Black Country businesses ‘need to overcome reticence’ to innovate and scale up

Many Black Country businesses would benefit from changing their mindset and embracing innovation and innovative thinking.

A panel of Black Country business leaders were in agreement that the sub-region is well-placed to take advantage of the opportunities ahead of it.

However businesses need to overcome their “reticence” to innovate and scale up, an audience at TheBusinessDesk.com event at the University of Wolverhampton Science Park was told.

“In terms of maintaining growth, the first thing we have to do is commit to consistently innovate,” Gareth Jones, managing director of Walsall-based In-Comm Training, told an audience of business people at the University of Wolverhampton Science Park.

“Technology moves so quickly – it does disrupt. But technology can add to processes and provide a clean product. Innovation is the key.”

Prof Ian Oakes, deputy vice-chancellor at the University of Wolverhampton, said: “”The biggest thing that will impact on whether we can take advantage of opportunities is very much the role of the small firms.

“We have got some world class companies in our region, the likes of Jaguar Land Rover, the aerospace companies, they are fantastic assets to have. But the vast majority of our companies are small firms, and unless we get those small firms into the supply chains of these larger, few companies then we aren’t going to take advantage of opportunities.

“Innovation is very much the key to getting those businesses into the supply chains otherwise our local companies will just end up with the low-cost manufacturing jobs – if we use manufacturing as an example – as opposed to higher, added-value jobs that we need.”

The panel discussion, which was supported by the Black Country LEP and the Elite Centre for Manufacturing Skills, agreed that businesses need to overcome their “reticence” to innovate and scale up.

Ninder Johal, a board member at the Black Country LEP, said: “The applications that come in for funding to the LEP show there is a reticence among SMEs to scale up. Too many SMEs are quite comfortable with the lifestyle. As a region we need to encourage more scale-up.

“Some of the mezzanine funds that are available do complain that Black Country businesses don’t Is it a lack of long-term thinking? Is it a problem that businesses, because they are family owned, are quite reluctant to give up equity? Is there a leadership problem?

“These are the things that do come up when these applications do come through – the reluctance, at times, to scale up. Whether that’s because of the more macro picture and the skills problem or infrastructure, it’s still interesting from a LEP perspective. We do look at the nature of the businesses that are applying and it’s not many that appear to want to scale up.”

Paul Cadman, chief executive of Manufacturing Matters and a non-executive director of a number of firms in the region, also highlighted how the lack of vision was holding back the long-term futures of companies.

“I also think there’s an issue of succession planning,” he said. “Where are we going to be? Who’s going to lead the company for you?

“We have got six universities in the West Midlands. The amount of people who are qualified and staying within the region is good.

“The more mature business owners in the Black Country should be looking to hand over, maybe not so much to the children but probably graduates within the region that can add value.”

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