The Enterprise & Business Growth
Strategy for the Liverpool City Region
2008 - 2013
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013
                A FINAL STRATEGY AND...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




1
    Introductions
     1.1 A n...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




            a set of action area...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




           Section 2 sets out t...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




2
     Context
       2.1 Policy...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




2.2 The growing importance of en...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




               Liverpool City Re...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




               the national leve...
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                delivery in Engl...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013



                         18
     ...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




3
    Business Situation
       ...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013



                                 ...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013



Source: Cambridge Econometrics an...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




Figure 3-1: VAT registrations pe...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




                          Busine...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




Table 3-5: Deficits table for VA...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




                            Tabl...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




                           Merse...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




Table 3-7: Deficits table for pr...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




                                ...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




Table 3-8: Deficits table for th...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




Table 3-9: Deficits table for th...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




4
     The Strategic Framework
 ...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




4.2 Our Vision

            Our ...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




Figure 4-2 : The Strategic Frame...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




4.4 Strategic Aim 1: More Busine...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




                     actual sett...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




                     growth and ...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




          Merseyside is fortunat...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




                    be exploited...
THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013




Availability of suitable busines...
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
The Enterprise
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  1. 1. The Enterprise & Business Growth Strategy for the Liverpool City Region 2008 - 2013
  2. 2. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 A FINAL STRATEGY AND ACTION PLAN TO THE MERSEY PARTNERSHIP Contents Introductions.............................................................................................................1 Context .....................................................................................................................4 Business Situation..................................................................................................10 The Strategic Framework ......................................................................................22 The Action Areas....................................................................................................31 Monitoring and evaluation......................................................................................33 Annex A: Detailed Action Areas……………………………………………………A-1 A separate Evidence Report designed to accompany this Strategy document is available from The Mersey Partnership. www.merseyside.org.uk This document has been produced in partnership with
  3. 3. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 1 Introductions 1.1 A new shared commitment to wealth creation and prosperity The Liverpool City Region is a key economic engine for the North West of England. The local economy supports just under 590,000 direct jobs, and is 1 estimated to contribute almost £21 billion in overall GVA terms. Crucially, it houses a growing number of first-rate knowledge, and research and development (R&D) assets including science parks, business incubation facilities, universities and hospitals. This Enterprise and Business Growth Strategy and Action Plan sets out a clear commitment from local public, private and third sector partners over the next five years for the Liverpool City Region to realise its true wealth-creating potential. Through further collaboration, and a renewed sense of optimism and ambition, we will consolidate the progress made over recent years and ensure that the Liverpool City Region repositions itself as an internationally competitive business environment in an increasingly global economy. We are fully aware of the challenges that we face – competitor city regions across the world are also investing heavily in order to preserve and bolster their economic futures. Equally, the speed of technical change is increasing by the day, markets are becoming ever more dynamic, competition is sharpening, and the ingredients for economic success are proving harder to assemble. However, despite these well documented challenges, the overarching enterprise goal for the Liverpool City Region is a simple one; namely, to increase its rate of economic growth by:  Growing the business base through increased business start-ups and improved survival rates  Supporting local business growth and expansion  Increasing local business productivity levels. 1.2 Setting the scene In October 2007, SQW Consulting (SQW) was commissioned by The Mersey Partnership (TMP) to assist with the development of an Enterprise 2 and Business Growth Strategy for the Liverpool City Region to cover the period 2008-2013. This document sets out the new strategic framework and 1 The Liverpool City Region socio-economic projections report produced by Cambridge Econometrics and SQW Consulting states that, by 2008, the Merseyside GVA figure will be £20,885 million (using 2004 base data). 2 The Liverpool City Region in the context of this study refers only to the six local authorities in Merseyside – namely: Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral. 1
  4. 4. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 a set of action areas and it is intended to catalyse and shape the activities of all stakeholders as they work together to bring about economic success for all of the City Region’s businesses and communities. Based in evidence (see the main Evidence Report for further details) and guided by extensive consultation, the Strategy has been prepared in order to make the Liverpool City Region a more enterprising, prosperous and attractive business environment over the next five years. It has intentionally been designed with flexibility in-mind – providing a route map with which to direct, manage and shape our economy and, at the same time, allowing us to respond assertively to fresh challenges as they emerge. Although the Strategy is intended to provide stability and a common reference point for stakeholders, it is designed with flexibility to respond to changing circumstances and to the different needs of those places that make up the City Region. Further, the Strategy has been intelligently designed so as to complement the good work that is already ongoing across our area, whilst also highlighting those strategic gaps that need to be addressed. Although the focus of the Strategy is on wealth creation, it is has been developed for all of our diverse community groups. Indeed, it is crucial that our strategy is well-aligned with, and contributes to, emerging wider regional and national thinking on these important business agendas. 1.3 Elements of the Strategy Framework Architecture The key components of the Strategy are as follows:  A Vision that describes our five year enterprise and business growth intent  Three high-level Strategic Aims which define the objectives that the Strategy is seeking to achieve  Within each Strategic Aim, a series of Operational Aims which characterise the broad areas of activity that will be implemented under the guide of the Strategy in order to deliver against the three Strategic Aims  Four Cross-cutting Themes which are designed to run across the Strategy, establishing a culture for, and directly conditioning the achievement and delivery of, the Strategic/Operational Aims and the actions that they subsequently give rise to  A set of indicative action areas as part of an evolving Action Plan, which we will go forward with over the next five years in order to deliver our strategy. The remainder of this strategy document is structured as follows: 2
  5. 5. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013  Section 2 sets out the strategic context within which the Enterprise and Business Growth Strategy will operate  Section 3 defines the enterprise and wider business growth challenges that the Liverpool City Region faces and which will need to be addressed if our communities are to prosper economically  Section 4 describes our Vision for enterprise and business growth, and the Strategic Aims, Operational Aims and Cross-cutting Themes needed to deliver this  Section 5 provides a series of indicative action areas that are designed to translate the strategic commitments into operational activity on the ground  Finally, in Section 6, we provide our thinking on how we will track our progress over the next five years in delivering the step change in performance that our strategy calls for. 3
  6. 6. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 2 Context 2.1 Policy landscape Unfortunately, our Enterprise and Business Growth Strategy cannot be implemented in isolation. Rather, it must respond to, and be influenced by, other strategies and activities being progressed by partners at national, regional, and sub-regional levels. Understanding the strategic positioning of the Strategy relative to this existing thinking, as summarised in the graphic below, is therefore an important influence on our Framework. Additionally, the existing policy landscape has provided us with a wealth of valuable information relating to the key business start-up and growth drivers which, in turn, have helped to shape and develop our thinking. Figure 2-1 below illustrates the complex strategic context within which the Strategy sits. It is important to be aware of the linkages across geographical levels – for example, between Multi-Area Agreements (MAAs) and Local Area Agreements (LAAs) – as well as the agendas on skills and employment and innovation, which are key developments running in parallel to the Strategy. Figure 2-1: Strategic Context for the Liverpool City Region Enterprise and Business Growth Strategy Source: SQW Consulting 4
  7. 7. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 2.2 The growing importance of enterprise and business growth At the core of the Strategy is the acknowledgement of the pressing need to deliver a step change in the scale of enterprise and business activity across the Liverpool City Region. The development of enterprise and high growth businesses are already identified as key priorities in the current Action Plan 3 for the Liverpool City Region 2008-2011 . Further, they are key priorities for the wider North West region, as highlighted in the Regional Economic 4 Strategy , and through the Regional Enterprise Strategy. The economic and social benefits of increased enterprise and a successful business base have been illustrated through national policy documents, in 5 particular the recently published National Enterprise Strategy . This seeks to provide the context and drive to make the UK the most enterprising economy in the world and the best place to start and grow a business, using five ‘enablers’ of enterprise as key policy instruments. Enterprise is also 6 recognised as one of HM Treasury’s five Drivers of Productivity , alongside the other four drivers, namely: Skills, Innovation, Investment and Competitive Markets. In situating the Strategy, particular reference needs to be made to the two Local Enterprise Growth Initiatives (LEGIs) operational in Merseyside – in Sefton/Liverpool (StepClever) and St Helens. These are spatially-targeted initiatives providing a significant amount of investment into enterprise development activities in their respective areas. In terms of this Strategy, they offer potential to ‘roll out’ successful schemes across Merseyside and to share any emerging good practice lessons. 7 The final report of the Merseyside Entrepreneurship Commission (MEC) is a further policy document at the sub-regional level which highlights what needs to be done to stimulate, promote and develop an entrepreneurial culture within our City Region. Paramount among its many recommendations is the need to deliver the best education and support to young entrepreneurs locally. With the promotion of an entrepreneurial culture being an important aspect of this Strategy, the key recommendations contained in the MEC report will be taken on board during its implementation. 2.3 Being alert to the value-added imperative Encouraging enterprise activity and the growth of the business base is undoubtedly important for the long-term future of the economy. Taken alone, however, it will not be enough to ensure that businesses in the 3 This document can be provided on request from The Mersey Partnership. 4 The Northwest RES is available at www.nwda.co.uk/pdf/RES06v2.pdf 5 Enterprise: unlocking the UK’s talent, HM Treasury (March 2008). Available at www.berr.gov.uk/files/file44992.pdf 6 See www.berr.gov.uk/about/economics-statistics/economics-directorate/page21913.html and www.hm-treasury.gov.uk/consultations_and_legislation/productivity_indicators/consult_productivity_ indicators_index.cfm for more information on the five drivers. 7 U can make it in Merseyside: Final Report, Merseyside Entrepreneurship Commission (December 2005). 5
  8. 8. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 Liverpool City Region will prosper in the global economy. Increasingly, business development needs to be focused on high value-added activities. This is at the forefront of economic policy aspirations at all geographical levels, starting (at the highest level) from the Lisbon Agenda of the European Union. The Strategy must contribute towards increasing the level of Gross Value Added (GVA) in the Liverpool City Region and be able to demonstrate how its measures will contribute to this. Indeed, under the terms of the Sub- National Review of Economic Development and Regeneration (SNR), raising GVA per capita is to become the single over-arching regional growth 8 objective, supported by raising the rate of business start-ups . Nevertheless, by referring to high value-added activities, we are not discriminating against those less glamorous sectors such as manufacturing and processing industries, which currently play an important role in our economy. Rather, we are being clear that our economic activities must over time be geared towards reducing the GVA deficit with our competitors. Developing, broadening and selling our knowledge base. . . The imperative of growing knowledge-intensive and internationally competitive economies lies at the very heart of European, national, regional, sub-regional and local policy aspirations. In this context, and as suggested earlier, it is vital that in the Liverpool City Region business growth becomes increasingly focused on those higher value-added sectors that will prosper most in the global economy over the longer-term and contribute to 9 addressing the Liverpool City Region’s GVA gap . To remain competitive and productive, the Liverpool City Region must build on and promote its key knowledge assets, including the universities, science parks, incubation facilities, hospitals and high value-added companies. A particular focus for growth will be Liverpool’s emerging ‘knowledge quarter’. Our defined priority sectors must also be supported (e.g. through The Mersey Partnership’s Sector Development Programme). In terms of sectoral priorities, it is crucial that, at all levels, the priorities for Liverpool City Region are well evidenced, agreed and fully understood by all. Embracing the innovation agenda. . . Closely related to this is the innovation agenda – the need for higher levels of innovation and R&D to support economic growth. In this respect, the 10 recently published White Paper on Innovation is a key guiding document at 8 See Review of Sub-National Economic Development and Regeneration, HM Treasury (July 2007). Available at www.hm-treasury.gov.uk/media/9/5/subnational_econ_review170707.pdf 9 See under Section 3 of either this report or the Evidence Report for a discussion of the Liverpool City Region’s GVA gap with the North West and UK. 10 Innovation Nation, DIUS (March 2008). Available at www.dius.gov.uk/publications/ScienceInnovation.pdf 6
  9. 9. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 the national level. The relationship of science to innovation is also important, 11 as reflected in the North West Science Strategy 2007-2010 . Equipping the City Region with the right skills for employment. . . The Strategy will also need to ensure close synergy with the skills and employment agenda as this will impact on how much value-added activity can be expanded within the Liverpool City Region. As the Leitch Review of 12 Skills has recognised, it is becoming increasingly important that workers, at all levels, improve their skills as this will ultimately lead to higher productivity, the creation of wealth and social justice. Importantly, economies must have higher-level skills as these are required to drive improvements in leadership, management and innovation. At the sub-regional level, the City Employment Strategy (CES) will be the key driver behind improvements in the skill levels of our workforce. 2.4 National policy developments Crucial to the success of this Strategy are two key policy developments being introduced at the national level – these are the Business Support Simplification Programme (BSSP) and the Sub-National Review of Economic Development and Regeneration (SNR). The simplification of business support. . . The most crucial policy development occurring at the national level in terms 13 of the provision of business support is the BSSP . This programme introduces measures to simplify business support provision across England, ensuring that it better meets the needs of businesses and is easier to understand and access by customers. The new model of business support provision is based around ‘products’ with the commitment that by 2010, less than 100 products in total will be on offer in the ‘product portfolio’, delivered by a range of respected providers. The Strategy will align with and seek to add value to the BSSP’s portfolio of 14 products . Under the BSSP arrangements, Business Link will become the primary access channel for business advice and support. Key changes to sub-national economic development activity. . . The Strategy has been developed in light of the key reforms being 15 introduced through the SNR process, as these will significantly alter the landscape of economic development and regeneration policy-making and 11 Northwest Science Strategy 2007-2010, NWDA (April 2007). Available to download from www.northwestscience.co.uk/pages/index.php?page_id=1206 12 Prosperity for all in the global economy – world class skills, HM Treasury (December 2006). Available at www.hm-treasury.gov.uk/media/6/4/leitch_finalreport051206.pdf 13 There is a webpage for the BSSP at www.berr.gov.uk/bbf/simplifying-business-support/page44805.html 14 See Section 2 of the Evidence Report for a full list of these products. 15 Review of Sub-National Economic Development and Regeneration, HM Treasury (July 2007). Available at www.hm- treasury.gov.uk/media/9/5/subnational_econ_review170707.pdf 7
  10. 10. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 delivery in England. Crucially, the reforms are based on the principle that the delivery of economic development and sustainable growth objectives should occur at ‘the most appropriate’ spatial level. Under these changes, the Regional Development Agencies’ roles will become more tightly focused on defining strategy at the regional level, with the delivery of objectives delegated where appropriate. It also means that local authorities will be supported to work together through sub-regional partnerships to tackle shared issues. To this end, the development of a Multi Area Agreement (MAA) for Merseyside will be significant in bringing together economic development priorities at the sub-regional level. Its relationship with the new individual Local Area Agreements will be complementary and not hierarchical. Further, the review outlines the government’s commitment to empower local authorities to promote economic development and neighbourhood renewal. Importantly, there will be greater flexibility, stronger partnership working and co-operation from other agencies, and greater incentives for achieving economic growth and for ensuring disadvantaged areas benefit from and contribute to economic development. Additionally, the government has proposed that local authorities will be required to analyse the economic circumstances and challenges of their local economy. This will help them to develop a clear economic vision and to provide strong leadership. The role of the Regional Development Agencies will also evolve, as they focus more on supporting economic growth and giving them a greater role in meeting business support needs to help simplify the number of schemes down to no more than 100 by 2010. 2.5 Not forgetting other wider developments Global economic changes. . . The Liverpool City Region is not an economy in isolation – in an increasingly globalised world it is absolutely critical that businesses in the city region are able to effectively respond to the challenges posed by global economic change and, at the same time, to take advantage of the opportunities it 16 brings . Less EU funding. . . 17 Finally, decision-makers in the sub-region will also need to adapt to the significant reduction in ERDF funding being administered through the Investment Frameworks of the North West Operational Programme 16 As stated in the paper Long-term opportunities and challenges for the UK: Analysis for the 2007 Comprehensive Spending Review, HM Treasury (November 2006). Available at www.hm-treasury.gov.uk/media/6/F/csr_longterm271106.pdf 17 The sub-region in this context refers to the former Objective 1 region of Merseyside which does not include Halton and contains Knowsley, Liverpool, Sefton, St Helens and Wirral. 8
  11. 11. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 18 (NWOP) – this will directly affect the level of capital and revenue funding available for the provision of business support activities. However, local authorities in the Liverpool City Region are to receive significant levels of investment to address worklessness in their areas through the new Working Neighbourhoods Fund (WNF). 18 For more information, there is a dedicated webpage for the ERDF in the North West at www.erdfnw.co.uk 9
  12. 12. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 3 Business Situation A crucial part of the strategy development process is to understand fully the economic situation in the City Region in relation to enterprise and business growth. In this section we bring together concisely the headline messages from recent baselining work, setting out the challenges that the Strategy and its Action Plan need to address. The recent performance of Merseyside is compared to that of the North West region as a whole as well as the national 19 average across a broad range of key economic indicators. Deficits tables are produced for a number of these indicators in order to display, in real terms, the scale of the impact needed in order to bring the sub-region and its constituent districts in line with regional and national figures. The full results of the economic baselining exercise (including further analysis at the district level) are provided in Section 3 of the Evidence Report. 3.1 Responding to the GVA imperative Raising Merseyside’s Gross Value Added (GVA), the key measure of wealth creation in an economy, must lie at the heart of the Strategy. The Evidence Report highlights the imperative of raising GVA per capita and GVA per employee in the Liverpool City Region in order to close the gap with the North West and UK. As Table 3-1 shows below, across both indicators Merseyside has consistently lagged behind regional and national rates over the last 25 years; more worryingly, the gaps have actually widened in proportional terms. 19 The national comparator used in this report will be Great Britain, except where data at this geographical level is not available – in these instances, the United Kingdom will be used as the national comparator. 10
  13. 13. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 20 Table 3-1: GVA per capita and GVA per employee , 1981-2004 for Merseyside, the North West and the UK GVA per capita GVA per employee 18 35 GVA per employee (£000s) GVA per capita (£000s) 16 30 14 25 12 20 10 8 15 1981 1986 1991 1996 2001 1981 1986 1991 1996 2001 Merseyside North West United Kingdom Merseyside North West United Kingdom Source: Cambridge Econometrics and SQW, Liverpool City Region economic projections and prospects Table 3-2 and Table 3-3 are deficits tables showing the scale of the challenge to bring Merseyside and its constituent districts in line with regional and national rates of GVA per capita and employee respectively. Deficits are simply the absolute difference between the rate of GVA per capita/employee in each area compared to the North West and United Kingdom. In the table below, the columns labelled ‘impact needed’ show how much total GVA would need to be raised by if each area was to have a rate of GVA per capita/employee equivalent to the regional or national rate. Table 3-2 shows that an increase of approximately £6,733 million (£6.7 billion) in Merseyside’s overall GVA is needed to bring the sub-regional GVA per capita in line with the national average; however, a smaller increase (£3,448 million) would be needed to bring the sub-regional GVA per employee in line (see Table 3-3), reflecting a relatively low employee/head of population ratio in the sub-region as a whole. Table 3-2: Deficits table for GVA per capita, 2004 Compared to the North West Compared to the UK Figure Deficit Impact needed Deficit Impact needed United Kingdom £17,149 North West £15,080 Merseyside £12,594 -£2,487 £3,676 million -£4,556 £6,733 million Halton £17,037 No deficit No deficit -£112 £13 million Knowsley £11,971 -£3,109 £468 million -£5,178 £780 million Liverpool £15,694 No deficit No deficit -£1,455 £636 million Sefton £10,388 -£4,692 £1,317 million -£6,761 £1,897 million St Helens £10,525 -£4,556 £808 million -£6,625 £1,175 million Wirral £10,023 -£5,058 £1,586 million -£7,126 £2,234 million 20 All GVA data is presented in terms of 2003 prices. This report uses the underlying data used in Liverpool City Region Economic Projections and Prospects, Cambridge Econometrics and SQW Consulting (October 2007). 11
  14. 14. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 Source: Cambridge Econometrics and SQW, Liverpool City Region economic projections and prospects, and NOMIS Midyear population estimates Table 3-3: Deficits table for GVA per employee, 2004 Compared to the North West Compared to the UK Geography Figure Deficit Impact needed Deficit Impact needed United Kingdom £33,717 North West £30,492 Merseyside £28,448 -£2,044 £1,337 million -£5,270 £3,448 million Halton £34,103 No deficit No deficit No deficit No deficit Knowsley £29,507 -£985 £60 million -£4,210 £257 million Liverpool £28,132 -£2,359 £575 million -£5,585 £1,362 million Sefton £25,819 -£4,673 £528 million -£7,898 £892 million St Helens £28,230 -£2,262 £150 million -£5,488 £363 million Wirral £28,308 -£2,184 £242 million -£5,409 £600 million Source: Cambridge Econometrics and SQW, Liverpool City Region economic projections and prospects 3.2 Closing the gap in terms of enterprise and business activity The Evidence Report uses a number of different indicators to assess the level of enterprise and business activity in the Liverpool City Region. Below, we summarise our performance against the headline indicators which will form the core of the Strategy’s monitoring and evaluation framework (see Section 6): VAT registrations; VAT registered-stocks; and self-employment rates. VAT registrations – our pipeline of new wealth generators The rate of VAT registrations21 is one of the headline measures of enterprise activity within an economy in any given year. Figure 3-1 shows that Merseyside has consistently had a lower rate of VAT registrations than both the national and regional averages over the period shown; however, the gap between the sub-regional and national rates has narrowed slightly since 1999 (from 65% in 1999 to 58% by 2006). 21 VAT registration figures show the number of enterprises registering for VAT each year. 12
  15. 15. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 Figure 3-1: VAT registrations per 10,000 working age people, 1999-2006 for Merseyside, the North West and the UK VAT registrations per 10k WAP 60 55 50 45 40 +65% +58% 35 30 25 20 1999 2000 2001 2002 2003 2004 2005 2006 Merseyside North West Great Britain Source: NOMIS VAT registrations and Annual Population Survey (APS) Table 3-4 indicates that an additional 1,060 VAT registrations would have been required to bring the Liverpool City Region in line with the regional average in 2006; to meet the national average, an additional 1,620 VAT registrations would have been needed. Table 3-4: Deficits table for VAT registrations per 10,000 working age people, 2006 Compared to the North West Compared to Great Britain 22 23 Figure Deficit Impact needed Deficit Impact needed Great Britain 50.0 North West 43.7 Merseyside 31.6 -12.0 1,060 -18.4 1,620 Halton 32.6 -11.0 80 -17.4 120 Knowsley 23.0 -20.6 180 -27.0 240 Liverpool 33.3 -10.3 280 -16.7 450 Sefton 32.7 -10.9 180 -17.3 280 St Helens 32.6 -11.0 120 -17.4 180 Wirral 31.3 -12.4 230 -18.7 340 Source: NOMIS VAT registrations and APS 22 Impact refers to the number of additional VAT registrations required to bring each area in line with the regional average. Figures have been rounded to the nearest 10. 23 Impact refers to the number of additional VAT registrations required to bring each area in line with the national average. Figures have been rounded to the nearest 10. 13
  16. 16. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 Business density – our existing stock of wealth generators. . . VAT-registered stocks are an indicator of the size of the business population. Figure 3-2 shows that the increase in the rate of VAT registrations in Merseyside between 1999 and 2006 has contributed to closing the gap in VAT-registered stocks (weighted to the size of the working age population) with the North West and Great Britain. Figure 3-2: VAT-registered stocks per 10,000 working age people, 1999-2006 for Merseyside, the North West and the UK 550 VAT stocks per 10k WAP 500 450 400 +68% 350 +76% 300 250 1999 2000 2001 2002 2003 2004 2005 2006 Merseyside North West Great Britain Source: NOMIS VAT registrations and APS However, there is still a significant amount of work to do to bring the Liverpool City Region in line with the comparator geographies. Indeed, an extra 18,900 VAT-registered businesses would have been needed in the Liverpool City Region for it to equal to the national average in 200624. Table 3-5 shows that this would require a significant increase in the number of VAT-registered businesses in all local authority districts. A major thrust of the Strategy must therefore be to help businesses to start-up and survive as well as to begin trading and grow above the VAT threshold. 24 This is assuming there are no VAT deregistrations as these would lower the number of VAT-registered stocks. 14
  17. 17. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 Table 3-5: Deficits table for VAT registered-stocks per 10,000 working age people, 2006 Compared to the North West Compared to Great Britain 25 26 Figure Deficit Impact needed Deficit Impact needed Great Britain 532 North West 453 Merseyside 317 -136 12,000 -215 18,900 Halton 335 -118 800 -197 1,400 Knowsley 220 -233 2,100 -312 2,800 Liverpool 319 -134 3,600 -213 5,800 Sefton 359 -94 1,500 -173 2,800 St Helens 314 -139 1,500 -218 2,300 Wirral 320 -133 2,400 -212 3,900 Source: NOMIS VAT registrations and APS Self-employment. . . Positively, there has been a marked improvement in the self-employment rate in Merseyside, especially since 2001. However, as Figure 3-3 shows, there was still a significant disparity with regional and national rates in 2006, so the positive momentum must be sustained into the future. Figure 3-3: Self-employment rate, 1999-2006 for Merseyside, the North West and the UK 10 % of WAP who are self-employed 9 8 7 6 5 1999 2000 2001 2002 2003 2004 2005 2006 Merseyside North West Great Britain Source: LFS/APS 25 Impact refers to the number of additional VAT registered-stocks required to bring each area in line with the regional average. Figures have been rounded to the nearest 100. 26 Impact refers to the number of additional VAT registered-stocks required to bring each area in line with the national average. Figures have been rounded to the nearest 100. 15
  18. 18. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 Table 3-6 illustrates what this disparity means in real terms – having 12,200 more self-employed people would bring Merseyside’s self-employment rate level with the regional average; an extra 21,800 people would bring the rate 27 level with the national average . Targeted strategic action is thus needed to help get more of our people into self-employment, particularly from those segments which are currently under-represented, such as females. Table 3-6: Deficits table for self-employment rates, 2006 Compared to the North West Compared to Great Britain 28 29 Figure Deficit Impact needed Deficit Impact needed Great Britain 9.3 North West 8.2 Merseyside 6.8 -1.4 12,200 -2.5 21,800 Halton 5.2 -3.0 2,100 -4.1 2,900 Knowsley 5.9 -2.3 2,000 -3.4 3,000 Liverpool 6.3 -1.9 5,300 -3.0 8,300 Sefton 7.8 -0.4 600 -1.5 2,300 St Helens 7.2 -1.0 1,100 -2.1 2,200 Wirral 7.6 -0.6 1,100 -1.7 3,100 Source: APS And the other indicators… The Evidence Report also analyses enterprise and business activity through a range of other indicators. The headline messages to note are as follows:  Business start-up rates are generally low across the Liverpool City Region compared to regional and national averages, though Sefton has recorded particularly strong start-up rates over the past five 30 years  Encouragingly, businesses in Merseyside have similar survival rates 31 to their counterparts nationwide – this is a marked improvement on the situation back in 1995  Total Early-Stage Entrepreneurial Activity (TEA) in the sub-region was 4.6% in 2006, lower than the UK average of 5.8%; however, 27 Self-employment rates are taken as a proportion of the working age population Hence the extra ‘people’ referred to here could be anyone of working age, whether employed, unemployed or economically inactive at present. 28 Impact refers to the number of extra self-employed people (of working age) required to bring each area in line with the regional average. Figures have been rounded to the nearest 100. 29 Impact refers to the number of extra self-employed people (of working age) required to bring each area in line with the national average. Figures have been rounded to the nearest 100. 30 Based upon estimates provided by Barclays Bank plc. 31 Using data take from the DTI (now BERR) Small Business Service (February 2007). 16
  19. 19. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 Merseyside does have a slightly higher level of social entrepreneurial 32 activity . 3.3 Bringing-in the value-added dimension Crucially, the Evidence Report looks beyond the headline indicators of enterprise and business activity to consider activity in specific ‘types’ of industries, particularly those with a strong value-added element – growth in these industries will have the greatest impact in closing the Liverpool City Region’s GVA gap with the North West and UK. The key points are summarised below. Unlocking our knowledge economy. . . The direction of economic policy, at all levels, has become more and more focused on the need to develop businesses in those industries driven by high levels of knowledge, innovation and skills. Over recent years, the Liverpool City Region has witnessed sustained increases in the proportion of employees and business units operating in 33 knowledge-intensive industries . Between 2003 and 2006 employment in knowledge-intensive industries rose from 8% to 9% of the workforce. However, as Table 3-7 reveals, this still falls short of regional and national averages – indeed, the sub-region would need an additional 9,900 people employed in knowledge-intensive businesses to equal the regional average 34 and an extra 14,200 people to equal the national average . However, Table 3-7 shows that not all districts have a deficit in terms of knowledge-intensive employment – Halton and Liverpool both lie above the regional and national averages on this important measure. It is vital that the key knowledge assets in these two areas are built upon further and reinforced going forwards. 32 Data taken from the Global Entrepreneurship Monitor (GEM) Report. See www.gemconsortium.org 33 In the Evidence Report, the classification for ‘knowledge-intensive industries’ is based on the OECD definition using 3 digit SIC codes. This includes pharmaceuticals; office machinery and computers; aerospace; precision instruments; electrical engineering; telecommunications; financial intermediation; insurance and pension funding; activities auxiliary to financial intermediation; computer and related activities; R&D; other business activities; motion picture and video activities; and radio and television activities. 34 This is holding the employment rate constant. Hence the extra ‘people’ referred to here are people moving into knowledge-intensive employment from employment which is not knowledge-intensive. 17
  20. 20. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 Table 3-7: Deficits table for proportion of employment in knowledge-intensive businesses, 2006 Compared to the North West Compared to Great Britain 35 36 Figure Deficit Impact needed Deficit Impact needed Great Britain 10.4 North West 9.7 Merseyside 9.0 -0.7 9,900 -1.4 14,200 Halton 14.3 No deficit No deficit No deficit No deficit Knowsley 7.7 -2.0 1,100 -2.7 1,500 Liverpool 10.9 No deficit No deficit No deficit No deficit Sefton 8.3 -1.4 1,300 -2.1 2,000 St Helens 4.4 -5.3 3,200 -6.0 3,600 Wirral 5.6 -4.0 3,900 -4.7 4,600 Source: ABI Workplace Analysis Priority sectors. . . Growth in the Liverpool City Region’s priority sectors is also vitally important, 37 as identified in the sub-region’s key policy documents . The Evidence Report shows that there has been significant employment growth in some of the key sectors over recent years – in particular, life sciences and the banking, finance and insurance sectors. Through the Strategy, we need to build on this growth as a key opportunity to create more high value-added jobs in the area. However, we will also seek to protect employment in other key priority sectors, including the automotive and maritime industries. 3.4 Laying the foundations for enterprise and growth success Finally, the Evidence Report considers, both from supply and demand perspectives, the wider environment in relation to enterprise and business growth. Specifically, it looks at skills, labour market activity, the provision of suitable premises and wider supporting infrastructure. 35 Impact refers to the number of people moving into knowledge-intensive employment from employment which is not knowledge-intensive that will bring each area in line with the regional average (holding overall employment rates constant). Figures have been rounded to the nearest 100. 36 Impact refers to the number of people moving into knowledge-intensive employment from employment which is not knowledge-intensive that will bring each area in line with the national average (holding overall employment rates constant). Figures have been rounded to the nearest 100. 37 Including the Liverpool City Region Development Programme (LCRDP), the Action Plan for the Liverpool City Region 2008-2011, and the Merseyside Economic Review 2007 (MER) 18
  21. 21. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 3.5 The skills imperative Qualifications The Evidence Report brings attention to the lack of intermediate and higher- level skills in the Liverpool City Region. This is illustrated by the long- standing deficits in the proportion of the working age population possessing NVQ Level 4+ and NVQ Level 2+ skills, as shown in Figure 3-4 below. Unless this is addressed in an effective and co-ordinated manner, it is likely to hinder the achievement of priorities for enterprise and business growth in the Liverpool City Region. Figure 3-4: Proportion of the working age population possessing NVQ2+ and NVQ4+, 1999-2006 for Merseyside, the North West and the UK % of WAP with NVQ2+ and NVQ4+ 65 NVQ2+ 55 45 35 NVQ4+ 25 15 1999 2000 2001 2002 2003 2005 2006 Merseyside North West Great Britain Source: LFS/APS Table 3-8 overleaf shows that an additional 30,400 people of working age gaining NVQ Level 4 or over would bring Merseyside in line with the regional average; an additional 53,300 people qualified to this level would bring the sub-region in line with the national average. 19
  22. 22. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 Table 3-8: Deficits table for the proportion of the working age population possessing NVQ4+, 2006 Compared to the North West Compared to Great Britain 38 39 Figure Deficit Impact needed Deficit Impact needed Great Britain 27.4 North West 24.8 Merseyside 21.3 -3.5 30,400 -6.1 53,300 Halton 16.8 -8.0 5,800 -10.6 7,600 Knowsley 13.5 -11.3 10,000 -13.9 12,300 Liverpool 21.5 -3.3 8,900 -5.9 16,000 Sefton 23.3 -1.5 2,500 -4.1 6,600 St Helens 21.7 -3.1 3,200 -5.7 6,000 Wirral 24.8 0.0 100 -2.6 4,800 Source: APS Occupations. . . The proportion of employment in the top three occupations of the Standard Occupational Classification (SOC) is also a key indicator of skill levels. As Table 3-9 shows, an additional 22,000 people employed as either managers or senior officials, professionals or in associate professionals and technical occupations in Merseyside would bring the sub-region in line with the regional average; an extra 36,800 people in these occupations would bring 40 the sub-region in line with the national average . 38 Impact refers to the number of extra working age people gaining NVQ4+ required to bring each area in line with the regional average (holding the working age population constant). Figures have been rounded to the nearest 100. 39 Impact refers to the number of extra working age people gaining NVQ4+ required to bring each area in line with the national average (holding the working age population constant). Figures have been rounded to the nearest 100. 40 This is holding the employment rate constant. Hence the extra ‘people’ referred to here are people moving into the top three occupations from any of the other occupations. 20
  23. 23. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 Table 3-9: Deficits table for the proportion of employment in the top three occupations of the SOC, 2006 Compared to the North West Compared to Great Britain 41 42 Geography Figure Deficit Impact needed Deficit Impact needed Great Britain 42.3 North West 39.9 Merseyside 36.4 -3.5 22,000 -5.9 36,800 Halton 32.8 -7.1 3,600 -9.5 4,800 Knowsley 27.7 -12.2 7,600 -14.6 9,100 Liverpool 35.2 -4.7 8,200 -7.1 12,400 Sefton 40.0 No deficit No deficit -2.3 2,700 St Helens 37.1 -2.8 2,100 -5.2 3,900 Wirral 39.4 -0.5 600 -2.9 3,800 Source: APS Labour market activity. . . A healthy and active labour market is a key element in the structure of an economy, underpinning the formation and growth of successful businesses. Encouragingly, the Evidence Report tells us that there has been good progress recently in raising economic activity rates and reducing dependency on benefits in the City Region. Ensuring that this continues is essential to the future economic success of the Liverpool City Region as it still falls short of regional and national comparators across a number of labour market indicators. Premises and infrastructure. . . In order to attract new quality businesses to the Liverpool City Region, retain growing businesses in the area and support ‘would-be’ entrepreneurs, there must be an adequate supply of quality premises that meets the needs of modern businesses at all points of their development cycle. Data from the Evidence Report suggests that there is a shortfall in office space in certain parts of the sub-region and that Liverpool has a strong offer overall in terms of premises. The momentum of recent physical development activity must be sustained by supporting Liverpool’s role as the economic centre of the sub-region, whilst ensuring other areas of our City Region are fully supported in attracting and retaining businesses. 41 Impact refers to the number of people moving into the top three occupations from any of the other occupations that will bring each area in line with the regional average (holding overall employment rates constant). Figures have been rounded to the nearest 100. 42 Impact refers to the number of people moving into moving into the top three occupations from any of the other occupations that will bring each area in line with the regional average (holding overall employment rates constant). Figures have been rounded to the nearest 100. 21
  24. 24. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 4 The Strategic Framework 4.1 A strategy that is fully fit for purpose The development of the Strategy has been guided by the three overarching imperatives that we identified earlier – namely, to:  Grow the scale of the existing business base through increased business starts and improved survival rates  Support the creation of value through business growth and expansion  Deliver competitiveness by increasing business productivity. However, the size of the task required to achieve these goals should not be underestimated. Figure 4-1 summarises the business growth process in schematic form and highlights the various barriers that will need to be overcome to achieve this. Barriers arise at each stage of the process, affecting not only potential entrepreneurs and new businesses, but also well- established indigenous businesses seeking to grow their operations and prospective inward investors. Our strategy must be capable of addressing these barriers. Figure 4-1 : The enterprise and business growth process Source: SQW Consulting 22
  25. 25. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 4.2 Our Vision Our agreed vision for the Liverpool City Region Enterprise and Business Growth Strategy is as follows:  By 2013, the Liverpool City Region economy will be recognised for its diverse portfolio of competitive knowledge-based business assets. Additionally, it will be equally well known for its highly skilled, innovative, flexible and enterprising workforce, and inward investment success.  By 2013, we will have closed our GVA per employee gap with the North West region and made considerable progress against our other key deficits.  Specifically, over the five year lifetime of the Strategy, we will have closed our GVA per employee gap with the North West completely, and reduced by 50% our GVA per capita deficit with the region. Further, over the same timeframe and using the same comparator benchmark geography (the North West region), we will have reduced our new VAT registration rate and VAT registered stock deficits by at least 33% and all of the following deficits by more than 50%: self-employment rate; proportion of employment in knowledge intensive businesses; proportion of our working age population possessing NVQ Level 4+ and proportion of employment in the top three occupations of the SOC. 4.3 The Strategic Framework In order to achieve our vision of a productive and prosperous City Region, the Strategy has three Strategic Aims: More Businesses, Growing Businesses and Productive Businesses (see Figure 4-2 for an overview of the Framework). Flowing from each of these is a series of Operating Aims that indicate the types of intervention that will be required in order to achieve the desired strategic impacts. The Strategy is framed by four important Cross-cutting Themes, which characterise our behaviour in delivering the Strategy. 23
  26. 26. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 Figure 4-2 : The Strategic Framework B y 2013, the Liverpool City Region econom y will be recognised for its diverse portfolio of competitive knowledge-based business assets. Additionally, it will be equally well known for its highly skilled, innovative, flexible and enterprising workforce, and inward investment success. Strategic Aim 1: Strategic Aim 2: Strategic Aim 3: More Growing Productive Businesses Businesses Businesses Cross-cutting themes Operating Aims Operating Aims Operating Aims •Developing an enterprise •Tailored business advice & •Tailored business advice & Skills & Employment culture support for retention & support for increased growth productivity •Local enterprise Environmental development •Prioritising key sectors/ •Improving leadership & Sustainability developing networks management skills •Encouraging a more dynamic & sustainable start- •C apturing local purchasing •Value added diversification Access to Finance up m arket opportunities and innovation •Securing FDI •Maximising investor •Improving supply chain development performance Availability of Suitable Business Premises •Maximising international •Exploiting ICT & technology trade development transfer • Enhance enterprise education • Business collaboration • Skills solutions for & raise awareness levels networks & priority sector business development Action Areas • Graduate enterprise & retention • Innovation collaboration • Preparing to export/ (aligning with BSSP • Business creation investigating new markets • Leveraging key product themes) knowledge/technology • Local community business • Access to business expertise assets coaching/support for growth • Getting the most from FDI Source: SQW Consulting 24
  27. 27. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 4.4 Strategic Aim 1: More Businesses The Liverpool City Region needs more people starting more businesses. In terms of VAT registrations, there is a gap of 58% between the City Region and the figures for Great Britain. The VAT registered business stock is also much lower than the comparator (with the City Region lagging behind Great Britain by 68%). Added to this, total early stage entrepreneurial activity (TEA) is significantly below the UK average (6.6% in Merseyside in 2006 compared with a UK average of 5.8%). Addressing these shortfalls will require a co-ordinated approach to ensure support is provided right through from awareness-raising, to start-up advice and on to early stage growth. Our aim is to ensure that the support provided is tailored to the requirements of individuals and we recognise that extra support will be required by those with special needs, whether relating to gender, race, disability, age or location. Under the principles of the Business Support Simplification agenda, Business Link North West will be the first port of call and its information diagnostic and brokerage approach is intended to offer a flexible and tailored customer journey. Our goal is to raise TEA in the City Region to the UK average rate, close the business start up rate gap with the North West and nationally, whilst maintaining our promising business survival rates. Operating Aims More Businesses will be achieved by:  Developing a more entrepreneurial culture: We will ensure this starts as early as possible by embedding entrepreneurship in the school and university curriculum. However, it is never too late to start a business and hence a range of promotional tools will be employed in order to raise awareness of the benefits of entrepreneurship amongst all age groups within our communities.  Local enterprise development: We will focus on raising interest in entrepreneurship and new business starts amongst groups who, for a variety of reasons, have never considered starting a business before. It will be essential to make the assistance available on a local basis and at convenient times given that new entrepreneurs are likely to be running their business single-handedly. Outreach activities will also encompass those running businesses in the informal economy. They already have well-honed entrepreneurial skills which are currently not contributing to wider economic well- being and hence need to be encouraged to legitimise their activities.  Encouraging a more dynamic and sustainable start-up market: It is essential that the start-up advice provided to would-be entrepreneurs is relevant to their needs, commencing well before the 25
  28. 28. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 actual setting-up of the business and continuing through to include post-start mentoring. Our aim is to ensure that businesses are set up in a robust manner that will allow them to survive and prosper over the medium to long terms.  Securing Foreign Direct Investment (FDI): Given the cost base of the UK in comparison with the economies of the developing world, it is becoming increasingly difficult to attract large scale production facilities to the City Region. Our key priority for future inward investment promotion is therefore to encourage higher value-added FDI. That is both in terms of the type of company attracted (high tech/high growth – with more to offer in terms of knowledge spill- overs) and the level within the company structure of the local office (preferably the UK headquarters – with more authority to make supply chain decisions). Our key aim is to make the Liverpool City Region a first choice destination for high value inward investors. 4.5 Strategic Aim 2: Growing Businesses Business start-up rates in three of the six Merseyside local authority areas are the same as the national average (13 new firms per 1,000 working age population in 2006). However, the lower VAT business registration rates suggest that these businesses are not moving beyond the first basic stage of growth. It is vital to encourage and support new businesses to grow, and the Strategy’s commitment to develop our existing enterprise stock is a key priority. Given the current shortfall in VAT registrations, there is a lot of work to be done. However we are committed to closing the sub- regional/regional/national gaps. Operating Aims Growing Businesses will be achieved by:  Providing tailored business advice and support for retention and growth: Much of our established business base does not fall into the high growth category. That does not mean that these businesses have no growth potential or that they are not important. Where a business has attained a stable financial position, it is important to ease it out of its comfort zone and on to the next stage of development. Through increasing innovation and streamlining processes, both growth and productivity improvements can be achieved.  Prioritising existing key sectors/developing networks: We have a number of high value-added sectors (life sciences, digital and creative industries, maritime and financial and professional services) that are developing well. We will focus on ensuring their future 26
  29. 29. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 growth and progression as we see them as leading the future business growth in the City Region. Specific sector support will take the form of promoting the sectors as widely as possible, encouraging sector firms to network and collaborate with each other to exploit their growth potential and providing targeted inward investment assistance.  Capturing local purchasing opportunities: Given the importance of the public sector within the City Region, this is a key target for the Strategy. At present the requirement that public sector procurement teams achieve Value for Money has led to them granting a small number of contracts to large contractors. A key priority therefore will be to work with these teams (such as the NHS Purchasing and Supply Agency and the Local Authority Procurement departments) to look at ways that existing SMEs can be included in the supply chain through an arrangement that does not adversely affect the cost effectiveness of the provision.  Maximising investor development: Attracting foreign investors to our City Region is one challenge, but keeping them here is another. We will ensure proactive aftercare for all new inward investors, with a dedicated Relationship Manager assigned to each. The Relationship Manager will meet with the company soon after arrival (ensuring a smooth transition from any support previously supplied by UKTI) and keep in regular contact in order to ascertain their requirements and signpost them to relevant support (in the private, public or third sector, as required). Our aim is to ensure that, as the foreign company expands, it is able to do so within the City Region rather than moving elsewhere.  Maximising international trade development: We will work closely with UKTI to ensure that an increasing number of our local companies gain the knowledge and confidence to trade abroad. UKTI has a range of trade development support products and we intend to supplement these with specially commissioned studies on key new markets. Liverpool has, for instance, the oldest Chinatown in Europe, and we will build on our well-established historic links such as these to explore the latest overseas opportunities. 4.6 Strategic Aim 3: Productive Businesses Merseyside currently suffers from major deficits in terms of its GVA per capita (a 20% deficit versus the North West and a 36% deficit versus Great Britain). This means that we need to have more people employed in more productive business activities if we are to have any chance of narrowing the gap. 27
  30. 30. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 Merseyside is fortunate however, in having a strong base of knowledge- intensive businesses (KIBs) and its performance is similar to the regional and national levels. This is an area where it is realistic for us to envisage the City Region closing its performance gap. Operating Aims Productive Businesses will be achieved by:  Tailored business advice and support for increased productivity: Merseyside’s high tech/high growth businesses are the jewels in the regional crown and need to be carefully nurtured and supported. However, high growth businesses have very specific support needs. The complexity of a new high tech product means that there are added costs and effort related to bringing the product to market (in terms of proof of concept and commercialisation activities). We will ensure that the specialised support to guide the star businesses through these stages is available and readily accessible.  Improved leadership and management skills: We recognise that as businesses grow, so too does their need for a more formal leadership and management structure. This is an essential step in taking the business forward and a pre-requisite for raising the equity a business needs to support the long-term growth of its activities. We will make use of the recent research and development work undertaken by the NWDA on leadership and management skills for SMEs to ensure suitable provision for our businesses.  Value-added diversification and innovation: In addition to supporting those businesses that are highly productive from the outset, we will also seek to encourage all of our businesses to consider how they might become more productive. Businesses can take a number of routes to higher productivity such as streamlining processes, developing new higher value products or acquiring other highly productive businesses. We will ensure that they have access to support to make the necessary decisions and follow through on the changes.  Improving supply chain performance: A major effort is required to assist local SMEs entering the supply chain. The Strategy will be used to bring large and small companies together to foster a greater understanding of the needs of the former and the abilities of the latter. We will also work closely with the designated sector organisations to ensure that they are developing vertical linkages that include local SMEs as suppliers.  Exploiting ICT and technology transfer: Our City Region benefits from possessing a number of key knowledge assets, which need to 28
  31. 31. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 be exploited as productively as possible. We will continue to work with Merseyside ICT to foster stronger links between the research base and local businesses and ensure that IT is firmly embedded in all business sectors. 4.7 Cross Cutting Themes Ensuring coherence in approach and consistency in delivery will be essential to the Strategy’s ultimate success. To achieve this, the Strategy is underpinned by four Cross Cutting Themes. These themes will play a key role in shaping and influencing the way in which the Strategic Aims are progressed. Skills and employment All businesses need a suitably skilled workforce. As a first step, more Merseyside students need to be encouraged to stay on in education to gain higher level qualifications (and thus close the gap with the region and Great Britain as a whole). However, what businesses really need are employees with skills relevant to their specific activities. The fast pace of business development means that these requirements change rapidly over time. It is important therefore, that people on Merseyside receive timely and relevant skills training to equip them for the needs of the workplace. The Strategy will be fully aligned with the recently developed City Employment Strategy as part of a joined-up approach to skills development and retention on a local level. Environmental sustainability Ensuring environmental sustainability is becoming an increasingly important aspect of modern business life. As part of the regional initiative on resource efficiency, we will make the benefits clear to businesses in order to encourage them to reduce their use of energy and raw materials and generate less waste. Additionally, the environmental technologies is an important emerging sector for our economy and there is scope for significant growth over the coming years given our proximity to the coast and key natural assets. Access to finance Finance forms the lifeblood of any business but SMEs can experience a number of problems when seeking to access it. The Strategy, with support from key agencies such as Business Link North West, Merseyside Special Investment Fund and the local private sector finance providers, will ensure that the necessary support and funding is made available to firms. This will include a package of measures including awareness-raising on different sources of finance, training in finance and investment readiness, start-up seed funding and access to a range of debt and equity financing options. 29
  32. 32. THE ENTERPRISE AND BUSINESS GROWTH STRATEGY FOR THE LIVERPOOL CITY REGION 2008 – 2013 Availability of suitable business premises We are committed to ensuring that the accommodation offer in the City Region reflects the requirements of the business base, be it ‘easy in easy out’ space for new start-ups or the specialised needs of high tech companies such as wet lab space and high quality formalised incubation provision. Where necessary, business support will be provided alongside the workspace. Despite the tangible progress made over recent years in transforming our land and property offer to business, we must continue to develop competitive employment sites that meet the needs of today’s businesses. We will undertake an audit of our strategic facilities and develop a strategy for their future development to maximise opportunities and synergies. As part of this exercise, we will not lose sight of the important role that manufacturing and processing industries play – these less glamorous sectors continue to create high GVA employment opportunities locally and we must ensure that our sites and premises continue to meet their requirements. 30

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