Innovation the key to regional growth – KPMG event

HIGH level attendees at an event in accountancy and advisory firm KPMG’s offices in Birmingham have reinforced the need for innovative thinking for the region to move forward.

The third in a series of events under the banner The Innovators – staged by KPMG in conjunction with TheBusinessDesk.com – looked at how creative thinking can trigger economic growth.

Wouter Schuitemaker, investment director at inward investment body Business Birmingham, reflected on the recent decision by HSBC to relocate to the city and how it is important to be ahead of the game in terms of industry trends.

“We have perhaps dined out on Deutsche Bank for a while and we needed another to keep things going,” he said.

“We are seeing a phenomenon in terms of on-shoring, near-shoring and north-shoring. That trend has been quite recent and we try to stay ahead of the curve.”

Turning to the creative thinking around the region’s automotive sector, Dr Mark Swift, head of small business programmes at WMG at the University of Warwick, said: “Innovation is driving all this change. Warwick wants to be Europe’s centre of excellence for automotive research.

“Tata’s automotive research is coming to Warwick and that’s 300-400 people.

“We opened an academy last year and we want to create a new generation of engineers and to give them confidence that there is a career there.

“It is sustainable.”

Birmingham Airport chief executive Paul Kehoe has seen innovative thinking lead to an extended runway – which can be used by larger planes feeding long-haul destinations – and is now keen to see smart thinking lead to an increase in traffic.

“We have taken an innovative approach in persuading Chinese airlines to come in and now we want a regular service,” he said.

“And we need innovative thinking to get government to support the Midlands. We probably need that more than the runway extension.”

Another area where the region is having to be innovative in its thinking is when it comes to devolution. New ways of thinking need to be initiated to access central government cash and to be given authority for devolved powers.

This may also mean forging alliances with other authorities or bodies in the region.

Richard Butler, regional director of the CBI, said: “Most businesses think we need to get our act together to compete with the Northern Powerhouse. There is a lot of fragmentation – there are three LEPs covering this area.

“This for me would be a priority.

“If you look at something like JLR, it spreads across various parts of our area but it is a single entity.”

Schuitemaker said there is some disagreement about the strongest brand, given Coventy and Warwickshire’s growth in the automotive sector in particular.

“My view is that there is broad consensus that you go with the positioning that has the most resonance in overseas markets,” he said.

“There is more resonance around the brand of Birmingham than other parts of the region.”

Turning to the role of local enterprise partnerships (LEPs) in innovating for change, Greg Lowson, president of the Greater Birmingham Chamber of Commerce, said: “The view of the Greater Birmingham one is pretty positive.

“They have probably suffered from a lack of resources and will probably do better going forward.”

Turning to the importance of large-scale property development to the region’s prospects, Schuitemaker from Business Birmingham said such schemes are “absolutely crucial”.

“We’ve missed out on some big deals in the last few years, such as a legal services requirement with 600 jobs and a 500 person call centre, because we didn’t have the right properties.

“A lot of the stuff that is happening now is being driven by the Enterprise Zone and that is an innovation based on the TIF model in the US.”

Birmingham Airport’s Kehoe believes high-speed rail project HS2 is a game-changing, innovative project.

“It will change the economic landscape of the UK,” he said.

He is also keen on the extension to the Midland Metro ‘tram lines’ through Birmingham city centre.

“Nottingham is a third of the size of Birmingham and has three tram lines. We are just building our first,” he said.

“We need better public transport and I don’t mean buses. Trams will open up the city.”

Schuitemaker at Business Birmingham said: “It needs to go on out of the city centre to Digbeth and Edgbaston etc.”

But he pointed out that having to deal with legacy issues has put massive constraints on Birmingham City Council’s ability to innovate.

“There is little wriggle room to be innovative,” he said.

Summing up. KPMG sales and marketing director Andy Youngman said: “Everything that we have spoken about is very, very positive.”