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All things considered, business is pretty good in the West Midlands. In fact, it is so good this period has become known locally as the regional “renaissance”.
The West Midlands Combined Authority’s economy is worth over £99bn (ONS GVA 2017) – the same as a small European nation. Major employers, such as HSBC UK, PwC, Jaguar Land Rover and BT, are making significant investments. We are one of the first UK regions to trial 5G connectivity and the phenomenon that is Peaky Blinders has launched the region into the consciousness of a whole new global audience.
On top of that, we have the “big three” on the horizon: Coventry City of Culture 2021, The Birmingham Commonwealth Games 2022 and HS2.
It is safe to say that us traditionally self-deprecating West Midlanders have a newfound sense of confidence. The West Midlands Mayor has a key role to play in grasping the moment and using these opportunities as a springboard for driving regional growth throughout the 2020s. They are also going to have to navigate some significant challenges.
Making “Legacy” a Reality
While potentially bringing huge upsides, the cluster of once in a generation opportunities on the horizon will not transform the region on their own. The region faces a choice – let them happen “to” us or “for” us. They could be great events and a train line or genuine catalysts for driving economic growth through local transport planning, procurement and supply chain development and vehicles for stimulating key sectors, innovation, skills development and jobs growth.
While much activity is already underway in this space, the West Midlands Mayor has a vocal role to play in ensuring local and national stakeholders are genuinely joined up, planning ahead and delivering associated interventions which will make those much discussed concepts of “legacy” and “wider economic benefit” into a reality.
Being an Advocate for HS2
There is also no ignoring the fact that HS2 has become a political punching bag. On completion, HS2 will place the West Midlands at the heart of a national network connecting 8 out of the 10 UK’s largest cities. The region is already seeing an uptick in investment, partially driven by the expectation of a mid to long term economic boost for the region and on completion HS2 is expected to add c.£14bn to the regional economy (Birmingham Economic Review 2019). The West Midlands Mayor must be in it for the long haul, unwaveringly lobbying for the completion of the full route and challenging proposals aimed at scaling back this project for short term political benefit.
Championing Businesses’ Needs Throughout Brexit
The Government may be focussing on getting “Brexit done” but there’s no denying that it exposes the region to significant risks. Manufacturing, particularly automotive sector, forms a major part of the regional economy. There is a huge opportunity here for the region to become a leader in electric vehicle R&D and production – but only if the trade deal agreed between the EU and UK doesn’t decimate manufacturers’ access to EU supply chains and markets.
We want to see the West Midlands Mayor use their clout to advocate for local businesses on the national stage in regards to; the objectives of UK-EU trade negotiations, immigration reform, the UK Shared Prosperity fund and support for employers (particularly SMEs) in adapting to changes.
Stimulating A Business Environment Fit for the Future
Through our Quarterly Business Report (QBR), the means by which we keep our finger on the pulse of the performance of the local economy, we track the principal concerns of Greater Birmingham based businesses. In Q4 2019 17% cited Brexit related factors as the single biggest concern facing their organisation (a high percentage for a list usually dominated by operational issues, not the external political environment).
It also demonstrated employers’ increasing concerns about the cost of doing business. 32% of QBR respondents cited input costs (such as corporation tax, business rates, other overheads) as their principal concern. Technology is evolving at an exceptional pace with AI, automation, VR and AR all exciting but disruptive forces and Brexit, the US-China trade war and other global economic headwinds looming in the background.
In this changing context, the West Midlands Mayor will also have a key role to play in monitoring the delivery of the Local Industrial Strategy in order to ensure that it is effective and remains relevant to the local economy. We are also calling for candidates to rule out implementing a business rate supplement.
Driving Collaboration Through Uncertain Times
The creation of the West Midlands Combined Authority has catalysed a spirit of collaboration between the region’s metropolitan authorities which, while welcome and already starting to bear fruit, is still in its infancy. The West Midlands Mayor will have a delicate role to play in managing political and geographic tensions to continue and enhance joined up action on key areas such as further devolution, skills, transport networks and sustainability, through an almost unprecedented period of change and uncertainty.
Keeping collaboration going and avoiding stakeholders retrenching and turning their gaze inwards if times get tough (or tougher, many local authorities are already under the cosh), will be a fine art.
Putting Business at the Heart of Communities
The share of neighbourhoods classed as being among the most deprived in the UK is twice as high in the West Midlands Combined Authority area as the national average (ONS Combined Authority Indicators 2015). For all its strengths and progress, there are ingrained issues facing a regional economy that is still, in some places, scarred from the last recession. While regional structures may rise and fall the unequivocal role of business in generating wealth, creating jobs and shaping communities remains constant. The Greater Birmingham Chambers of Commerce have been custodians of local business interests for over 200 years. We will continue to work with West Midlands Mayors in the decades to come to support our local businesses and ensure their fundamental role in society is recognised and valued.
Henrietta Brealey is Director of Policy & Strategic Relationships at the Greater Birmingham Chambers of Commerce.
This blog is published as part of an occasional series by guest experts to provide a platform for new ideas in urban policy. While they do not always reflect our views, we consider them an important contribution to the debate.
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