Stimulating Growth in the West Midlands
Maximising the benefits of inward investment
Attracting new firms and investment to the West Midlands is vital for job creation in the region. Research led by Professor Nigel Driffield underpinned economic strategies for the West Midlands Combined Authority (WMCA) that linked firm strategy, the value proposition that the region projects, and an understanding of the jobs created As a result, the West Midlands is outperforming other parts of the country, creating more jobs and attracting new employers.
The UK has a serious problem with inter-regional inequality. London and the Southeast are not simply the richest parts of the country, but also enjoy the fastest growth rates, made more acute by the Brexit vote in 2016. The result led to a collapse in the British pound and undermined the global supply chains upon which the local economy relied. Any intervention would have to address divided governance, split between councils, the Metro Mayor and Local Enterprise Partnerships (LEPs).
Professor Driffield’s research contributes to a better understanding of the beneficial effects of inward investment, most notably in terms of productivity and inclusive growth. This research influenced some key elements of the regional strategy, including:
A focus on labour supply and demand
Exploring ownership structures to encourage Foreign Direct Investment (FDI)
Encouraging ‘reshoring’ (companies bringing production back to the UK)
Offshoring, and its positive and negative effects on employment, particularly in the context of Brexit
The effect of Professor Driffield’s research on the economic strategies adopted by the West Midlands has been significant.
At the start of the 2010s, Greater Birmingham lagged behind the rest of the country but after five years of effective planning, that position has been reversed. The WMCA has seen an almost 200% increase in new businesses moving into the area. With roughly 12,000 jobs created each year, the West Midlands is outcompeting every region outside of London. Since 2017, the arrival of companies such as HSBC, Changan Automotive and Jacobs Engineering has contributed to record levels of inward investment, with £3.5bn growth in gross fixed capital formations since the launch of regional strategies in 2015. Parliamentary debates have quoted Professor Driffield and his team when discussing growth, interest rates and foreign-backed projects. As a result, both the Department for International Trade and the regional Brexit Commission have invited Professor Driffield to share the team’s work. The benefits of Warwick’s research could soon spread from enriching the West Midlands to boosting the nation’s economy.
Professor Driffield's research, translated through his role as lead academic advisor to the WMCA’s Strategic Economic Plan (SEP), formed part of the rationale for Greater Birmingham and West Midlands gaining devolution from Whitehall over economic policy. Driffield was invited as the academic lead on the WMCA 'Productivity and Skills Commission' (PSC) and his research has shaped the Commissions actions and recommendations, including a skills strategy aligned to the region’s inward investment strategy, based around a value chain approach.
Professor Driffield’s research is being used to inform plans for economic recovery following the Covid-19 pandemic. He has been appointed by the Business, Energy and Industrial Strategy Committee (BEIS) as a Specialist Adviser to its Post Pandemic Growth Inquiry. He is also on the advisory group advising the Department for International Trade on its inward investment strategy and, at a regional level, is central to the development of Coventry and Warwickshire LEP’s post-Covid-19 response strategy.