All aboard the Midlands engine: Delivering inclusive growth in the Midlands
09 December 2016
With the government focused on delivering an ‘economy that works for everyone’, the idea of ‘inclusive’ or good growth is rising up the agenda. In early December, we hosted a roundtable with Stephanie Flanders in our Birmingham office as part of the RSA Inclusive Growth Commission, where the discussion looked at the private sector role in supporting inclusive growth.
Over the last 18 months there’s been a growing sense of optimism and confidence in the Midlands and that was certainly reflected in the contributions from attendees drawn from the private and public sectors, including Local Enterprise Partnerships, local government, representative bodies such as the CBI, and businesses based in the Midlands. Our Good Growth for Cities research highlights the need to look beyond Gross Value Added (GVA) and consider a wider range of economic success factors, and this was very much reflected in the key points that were discussed.
Attendees agreed that businesses need to engage more on skills. A CBI report, released on the same day, highlighted different levels of educational attainment in different regions and the implications of this on a region’s economic success. Too often the skills system, and employers themselves, are left to pick up the pieces on basic numeracy and literacy.
In terms of motivating and inspiring younger generations, there were also interesting questions raised around what ‘visual success stories’ people can see to increase their understanding of the knowledge economy. With the decline of traditional industries with a strong visual identity, for example automotive, mining and shipbuilding, in many places, how can we create a sense of what the jobs and opportunities of the future are? The example of Nissan in Sunderland was discussed, where few people living in central Sunderland work at Nissan despite it being a major employer for the city.
While skills is a complex area, there are basic things that all major employers can do to raise awareness and create opportunities for engaging potential employees of the future. Many of the employers represented highlighted the work being undertaken to reach out collaboratively to schools and their pupils to familiarise themselves with careers in and around the City, the West Midlands Combined Authority area and beyond, for example, the Greater Birmingham Professional Services Academy. However, more can and should be capable of being achieved with better co-ordination and communication of these programmes to those not currently participating.
Infrastructure was also high on the agenda. Some attendees noted that the UK still has too much of a ‘sticking plaster’ approach to infrastructure. There was debate over the need to invest in bigger national infrastructure projects such as HS2, versus addressing smaller local projects, with the i54 link road cited, and initiatives to improve access to employment opportunities. The broad conclusion was that both were needed in order to support regional and national growth. This led to recognition of the need to think strategically about infrastructure commissioning and the potential to leverage such spend in order, for example, to engage SMEs and employ apprenticeships.
Finally, while industrial strategy is typically focused on investing in new or growth industries, the ‘long tail’ of lower productivity businesses needs to be addressed as well as the investing in the ‘cutting edge’. It’s not enough to just focus on attracting higher skilled jobs and assume there will be a trickledown effect: places need to think about building a ladder of progression from low to highly skilled jobs to reflect their labour markets and help get people into work - and then progress. Taking this approach will both boost productivity and ensure that growth addresses the full spectrum of local economic need.
While issues of the magnitude of skills, infrastructure and industrial policy can quickly become mired in complexity, what I came away with is a real sense of needing to keep up the local momentum beyond driving good growth. The Midlands is already making great strides forward and business, working with public sector partners, must play its critical role in delivering an economy that works for all.