Learning, Innovation and Economic
Development: The Creative Sector in
the Birmingham City Region
Laura James
LLAKES Centre, Institute of Education,
University of London
Economic development in the
creative sector in the Birmingham
city-region
• Context: recession and political/policy changes post2010
• How have innovative SMEs in the creative sector (TV
production, website design, digital branding) been
affected?
• Three groups of actors:
– Policymakers at the regional and local scale
– small and medium sized firms (SMEs)
– intermediary organisations and individuals
• Interviews with firms at six month intervals; pre/post
LEP interviews with policymakers
Economic development under New
Labour: regional clusters
• Heavily influenced by cluster concept (Porter)
– ‘a geographic concentration of interconnected companies,
specialised suppliers, service providers, and firms in related
industries and associated institutions’
• Nine Regional Development Agencies (RDAs)
• Statutory powers and responsibilities
• Advantage West Midlands
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Invested £300 million annually
Regional Economic Strategy
Economic development policies organised by ‘cluster’
Digital media – film, animation, TV, interactive media, radio,
music, computer games, photography, digital imaging
AWM Digital Media Cluster (20032010)
• £4.8 million RDA fund, leveraging £2.8 million EU
funds
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Proof of concept funding (Creative Advantage Fund)
Infrastructure and facilities (Serious Games Institute)
Events and networking (Digital Event; Hello Digital)
General business support (through Business Link)
• Claim: 226% return on investment; 184 jobs
safeguarded; 54 new businesses created or moved
to region; 832 businesses supported; 140
collaborations
Post-2010: Local Enterprise
Partnerships
• Coalition government rejected the regional scale
in favour of ‘functional economic areas’ at the
‘local’ scale
• Boards chaired by private sector leader
• Include local authorities, local business leaders,
learning providers.
• 39 LEPs in England, largely based on Local
Authority areas (some overlaps)
• Former WM region split into six LEPs (focus on
Greater Birmingham & Solihull)
What will LEPs do?
• LEPs will:
– set economic priorities & support business
development
– coordinate bids to centralised funds
– be involved in strategic planning
– collaborate with JCP & learning providers
– be ‘involved’ in delivery of other national priorities
• No statutory powers or on-going funding
– Approx. £230,000 per LEP start-up/capacity funding
– Can bid for Regional Growth Fund (£2.4bn 2011-15)
– Can bid for Enterprise Zones
LEPs vs. RDAs
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Local vs. regional
Bidding for pots of funding vs. core funding
Variability/fragmentation vs. equalisation
Private sector led vs. public sector
Recession vs. growth
What difference has it made to SMEs?
• Several different processes
– Recession
– Public sector budget cuts (creative & cultural
organisations/activities)
– Abolition of business support/economic
development organisations
– Dissolution of networks and collaborative
relationships
– Policy gap
Loss of RDA
• There’s nothing really, no central hub for this sort of
collaboration to happen, so you kind of see sort of
pockets of things emerging without the formality
around it and without the support (SME Owner).
• One thing AWM did do very well was providing a
degree of coherence and packaging it all into a regional
showcase. So what we’ve got at the moment is very
disparate. They had people who were very active,
whose job it was to know everyone’s business and put
people together (SME employee)
Loss of RDA
• ‘I mean Business Link’s I guess more of a kind of
start-up facilty, so for us it was “haven’t missed it
that much” because we kind of made the most
out of it when we needed to (SME Owner)
• For a little while every organisation working in
digital media in the West Midlands was being
constantly shunted towards this magical pot of
funding…there were some companies that were
being propped up by public funding (SME
employee)
LEP: challenges & opportunities (1)
• Lack of clarity over role, funding, powers
• Fragmentation, duplication of effort, lack of strategy
‘The government mandate to LEPs was “go off and do what
you like” and then everyone says “what does that mean?”’
(Business consultant)
• Partnership working
• Responsive
‘We’ve got a board of 18 people and a small secretariat so
that’s not geared up to delivery…I think the key role of the LEP
is really facilitation, bringing people together and trying to
galvanise things’ (Local Authority executive)
LEP: challenges and opportunities (2)
• Scale
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Markets
Need to be outward-looking
Strategy
Large scale funding
‘To be honest we’re looking outside of Birmingham
for a lot of the work that we do now, so we’ve got a
London office. We’re based here but we don’t really
see it as a place for opportunity on the kind of scale
we want to work on’ (SME owner)
Conclusions
• SMEs engaged with policymakers and business support
agencies in different ways at different times.
• The RDA’s strategic role was highly valued as was
targeted funding and business development support.
• LEPs will most likely take over some of this
• BUT…
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Recession and budget cuts
Lack of statutory powers
Policy gap
Higher transactions costs
Localism or parochialism?