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From Ironbridge to the Bullring, the West Midlands has long been an area of invention, transformation and change. Its recent history has been dominated by economic restructuring, and the need to develop new roles for cities such as Birmingham, Stoke, Wolverhampton and Coventry following industrial decline.
Despite two decades of strong and sustained public sector investment in regeneration and infrastructure, such as the removal of Birmingham's "concrete collar" ring road, the West Midlands still has some formidable challenges.
Critically, the region is still underperforming economically. Between 2000 and 2006, it had the lowest growth in productivity per person (or per capita GVA) of any UK region. The employment rate, which has been consistently below the national average, declined 2% between mid-2005 and mid-2008. Some 16% of residents - more than any region save Northern Ireland - have no qualifications. These statistics are worrying for a region that needs a substantial skills boost to attract investment and new jobs.
So far, efforts to tackle the region's underperformance have been well-intentioned but too broad. The West Midlands Economic Strategy, revised in 2007, identifies no less than 13 "priority business clusters" for growth. Some of these, such as the automotive and food and drink sectors, are based on a realistic appraisal of the region's assets and potential. Others are not.
While the region certainly has a chance to encourage new businesses and jobs over the medium-to-long term, it must prioritise its growth efforts better, and focus on a few key areas where public sector investment could best support employment growth in the region's cities and towns. Regional strategies also obsess too much about the West Midlands' performance relative to more successful areas such as the south-east. Focusing on absolute growth and delivering year-on-year improvements within the region would be far better.
Globalisation has generated both opportunities and threats for the region. While some have benefited, others, especially those employed in traditional manufacturing, have not. People in areas of Birmingham, Stoke and West Bromwich who have lost jobs and businesses to global competition will likely need more support from national and regional government in the years to come.
To grow its economy, the West Midlands also needs to coalesce more around its biggest and most visible asset: Birmingham. While residents of towns from Dudley to Lichfield remain justifiably proud of their industrial heritage and local identity, Birmingham is the one name that big national and international investors recognise. A strong Greater Birmingham city-region, with cities such as Wolverhampton, Coventry and Birmingham clubbing together, would help present a united front globally.
In the shorter term, the deepening recession will hit some parts of the West Midlands fairly hard. Birmingham, for example, could see significant employment losses in a number of its top business sectors, such as financial services, retail, distribution, and manufacturing. Over the medium term, the high levels of public sector employment in the region could also be squeezed as Whitehall seeks efficiency savings to pay for tax cuts and bank bail-outs. The region's new economic taskforce could help - if matched with a realistic long-term growth plan, centred on the Birmingham city-region.
A version of this article first appeared in the Guardian.
