You are in: Home > Business and Economy > Economic Review > Archive > 2003/4 Review

Birmingham & Solihull Economic Review 2003/4

This is the second joint Review of the Birmingham and Solihull Economy produced by Birmingham City Council, Solihull MBC, Birmingham & Solihull Learning and Skills Council and the Birmingham Chamber of Commerce & Industry through the Birmingham Economic Development Partnership and the Solihull Business Partnership.

The Review provides an objective and evidence-based assessment of the Sub-regional economy to inform the new Economic Strategies for both Birmingham and Solihull. The Review is divided into four section dealing with economic performance, business development, learning and skills and area regeneration. There is also a short summary which brings together the Review's key findings and policy implications.

Trends

Over the last decade the Sub region has became a predominantly service based economy with over 78% of employment in services and around two thirds of this in marketable services. Manufacturing has lost its predominance but remains important, employing around 100,000 people and having a proportionately higher impact on the local economy due to its greater trading interaction with the national and global markets. Local economic policy has been to increase the same kind of trading interaction in the service sector (e.g. through the promotion of tourism and improving the retail offer as well as enhancing the Sub-regions role as a major centre for Professional Services).

Drivers of Change in Birmingham

One of the key strengths of the Sub region in recent years has been the sheer momentum of the geographical expansion and redevelopment of Birmingham's City Centre, which has created an infrastructure for sustainable diversification into activities such as professional services, tourism, leisure and hospitality that bring external sources of income into the local economy.

Drivers of Change in Solihull

Building on traditional manufacturing strengths, the service sector in Solihull has become the key driver of change and has experienced remarkable growth in recent years with employment increasing by nearly 40% between 1991 and 2001. This growth has been stimulated by ICT and the development of new business parks such as Blythe Valley.

Enterprise

Historically, the Sub-region's economy was built on entrepreneurial activity in manufacturing and particularly the emergence of the motor industry. Manufacturing remains of strategic importance, but there is a now a fresh impetus to entrepreneurial activity centred on a broadly diversified service economy- with its core in professional services - which is increasingly self-sustaining.

Clusters

The Regional Development Agency – Advantage West Midlands (AWM), has identified 10 clusters as regional economic development priorities. Some of these clusters represent traditional strengths, others have been targeted for their future growth prospects. In the case of the Sub-region the crucial clusters for future employment growth are Specialist Business Services; Tourism & Leisure and Information & Communication Technology (ICT).

Workforce, Learning and Skills

To realise the Sub-regions employment growth prospects, it is essential that the current modernisation of the workforce should gather further momentum. Our shared 'vision' is that by 2010 the workforce will have the skills to match the best in the world.

Unemployment and Social Deprivation

Unemployment is a major cause of social deprivation and both are spatially concentrated within the Sub-region. For example, just 10 wards in Birmingham's inner city accounts for 46% of all unemployment in the Sub-region. There are also important concentrations of unemployment & deprivation in some of Birmingham's outer estates and in North Solihull.

Regeneration and Social Inclusion

The largest and most severe spatial concentrations of unemployment, worklessness and social deprivation in the Sub-region are being tackled by large-scale interventions in the form of major regeneration programmes. The most significant of these are: East Birmingham/North Solihull Regeneration Zone; North West Birmingham/Black Country Regeneration Zone; Single Regeneration Budget; Kings Norton NDC1 and Aston Pride NDC2.

Prospects

There are strong grounds for optimism regarding future employment growth in the Sub-region. Birmingham's employment growth between 1991 and 2001 had fallen behind the national performance. However, the current pace of development investment in the Sub-region if continued will lead to faster employment growth locally than in the UK, so that this employment gap could be closed by 2015. This outcome is achievable if all the development projects currently planned in the local economy come to fruition.