to keep focusing on improving the user experience – what did it look like for the user, was it tailored to meet their lifestyle needs.
Jon Sandys, Principal Design Manager, Jaguar, spoke compellingly about the XE, ‘the most important car ever launched by Jaguar’ and that whilst it was possible to ‘argue that there is no more room in this segment a 5% market share represents between 60k-70k cars per annum which would be massive for Jaguar’.
The car made from an aluminium monocoque body weighing just 342kg was 75% aluminium and 25% steel and was a first for Jaguar representing the highest percentage use of aluminium in that sector. The car featured more connectivity than previous models including being to remotely control the car temperature via iPhone, for example, through the XE app enabling features such as 7 day climate programming.
JLR have been powering ahead on the back of one the most ambitious design and innovation programme seen in the Midlands ever – perhaps since the days of Boulton, Watt and Murdoch. This included £1.5bn new product investment annually since 2012 to bring forward the 50 new products promised by Dr Speth and £1.5bn capital investment into new plant including £500m invested into the recently opened i54 plant in Wolverhampton. This investment sits alongside major investments including BMW’s £500m 3 cylinder i8 engine investment into Hams Hall and JCB’s reshoring of cab production to Uttoxeter representing a further £150m investment.
GKN has continued to see healthy growth with revenues almost doubling in the past 6 years from £4.4bn in 2009 to almost £8bn in 2013. 40% of cars built today have GKN driveshafts and 90% of commercial aircraft taking off everyday are powered by GKN technology. Their Driveline business saw a 23% increase in sales to China in 2013 following a 6% increase in 2012.
Aerospace has outperformed the economy as a whole during the recession growing at 7% between 2008-2013. Rolls-Royce Aerospace, based in Derby, is the world’s second biggest producers of jet engines after General Electric and half the world’s large modern aircraft fly on wings made in the UK.
Reshoring remains a major opportunity for the region, and more work needs to be done to understand our current supply chains and the gaps that we need to fill.
Stewart Towe, Chairman, Black Country LEP has said: “The Midlands supply chain opportunities are generally underworked. Of course we have our key anchor tenants which are really important, like Jaguar Land Rover, GKN and others too. But if we can work on the supply chain we can make a massive difference in terms of the money spent here impacting on the local economy, with the multiplier effective and the knock-on impact of investment in upskilling our labour force.”
With this growth in aero and auto sectors forecast to continue, with so much of this activity Midlands-based and with great opportunities for onshoring, which has in the past year alone seen £1bn business brought back to UK and much of this to the Midlands, we must focus on getting our economic development right.
Mike Wright, Executive Director, Jaguar Land Rover, speaking recently at the CBI Manufacturing Summit said, “In designing our products we create a process where we need all our suppliers to be talking with us and sharing challenges, innovating together, and getting product to market faster.”
The old way of looking at ourselves must not block the pathway to the economic success the people of our region want and deserve. The devolution agenda allied with greater focus on alignment of industrial strategy in our region offers opportunities to bridge old rifts. Courageous political leadership is vital to stop our continuous underperformance, prevent fragmentation of the economic agenda and create the greater wealth upon which we all depend. Signs that this is recognised are there as a good first step.
Birmingham is a key gateway into the Midlands. The Midlands is the UK manufacturing powerhouse – supply chains are key to our manufacturing success in auto and aero in particular. We need them to be highly connected to function as effectively as possible. These connections can be either enhanced through a broader economic framework, signalling sources of expertise, resource and finance, or fall apart through an economic framework that does not hang together.