APPENDIX 37
Memorandum submitted by the Northwest
Regional Development Agency
INQUIRY ON UKTI's FIVE-YEAR STRATEGY
OVERVIEW
The Northwest Regional Economic Strategy 2006
(RES) seeks to shape the future economic direction of the region.
Specifically this seeks to improve the Northwest's International
Competitiveness through three actions (these are detailed full
in an appendix) (not printed here):
— Maximise opportunities from globalisation
and emerging markets;
— Realise opportunities from international
trade;
— Realise opportunities from inward
investment.
In the Northwest there are nearly 3,000 subsidiaries
of foreign owned companies. These subsidiaries represent circa
only 1% of the companies in the region but account for over 16%
of regional GVA and one in nine jobs in the region are dependent
on inward investment. Recent research has demonstrated that foreign
companies in the NW pay more than indigenous companies and are
also more productive (source DTZ 2005).
In all our markets overseas, NWDA works with
UKT&I via the "COP framework" (Committee on Overseas
Promotion) to co-ordinate activities and reduce duplication. Annually
we undertake Peer Reviews of our overseas network, with UKT&I,
to ensure that there is close/effective working between the two
teams.
We review our inward investment activities on
a regular basis. We have just completed an independent review
of our presence in USA (undertaken by PWC). This has confirmed
the US-based team's excellent performance and underlined the good
value for money this represents for NWDA. UKT&I was consulted
on the review and it highlighted the good working relationship
between the NOE USA team and embassies/consulates.
INWARD INVESTMENT
1. What is your annual expenditure and staffing
resource on inward investment promotion to your region?
The NWDA works with the two other northern RDAs
(Yorkshire Forward and One North East) under the North of England
(NOE) banner in the US and Australian markets. RDAs have a presence
overseas in order to pursue opportunities that are specific to
their region complimenting UKT&I efforts on a national basis.
In Japan, we work with Yorkshire Forward. This allows us to share
resource allowing effective promotion overseas. In both Japan
and USA employees are directly employed by the RDAs but in Australia
we are represented by a third party consultancy (company called
PPR).
The total annual cost to the NWDA of these three
NOE overseas offices is £615,000. This combined with funding
from the other two northern RDAs employs 18.5 people overseas
and 1 UK-based person working on NOE inward investment activities.
NWDA resource that is UK based does not totally
focus totally on inward investment. There is a team of 14 people
that work on both foreign inward investment projects as well as
with UK owned companies. The salary cost of this team is £678,000
per annum.
NWDA also works with five sub-regional partners
(SRPs) on inward investment—The Mersey Partnership (TMP),
Cumbria Inward Investment Agency (CIIA), Manchester's Investment
Agency (MIDAS), Cheshire & Warrington Economic Alliance (CWEA)
and Lancashire Economic Partnership (LEP). This is part of the
NWDA's commitment to co-ordinate activities and delivery across
sub regional locations. We contribute another £1,950,000
towards SRP inward investment activity. Note, that this is not
totally foreign direct investment focused and levers in additional
support from other partners.
2. What activities does the agency carry out
to promote inward investment into the region (such as overseas
offices, missions, information provision etc)?
The NWDA's activities in promoting inward investment
include management of the NOE offices, liaison with UKTI and their
overseas network, interaction with other RDAs and DAs, management
of FDI enquiries, client management and the reporting of inward
investment successes to contribute towards national PSA targets.
Sub-regional partners work with NWDA on investor development with
existing FDI companies in the region as part of the co-ordinated
Team Northwest Model. The majority of SRP's activity is support
for indigenous UK companies.
3. Is the agency's inward investment promotion
carried out directly by the agency, or by another sponsored body?
See answers to questions 1 and 2 above.
4. Which sectors and countries is the agency
particularly focused on?
4.1 Sectors
RES Action 19 sets our international priority
as focusing the region's inward investment activity "to support
the region's knowledge base and complement, support and strengthen
priority sectors". The RES identifies these key sectors as:
— Business and Professional Services;
— Digital and Creative Industries;
— Energy and Environmental Technologies;
— Biomedical: biotechnology, pharmaceuticals
and medical devices;
— Advanced Engineering & Materials:
Chemicals, Aerospace, Automotive, Advanced Flexible Materials.
4.2 Countries
In 2005-06, 56% of the inward investment secured
by the NW region was sourced to countries where we have overseas
representation.
NWDA funds the North of England Inward Investment
Agency (NOE) which represents NWDA, Yorkshire Forward and One
North East in North America, Japan and Australasia.
NWDA also has a dedicated country manager for
China who is UK based.
5. How many inward investment projects has
the agency won in the last three years? How many of these have
created or saved jobs? In total, how many jobs have been created
or saved?
The Northwest is one of the UK's leading locations
for inward investment. This performance is recognised in the annual
results published by UKT&I.
|
| Total FDI to the NW | 2003-04
| 2004-05 | 2005-06
| Total |
|
| Number of Projects | 63
| 92 | 112
| 267 |
| Number of Jobs Created | 3,162
| 5,376 | 3,385
| 11,923 |
| Number of Jobs Safe-Guarded | 9,549
| 2,590 | 3,418
| 15,557 |
| Total Jobs | 12,711
| 7,966 | 6,803
| 27,480 |
|
In the last three years the NWDA has won 128 inward investment
projects, and in total, created and saved 21,386 jobs. The table
gives a year-by-year breakdown.
|
| NWDA Involved Successes | 2003-04
| 2004-05 | 2005-06
| Total |
|
| Number of Projects | 34
| 54 | 40
| 128 |
| Number of Jobs Created | 3,162
| 3,214 | 1,872
| 9,248 |
| Number of Jobs Safe-Guarded | 9,899
| 2,389 | 850
| 13,138 |
| Total Jobs | 13,061
| 5,603 | 2,722
| 21,386 |
|
From these figures, the NWDA has been involved in the creation/safeguarding
of 78% of all FDI jobs in the Northwest over the last 3 years.
In 2005-06, based on our data, UKT&I accounted for only
six of our involved projects (15%) and less than 2.34% of the
total FDI jobs reported.
6. Could the agency outline some examples of successful
inward investment projects, which the region has recently won,
and how these have impacted on the region?
Novartis, Swiss owned pharmaceutical company, was supported
by the NWDA in their plans to establish a £100 million state-of-the-art
vaccine production facility in Liverpool that has safeguarded
the existing 400 jobs on site and led to another 300+ new jobs
being created. NWDA worked with the company to develop detailed
training and financial packages to support the investment.
Bank of New York (US owned company) established a new "growth
centre" for their UK and European business in Manchester
creating 377 new jobs. The NWDA and partners worked with the Bank
to find a suitable location, helping the project team to sell
the Northwest as part of their bid to secure an investment decision
internally and provided financial support to attract the investment.
Local agencies have also worked with the company on training and
recruitment. As part of this process, we hosted numerous visits
to the region to showcase existing companies, houses, schools,
the transport network and available offices.
Handleman Company (US company) has created 1,000 new jobs
in Bolton. The company supplies and merchandises home entertainment
products for the major outlets including CDs and DVDs. NWDA worked
with the company to find suitable NW locations, benchmark other
UK sites being considered (this looked at demographics, wage levels
and skills profiles) and introduced the company to key local contacts
(eg, Chief Executives of Local Authorities).
Prinovis (part of the German owned Bertelsmann Group) established
a gravure printing plant in Liverpool that has led to a £120
million investment and the creation of 400 new jobs. NWDA worked
with the company to identify a suitable site, the project team
to sell the location internally, secure funding for site works,
training and capital investment. We also hosted numerous visits
to the region by key decision makers within the company and worked
with their project team during construction of the new facility.
7. What are the agency's future plans for inward investment
promotion, within the context of UKTI's new five-year strategy?
The importance of international activities to the NW has
been recognised in a new Internationalisation Strategy that the
NWDA has developed. This is seeking to increase the focus of our
activities, improve co-ordination and, hopefully, increase resource
in this area as we aim to narrow the GVA gap on behalf of the
NW. Our plans fully involve UKT&I and compliment the new five-year
strategy—for example, greater focus on emerging markets
such as India and China.
However, we have a number of concerns regarding UKT&I's
new strategy. This is mostly around the move of focus and resource
from developed markets such as Europe and the US. These markets
play an important part in the NW's inward investment and trade
activities and we do not want to see a reduction in our efforts
in these areas. As such, we are looking at the impact of UKT&I's
reductions of resource in these areas and deciding how we should
react.
8. What trade missions to promote exports from the region
has the agency organised or taken part in over the last three
years?
In 2004 NWDA and UKTI signed a Memorandum of Understanding
which states that: "UKT&I is the NWDA's lead partner
for international trade development activity and, as such, will
lead and co-ordinate wider partnerships in response to customer
and business needs." The NWDA contracts directly with UKT&I's
NW Trade team to enable them to provide an enhanced trade service
to our priority sectors. UKT&I deliver missions on our behalf.
This additional investment enables the region to leverage greater
benefit fro the wider UKT&I network.
9. How do you determine which missions to promote? Do you
ever co-operate with other RDAs in promoting joint missions? Do
you encourage/allow firms from outside your region to participate
in your missions?
The UKTI northwest team works with regional partners including
the NWDA, Chambers, the Northwest International Business Forum
and sector organisations to develop a regional programme of overseas
missions. The underlying aim is to match the region's strengths
with opportunities overseas and utilise any special links that
the region has with overseas markets. UKTI organise a Market Visit
Scheme on a regional basis which enables the northwest UKTI team
to target regional opportunities. These schemes are marketed on
a pan Northern basis to enable companies from outside the Northwest
that have a specific interest in a mission to participate.
The NWDA provides additional support for sector missions
and other trade activities such as a Meet the Buyer programme
which brings buyers from across the globe to meet with companies
in the Northwest. A recent programme of six Meet the Buyer events
generated £20 million worth of additional business for Northwest
companies. Companies from across the UK were able to participate
in these events.
| 
