Medway Economic Development Statement by lonyoo


									    Medway Economic
Development Statement
                         April 2006

              Economic Development
                   Medway Council

1.     Introduction

2.     Executive Summary

3.     Medway is Changing – background and benchmarking

4.     Strategic Development

5.     Sectors

6.     Key Issues

7.     Key Aims

       Appendix 1 – Action Plans

       Appendix 2 – Glossary of Terms

       Appendix 3 – List of Consultees

1.     Introduction

1.1    This is the Medway Economic Development Statement 2006. It provides a
       concise report of Medway’s position, ambition, and priorities that need
       addressing over the next 3 years (2006-2009) if Medway is to prosper
       over the long term.

1.2    The statement comes out of the mid-term review process of the Medway
       Economic Development Strategy 1999-2010.1 The review recommended
       that through the pace of change the 10-year strategy had become
       outdated in many respects, and that a more adaptable strategic approach
       is necessary.

1.3    This statement sets out with a short lifetime to allow amendment in 2009 –
       to dovetail with the regeneration work fundamental to future prosperity.

1.4    The aims set out in the statement are those that emerged from the mid-
       term review. The aims and subsequent objectives will be delivered by the
       action plan 2006-09, in appendix 1. This three-year timescale is put
       forward to tie in with the regeneration timescales being specified by the
       Office of the Deputy Prime Minister, under the auspices of the Thames

1.5    While this statement outlines a longer-term economic development vision
       for Medway to 2021, it sets out to integrate that longer-term vision into the
       forthcoming Medway Regeneration Framework. This document should be
       read in conjunction with the Regeneration Framework, the Community
       Plan, and the Local Development Framework.

1.6    On a regional and sub-regional level, the statement feeds into the South
       East Regional Economic Strategy and Kent and Medway Strategic

1.7    The statement will not address certain micro level economic development
       activities such as local purchasing as these are dealt with elsewhere.

  The review was conducted by Medway Council Economic Development section earlier in 2005.
It can be found by searching ‘Economic Development Strategy Review’ at

2.    Executive Summary
2.1   Medway’s vision is to become a City of Learning, Culture, Tourism and
      High Technology, and a prosperous, competitive and robust economic
      driver of regional significance within the South East economy.

The long-term strategy for Medway is as follows:

2.2   Medway is capable of sustaining growth rates of twice the national
      average seen by Brighton & Hove in recent years. The Council believes
      that with an increased growth rate, Medway is capable of creating around
      40,000 new jobs by 2021, and that this will fulfil the ambition of the
      sustainable communities plan in Medway.

2.3   This growth of the economy and jobs will be across the sectors, and is
      dependent upon certain preconditions being met. These are set out in the
      following strategic priorities:
       Chatham City Centre – To firmly establish Chatham as the city centre
          and heart of cultural, commercial and leisure activity. This will build
          upon present advantages in city-scale amenity provision to give
          Medway the central economic focus it currently lacks. Necessary
          investment to create Chatham city centre will enable Medway to
          compete more effectively in attracting inward investment in future (see
          2.4 below).
       The Universities at Medway – To connect the new university sector to
          the business and wider community, improve the quality of provision
          and increase the influence of the universities and the education s ector
          over the Medway economy.
       Transport connectivity – To ensure that necessary infrastructure
          improvements (particularly rail) are made to better connect Medway
          with London and the South East. Public transport investment within
          Medway is also essential to provide a viable alternative to car use, and
          improve access to employment opportunities.
       Employment space – Jobs cannot be created in Medway without the
          allocation of the necessary space, which is currently scarce in
          Medway. Appropriate and effective use of regeneration sites for
          employment uses is therefore imperative.
       Sector development – Work to enhance the key sectors of
          manufacturing/engineering, construction, health and
          cultural/tourism/creative industries will directly address employment,
          wage, skills, knowledge economy and growth targets. The key sectors
          for inward investment focus will be financial and business services
          from 2009 onwards.

Job creation strategy summary:

2.4   Medway will develop key sectors in the short term, while working to
      ensure that key preconditions are put in place to ensure that Medway is in
      the best position to benefit from an improvement in the financial and
      business services inward investment market from 2009 onwards. It is also
      anticipated that successful development of key sectors will create a local
      market for business services to improve.

Key Aims

2.5   To achieve the vision outlined in 2.1, this statement sets out to adopt the
      key aims outlined in the mid-term review of the Medway Economic
      Development Strategy 1999-2010, with the addition of the critical Jobs
      aim. The key aims identify and provide the basis for a framework to
      address the major issues affecting the Medway economy. They should be
      viewed as an interlinked set of aims to drive a holistic approach to drive
      the vision for Medway.

2.6   Image – events, culture, marketing and profile are now accepted as vital
      to successful economic development. Measures to improve Medway’s
      image will therefore be central to plans for physical and economic
      regeneration, and for increased business activity. For example, London
      Olympics in 2012 are an unprecedented opportunity to plan for increased
      cultural activity and media coverage to ensure the establishment of
      Medway as a City of Culture.

2.7   Regeneration – the Thames Gateway is the major catalyst for change in
      Medway, and support from central Government is set to transform
      Medway so that the preconditions are right for economic regeneration to
      happen. Successful delivery of regeneration plans will trigger increased
      levels of inward investment and innovation in Medway, which will secure
      better quality employment, reflected in increased wage levels and growth
      for the Medway economy. The alignment of Neighbourhood Action Plans
      will provide an important connection between existing communities and
      access to opportunities arising from large-scale development plans.

2.8   Skills – there is a clear need to instil a learning culture among Medway
      people and Medway businesses alike. Measures are required to enable
      up-skilling and re-skilling of the Medway workforce, and flexible delivery of
      adult training. Links to the young people’s plan will be vital. It is therefore
      imperative that Medway makes full use of its new education infrastructure,
      and establishes firm links between businesses, community training
      facilities and schools to fulfil its ambition to become a City of Learning.

2.9   Competitiveness – Medway needs to increase the amount of business
      activity, and for existing business to become more competitive. Actions to
      support this aim will help the economy become more robust and less

       vulnerable to external economic conditions. The strategy will support
       entrepreneurship, encourage more efficient processes and advocate
       increased use of new technology to assist Medway businesses to become
       more competitive.

2.10   Jobs – Medway needs to narrow the gap between the number of working
       people, and the number of jobs in Medway. The quality of new
       employment is also of critical importance, and the action plan will outline
       measures to support the development of new high value-added
       employment. Provision of suitable space for employment generating
       activity will be a key facet of the strategy. Employment creation will
       become an overarching aim of the Medway Economic Development
       Statement, with measures outlined under the above aims contributing to
       this key deliverable.

3.        Medway is Changing – Background and

3.1       There are a number of ‘pull’ factors that are driving change in Medway:
          Thames Gateway regeneration schemes that will transform Medway’s built
          environment; The expansion of the Universities at Medway, and of the
          University College for the Creative Arts; Recognition of quality of life on
          offer in Medway with the creation of attractions in Chatham, the
          Ranscombe Country Park and the annual Rochester Castle Gardens
          concert series.

3.2       The Medway economy is worth £2.6bn per year, and has grown at a rate
          above the national average (+22.8%) since 1998. With a large-scale
          regeneration programme now underway, the current population of over
          250,000 is forecast to expand to a city of some 300,000 people by 2020.

3.3       Medway has a working population of 158,000, and an economically active
          population of 126,000. This is a significantly sized active workforce that is
          larger than the economically active population of Newcastle. Around
          90,000 people are employed in Medway, although Medway exports 41%
          of its workforce (nearly 50,000 people) to the London and South East
          economies on a daily basis, with less than 20,000 people commuting into
          Medway. On average, workers in Medway also travel further to work than
          workers from any other area of the South East.

3.4       The 90,000 jobs in Medway currently are in the following sectors: 2

             Public sector administration and health             27.4%
             Retail and distribution                             26.2%
             Finance and business services                       17.9%
             Manufacturing and engineering                       11.6%
             Leisure and tourism                                 7.2%
             Construction                                        4.9%

3.5       The figures above show a predominance of employment in the service
          sector, which is in common with national and regional industrial profiles. It
          should be noted that the main employment sectors in Medway are not
          high wealth creating sectors, as is the case with the major financial and
          business services operations in Medway (with some exceptions).
          Manufacturing, engineering and construction, however, have greater

    Annual Business Inquiry – Employee Analysis (2003)

          productivity and estimated to contribute around a third of Medway’s GVA,
          making them very significant sectors in terms of wealth creation.

3.6       Of all the large urban areas in the country3, Medway has the lowest jobs to
          workforce ratio. 4 This is a very significant statistic because Medway, as
          expected of a large urban area, has a higher proportion of employment in
          public sector administration and retail, which account for nearly half of the
          jobs in Medway, and tend to be at the lower end of the earnings spectrum.
          Similarly, on average, a person working in Medway earns nearly 10% less
          than the national average.

3.7       Medway does not function as a sub-regional centre for business activity in
          the way normally expected of a large urban area. For example, there are
          fewer large companies based in Medway than any of the comparable
          large urban areas in the South East. With proportionately fewer head
          office sites, much of local manufacturing and service sector employment is
          in lower value-added activities. Large companies still employ a greater
          proportion of the workforce than medium- or small-sized companies, which
          is a key reason for Medway’s poor jobs density ratio.

3.8       As a consequence of the large numbers of workers commuting out of
          Medway and a predominance of low wages, Medway’s Gross Value
          Added (GVA) per capita of population is very low in national terms at 66%
          of the average for England.

3.9       There has been, however, a 25% increase in Medway’s business stock
          since 2000, and there are now an estimated 13,000 businesses in

In relation to the national and regional position

3.10      Since 1989 the UK economy has doubled in size, and against this
          background of growth, the Medway economy has expanded more quickly
          than forecast when the first Medway Economic Development Strategy was
          adopted in 1998.

3.11      Medway is, however, an under-performing part of the London-centric
          South East economy, and it lags significantly behind the South East
          average in economic performance.

3.12      Medway has, however, a number of advantages that could enable
          Medway to fulfil its potential – these are:
           Centrally-located major brownfield opportunities
           Geographically close to London/South East/European markets, and
    Areas with a population of over 250,000.
    With the exception of some London Boroughs, and equal with Wigan and the Wirral.

           London hub airports
          Considerable advantage in land costs at present
          Developing Higher Education sector with 4 universities
          Very significantly sized workforce
          Considerable advantages with natural and built environment
           (river/heritage/levels of amenities etc)

3.13   In summary, Medway’s transition from economic downturn to 21st century
       sub-regional city economy is underway, although it has a long way to go.
       Recent growth rates for the economy have been good if unspectacular in
       national terms. The growth rates seen in Brighton and Hove over the same
       period have been twice the national average (in excess of 8% per annum),
       and provide a strong benchmark against what is realistically achievable for

3.14   Such growth is necessary to achieve Medway’s vision and will have wider
       benefits also. As relative affluence is strongly linked to good health,
       successful delivery of this strategy will have a positive impact upon targets
       for a healthy Medway, as set out in the Medway Community Plan.


3.15   Medway has begun to directly compare its performance against similar
       sized areas in the South East region. This is because the wider economic
       conditions are the same, and identical data sets are available to allow
       accurate and easy comparison:
        Brighton & Hove
        Milton Keynes
        Portsmouth
        Southampton

3.16   Medway should indicatively compare its performance against:
        Kent (local average)
        South East (regional average)
        National average

3.17   Key performance indicators will include:
        GVA and GVA per capita
        Industrial profile
        Skills profile
        VAT stock (registrations and de-registrations)
        Economically active/employed/unemployed
        Travel to work data
        Average wages (workplace- and resident-based)
        Jobs density (number of jobs per worker in area)

4.    Strategic Development
4.1   By 2021, Medway will become a city with a population of 300,000 people.
      With more people living in Medway, more jobs and employment
      opportunities need to be planned and provided in the process of
      successfully developing key local strategic sites. Economic growth is also
      dependent upon ensuring that Medway benefits as much as possible from
      major regional strategic developments – those planned and conceptual at
      present – and from major changes in future years that will impact upon the
      Medway economy.

Medway’s Renaissance

4.2   The huge regeneration programme is set to transform Medway over the
      next 15 years. Under the auspices of the Sustainable Communities
      agenda, the Medway Regeneration Framework will provide a
      comprehensive plan to drive forward the large-scale redevelopment of
      central Medway. Successful regeneration will be a key pillar to achieving
      economic prosperity in Medway, and Chatham, Rochester Riverside and
      Transport for Medway components of the Regeneration Framework will be
      particularly significant.

4.3   Chatham Centre – Chatham is set to become the new city centre for
      Medway. It need to enhance its role as central business district,
      particularly in the provision of quality office space, which is a key factor in
      ensuring that Medway begins to function as a sub-regional economic
      driver. Substantial new housing development, an expanded retail offer,
      and improved leisure (including hotel) and amenity provision will also be
      essential. It is anticipated that greater levels of economic activity in
      Chatham city centre will have a positive impact upon surrounding deprived

4.4   Rochester Riverside - This flagship dense urban development will
      include new hotel and leisure facilities, and will provide new business
      accommodation. Situated in the heart of Medway, the development will
      assist to increasing economic activity in Rochester, Chatham and Strood.

4.5   Transport for Medway - Medway needs to achieve a step-change in
      levels of public transport usage. This is a critical requirement for the
      overarching vision of Medway developing as a cohesive city-economy of
      regional significance. Commitment to delivering public transport solutions
      that address the long-term needs of the Medway economy is crucial. The
      issue of accessibility for jobs, learning and the opportunities arising from
      the regeneration programme is also vitally important for Medway's less
      affluent communities.

4.6    Major employment sites – the Isle of Grain and Kingsnorth are large
       sites with potential for the creation of large numbers of employment
       opportunities (albeit with low employment density). Situated on the Hoo
       Peninsula, these development opportunities are likely to be realised over
       the long-term development opportunities once issues such as adequate
       utility provision and road connections are resolved.

4.7    Innovation – Medway has two initiatives in the Medway Innovation Centre
       and the Medway Enterprise hub focused upon generating high growth
       start-up businesses focused on high tech and high value-added sectors.
       Innovation is also becoming increasingly important in lower value-added
       sectors, particularly in managing the supply chain. Medway Council and
       partners will be actively promoting this agenda.

4.8    Universities at Medway – this critical sector is forecast for expansion.
       With the inclusion of the University College for the Creative Arts, Medway
       is now four HE institutions. A thriving higher education sector is estimated
       to contribute an extra 25% to a local economy, which demonstrates the
       importance of this sector. The development of faculties such as the first
       new School of Pharmacy in the UK for over 20 years is focused on wealth
       generating activity.

4.9    Mid Kent College relocation – the £50m relocation of Medway’s FE
       institution to a site adjacent to the Universities at Medway will create a
       unique learning hub, and will provide a boost to the take-up of FE courses
       in Medway. The new college will provide a stronger link to local schools
       with the creation of a new 14-16 unit on site.

Strategic Developments

4.10   The following major proposed or forthcoming developments are
       anticipated to be critical to transformation of Medway to a robust and
       prosperous sub-regional economy:

4.11   The London Olympics 2012: The Olympics present an unparalleled
       opportunity for the Thames Gateway to galvanise its development plans
       under the banner of this golden PR opportunity. Medway, as a key part of
       the Thames Gateway, should allow the Olympics to become a key driver
       of efforts to improve Medway’s image, cultural offer and infrastructure. It
       will become a catalyst for job creation, for delivery of skills and training,
       and a major opportunity for Medway’s businesses.

4.12   Ebbsfleet: The international station and surrounding developments to
       include around 4.5million ft2 of new office space is a key element of the
       Thames Gateway concept. The creation of the transport and business hub

       in neighbouring Ebbsfleet should contribute to increasing amounts of
       business activity spreading eastwards from the City of London, through
       Canary Wharf. Although sometimes perceived as a threat to Medway, the
       close proximity of Ebbsfleet is expected to improve Medway’s viability as a
       business location.

4.13   Crossrail: Channel Tunnel Rail Link – Domestic Services have been
       secured for Medway from 2009, but the net effect on rail connectivity does
       not provide an adequate solution for Medway, particularly with forecast
       reduced capacity. Present plans for Crossrail stop at Abbey Wood and
       Shenfield in Essex, and therefore do very little for Medway and the
       Thames Gateway in general. The Crossrail route to Ebbsfleet is
       safeguarded, but future trans-regional strategic rail development plans
       need to recognise the present connectivity deficit in the Thames Gateway,
       and the importance of direct rail connections between the City of London,
       airports, and large urban areas outside the M25.

4.14   Lower Thames Crossing: The River Thames is a barrier to economic
       activity between Essex and North Kent, as demonstrated by the very low
       levels of inter-commuting between the two counties in national travel-to-
       work data. The expansion of Stansted airport increases the importance of
       improved connections between Medway and the East of England. The
       Council recognises that there are potential environmental concerns, and
       awaits clarification of the government’s policy.

4.15   South East airport expansion: Airports are the gateway to the world, and
       planned expansion will be a major driver for the wider South East
       economy, to which Medway lags in terms of performance already. As
       Medway is close to these key economic drivers, it is vital that connections
       are improved to ensure relative growth for the Medway economy.

Anticipated Changes – Technology

4.16   The Knowledge Economy: There is much confusion over the term ‘the
       knowledge economy’. It is, however, a very clear concept - in modern
       economic activity, knowledge is becoming increasingly important as the
       factor that creates value on a good or service. Hence, knowledge and
       skills-based aspects of human capital are now vital for economic
       development. In this respect, knowledge is progressively more essential in
       both production and service industries, and increased demand for
       specialist skills reflects that.

4.17   e-Business: Distinct from ‘the knowledge economy’, e-business should be
       considered as a generic and a basis for all business activity. It is equally
       relevant for any business or industrial sector, and it is important that e-
       business is not considered as purely the domain of ICT companies.

         Information and Communications Technology will continue to improve
         exponentially in the coming years with the net effect of making businesses
         more efficient (if they use ICT to its potential). It is estimated that 40% of
         productivity gains in European companies were attributed to ICT between
         1995 and 2000. In the USA, the figure was 60% for the same time period,
         which suggests that there is scope for further improvement. 5 ICT
         infrastructure to enable e-business will become increasingly important,
         although key developments such as the rollout of Internet Television will
         render the present levels of infrastructure inadequate. For example,
         forecasters are highlighting the future need for Super-broadband (with
         speeds of 100-200mb per second). Medway (with partners) has an
         opportunity to work towards gaining the necessary investment to ensure
         that Medway is not left behind in terms of future ICT capacity.

Anticipated Changes – People

4.18     Demographic changes: Medway has a relatively young population and
         will, therefore, be less exposed to the pressures of the ageing population
         than elsewhere. Nevertheless, the issue of the ageing population remains
         a significant one for Medway because of the progressively large numbers
         of older people who will live in the area. The growth in the ‘silver pound’ is,
         however, an economic opportunity that Medway should consider,
         particularly in the leisure/tourism sector.

4.19     Work-Life Balance: Influencing factors such as the impact of ICT on the
         working environment mean that work-life balance issues will become more
         important, particularly in the context of the increasingly rapid pace of
         economic activity. Research demonstrates that employers that instil work-
         life balance working practices have a more motivated and productive
         workforce. This is an important issue for the Medway economy, as male
         employees in Medway work the second longest amount of hours per week
         in the South East region (after Kent).

4.20     Skills: Improvements in ICT and constant changes to business processes
         will mean that it is necessary for training to become ever more flexible.
         The trend in requirement is moving towards ‘skilling’ and ‘re-skilling’.
         Transferable skills such as ICT and project management are becoming
         more desirable, and local learning strategies need to address this.
         Developments in vocational learning will also improve the employability of
         young people, and these need to be linked in to the local economy.

4.21     ICT Skills: It is also possible that ICT could be considered to be a leveller
         in terms of social inclusion. For instance, mobile phones are ubiquitous
         and the increasing convergence between PCs and mobile phones present
         an opportunity to introduce those socially excluded groups that are
    SEEDA Regional Economic Strategy 2006-16 Consultation document.

       comfortable with mobile telephony into the mainstream work environment.
       Additionally, ICT presents an opportunity for house bound people to
       access gainful employment.

4.22   Employment profile: Almost half of the companies created in Medway
       over the past few years have been in the business services sector.
       Factors of ICT, work-life balance and changes to training delivery make it
       more likely for people to multi-job. This is both a cause and effect of the
       fragmentation of the modern employment structure, where out-sourcing
       and sub-contracts are becoming increasingly prominent.

4.23   Local tourism: There is an increasing recognition for the need for local
       people to spend their leisure time "on their doorstep" rather than export it
       to London or neighbouring towns - but only if the leisure/tourism offer is
       sufficient. Medway has the capacity to restore the balance of local demand
       to Medway through the regeneration process, and through on-going
       improvements in the local leisure/tourism offer.


4.24   The following areas of activity are therefore considered to be strategic
       priorities to achieving economic growth and increased employment in
        Chatham City Centre – To firmly establish Chatham as the city centre
           and heart of cultural, commercial and leisure activity. This will build
           upon present advantages in city-scale amenity provision to give
           Medway the central economic focus it currently lacks. Necessary
           investment to create Chatham city centre will enable Medway to
           compete more effectively in attracting inward investment in future.
        The Universities at Medway – To connect the new university sector to
           the business and wider community, improve the quality of provision
           and increase the influence of the universities and the education sector
           over the Medway economy.
        Transport connectivity – To ensure that necessary infrastructure
           improvements (particularly rail) are made to better connect Medway
           with London and the South East. Public transport investment within
           Medway is also essential to provide a viable alternative to car use, and
           improve access to employment opportunities.
        Employment space – Jobs cannot be created in Medway without the
           allocation of the necessary space, which is currently scarce in
           Medway. Appropriate and effective use of regeneration sites for
           employment uses is therefore imperative.
        Sector development – Work to enhance the key sectors of
           manufacturing/engineering, construction, health and
           cultural/tourism/creative industries will directly address employment,
           wage, skills, knowledge economy and growth targets. The key sectors

for inward investment focus will be financial and business services
from 2009 onwards.

5.      Sectors

5.1     A key recommendation of the Medway Economic Development Strategy
        mid-term review was the need to refocus the identified key industrial
        sectors for Medway economy. The importance of understanding the role of
        sectors within the local economy is key to effective diversification to create
        an agglomeration economy 6, which is essential if Medway is to create the
        robust economy it needs.

5.2     The sectors set out below are therefore identified as key on the basis of
        value added to the Medway economy, anticipated levels of activity, and in
        providing other external benefits, rather than relying on crude employment

5.3     Specialist manufacturing/engineering: There are over 900
        manufacturing and engineering businesses in Medway, which are
        responsible for over £1bn of Gross Value Added per annum. It is still,
        therefore a relatively high wealth-creating sector. The sector GVA per
        worker is, however, around 65% of the regional average, so it is an
        important objective of strategy to improve productivity in this sector.
        Medway has existing clusters of niche manufacturing, such as automotive
        and instrumentation. The Medway Innovation Centre will incubate start-up
        businesses in high growth niche areas spinning out of BAE Systems.

5.4     Construction: This is identified as a key sector as there are over 1,000
        VAT registered construction companies in Medway. There is also a huge
        projected increase in demand for all trades and related disciplines in future
        years because of the Thames Gateway sponsored development

5.5     Health: This is a growth sector on a global level, with expenditure forecast
        to grow exponentially as a result of the ageing population. Medway also
        has the presence of all key elements to establish a very robust health
        industrial sector group (hospital, training facilities, large care sector, health
        instrumentation manufacturers and a pharmaceutical faculty).

5.6     Tourism, cultural and creative industries: Cultural tourism is a key
        priority for Medway and hotel and cultural facilities investment will create a
        large number of jobs in this sector. This is an important growth sector
        (growing at twice the rate of the national economy), and pillar of the major
        regeneration plans. Medway also has the critical conditions necessary for
        a successful creative industries cluster (low rents, large population to
        achieve critical mass, and a reputable art and design university).

  Agglomeration is where close proximity of similar businesses stimulates competition and
information exchange, and improves business economic efficiency.

5.7       Higher Education: This sector expansion is well underway in Medway,
          and will become a long-term economic driver for the local economy. Links
          to the local business community will be encouraged and improved.
          Expansion in the Further Education (FE) sector is forthcoming. FE is a key
          component of the education sector, and will be vitally important in
          addressing Medway skills requirements.

5.8       Retail: Retail is key element of regeneration plans, particularly in Chatham
          where retail floor space will be doubled. It is also a major employer.

5.9       Marine: With the opening of the British Gas terminal on the Isle of Grain,
          Medway will become the eleventh largest port in the country. 7 The
          commercial value of the River Medway is currently being researched, and
          marine engineering specialisms are being developed in the University of

Future Growth Sectors

5.10      Business Services: This is a key growth sector nationally, and 47% of
          new businesses in Medway are registered as business services. Work to
          develop the business services sector is anticipated from 2009, once other
          key sectors have been properly established.

5.11      Environmental Technologies: The Isle of Grain has been identified by
          DEFRA 8 as the only suitable site for a Biomass hub in the South East of
          England. The potential for a cluster is strengthened by the presence of
          expertise at the University of Greenwich, so it is anticipated that this will
          become a more important sector for the Medway economy from 2009


5.12      These key sectors will be taken forward by partners involved in a
          concerted strategy of business development activity outlined in the action
          plan (appendix 1). Activities will include:
           Establishing networks;
           Supply chain analysis and engagement;
           Building links between HE and business;
           Establishing ties across sectors to allow cross fertilisation; and
           Enabling and facilitating small business consortia

5.13      An inward investment strategy will be developed in 2006 that will stipulate

    Department for Transport (2004). Port of Medway includes Thamesport and Sheerness.
    Department for Environment, Food & Rural Affairs

the necessary preconditions for a sound inward investment offer. There
will be a continuation of the strong partnership working with Locate in Kent
to monitor trends and facilitate day-to-day enquiries. It is anticipated that
over the long-term, the most viable options for inward investment will be
in: financial services (if connectivity improvements are forthcoming), and in
business services. The latter is anticipated to become a growth sector on
the back of improvements in other sectors (construction, health,

6.      Key Issues

6.1     The vision set out in section two describes a Medway that will change over
        the coming years. The requirement to become a stable and robust sub-
        regional economy is of paramount importance. This is because, since the
        closures of the main drivers of the Medway economy in the early 1980’s,
        the economy has proved to be very vulnerable to external economic
        downturns. It is critical that the Medway economy improves its function as
        an agglomeration economy to the extent that it is able to withstand
        external shocks.

6.2     This section outlines the key issues that Medway needs to successfully
        address if it is to become a robust economy and a prosperous city in the
        21st century. Thames Gateway is the key driver of the regeneration
        agenda in Medway, which in turn will be the key driving force for Medway
        to address its challenges. These interlinked issues are:

6.3     Competitiveness/Growth: Medway needs to become more competitive,
        and it needs to close the gaps that still exists in terms of GVA per capita
        and wages with comparator areas. It also needs to continue to increase
        land values locally.

6.4     Unemployment: The official unemployment rate is now above the
        national average, and it has increased each month since July 2005, which
        reflects the relative vulnerability of the Medway economy. At the time of
        writing, however, the local labour market is fairly buoyant (particularly in a
        historical context), and many local employees still report vacancies. A key
        issue in Medway is with the greater proportion of unemployment among
        18-24 year olds, which is well above the national average. There are also
        nearly 10,000 economically inactive residents in Medway who state that
        would like to get a job. 9 Concerted efforts will continue to be supported
        within those key targeted neighbourhoods in order to enable people back
        into employment.

6.5     Employment: There is a need to increase the number of jobs in Medway.
        There is a very high level of out-commuting (see paragraph 3.2), and the
        average Medway resident has the furthest travel-to-work distance in the
        South East region. There are also proportionately less large private sector
        employers than in similar-sized urban areas in the South East, which is
        symptomatic of Medway’s current attractiveness as a business location.

6.6     Businesses: While there has been significant increases in the business

  The 2001 Census data includes a category for economically inactive who would ‘like to get a

       stock in Medway in recent years, there is room for an improvement in the
       number of businesses to people ratio. This is a legacy of the lack of
       entrepreneurship that occurs in large previously industrial urban areas.
       This issue needs to be addressed (particularly in schools), and the
       business environment in Medway also needs to be improved (increases in
       hotel stock, for example).

6.7    These issues are caused/compounded by the following factors:

6.8    Transport: The basis of all economic activity is communication –
       connectivity in transport terms. For Medway to narrow the jobs to workers
       ratio, it needs to become a better-connected, more viable business
       location. Reading, for example, is equidistant from the centre of London to
       Medway, but the train journey takes half the time. Reading is also a net
       importer of labour. Medway has a connectivity deficit when compared with
       Reading that will not be addressed without improved rail connections to
       London and key transport hubs.

6.9    Employment land: There is a scarcity of suitable employment land
       (particularly within the urban core), and difficulties exist with bringing
       forward major potential employment sites (Isle of Grain and Kingsnorth). If
       Medway’s aim to narrow the gap between jobs and workers, it is vital that
       Medway’s capacity for jobs is increased. To achieve this, it is necessary to
       plan effectively for the type of employment space that will be required over
       the long term. For example:
        Mixed uses on key developments should include adequate A2/B1
        Land-intensive commercial uses should be encouraged outside of the
          urban core
        Chatham needs to increase its role as the natural central business
          district for Medway

6.10   Skills: The Medway skills profile matches that of post-industrial northern
       cities. It is critically important for Medway to improve on all levels of
       learning standards where it currently lags, and the strategy will support the
       ‘skills for life’ agenda. Improvements at NVQ4 are related to increased
       productivity in business, which will be an important element of improving
       wage levels. Medway also has a new HE sector that is now working to
       convert the ‘brain drain’ that has affected Medway for years into a ‘brain
       gain’. The HE sector also needs to properly establish itself within the
       Medway business community, and increased numbers of graduates
       working in the area will assist this process. The development of the new
       FE campus in Gillingham will provide a major fillip to Medway’s skills base.

6.11   Image: Medway needs to improve its image (both externally and
       internally), and needs to market and brand itself in a modern way, using

modern methods. Medway is a city-scale conurbation that does not have
the level of amenities expected of a large urban area. Improvements to
levels of commercial office space, cultural facilities, exhibition space and
hotel stock (particularly in Chatham) will work to improve Medway’s image,
as will the major Thames Gateway developments.

7.    Key Aims

7.1   Under the headings of the strategic aims set out in section 2, the
      objectives listed below are set out to directly address the issues outlined in
      section 6:

            Aim 1 – Improve Medway’s Image
            Aim 2 – Accelerate the economic Regeneration of Medway
            Aim 3 – Progress Medway’s Skills
            Aim 4 – Increase Medway’s Competitiveness
            Aim 5 – Increase the number and quality of Jobs in Medway

7.2   Image: Strategic Aim 1 recognises the importance of PR techniques to
      achieve modern economic development goals. The focus of the aim is on
      raising the profile of Medway, but also to increase expectations and
      aspirations of Medway residents. Critical objectives within this aim look to
      boost tourism and provide the catalytic cultural infrastructure.

7.3   Regeneration: Strategic Aim 2 recognises the key role that prioritises the
      delivery of the physical infrastructure that will provide the preconditions
      necessary to achieve economic prosperity in Medway. With priority given
      to transport infrastructure and employment space, the objectives and
      actions set out under Aim 2 will ensure that Medway develops as a city,
      and that it is well placed to benefit from a future upturn in the financial and
      business services market.

7.4   Skills: Strategic Aim 3 prioritises the establishment of a learning culture in
      Medway by setting out objectives that set out to strengthen the connection
      between individual, community and business needs and education
      provision. In addressing this issue, the plan seeks to improvement in
      Medway skills profile, to decrease unemployment and economic inactivity
      levels and to assist in growth targets. There will also be a strong alignment
      to the Young People’s Plan, which commits to helping young people
      achieve economic well-being.

7.5   Competitiveness: This strategic aim will address issues critical to
      developing a larger and more dynamic Medway economy. Actions focused
      on promoting entrepreneurship, greater productivity and knowledge
      transfer will try to foster indigenous business growth. Work on supply
      chains will include developing links to large redevelopment projects, public
      sector procurement and business-to-business activity. Major public and
      private sector investment in Medway will provide opportunities to local
      businesses, and a key component of the strategy is to maximise the
      multiplier effect to benefit the Medway economy.

7. 6   Jobs: The aim to narrow the gap between the number of workers and the
       number of jobs in Medway is seen as an overarching aim for the Medway
       Economic Development statement. Objectives outlined above are seen as
       critical to both creating the preconditions for job creation, and in directly
       delivering jobs. The action plan provides a breakdown of where job
       creation is anticipated in Medway over the next 15 years.

7.7    The action plan in Appendix 1 provides a breakdown of each objective and
       a description of key actions. It also describes targets and key milestones
       for the projects. Actions are described on 3 levels:
        Direct delivery – projects are in train through Medway Council or
           partner delivery
        Lobby role – critical projects or issues that require support at sub-
           regional, regional or national level
        Future requirement – project that need better definition and future


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