Insider Media Limited

When it comes to the art of making things, the Midlands still reigns supreme. It has survived by evolving into sectors and products almost unimaginable during the supposed heyday of manufacturing, when the Midlands was the workshop of the world. Instead of being cheap and plentiful, the emphasis is now on low volumes, high margins – but still with that same attention to detail and ingenuity.

Over the next few pages Insider celebrates those innovators who come up with the ideas that make manufacturing one of the region’s most fast-moving sectors. We look at five core areas where the region stills leads the world – aerospace, automotive, biosciences, digital media, and food and drink.

Martin Draper, managing director for LDC in the Midlands, says: “Despite the decline of traditional low value-added manufacturing, which had secured the Midlands its worldwide reputation as a business epicentre, the area has successfully evolved and adapted its skills range and expertise to include forward-thinking manufacturing practices.

“The combination of innovative technology, cutting-edge design and an increased emphasis on research and development (R&D) means the region specialises in high-value manufacturing, where quality end products are guaranteed.”

Ronnie Bowker, senior partner of accountants at Ernst & Young in Birmingham, adds: “The challenge of manufacturing isn’t really seen as exciting for people at schools – they seem to confuse manufacturing with images of smoking foundries and places that really aren’t that nice to work.”

AEROSPACE

With oil and raw material prices set on an interminable rise, the credit crunch biting and environmental awareness making many consumers think twice about flying, we could be forgiven for thinking the Midlands’ aerospace industry was all doom and gloom.

Far from it: from Rolls-Royce in the east to Umeco in the west, the sector is thriving. For example, Doncasters Group, the Melbourne manufacturer of components for the civil and military aero engine markets, is having to deal with the challenges of growth.

Eric J. Lewis, chief executive, says: “When I first joined Doncasters the group had just been bought by Royal Bank Private Equity, and we were busy integrating another business, Ross & Catherall, into the company. We were just starting to introduce lean techniques across the group when the 9/11 catastrophe hit, with its ramifications for the aerospace industry. We simply went into ‘survival’ mode.

“These shocks meant we had to cut costs. We set about creating a leaner, more robust business that would ensure immediate survival and make sure we were placed to ride any future traumas.

“Six years on, Doncasters is a much stronger business and, while the economy is uncertain, we’re expecting significant growth. All of this means we face the welcome, but equally challenging, task of gearing up for growth.”

Another company that has produced a stellar performance of late is Rolls-Royce. After a series of huge contract wins, Derby’s biggest employer saw orders increase 17 per cent to £53.5bn this year.

According to Sir John Rose, chief executive, it’s down to chasing what you’re good at. He says: “Over the past decade, Rolls-Royce has pursued a consistent strategy to create a global power systems company with a broad portfolio of products and services.

“The youth, scale and geographical diversity of our civil aerospace installed base, along with our broad portfolio, will mitigate the consequences of uncertain conditions in the airline industry.”

It’s not just the big companies who are driving the sector forward. AWM is giving £1.18m to three West Midlands companies working together as part of a £103m national aerospace programme. Goodrich Actuation Systems and GE Aviation in Wolverhampton, and KUKA Robotics in Halesowen are among 18 UK industrial partners working on the three-year Next Generation of Composite Wing (NGCW) programme – a collaborative scheme to develop lighter aircraft wings and reduce fuel use.

Jim Coyle, aerospace cluster manager at AWM, said: “Innovative projects are changing lives and boosting the economy across our region. Our long-term vision is to establish an internationally recongnised, sustainable aerospace industry, creating wealth and opportunity for the whole Midlands region.”

AUTOMOTIVE

The past year has been one of consolidation for the Midlands automotive industry. Not yet badly affected by the downturn, our carmaker and auto component manufacturers continue to keep the wheels turning.

The Midlands is at the heart of the UK’s transport network and the transport industry. With a wealth of experience and capability in automotive supply chain and technology, plus innovative manufacturing and research organisations, some of the largest and best-known auto companies in the world have either been bred here, or have chosen to locate here.

Toyota, Jaguar Land Rover, Aston Martin, van maker LDV and taxi builder LTI have based their headquarters, main vehicle assembly plants and R&D facilities in the region. Easy access to Honda’s Swindon plant, BMW’s Mini factory at Cowley and Nissan in Sunderland opens up more opportunities for suppliers. There is a significant R&D presence in the region, including several independent and Original Equipment Manufacturer (OEM) facilities and expertise in the region’s universities.

Specific research strengths include: engineering; design and styling; materials; telematics; intelligent transport systems; satellite navigation application development; engine design; hybrid vehicles and low-carbon technologies and fuel cells.

On top of all that, in the past weeks, it has been announced the British Grand Prix is staying in the East Midlands, albeit at a different venue in Castle Donington – something that excites Bryan Jackson, ex-Toyota boss and chairman of Emda.

He says: “We’re pleased the Grand Prix will continue to benefit the East Midlands economy, not only acting as a catalyst to increase visitor numbers and spend, but by helping secure the long-term future for the sport and its related industry. With Silverstone also working on its development, we will have two excellent facilities that will have world-class appeal.”

But the biggest vote of confidence in the sector this year was Ford’s sale of the Jaguar and Land Rover marques to Indian motor group Tata for £1.15bn.

Tata isn’t, of course, British, and as much as those who wanted Jaguar and Land Rover to return to UK ownership may grumble, they can hardly argue with the figures. Tata Motors is India’s largest automobile company, with revenues of £4.4bn in 2007/08. With more than four million Tata vehicles in India, it is the leader in commercial vehicles and among the top three in passenger vehicles. It is also the world’s fourth-largest truck maker and the second-largest bus manufacturer.

BIOSCIENCE

If manufacturing has an image problem, then bioscience is changing that for the better.

Nottingham leads the region in this sector, second nationally only to Cambridge. At the heart of the region’s biosciences is The University of Nottingham, and, perhaps more importantly, the ever-expanding Biocity development that provides space for fast-growing businesses.

Biocity was made possible by a huge donation of laboratory and office buildings and equipment from BASF to Nottingham Trent University in 2001, believed to be the largest corporate donation to a new university.

Alliance Boots’ presence in Nottingham has been crucial in developing an entrepreneurial spirit in the bioscience sector. It has been the breeding ground for local successes such as Clinphone, Pharmaceutical Profiles, Orion Pharma and Molecular Profiles.

And Nottingham isn’t resting on its laurels. Developer Blueprint is busy with Nottingham Science Park, while the University of Nottingham’s Innovation Park opens in September 2008. It aims to attract high-tech companies to work alongside university’s research and knowledge transfer activities.

In the west things are also moving apace. The region has become the base for world-renowned companies such as Kimal, Sunrise Medical, Microtek, Salts Healthcare, Sterilox and Warwick Sasco.

The development of the £90m University Science Park, at Pebble Mill in Birmingham, is one of the biggest investments in Birmingham’s life sciences economy. The 393,000 sq ft centre for the biomedical industry will push the commercialisation of intellectual property for companies to bring medical solutions to market.

The park, based on the former BBC site, will boast specialist laboratories and incubator units to help biomedical companies to grow. The partners hope the scheme will be enriched by proximity to a cluster of academic and research institutes including University Hospital Birmingham’s £559m ‘Super Hospital’; the University of Birmingham School of Medicine; The Henry Wellcome Building for Biomolecular Nuclear Magnetic Resonance; and the Aston Academy of Life Sciences.

Ernst & Young’s Bowker says: “The one area that should be really exciting is medical technology. There’s so much going on and it isn’t celebrated enough. Yet it has the capability to attract the best school and university leavers.”

DIGITAL MEDIA

For ten years or more the digital sector in the West Midlands has been quietly producing great work of an international standard. Perhaps the time is right to start making a lot more noise about it.

It is not by accident that Channel 4 chose to work with Screen WM as the first regional partner in the 4ip initiative, nor any surprise that Advantage West Midlands matched the broadcaster’s £5m investment to create a combined pot to be invested in the region’s digital projects in the next two years.

Here we have one of Europe’s major regions for games development – rivalled in the UK only by London – and a growing number of respected interactive and digital agencies.

Add to this the internationally-recognised Serious Games Institute in Coventry and the “world’s first user-generated content movie” – Faintheart – produced with MySpace, supported by Screen WM and shot in Ludlow – and you start to get a sense of how essential digital media is to the local economy.

Of course, there are already few and well-established obvious big-hitters. Companies such as Codemasters, Blitz and Rare in the games sector and Maverick working in the broadcast production and digital sectors have long been standard bearers for the region.

But as we approach the autumn launch of the 4ip fund, the spotlight on them will broaden on to unsung small and medium-sized enterprises in the region. Companies such as Fish in a Bottle, for example, which built on the success of its online Dr Who games for the BBC with a successful Heroes online game for NBC Universal, and Birmingham-based digital design agency Clusta, whose clients include Pacha London, Sony BMG and Pioneer. It has produced great work associated with international TV hits, with video graphics for ‘behind-the-scenes’ TV specials for Bones and Prison Break.

FOOD & DRINK

The food and drink sector was identified by Emda in its Regional Economic Strategy as one of four priority sectors that are likely to make the greatest contribution to the region’s economy. The food and drink sector in the East Midlands is also anticipated to grow more rapidly than the industry nationally during the period to 2014. The forecast is for output growth of about 30 per cent compared with 9 per cent for the UK.

In Lincolnshire alone food and farming is estimated to contribute £1bn to the county’s economy. In terms of value and employment, the sector is the third-biggest in Lincolnshire and its economic reliance on food and farming production and manufacture is four times higher than the national average.

To bring on the next wave of food and drink entrepreneurs a new network has been launched this year. The Food and Drink Innovation Network (iNet) is one of four that are being developed by Emda and East Midlands Innovation – the regional Science, Innovation and Industry Council. The aim of the iNet is to bring together partnerships of regional businesses, universities, the public sector and innovative individuals to drive the exploitation of ideas.

Based at Southglade Food Park in Nottingham, the Food and Drink Forum is leading on the delivery of the iNet. It is leading a consortium of partners with expert sector knowledge: they are the Food Processing Faraday Partnership and the universities of Nottingham, Lincoln and Nottingham Trent with their extensive expertise in food science and emerging technologies.

Speaking about the Food and Drink iNet, Mike Carr, Emda’s executive director of business services, said: “Our aim is to create an environment where individuals and businesses are encouraged to develop ideas and are given the support to transform them into reality.

“The Food and Drink iNet is exciting and I am confident it will enable businesses in the sector to become more innovative in the work they do, giving them a competitive edge.”

Fiona Anderson, managing director of the Food and Drink Forum, believes iNet will also encourage businesses to locate in the region. “The iNet will provide the East Midlands with a unique selling point in the Food and Drink sector,” says Anderson.

“By working with partners we can provide businesses with an unrivalled package of advice, which means they will have every opportunity to grow and be successful. It will make locating in the region an even more attractive proposition for manufacturers.”

The process is being mirrored in the West Midlands, where an incubator centre for food and drink companies at Shropshire Food Enterprise Park is the first in a network of centres across the West Midlads, AWM is providing £4.7m to Shropshire County Council to develop the region’s first Food Enterprise Centre on the Advantage West Midlands-owned Shropshire Food Enterprise Park. The centre will include workspace for 12 start-ups in purpose-built units. After three years companies will have the opportunity to move into ‘grow-on units’ elsewhere on the park.