UK: Diversity fights adversity in the East Midlands. (1 of 3)

UK: Diversity fights adversity in the East Midlands. (1 of 3) - The East Midlands economy is holding steady through the highs and lows, reports Nick Hasell.

by
Last Updated: 31 Aug 2010

The East Midlands economy is holding steady through the highs and lows, reports Nick Hasell.

Coalville is, by any standards, an uninviting name. How exactly, in the 1830s, a collection of Leicestershire parishes came to be so known is a subject of local conjecture. Anecdote has it that the stop on George Stephenson's railway serving the newly sunk mines simply lacked a name. With its pervasive atmosphere of smoke, dust and dirt, "Coalville" seemed as good a candidate as any.

Whatever its origin, all four principal collieries have now closed, the last as recently as February this year. Snibston pit, which in its day laid claim to the deepest mineshaft in Europe, is scheduled to reopen next spring in the familiar guise of an industrial heritage museum. More significantly, the site of Whitwick colliery is now a substantial retail and business park.

In the wake of coal's demise - and despite more glamorously titled rivals - Coalville has, through such development, attracted a respectable share of new businesses - well over 100 since 1985. Unemployment currently stands at 4.9%, up one percentage point on last year but still well below the regional average.

One of the largest of these incoming firms is the Japanese-owned lamp manufacturer Phoenix Electric - an apt name, one might think, for a company settling in the region's industrial ashes. Having taken on 115 employees and occupying a converted warehouse, Phoenix now has plans for a larger purpose-built factory on an adjacent site. A further 100 jobs should follow.

With little or no grant incentives available to would-be start-ups, general manager Ken Wolfe explains the location decision in terms of basic considerations: low labour costs, the local workforce's engineering skills, room for expansion and a central and accessible location. At the same time, what the employees make of Japanese work practices and high daily production targets is uncertain. The results are perhaps eloquent enough. "So far we've beaten any time plan I would have thought feasible," says Wolfe.

Yet in many ways Coalville has still to shake off its past - for instance, some of the workforce living in outlying villages walk three miles into work every day. "It's quite an incredible area," testifies Wolfe as newcomer, "so totally different from Leicester only 12 miles away."

Such diversity, geographical and otherwise, appears to be the hallmark of the East Midlands. Ranging from Northamptonshire - a county often seen to participate more in the fortunes of the South-east - to the predominantly rural Lincolnshire, the region's heartland lies within the triangle formed by Leicester, Derby and Nottingham. The latter claims supremacy but its effect on the others is hardly overbearing. Similarly, within this area no single sector of industry is pre-eminent; rather there exists a heterogeneous mix of the traditional manufacturing base - textiles, mechanical engineering, footwear - with an expanding services sector.

Through such a pattern, the theory goes, the region has largely escaped the problems relating to the heavier concentrations of industry found in its neighbour to the west. Most indicators indeed seem to suggest that, thus far, the East Midlands is not feeling the recession as acutely as most. Among other things, the Confederation of British Industry reports that "the investment outlook in the East Midlands is less pessimistic than in the UK as a whole".

Yet if this diversity takes the sting out of recessionary pain, simultaneously it denies the region any strong sense of identity. There are those who see the East Midlands as failing to be a region in any meaningful sense at all, a puzzling non-entity whose constituent counties have little in common. Unlike other restructuring areas, the region has no grant-wielding sponsor in the form of a development agency. Nor has it been vested with an urban development corporation. The only recipient of any substantial financial aid in the area has been Corby, which, following the closure of its steel industry in 1980, has picked up some £130 million in European Community grants. While many are averse to the idea of a quango, others feel that there is a need for a vocal promotional body.

Noting a lack of resources and regional commitment, advocates of the five counties as a cohesive force have banded together to form the East Midlands Investment Campaign (EMIC). Backed by the CBI, it is an essentially short-term project which aims to raise both consciousness and capital. With the recognition that business activity in Europe is increasingly region led, EMIC fears losing out if similar structures are not adopted domestically.

Chairman Philip Hammersley denies that EMIC is seeking to duplicate the work of a development agency, instead describing the approach as "rifleshot" - carrying out a specific series of projects that would, in the first instance, stimulate indigenous investment. Current proposals include a high-tech research centre in the Loughborough area and a business park adjacent to East Midlands International Airport. Infrastructure improvements are also sought, high among the priorities being the electrification of the Midlands main line - a move not scheduled by British Rail for another 10 years.

Hammersley berates the hitherto lack of "a strong business voice on such issues. In the past we have not shouted loud enough and, as a consequence, have lost out."

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today