The Institute of Economic Development Conference in November included a number of very interesting presentations, and among those that really stood out was one by Marian Sudbury of UK Trade and Investment (UKTI). Her presentation — Increasing Inward Investment — was a clear challenge to her audience, made up mainly of LEPs, Local Authorities and economic developers, to think in new ways about how they can increase investment in their area.
According to Ms Sudbury, there are two ways of attracting investment. The first is by working with existing investors, and she stressed in her presentation that it is vitally important for economic developers to ensure they are looking after these organisations, not least because it is less risky and requires fewer resources than going after new markets.
However, she then went on to say that for any area to really develop and grow, it also needs to seek to attract new investors, whether from another part of the country, or from overseas. How can this be done? Part of her answer was to emphasise the importance of thinking about what new investors are looking for:
“You can attract investors by identifying the market need in your area. One simple but powerful way to do this is to survey local businesses on their supply chain needs. Government did this in the automotive sector, by working with industry councils and a university. Together, they identified £4bn worth of opportunity. Now that is attractive. Such market research is resource intensive, but the automotive research shows that by combining resources we can create new opportunity.”
She then moved on to criticise the kind of approach that seeks to attract investors with what amounts to generic promotion or, to put it another way, Unique Selling Points (USPs) that are not actually particularly unique. To illustrate the point, she showed the audience a couple of extracts taken from the skills marketing of two European cities:
- A city with a highly educated workforce, qualified personnel and research
- A highly educated, flexible and motivated workforce with language skills
Which cities are they? The answers are Stockholm and Amsterdam respectively, yet the descriptions are so similar that they could be describing any major European city. Not only this, but as Ms Sudbury pointed out, far too many sales pitches are essentially the same, using clichés about good infrastructure, world-class universities, etc. etc.
However, what investors really want to know about an area is what marks it out and what makes it special. In other words, they aren’t looking for one-size-fits-all USPs, but “a tailored offer that will be lucrative for the investors to whom you are pitching.” Most crucially, investors want granular detail on the facilities that will make their business viable and profitable.
Ms Sudbury then went on to mention a number of issues where granular detail is vitally important, and one of these was that of skill supply. Quite simply, any investor looking to invest in a new area is going to want to know what skill supply already exists in the area that matches the kinds of skills they will be looking for.
We agree that this is indeed vital, and would only add that such detail cuts both ways between investors and economic developers. Not only is knowing the skills supply in an area crucial for anyone thinking of investing, but it is just as important for economic developers to be fully acquainted with the granular details of their economy in order to inform them on their region’s strengths, both in terms of industry and skills, so that they can understand what kind of investors they should be seeking to attract in the first place.
This does raise an important question. How exactly can economic developers identify their region’s industry and skills strengths? In her presentation, Ms Sudbury mentioned surveying local businesses on their supply chain needs as one way of identifying market need in an area, but she also admitted that such an approach is resource intensive. We want to suggest another solution, which is far less resource intensive, but highly effective: the use of highly granular and detailed local and regional labour market data.
Over the course of this five-part series, we will be looking at how granular data can be used by economic developers to identify the industry and skills strengths in their area. In Part 2, we’ll be looking closer at the vital importance of identifying strengths. In Parts 3 and 4, we’ll be looking at ways of identifying these strengths and uncovering skills in an area. Then in the final part, we’ll be finishing off with a case study of a LEP that has used granular data to great effect to encourage inward investment.
For more information on how our granular data can help encourage inward investment in your area, contact Martyn Gerard at firstname.lastname@example.org