Public Sector

Regional Economic Strategies

The Regional Economic Strategy of the West Midlands '04 – '10

Delivering Advantage, the West Midlands Economic Strategy for 2004–2010, sets out a Vision for transforming the West Midlands into a world-class region by 2010. The Strategy builds on the original West Midlands Economic Strategy (Creating Advantage) published in 1999, and the subsequent Agenda for Action (2001). It focuses on the delivery of key actions involving a wide range of partners.

The RES identifies a number of challenges faced by the region, these include an environmental challenge and a challenge to promote a learning and skilful region.

Delivering Advantage is a strategy for the whole region, but its delivery will need to address the specific needs of the rural economy, rural businesses and rural communities. The natural links between rural and urban areas lead to supporting an overall regional approach – all elements of Delivering Advantage and the associated documents have significant rural components. There are a number of rural dimensions to the challenges, particularly the specific requirements for modernising and diversifying the rural economy. The rural economy has low wages, seasonal or part-time employment and over-dependency on employment in certain traditional sectors (especially land-based activity). The RES shows the policy choices that will be required to address these challenges. For instance, diversification of the region’s rural economy will be a key feature of the business development agenda. The challenges of relatively poor wages, regeneration of the remoter rural areas, infrastructure support and poor accessibility are also addressed within the appropriate parts of the Strategy.

A number of skills shortages, skills gaps and a widespread failure of employers to engage in training are hampering the growth of our businesses. In many areas there is a need to upskilll or reskill the regions workforce. The regions priorities include;

increased access to learning through implementation of the Regional E-Learning Strategy and the development of other flexible learning opportunities – particularly in rural areas,
promoting ambition and enthusiasm – by raising aspirations through new and more creative approaches to learning and skills development,
promotion of environmental awareness and improvement, and
enhancement of cultural opportunities; and maintaining and developing green spaces to provide better living conditions and improved perceptions of local areas.

The Priorities

Five challenges have been given the highest priority, because they are the ones that if met will make the greatest difference to achieving the Vision. They are:

• The Enterprise Challenge – because an enterprise culture is critical to a successful region. This must have a strong focus on young people, as they are crucial to the future prosperity of the region;

• The Manufacturing Challenge – because manufacturing is vitally important to the region’s economy yet is experiencing falling employment and low productivity. Modernisation and diversification are essential if we are to build upon our historical base and increase employment and productivity;

• The Skills Challenge – because the region is failing to fully equip all of its people with the skills they require and to provide employers with the skilled workforce they need;

• The Transport Challenge – because the transport system in the region is inadequate for our present economy, let alone the world-class economy we aspire to be.

• The Economic Inclusion Challenge – because differences in economic performance within the region are growing, and must be addressed so that all who live and work here share in the wealth created.

Promoting a Learning and Skilful Region

This Pillar drives the development of a highly skilled, innovative and adaptable workforce which attracts and supports the growth of high value jobs and wealth creating businesses. This will increase income levels across the workforce, and ensure that everyone has the relevant skills to take advantage of job opportunities – whether in deprived parts of major urban areas, or remote rural communities. To facilitate this, Pillar 2 demands that partners tackle the basic skills gap by developing workforce skills, improving leadership and management skills, developing an enterprise and entrepreneurship culture and expanding higher level skills.

The Vision

Learn West Midlands

By 2010, schools will produce highly qualified and motivated students and the gap between poorly performing schools and those implementing nationally recognised, successful pilot projects will steadily close as tried and tested education projects are rolled out across the region. An ongoing ‘hearts and minds’ campaign by schools, higher and further education institutions and business will enthuse a new workforce to the benefits of working in West Midlands businesses. Students with high aspirations will value the acquisition of transferable skills and the wide range of revitalised manufacturing industries and entrepreneurial businesses ready and waiting to employ them.

By 2010, our universities and other higher education institutions will fulfil their roles effectively and efficiently. Those with world-class faculties and departments will work alongside specialist teaching universities to ensure that local students receive the best education possible. Meanwhile our colleges and schools will successfully support the provision of skills demanded by the region’s ten Business Clusters.

Universities, colleges and schools will utilise advice and experience from the business sector as all elements join together to work in partnership. Many of our educational institutions will have collaborative ventures with business.

The region will be attracting high numbers of ‘young entrepreneurs’ – students who establish and grow their own businesses with the support of regional venture capital. The West Midlands will be recognised for an approach to lifelong learning where schools, colleges, universities and employers work together to support our people throughout their lives, and assist everyone to reach their full potential. People will choose to learn in this exciting and successful region.

The Challenges

The Environmental Challenge

Our environmental economy is large and diverse. We estimate it employs more than 90,000 people in the private, public and voluntary sectors;
Increased environmental performance has proved cost effective for business;
A high quality environment is vital for tourism development, inward investment and overall quality of life; and
Our challenge is to work together to utilise available opportunities to ensure that economic development enhances, and is in turn enhanced by, the environment.

Challenges for Promoting a Learning and Skilful Region

The region is failing to provide appropriate skills for its people. It has persistently been at the bottom of the national table on basic skills – 12% of the workforce have no qualifications at all, with particular problems in parts of Stoke-on-Trent, the Black Country, Birmingham, North Solihull, and Coventry (i.e. virtually every urban area in the region); the West Midlands has consistently been ranked as the lowest achieving English region in terms of NVQ level 2 qualifications;
Skills levels are low just as a changing economic structure is accelerating the need for adaptation and improvement. Major skills gaps in management development and leadership have been identified across all sectors – private, public and voluntary – of the regional economy;
The performance of the education system and young people’s qualification levels vary widely across the region. The overall percentage of our young people gaining five good GCSEs, 48% (2002), is lower than the national average of 52%;
Only 28% of our young people move on to higher education. The national target is 50% by 2010. Fewer than half of first degree graduates entering employment from our 13 higher education institutions remain in the West Midlands; and
Our challenge is for all partners to address these significant weaknesses, to narrow the gap with other regions, to reduce differences within the region, and, having trained employees, to encourage them to stay in the region rather than lose their skills.

Towards a Rural Renaissance

There are a number of rural dimensions to the challenges, particularly the specific requirements for modernising and diversifying the rural economy. The rural economy has low wages, seasonal or part-time employment and over-dependency on employment in certain traditional sectors (especially land-based activity). However, with the exception of this and financial services, the rural economy mirrors in structure that of the rest of the region, with manufacturing accounting for over 20% of employment. This Strategy shows the policy choices that will be required to address these challenges. For instance, diversification of the region’s rural economy will be a key feature of the business development agenda. The challenges of relatively poor wages, regeneration of the remoter rural areas, infrastructure support and poor accessibility are also addressed within the appropriate parts of the Strategy The Rural Renaissance Statement brings these all together to provide a clear agenda to move forward the region’s approach to the delivery of rural policies and actions.

Developing Workforce Skills

raise awareness of and aspiration to high value employment opportunities via the development of specific advice, guidance and labour market information – focusing upon action to raise aspirations and engagement in training,
increase access to learning through implementation of the Regional E-Learning Strategy and the development of other flexible learning opportunities – particularly in rural areas,
improve language, international management and project management skills by implementation of the West Midlands Language Strategy – linking in to and complementing the aim to improve international engagement,
increase access to modern apprenticeships – improving the skill levels of both young people and adults, and
promoting ambition and enthusiasm – by raising aspirations through new and more creative approaches to learning and skills development.

Developing Sustainable Communities

Successful, sustainable local economies and communities need an environment (real and perceived) that is attractive, safe and offers high quality social and cultural infrastructure.

As identified in the emerging Regional Planning Guidance, the current outward drift of people and jobs from major urban areas is a key issue. In some rural, older industrial and former coalfield areas, communities are struggling due to structural change. Actions must therefore ensure that environmental conditions do not act as a disincentive to investment. These actions include initiatives to reduce crime, particularly business crime which increases costs and thus affects competitiveness and ultimately jobs or services in an area. It is also necessary to ensure that limited cultural opportunities do not act as a disincentive.

The priorities for action through Local Strategic Partnerships and regional partners are;

prevention of crime and the fear of crime – supporting best practice in crime education and improving links with criminal justice organizations,
improvement of housing choice – supporting housing investment as part of neighbourhood renewal and action within Regeneration Zones,
promotion of environmental awareness and improvement; enhancement of cultural opportunities; and maintaining and developing green spaces to provide better living conditions and improve perceptions of local areas, and
reduction of health inequalities – action to counter poor health and poor access to care leading to improvements in productivity and economic activity of communities.

The Role for Higher Education

Universities and higher education institutions play a major role in economic development. There are three elements to university performance – teaching, research and ‘third leg’ activities working with the community.

The region must develop a coherent approach to our higher education system which recognises the different but complementary roles played by different institutions. We will gain competitive advantage by all our institutions being top of their own class and working in innovative and collaborative ways, linking in to business and other regional partners.

We must ensure the region retains its ‘research power’ – the proportion of research funding coming to our universities that have departments with 5* ratings. Birmingham and Warwick are the two universities in the region in the highest ranks. Some universities have areas of highly rated specialist research. The region needs to support retention and development in these areas and help them in their key regional role. Universities are key players in High Technology Corridors, through spin-offs and knowledge and technology transfer.

Our universities have a critical role to play in improving the region’s learning and skills base – for example by making provision for needs identified through Cluster Opportunity Groups and Learning and Skills Councils. They also have a critical role in working with small business – offering specialist help to solve business problems, and using their experience and knowledge of regeneration to aid local partnerships. There is potential within the teaching role for universities to collaborate and benefit from differing expertise

West Midlands Economic Strategy – Consultation Draft, May 2007

The strategy sets out the vision for the region to be:
‘A world-class region in which to invest, work, learn, visit and live and is increasingly successful in creating wealth to benefit all of its people’.

It states that growing the economy must take place in a way that respects environmental limits.

Strategic objectives are set out within the strategy under broad economic component headings. The ones which link into the achievement of sustainable development within the region and the work of the proposed Centre are listed in the table below.

Economic Component	Objective Area	Strategic Objective
Business	Growing businesses	Exploiting markets and sectors with the most wealth and employment potential.
		Capitalising on low carbon opportunities.
	Improving competitiveness	Improving business competitiveness
		Stimulating employer investment in skills and training.
		Driving up entrepreneurship.
	Exploiting knowledge	Investing in high value skills for the future economy.
		Exploiting regional knowledge assets.
Place	Sustainable communities	Developing sustainable communities.
		Regenerating our most deprived communities.
People	Sustainable living	Stimulating the demand for tomorrow’s products.
	Raising demand for skills	Extending leadership and management.
		Aspirations for skills and learning progression.
Powerful voice		Engaging with UK, European and international decision-makers.
		Improving our image and marketing the region.

The commitment to sustainable development is a fundamental aspect of this Strategy which seeks a sustainable economy that supports a healthy and just society, living within environmental limits. The focus on a low carbon economy is a cornerstone of this Strategy. Equipped with the government findings and conclusions of the Stern Review of the Economics of Climate Change, this strategy sets out to be the UK’s first low carbon regional economy strategy.

There are also major future challenges identified in the work undertaken to develop this strategy and as part of its ‘future proofing’. These are future challenges in the sense that each is beginning to have, or is already having, an impact today, but their scale and impact is likely to increase in the future.

Climate change

It is becoming increasingly accepted that there will need to be some changes to the way economic activity is organised and technology deployed in response to climate change. These changes present serious challenges to the region’s business base, but also considerable opportunities.

Carbon dioxide emissions (the principal greenhouse gas contributing to climate change) are currently strongly linked to economic activity, and modelling predicts that if we were to continue on a ‘business as usual’ basis, carbon emissions would increase by 9.6% between 2006 and 2015. It is essential that this link between economic growth and emissions growth (along with wider environmental impact) is broken to create a sustainable future for the region. In addition, we need to plan for the risks and opportunities for the region’s economy that changing weather patterns will bring.

Stimulating demand for low carbon housing, transport and consumer products and encourage lifestyle changes which shift the region towards more sustainable patterns of energy consumption, to support regional supply chains and improve overall efficiency and accessibility.

Underlying principles

The commitment to sustainable development is a fundamental aspect of this Strategy. Fully informed by the government’s March 2005 Sustainable Development Strategy (SDS), the Regional Sustainable Development Framework (2006) and Future Advantage – Advantage West Midlands Sustainable Development Policy and Action Plan, this strategy is seeking a sustainable economy that supports a healthy and just society, living within environmental limits.

Developing a low carbon economy

The focus on a low carbon economy is a cornerstone of this Strategy. Equipped with the government findings and conclusions of the Stern Review of the Economics of Climate Change, this strategy sets out to be the UK’s first low carbon regional economy strategy. To provide independent verification for this claim we commissioned Arthur D Little consultants, who work globally with many of our key sectors, to help us define what a low carbon regional economic strategy would look like and how the strategy could achieve this. Further work will be conducted to develop this thinking with the different businesses, places and people within the region to produce relevant tailored targets and actions.

Urban and rural renaissance

This strategy contains a strong commitment to urban and rural renaissance. Advantage West Midlands have worked very closely with the Rural Affairs Forum and the West Midlands Regional Assembly to ensure that the implications of the Strategy for the rural parts of the region and for rural policy interests have been considered and addressed, a process also known as “rural proofing”.

The Rural Affairs Forum is the key regional body in ensuring that the West Midlands Economic Strategy is rural proofed. The RAF, WMRA and AWM have agreed an approach which aligns the proofing of this strategy and the WMRSS. A joint Regional Economic Strategy/Regional Spatial Strategy working group has met on a regular basis during the strategy development process to ensure alignment between the two strategies. Through this alignment with the WMRSS, this strategy aims to meet the twin aims of urban and rural renaissance. In particular the ‘Place’ element of the WMES will direct and support activity contributing to this commitment.