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					Company Relocations in
the East of England




A report to the East of
England Development Agency




March 2002

                             PRISM RESEARCH LTD




                                          1
Company Relocations in the
East of England


Contents



Introduction ........................................................................................................................................... 2

Overview of the Areas .......................................................................................................................... 3

Physical Development in the East of England ................................................................................. 21

Summary .............................................................................................................................................. 27

Policy implications .............................................................................................................................. 29

Annex 1 ................................................................................................................................................ 31

Annex 2 ................................................................................................................................................ 33




Prism Research Ltd                                                                                                                                       1
March 2002
Company Relocations in the
East of England


Introduction

       1.      This report presents the results of an analysis of company movement, into, out of,
               and within the East of England, as defined by Government Office.

       2.      In particular, the report focuses on movement in respect of those portions of the
               region with Objective 2 Status, and those formerly within the Objective 5B Area,
               which have transitional support under Objective 2b.


                Objective 2 Areas (Pop. 463,700)
                Luton (13 wards)
                Southend on Sea (5 wards)
                Waveney & Gt. Yarmouth (20 wards)
                Breckland (40 wards)
                North Norfolk Coast (10 wards in 2 districts)


                Transitional Areas (Pop. 151, 500)
                The Fens (28 wards in 3 districts)
                Rural East Suffolk (16 wards in 3 districts)
                Part Central Rural Norfolk (3 wards in North Norfolk)




       3.      For comparative purposes, some data is included on the remaining portions of the
               region.

       4.      The primary data derives from Prism’s CREDO databases of company moves and
               physical development, although the firm emphasis is on company movement, as the
               physical development database can be analysed only down to district, not ward level,
               necessary to assess the position in respect of the Programme Areas. Further
               explanation of the nature of this database is contained at Annex 1. Some VAT stock
               data and population data is also introduced for the purposes of making comparisons.

       5.      Four main themes are developed in the report:

                     i)    first, there is an overview of the area;
                     ii)   second, analysis by three time periods is presented – from pre 1991, from
                           1991 to 1996, then from 1996 to 2001;
                     iii) third, an analysis by sector is undertaken, using a classification which
                          includes the sectors targeted within the Regional Economic Strategy . This
                          sectoral data is also analysed by the time periods referred to above;
                     iv) the report concludes its analysis with a brief exploration of physical
                         development patterns and trends in the region.

       6.      Finally, a short conclusions section summarises the findings and considers their
               implications for policy makers in the region.

       7.      Throughout this report, area names suffixed by O2 relate to Objective 2 Programme
               Areas, and those sufficed by – T, relate to the transitional areas. Other areas with
               similar names relate to Local Authority Districts, or Unitary Authorities where data is
               analysed by county, the pre-re-organisation boundaries have been used.



Prism Research Ltd                                                                                     2
March 2002
Company Relocations in the
East of England


Overview of the Areas

           8.       The first table presented shows data for each of the Objective 2 Areas (suffixed 02),
                    and Transitional Areas (suffixed T). For comparative purposes, data for the relevant
                    districts as a whole is shown. This table covers movement over approximately the
                    last 12 years, up to the end of June 2001.

           9.       The second shows the same statistics for all districts in the East of England,
                    including those with Objective 2 and Transitional Wards within their boundaries
                    (shown in italics)

           10.      The first three columns show the numbers of moves into, out of, and within each
                    area, followed by the total, and net balance of moves in, and out of the area.

           11.      These are followed by three benchmark statistics:

                            
                                                         1
                                Zonal Gravity Index
                               total moves as a % of total business stock (VAT registered businesses)
                               net balance, as a % of business stock


                                                 Company Moves                       Benchmarks
District                                                                       1   Moves as % Balance as
                                  In       Out    Within Total       Balance ZGI
                                                                                   businesses % of stocks
Luton 02                          303      313     298       914       -10   49%       30.0          -0.3%
Southend O2                       197      192     132       521         5   41%       27.6           0.3%
Waveney & Great Yarmouth O2       125      110     258       493        15   70%       19.4           0.6%
Breckland O2                      113       84     192       389        29   70%       11.0           0.8%
North Norfolk Coast O2             20       11      16        47         9   59%        5.1           1.0%
The Fens - T                      103       86     176       365        17   67%       10.6           0.5%
Rural East Suffolk -T              55       37      37       129        18   50%        6.9           1.0%
Central Rural Norfolk -T               9    12      20        41        -3   63%       11.7          -0.9%
District Aggregations             925      845    1129       2899       80
Luton                             303      315     398       1,016     -12             27.7          -0.3%
Southend-on-Sea                   276      299     333       908       -23             22.6          -0.6%
Waveney& Great Yarmouth           139      139     454       732         0             15.6           0.0%
Breckland                         111       85     210       406        26             11.5           0.7%
N Norfolk & K Lynn                177      135     377       686        45              9.7           0.6%
Fenland, E Cambs, K Lynn          317      253     546       1,116      64             12.1           0.7%
Waveney, Mid-Suffolk, Suff’k C.   379      255     575       1,209     124             12.5           1.3%
North Norfolk                      77       57     114       248        20              8.0           0.6%
East of England                   5,278 3,852 17,324 26,454 1,426            82%       16.4           0.9%
Table 1          Total moves (single location companies) for Programme Areas, and their
                 corresponding Districts (1987 to 2001)




1
 Zonal Gravity Index – a measure of an area’s ability to retain the moves it generates. Calculated as moves
within ÷ (moves within + moves out). Tends to rise with size of area, hence high region figure.

Prism Research Ltd                                                                                            3
March 2002
Company Relocations in the
East of England


                                                     Company moves                     Moves as %   Balance as %
           District
                                    In       Out     Within    Total   Balance   ZGI   businesses     of stocks
Mid Bedfordshire                   268       227       218       713      41     49%      16.0           0.9%
Bedford                            229       214       355       798      15     62%      20.0           0.4%
South Bedfordshire                 305       251       311       867      54     55%      24.8           1.5%
Luton                              303       315       398     1,016     -12     56%      27.7          -0.3%
Bedfordshire                       794       694     1,595     3,083     100     70%      19.0           0.6%
Huntingdon                         268       211       421       900      57     67%      17.5           1.1%
Peterborough                       207       163       370       740      44     69%      20.8           1.2%
Fenland                             95        80       156       331      15     66%      12.8           0.6%
East Cambridgeshire                122        98       127       347      24     56%      12.7           0.9%
Cambridge                          246       306       315       867     -60     51%      27.7          -1.9%
South Cambridgeshire               354       306       259       919      48     46%      18.4           1.0%
Cambridgeshire                     788       659     2,153     3,600     129     77%      15.9           0.6%
Braintree                          274       190       332       796      84     64%      18.7           2.0%
Harlow                             161       127       122       410      34     49%      27.8           2.3%
Thurrock                           230       170       221       621      60     57%      23.1           2.2%
Tendring                            92        87       197       374       5     69%      12.3           0.2%
Southend-on-Sea                    276       299       333       908     -23     53%      22.6          -0.6%
Rochford                           175       146       114       435      29     44%      19.6           1.3%
Maldon                             121       105       148       374      16     58%      15.9           0.7%
Epping Forest                      393       327       190       910      66     37%      21.3           1.5%
Colchester                         228       200       403       831      28     67%      19.4           0.7%
Chelmsford                         327       284       287       898      43     50%      20.0           1.0%
Brentwood                          224       232       138       594      -8     37%      23.4          -0.3%
Uttlesford                         248       184       180       612      64     49%      18.1           1.9%
Basildon                           459       317       321     1,097     142     50%      26.1           3.4%
Castle Point                       122       152       121       395     -30     44%      18.3          -1.4%
Essex                            1,952     1,440     4,485     7,877     512     76%      17.3           1.1%
Dacorum                            462       362       419     1,243     100     54%      24.9           2.0%
East Hertfordshire                 412       360       389     1,161      52     52%      22.9           1.0%
Hertsmere                          454       417       158     1,029      37     27%      31.2           1.1%
North Hertfordshire                372       282       414     1,068      90     59%      23.1           2.0%
St. Albans                         420       493       417     1,330     -73     46%      23.9          -1.3%
Stevenage                          169       161       167       497       8     51%      30.7           0.5%
Three Rivers                       323       333       125       781     -10     27%      28.0          -0.4%
Watford                            461       342       270     1,073     119     44%      40.1           4.4%
Welwyn Hatfield                    297       245       192       734      52     44%      25.9           1.8%
Broxbourne                         248       204       146       598      44     42%      24.9           1.8%
Hertfordshire                    2,600     2,178     3,719     8,497     422     63%      23.4           1.2%
Breckland                          111        85       210       406      26     71%      11.5           0.7%
South Norfolk                      131       117       139       387      14     54%      10.7           0.4%
Norwich                            194       220       338       752     -26     61%      25.9          -0.9%
North Norfolk                       77        57       114       248      20     67%       8.0           0.6%
Kings Lynn & West Norfolk          100        75       263       438      25     78%      11.1           0.6%
Broadland                          159       117       119       395      42     50%      12.3           1.3%
Great Yarmouth                      72        77       232       381      -5     75%      17.4          -0.2%
Norfolk                            427       330     1,833     2,590      97     85%      11.5           0.4%
Waveney                             67        62       222       351       5     78%      14.1           0.2%
Babergh                            153       127       161       441      26     56%      14.4           0.8%
Forest Heath                       106        86       135       327      20     61%      16.8           1.0%
Ipswich                            166       176       224       566     -10     56%      24.7          -0.4%
Mid Suffolk                        151        83       113       347      68     58%       9.8           1.9%
St Edmundsbury                     146       140       211       497       6     60%      16.2           0.2%
Suffolk Coastal                    161       110       240       511      51     69%      14.1           1.4%
Suffolk                            598       432     1,658     2,688     166     79%      13.4           0.8%
East of England                  5,278     3,852    17,324    26,454   1,426     82%      16.4           0.9%
Note: districts containing Programme Areas shown in italics
Table 2       Total moves (single location companies only) for all Local Authority Districts within
              the East of England, 1987 to 2001




Prism Research Ltd                                                                                              4
March 2002
Company Relocations in the
East of England



       12.    Two main themes are evident from Tables 1 and 2:

                            firstly, it is almost exclusively established urban centres that have lost
                             businesses, overall, including, rather surprisingly, Cambridge (although
                             there may be boundary issues here).
                            secondly, when examining moves as a percentage of overall stocks, the
                             most striking feature remains the low amount of movement in the
                             relatively rural areas, and especially in North Norfolk Coast, and Rural
                             East Suffolk. The other primarily rural areas designated as Objective 2 or
                             Transitional are also low generators of moves – Breckland, The Fens,
                             and Central Rural Norfolk.
       13.    This second theme contrasts strikingly with the urban Programme Areas, which have
              generated more moves (proportionately) than have their districts as a whole. In all
              three cases, however, Luton, Southend and Great Yarmouth and Waveney, the net
              balances in the programme areas are more favourable than those in the districts as a
              whole. Of the five Objective 2 areas, only Luton O2 experienced a negative balance,
              and this was slightly better than Luton as a whole.

       14.    In the rural Programme Areas, the data appears to reflect more static local
              economies. This is not simply a case of rural areas having less businesses. The
              total moves indicator is expressed as a percentage of total stock in the respective
              areas, to control for this factor. Of course, in rural localities, it is still the case that
              many businesses are agricultural or closely tied to this sector. Although there is
              much rationalisation in this sector, relocation is much less prevalent, and a less
              important contributor to change. In fact, if agricultural businesses are excluded from
              the VAT stock figures, the ratios of movers to stocks rise to levels much closer to the
              regional average for all rural districts except North Norfolk.

       15.    In all rural cases, however, the balances show that the intra-UK inward investment
              process appears to be assisting both the Objective 2 and Transitional areas, albeit
              marginally. In fact, although activity levels are higher in the urban areas, the net
              balances in the more rural areas are slightly more significant in terms of the rural
              stocks.

              Employment effects
       16.    We comment briefly here on the employment associated with these moves. Analysis
              is limited to firms employing less than 250 people, for two reasons:

                     v) first, experience shows that very few moves of a ‘lock, stock and barrel’,
                        nature involve more than this number of jobs (although this does not apply so
                        much to expansions and overseas inwards investments);
                     vi) second, the employment associated with a move is that of the legal entity.
                         Even with so-called ‘single location’ companies, as analysed here, this may
                         include the employment of wholly owned subsidiaries on other sites, which
                         are not legal entities in their own right. Experience again shows that the data
                         for SMEs is more reflective of the truth than is the case for larger firms, where
                         a ‘move’ may simply reflect a change of owner, that owner being located
                         elsewhere.

       17.    With these caveats in mind, it is nevertheless useful to examine briefly the kinds of
              size of company moving in the various locations.

       18.    Tables 3 and 4 reveal the employment effect associated with the recorded moves,
              Table 3 covering the Objective 2 and Transitional Areas, and Table 4 covering all
              districts, and existing and former counties.



Prism Research Ltd                                                                                      5
March 2002
Company Relocations in the
East of England



District                                     In         Out      Within      Total     Balance Balance as
                                                                                                % of jobs
Luton O2                                   7,196       8,664      4,529     20,389      -1,468         -2.1%
Southend O2                                2,876       3,385      1,546       7,807       -509         -1.4%
Waveney & Great Yarmouth O2                2,939       3,452      4,419     10,810        -513         -1.1%
Breckland O2                               2,461       1,419      2,771       6,651      1,042          3.0%
North Norfolk Coast O2                        106        137        153         396        -31         -0.4%
Aggregate of Objective 2 Areas            15,578      17,057     13,418     46,053      -1,479         -5.1%
The Fens - T                               1,488       1,131      2,189       4,808        357          1.2%
Rural East Suffolk -T                      1,306         329        346       1,981        977          8.8%
Central Rural Norfolk -T                      307        607        255       1,169       -300         -5.8%
Aggregate of Transitional Areas            3,101       2,067      2,790       7,958      1,034          3.1%
Aggregate of Programme Areas              18,679      19,124     16,208     54,011        -445         -0.7%
Table 3          Employment Effects of Moves on Programme Areas, 1987 - 2001

           19.     It is evident from Table 3 that the picture in employment terms looks less positive
                   than it does in terms of in company moves. Whilst Breckland O2, The Fens – T, and
                   Rural East Norfolk – T all record employment gains, the other five areas do not. In
                   three cases – Southend O2 , Waveney & Gt. Yarmouth O2, and North Norfolk Coast
                   O2, a positive balance in moves is associated with employment losses, due to the
                   out-movers being larger, on average, than the in-movers.

           20.     In Table 4, (overleaf) the picture for all districts, and for the region as a whole, reveals
                   an overall gain of some 25,000 jobs – a significant total, although equivalent to only
                   around 1% of regional employment, over the period.

           21.     The pattern of gains and losses in jobs tends to follow the pattern of movement of
                   companies, although there are more negative balances in respect of employment
                   than there are for company moves.

           22.     This view of movement tends to reveal the issues in relation to the deprived areas
                   more clearly. Whereas 5 of the 8 designated areas have negative employment
                   balances, only 16 of the 48 districts in the region do. If the districts containing
                   Objective 2 or Transitional status areas are excluded from this analysis the ratio
                   drops slightly to 12 out of 37 – less than a third.

           23.     Thus, whereas net employment losses are evident in more than half of designated
                   areas, they are found in less than a third of districts that do not contain a designated
                   area.




Prism Research Ltd                                                                                           6
March 2002
Company Relocations in the
East of England


District                              In       Out      Within     Total    Balance   Balance as
Mid Bedfordshire                     4,861     4,401     3,494     12,756       460      of jobs
                                                                                       % 1.4%
Bedford                              5,391     5,154     4,996     15,541       237      0.4%
South Bedfordshire                   7,222     6,721     4,983     18,926       501      1.3%
Luton                                7,778     9,124     5,871     22,773    -1,346     -1.7%
Bedfordshire                        19,730    19,617    25,127     64,474       113      0.1%
Huntingdon                           6,671     5,660     6,869     19,200     1,011      1.8%
Peterborough                         5,494     3,252     6,938     15,684     2,242      2.8%
Fenland                              1,944     1,096     1,610      4,650       848      3.4%
East Cambridgeshire                  2,704     2,491     1,327      6,522       213      1.2%
Cambridge                            5,362     7,654     6,971     19,987    -2,292     -2.9%
South Cambridgeshire                 7,055     8,043     3,270     18,368      -988     -2.0%
Cambridgeshire                      18,391    17,262    37,919     73,572     1,129      0.4%
Braintree                            4,811     2,855     3,840     11,506     1,956      4.8%
Harlow                               4,253     2,643     2,134      9,030     1,610      4.5%
Thurrock                             5,786     3,441     3,606     12,833     2,345      4.7%
Tendring                             1,514     1,751     1,680      4,945      -237     -0.8%
Southend-on-Sea                      4,016     4,992     3,991     12,999      -976     -1.7%
Rochford                             2,182     2,612     1,307      6,101      -430     -2.4%
Maldon                               1,781     1,938     2,429      6,148      -157     -1.0%
Epping Forest                        5,189     5,128     1,928     12,245        61      0.2%
Colchester                           5,278     4,814     6,509     16,601       464      0.7%
Chelmsford                           5,428     5,554     3,967     14,949      -126     -0.2%
Brentwood                            4,737     5,014     2,838     12,589      -277     -1.0%
Uttlesford                           3,860     2,445     1,869      8,174     1,415      5.2%
Basildon                            11,005     5,502     4,322     20,829     5,503      8.7%
Castle Point                         2,197     2,557     1,500      6,254      -360     -2.2%
Essex                               40,598    29,748    63,418    133,764    10,850      2.0%
Dacorum                             11,730     9,907     7,351     28,988     1,823      3.1%
East Hertfordshire                   7,814     6,979     5,313     20,106       835      1.6%
Hertsmere                            9,346     7,916     2,665     19,927     1,430      3.5%
North Hertfordshire                  7,207     6,388     7,735     21,330       819      1.8%
St. Albans                           9,633    12,040     6,635     28,308    -2,407     -4.4%
Stevenage                            5,386     3,176     3,221     11,783     2,210      5.7%
Three Rivers                         5,996     6,206     1,636     13,838      -210     -0.9%
Watford                             11,400     8,686     5,507     25,593     2,714      5.5%
Welwyn Hatfield                      6,639     6,036     2,900     15,575       603      1.1%
Broxbourne                           5,535     4,251     2,611     12,397     1,284      4.2%
Hertfordshire                       61,358    52,237    64,922    178,517     9,121      2.0%
Breckland                            2,476     1,445     3,030      6,951     1,031      3.0%
South Norfolk                        1,863     3,057     2,344      7,264    -1,194     -4.4%
Norwich                              4,618     5,738     7,477     17,833    -1,120     -1.3%
North Norfolk                        1,183     1,700     1,665      4,548      -517     -1.9%
Kings Lynn & West Norfolk            2,139     1,871     2,921      6,931       268      0.6%
Broadland                            3,393     1,724     1,061      6,178     1,669      5.8%
Great Yarmouth                       1,946     3,255     4,262      9,463    -1,309     -4.0%
Norfolk                              9,207    10,276    31,274     50,757    -1,069     -0.4%
Waveney                              1,680     1,082     2,763      5,525       598      1.6%
Babergh                              2,275     2,215     1,977      6,467        60      0.2%
Forest Heath                         2,851     1,218     1,897      5,966     1,633      7.0%
Ipswich                              3,825     3,166     3,651     10,642       659      1.1%
Mid Suffolk                          2,540     1,621     1,369      5,530       919      3.6%
St Edmundsbury                       3,968     3,644     4,540     12,152       324      0.7%
Suffolk Coastal                      3,219     2,355     3,767      9,341       864      2.2%
Suffolk                             14,452     9,395    25,870     49,717     5,057      2.0%
East of England                    125,881   100,680   286,385    512,946    25,201      1.2%

Table 4        Employment Effects of Moves, by District, 1987 - 2001




Prism Research Ltd                                                                                 7
March 2002
Company Relocations in the
East of England


              Trends over time
       24.    Clearly, the attractiveness or unattractiveness of locations may change over time,
              both in overall terms, and in relation to particular sectors. Thus, London remains
              Europe’s number one attraction for inward investment projects, yet the flight of
              manufacturing from the Capital has been such that it is getting difficult to identify true
              production operations there.

       25.    Of course, structural changes are only one factor at work in determining trends. The
              economic cycle also plays its part. With many moves generated by business
              expansion, albeit often triggered by property events such as lease expiry, the cycle of
              moves tends to slow in recession and pick up late in the recovery phase.

       26.    We examine below the balances of movement in the East of England over three
              broadly equal periods – from the inception of the database in 1987, to 1991; from
              1991 to 1996; and from 1996 through to 2001. The rise in coverage of the business
              database used by CREDO, from September 1995, means that trends in volumes of
              moves cannot be analysed meaningfully. However, it is valid to explore the overall
              balances to see the extent to which positive or negative trends can be observed to
              persist over time.

       27.    Tables 5 and 6 reveal the move balances over the three periods for the designated
              areas (Table 5) and for all the districts and former counties in the region (Table 6).


               District                                      Pre-1991        1991-1996        1996-2001
               Luton 02                                           2             -24               12
               Southend O2                                       14               -1              -8
               Waveney & Great Yarmouth O2                       16               -3               2
               Breckland O2                                       5              10               14
               North Norfolk Coast O2                            -1                6               4
               The Fens - T                                       1                9               7
               Rural East Suffolk -T                              2                6              10
               Central Rural Norfolk -T                          -1               -1              -1
              Table 5        Move Balances over Time, Programme Areas

       28.    The data reveals a rather uneven pattern over the three periods, but with more losses
              in the current decade than in the 1980s, when most of the programme areas enjoyed
              positive balances. Most of the negative balances were experienced during the
              recovery phase of the economic cycle, and taking lag effects into account, some may
              well have arisen due to the recession. In the relatively warm climate of the past 5
              years, only one area – Southend O2 – has experienced a significant negative
              imbalance.

       29.    In relation to the remainder of the region, the story is a little different (Table 6).




Prism Research Ltd                                                                                        8
March 2002
Company Relocations in the
East of England


District                                                      Pre-1991   1991-1996   1996-2001
Mid Bedfordshire                                                   -8         25          24
Bedford                                                           14         -12          13
South Bedfordshire                                                  5         30          19
Luton                                                               1        -36          23
Bedfordshire                                                      12           7          81
Huntingdon                                                        15          23          19
Peterborough                                                        1          7          36
Fenland                                                             1         14           0
East Cambridgeshire                                                 4          7          13
Cambridge                                                          -2        -23         -35
South Cambridgeshire                                              14          30           4
Cambridgeshire                                                    33          58          38
Braintree                                                         15          21          48
Harlow                                                              8         10          16
Thurrock                                                            4         37          19
Tendring                                                            0         -4           9
Southend-on-Sea                                                    -8         -1         -14
Rochford                                                          17           2          10
Maldon                                                             -9         -3          10
Epping Forest                                                     22           7          37
Colchester                                                        23          10          -5
Chelmsford                                                        13           6          24
Brentwood                                                           1          4         -13
Uttlesford                                                         -8         54          18
Basildon                                                          33          38          71
Castle Point                                                       -6         -1         -23
Essex                                                            105        180         227
Dacorum                                                           15          54          31
East Hertfordshire                                                17          37          -2
Hertsmere                                                         17          32         -12
North Hertfordshire                                                 6         45          39
St. Albans                                                       -16         -29         -28
Stevenage                                                           3         -4           9
Three Rivers                                                       -6         26         -30
Watford                                                           17          27          75
Welwyn Hatfield                                                   10          24          18
Broxbourne                                                          2         20          22
Hertfordshire                                                     65        232         125
Breckland                                                           5          7          14
South Norfolk                                                      -5         11           8
Norwich                                                          -12         -18           4
North Norfolk                                                      -7         15          12
Kings Lynn & West Norfolk                                           1         17           7
Broadland                                                         21          21          16
Great Yarmouth                                                      9         -5          -9
Norfolk                                                           12          32          53
Waveney                                                             2          6          -3
Babergh                                                             5         10          11
Forest Heath                                                      10           5           5
Ipswich                                                            -8        -24          22
Mid Suffolk                                                         7         28          33
St Edmundsbury                                                     -6          0          12
Suffolk Coastal                                                   16          15          20
Suffolk                                                           26          40        100
East of England                                                  253        549         624
Note: districts containing Programme Areas shown in italics
Table 6            Moves Balances over Time, by District



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          30.       In rather more of the districts, the trends repeat through the three periods, although,
                    again, the patterns are quite uneven. In general, it is the urban centres that are most
                    likely to have experienced negative balances in all three, or at least two, periods –
                    Cambridge, Southend (whole district), St Albans, Norwich, Great Yarmouth, Ipswich
                    all fit this picture. The new towns of Basildon, Harlow and Peterborough stand out
                    with Watford, Welwyn, Braintree, Huntingdon and a number of more rural districts as
                    persistent net beneficiaries of inward movement. As counties, Essex and Suffolk
                    have fared particularly well over the last 5 years, while Hertfordshire attracted a large
                    net positive balance of investments in the early 1990s.

                    ZGIs
          31.       Luton and Southend have rather low ZGIs, indicating they are not particularly good at
                    holding on to movers, however they do not exhibit by any means the lowest ZGIs in
                    the region.

          32.       Finally, the negative balances of some major urban centres are interesting –
                    particularly in the case of Cambridge. There are two plausible explanations for this
                    trend, which may apply differentially in the urban centres experiencing losses:

                              i)        Firstly, property rental and purchase costs can be influential in the
                                        outward migration of firms from urban centres. The case of London
                                        is well documented, but we have observed in other studies that high
                                        rentals can affect the balance of movement – thus the Thames Valley
                                        has occasionally become a net exporter of firms in recent years,
                                        whereas, over the 1990s, it was a significant net importer of firms,
                                        many originating in London. This is mainly symptomatic of a very
                                        dynamic economy in which lower value added operations move to
                                        cheaper locations, to be replaced, in the main, by more knowledge
                                        intensive, higher value added businesses;
                              ii)       A second issue is considered to be that of administrative boundaries.
                                        In many urban areas, particularly where the administrative
                                        boundaries are tightly drawn, we have witnessed the rise of
                                        investment in peripheral locations, often within the functional
                                        boundary, but outside the administrative boundary. While this may
                                        have implications for the economic health of urban centres, and
                                        sustainability issues, due to increases in car borne commuting, it has
                                        little impact on the overall health of the local economy. Indeed, it
                                        may help to reduce congestion in the centres.

                    Sectoral analysis
          33.       The CREDO database was re-configured to permit analysis by the ‘target sectors’
                    adopted by the region, within the Regional Economic Strategy. In some cases, there
                    was overlap between the sectors, particularly in relation to the so-called ‘creative
                    industries,’ which is usually taken to include at least some aspects of ICT, high-tech
                    manufacture, and leisure. For the purposes of this analysis, the sectors had to be
                    mutually exclusive, and best fit sectors were devised, which matched the definitions
                    given to us by Cambridge Econometrics for the target sectors, as closely as possible.
                    Annex 2 sets out the ‘fit’ of the sectoral groups used in this report with SIC92 codes at
                    2 or 3 digit level. Totals in the sectoral tables do not always agree with column
                    aggregates, as some move cases could not be allocated to the sectoral groups.

          34.       The first tables show the movement picture over the whole period, by sector, for the
                                                                                             2
                    Objective 2 Areas, in aggregate, and the Transitional Areas, in aggregate .

2
 The data in tables 7 to 10 comprises the aggregate of moves for each group of individual Objective 2 or Transitional Areas.
We could not present data for the two areas, as a whole, because the individual areas within each group were not a continuous
area. For example, if we had presented data for the Objective 2 areas, defining them as a single entity, a move from Luton to
Southend would have been defined as a ‘within’ move, a rather misleading definition.


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               Total Moves for Objective 2 Areas (1987-2001)
                                               Moves Moves             Moves      Moves       Moves
               Sector                             In      Out          Within     Total      Balance
               Agriculture, food processing        21         21         13         55          0
               Life sciences                        0          0          3          3          0
               High technology manufacture         12         21         17         50         -9
               Automotive engineering               2          3          3          8         -1
               Other manufacturing                140        137        177        454          3
               Construction & other production     95         69        122        286         26
               Retail and distribution            203        179        238        620         24
               Transport gateways                   9          6          4         19          3
               ICT                                 41         22         22         85         19
               Creative                            18         27         19         64         -9
               Finance and business services       47         47         57        151          0
               Tourism and leisure                 13         12         20         45          1
               Mainly public services              12         12         16         40          0
               Mainly private services            141        150        179        470         -9
               Total                              754        706        890       2350         48
              Table 7        Sectoral overview – Objective 2 Areas, 1987 - 2001


               Total Moves for Objective 2 (T) Areas (1987-2001)
                                                  Moves      Moves      Moves      Moves      Moves
               Sector                               In        Out       Within     Total     Balance
               Agriculture, food processing          22         10        17         49         12
               Life sciences                          1          0            0          1          1
               High technology manufacture            4          5            4      13          -1
               Automotive engineering                 1          3            1          5       -2
               Other manufacturing                   33         21        34         88         12
               Construction & other production        8         11        30         49          -3
               Retail and distribution               39         45        74        158          -6
               Transport gateways                     2          1            0          3          1
               ICT                                    6          0            6      12             6
               Creative                               2          3            0          5       -1
               Finance and business services          9         10        16         35          -1
               Tourism and leisure                    4          1            4          9          3
               Mainly public services                 4          2            8      14             2
               Mainly private services               32         23        39         94             9
               Total                               167        135        233        535         32
              Table 8        Sectoral overview -Transitional Areas, 1987 - 2001

       35.    Taking the Objective 2 Areas first, we can readily see that the majority of moves have
              taken place in sectors other than the target sectors – over 80% - reflecting, to a great
              extent the structure of the economy. Nevertheless, in total, CREDO has recorded
              480 moves in the target sectors, with a marginal net balance of just +4, within these
              sectors.


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       36.    Least successful target sectors were High-tech manufacture, and Creative industries
              each with balances of –9. Conversely, ICT was the most successful with a balance of
              +19, contributed mainly by Southend (+9) and Luton (+4).

       37.    Overall, the two largest balances, not surprisingly, (bearing in mind that non-target
              sectors accounted for 80% of moves), were in non-target sectors. Construction and
              other production attracted a net balance of +26 moves, and Retail and distribution a
              net balance of +24.

       38.    Regarding the Transitional Areas, the moves are again focused on the non-target
              sectors which account for 3 in 4 of total moves. These areas also achieve a small
              balance within the target sectors, but due, in this instance, mainly to the Agriculture &
              food processing sector. With a total of 49 moves in this sector, a balance of +12 was
              achieved – 24% of the total. Another target sector – ICTs – achieves an even higher
              proportion. Its balance of +6 represented 50% of total moves, an exceptional
              proportion, although of a small base, of only 12 moves. These two sectors were the
              main cause of a higher positive balance of moves in the target sectors within the
              Transition Areas (+18 moves).

       39.    The picture was also positive in relation to non-target sectors, but two of the sectors
              performing well in the Objective 2 Areas – Construction & Retail, both experienced
              negative balances in the Transitional Areas.

       40.    Turning now to the balance of investments more generally in the region, we have
              produced, overleaf, tables for the counties (pre-reorganisation), and region, as a
              whole.

       41.    The table shows that:

                            all former counties have enjoyed a positive balance in both target and
                             non-target sectors;
                            however, in relation to specific target sectors, there have been mixed
                             trends, particularly in relation to:
                             –   high-tech manufacturing
                             –   automotive engineering;
                            Essex appears to have been the most attractive county for target sector
                             businesses, with a substantial balance, accounting for 10% of target
                             sector moves. Norfolk and Suffolk have also fared well in relation to the
                             total number of target sector moves.
                            In contrast, Bedfordshire and Cambridgeshire have, (rather surprisingly in
                             the latter case), performed much less strongly over the period.
       42.    Below, we show the position for the East of England, as a whole (Table 9).




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County Balances                       Bedfordshire    Cambridgeshire            Essex          Hertfordshire        Norfolk                Suffolk        East of England
Sector                              Total   Balance   Total   Balance   Total      Balance    Total   Balance   Total   Balance    Total      Balance     Total   Balance
Agriculture, food processing          72       3       125       6       174            16    646        38      116          5      89              7    646        38
Life sciences                          3       -1        1       1         6             2     29         2        3          0       5          -1        29         2
High technology manufacture          102       -4      112       1       161            23    642        16       36          -1     50              6    642        16
Automotive engineering                15       -2       24       6        40             6    130         7       12          -2     12          -2       130         7
Other manufacturing                  622      28       625      38      1,380           89   4,642      221      484          3     450          33      4,642      221
Construction & other production      350      14       401      14      1,044           79   3,130      213      282      22        326          -2      3,130      213
Retail and distribution              786      48       880      50      1,984           92   6,705      354      701      21        673          28      6,705      354
Transport gateways                    13       1        19       2       187            28    340        50       21          3      74          12       340        50
ICT                                  141       -2      250       3       291            20   1,367       53       94          7      97              9   1,367       53
Creative                              85       8       122     -10       195            29    818        63       69          5      75              4    818        63
Finance and business services        193       6       243      12       528            35   1,750      109      155      16        147              8   1,750      109
Tourism and leisure                   37       -2       56      -2       121             5    457        23       60          3      49              5    457        23
Mainly public services                61       7        79      -3       159             0    537        14       48          1      54              4    537        14
Mainly private services              593       -3      657      11      1,587           85   5,197      253      490          8     584          55      5,197      253
Target sectors                       661       7       952      19      1,703       164      6,179      361      566      36        598          48      6,179      361
Non-target sectors                  2,412     94      2,642    110      6,154       345      20,211   1,055     2,005     55       2,087        118      20,211   1,055
Total                               3,073    100      3,594    129      7,857       512      26,390   1,426     2,571     97       2,685        166      26,390   1,426

      Table 9         Moves Total and Balances for Counties (former counties), 1987 - 2001




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       43.    The region (Table 10, below) has enjoyed a significant net gain in both target, and
              non-target sectors, with the respective balance representing 6% of moves (target)
              and 5% of moves (non-target).


                                                 All periods
               Region (1987-2001)
                                                  Moves        Moves   Moves      Moves      Moves
               Sector                              In           Out    Within     Total     Balance
               Agriculture, food processing         125          87      434        646         38
               Life sciences                          6           4       19         29          2
               High technology manufacture          141         125      376        642         16
               Automotive engineering                29          22       79        130          7
               Other manufacturing                  909         688     3,045     4,642        221
               Construction & other production      567         354     2,209     3,130        213
               Retail and distribution            1,300         946     4,459     6,705        354
               Transport gateways                    93          43       204       340         50
               ICT                                  314         261      792      1,367         53
               Creative                             196         133      489        818         63
               Finance and business services        387         278     1,085     1,750        109
               Tourism and leisure                  111          88       258       457         23
               Mainly public services                72          58       407       537         14
               Mainly private services            1,008         755     3,434     5,197        253
               Target sectors                     1,402        1,041    3,736     6,179        361
               Non-target sectors                 3,856        2,801   13,554    20,211       1,055
               Total                              5,278        3,852   17,324    26,390       1,426
              Table 10       Moves Totals and Balance for the East of England, 1987-2001

       44.    At the regional level, the target sector achieving the most positive trend was
              Transport gateways, with a positive net balance representing 15% of moves, and
              37% of moves across the regional boundary. In contrast, the least positive balance
              was in high-tech manufacturing where a balance of 2% of total moves equated to only
              6% of moves across the regional boundary.

              Employment Effects by Sector
       45.    Below we explore briefly the apparent employment effects of the moves for the
              programme areas, the former county areas, and the region, as a whole, in relation to
              sector.

       46.    By comparison with the company moves analysis, the employment effects analysis is
              rather less positive, showing net job losses within both target and non-target sectors
              for the Objective 2 Areas, but with the numbers fairly modest in relation to the totals
              associated with the moves. (Table 11, overleaf)




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                Objective 2 Areas (1987-2001)     Employment associated with …
                                                  Moves     Moves     Moves      Moves    Moves
                Sector
                                                    In       Out      Within     Total    Balance
                Agriculture, food processing         352       331       90        773        20
                Life sciences                          0         0      130        130         0
                High technology manufacture          262       269      355        886       -10
                Automotive engineering                24        96       13        133       -72
                Other manufacturing                 2401      2712     3063       8176      -297
                Construction & other production     1465      1012     1267       3744       477
                Retail and distribution             2604      3438     2076       8118      -791
                Transport gateways                   136        91       18        245        45
                ICT                                  300       346      132        778       -47
                Creative                             389       338      179        906        42
                Finance and business services        638       842      777       2257      -200
                Tourism and leisure                  380       649      468       1497      -224
                Mainly public services                83        76      346        505         7
                Mainly private services             2067      2640     3143       7850      -566
                Target sectors                      2,481    2,962     2,162      7,605      -446
                Non-target sectors                  8,620    9,878     9,895     28,393    -1,170
                Total                              11,237   12,864    12,126     36,227    -1,426
              Table 11       Employment Effects of Moves in Objective 2 Areas by Sector,
                             1987–2001

       47.    Based on much lower numbers of employment, overall, the position in the
              Transitional Areas is more positive revealing relatively small net employment
              balances in both target and non-target sectors, adding around 15% of the
              employment associated with moves. The positions are most positive for the
              Agriculture/food processing, and Transport gateways sectors, and most negative for
              High-tech manufacture.


                Objective 2 (T) Areas (1987-
                2001)                             Moves     Moves     Moves      Moves    Moves
                Sector                             In        Out      Within     Total    Balance
                Agriculture, food processing      1,201       463      151       1,815      738
                Life sciences                         6         0        0           6        6
                High technology manufacture          44       416       49         509     -372
                Automotive engineering                8        34       16          58      -26
                Other manufacturing                 558       349      621       1,528      209
                Construction & other production      70        62      283         415        8
                Retail and distribution             391       336      856       1,583       55
                Transport gateways                  267         8        0         275      259
                ICT                                  34         0       33          67       34
                Creative                             16        39        0          55      -23
                Finance and business services        55       134      109         298      -79
                Tourism and leisure                  16         2       15          33       14
                Mainly public services                7         9       82          98       -2
                Mainly private services             589       232      319       1,140      357
                Target sectors                    1,647     1,096       373      3,116      551
                Non-target sectors                1,615       988     2,161      4,764      627
                Total                             3,262     2,084     2,534      7,880    1,178
              Table 12       Employment Effects of Moves in Transitional Areas by Sector, 1987
                             - 2001

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       48.    On a County (former counties) basis, employment effects are positive for the target
              sectors in all counties except Bedfordshire, Cambridgeshire and Norfolk, with
              employment associated with those moving in, being substantially higher, generally,
              than employment associated with moves out, resulting in strong positive net overall
              balances.

       49.    There are some interesting spatial differences, by sector:

                            job gains through ICT sector moves were found only in Hertfordshire;
                            trends within the Creative sector were very mixed across the counties, as
                             were those in High-tech manufacture, Automotive engineering and
                             Tourism & leisure;
                            most counties recorded net gains in Agriculture/food processing,
                             Transport gateways, and perhaps, surprisingly, Finance and business
                             services.
       50.    Interestingly, in most counties, there were net employment balances in relation to the
              non-target sectors, both as a whole and within the constituent sub-sectors,
              suggesting that the region may be doing a little better on non-target sectors, than
              target sectors. Of course, these moves largely pre-date the RES, and cannot be
              seen as monitoring its effectiveness, but the data does emphasise that it will not be
              easy to encourage the significant development of sectors against the ‘natural grain’ of
              market forces – particularly in relation to sectors experiencing national difficulties
              such as the automotive sector.




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County Balances                   Employment associated with moves in….
                                    Bedfordshire      Cambridgeshire            Essex            Hertfordshire              Norfolk                Suffolk
Sector                            Total   Balance    Total    Balance   Total      Balance    Total      Balance    Total       Balance    Total       Balance
Agriculture, food processing        1,418      -216    2,827       585     2,855        237      1,888        521     1,864          112     1,538           -5
Life sciences                         137       -10        6         6       165        142        459        -24        27            0        40          -20
High technology manufacture         1,976      -243    1,964      -142     3,450        200      4,303       -403       349          -67       651          255
Automotive engineering                507       -83      884       -30       800        177        875         29       393         -165       623          239
Other manufacturing                12,105       722   11,476       618    21,904      1,186     26,217        101     8,863         -730     8,687        1,729
Construction & other production     5,515      -238    5,645       477    12,741      1,348     13,542        833     3,382          409     4,393          166
Retail and distribution            10,855       207   12,455       760    21,644      1,446     30,467      2,790     9,542         -412     6,707          483
Transport gateways                    200        56      755       162     2,042        -42        695        131       152           -1     1,484          371
ICT                                 1,261       -38    3,756      -267     2,227       -125      8,194      1,224       866         -130       771         -141
Creative                            1,300       417    1,690      -441     3,112        727      5,209        -87     1,051           65       848          -54
Finance and business services       3,310       253    4,100       441     8,291        200      9,656        105     2,322          -90     1,940          511
Tourism and leisure                 1,480      -200    1,504      -391     2,508        -42      4,545      1,167     1,262           -1       795          393
Mainly public services                907       161    1,076       107     1,692        131      2,751        334       470           39       299            0
Mainly private services             9,602      -884    7,854       202    21,623        959     26,743      1,984     8,441         -577     7,596          551
Target sectors                     11,589       -64   17,486       -77    25,450      1,474     35,824      2,663     8,286         -277     8,690        1,549
Non-target sectors                 38,984       -32   38,506     2,164    79,604      5,070     99,720      6,042    30,698       -1,271    27,682        2,929
Total                              50,679       -85   56,033     2,069   105,241      6,510    136,013      8,709    39,307       -1,330    36,395        4,482
Table 13      Employment Effects of Moves, by County (former counties), and Sector, 1987 - 2001




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       51.    In overall terms, the region (Table 14, below) showed only one net negative jobs
              balance – for High-tech manufacture. All other sectors, target or non-target, alike,
              recorded positive jobs balances.


                                                  Employment associated with….
                Region (1987-2001)                 Moves   Moves      Moves         Moves     Moves
                Sector                              In       Out      Within        Total     Balance
                Agriculture, food processing         2,726      1,492      6,978     11,196      1,234
                Life sciences                          173         79        537        789         94
                High technology manufacture          2,126      2,526      7,255     11,907       -400
                Automotive engineering                 803        636      2,261      3,700        167
                Other manufacturing                 18,505     14,879     48,337     81,721      3,626
                Construction & other production      9,015      6,020     27,033     42,068      2,995
                Retail and distribution             20,760     15,486     49,809     86,055      5,274
                Transport gateways                   1,451        774      2,854      5,079        677
                ICT                                  3,678      3,155      9,260     16,093        523
                Creative                             3,194      2,567      6,182     11,943        627
                Finance and business services        7,184      5,764     14,611     27,559      1,420
                Tourism and leisure                  3,503      2,577      5,029     11,109        926
                Mainly public services               1,550        778      4,485      6,813        772
                Mainly private services             16,621     14,386     45,795     76,802      2,235
                Target sectors                      24,838     19,570    54,967     99,375       5,268
                Non-target sectors                  66,451     51,549   175,459    293,459      14,902
                Total                               91,722     71,367   230,868    393,957      20,355
              Table 14       Employment Effects of Moves for the Region by Sector, 1987 - 2001

       52.    The sizes of the sectoral move balances tend to reflect the weight of the sectors in
              the economy. When considered in relation to the total number of jobs involved in
              moves in the respective sectors, arguably a better yardstick, Transport gateways,
              then Agriculture/food processing, were the strongest target sector performers. The
              largest positive jobs balance in a target sector was in Finance and business services,
              but the bulk of jobs attracted through the relocation process have come within non-
              target sectors – in those which have the strongest weight in the economy.

              Sectoral trends
       53.    As in the overview of trends, it can be seen that the figures build over time, primarily,
              but not entirely, due to the expansion of the business database used to build CREDO
              (Table 15, overleaf).




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Total Moves - Objective 2 Areas               Pre91            1991-1996           1996-2001           All periods
                                       Moves      Moves    Moves      Moves    Moves      Moves     Moves      Moves
Sector
                                       Total     Balance   Total     Balance   Total     Balance    Total     Balance
Agriculture, food processing              3            0     10        -4        42         4        55           0
Life sciences                             0            0      2         0         1         0         3           0
High technology manufacture               2           -4     27        -7        11         2        50          -9
Automotive engineering                   -1           -1      4         1         3        -1         8          -1
Other manufacturing                      51            0    139         5       213        -2       454           3
Construction & other production          35           12    100        15       126        -1       286          26
Retail and distribution                  44            8    223         9       311         7       620          24
Transport gateways                        3            0      7         3         9         0        19           3
ICT                                       3            1     14         6        68        12        85          19
Creative                                 11            3     14        -5        32        -7        64          -9
Finance and business services            14            9     34       -11       101         2       151           0
Tourism and leisure                       5            0      9         0        29         1        45           1
Mainly public services                    0            0      4         1        34        -1        40           0
Mainly private services                  36            7    158       -27       251        11       470          -9
Total                                   206           35    745       -14      1,231       27      2,350         48
Table 15           Sectoral Trends - Balance of Moves in Objective 2 Areas


Total Moves - Objective 2 (T)                 Pre91           1991-1996           1996-2001           All periods
Areas
                                      Moves       Moves    Moves     Moves     Moves     Moves     Moves      Moves
Sector                                Total      Balance   Total    Balance    Total    Balance    Total     Balance
Agriculture, food processing              3           2      10         -1       35        10         49         12
Life sciences                             0           0       0            0      1            1       1             1
High technology manufacture               3           0       4            0      6         -1        13         -1
Automotive engineering                    0           0       5         -2        0            0       5         -2
Other manufacturing                       7           1      26        10        55            1      88         12
Construction & other production           8           0      23            1     18         -4        49         -3
Retail and distribution                  14           -4     49            5     95         -7      158          -6
Transport gateways                        0           0       3            1      0            0       3             1
ICT                                       0           0       2            1     10            5      12             6
Creative                                  2           0       3         -1        0            0       5         -1
Finance and business services             2           0       9         -4       24            3      35         -1
Tourism and leisure                       1           1       0            0      8            2       9             3
Mainly public services                    0           0       0            0     14            2      14             2
Mainly private services                   8           1      15            4     71            4      94             9
Total                                    48           1     149        14       337        16       535          32
Table 16           Sectoral Trends - Balance of Moves in Transitional Areas over time

           54.     Analysing the Objective 2 Areas first, a number of observations can be made:

                                 manufacturing sectors have generally tended to exhibit negative
                                  balances, but ‘High-tech’ manufacturing actually made a small gain in the
                                  last 5 years, on a small moves total;
                                 sectors consistently achieving positive balances include Retail &
                                  distribution, and ICTs, whose balance has been improving steadily,
                                 no individual sector has lost businesses consistently, in all three periods;




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                              the target sectors experienced a negative balance only in the middle
                               1991 – 1996 period, which, bearing in mind the lag effects of moves,
                               coincided with the last significant recession.
           55.     Within the Transitional Areas, there was very little movement in the first period, and
                   moves balances were negligible. The second period revealed negatives in more
                   sectors than not, particularly within the target sectors, but in the final period this
                   picture was redressed with the target sectors achieving an overall balance of +20.

           56.     Encouragingly, this balance extended both to the more traditional sectors of
                   agriculture/food processing, and to the service industries that tend to be under-
                   represented in these relatively rural localities.

           57.     Looking across the region, as a whole, (Table 17, overleaf), we can see that positive
                   net balances of moves have occurred across most sectors, in all three periods, with
                   the deficits in High-tech manufacture, and Automotive engineering the most negative
                   feature of the last 5 years.

Total of Region                  Pre91                  1991-1996           1996-2001          All periods
                                 Moves     Moves     Moves    Moves     Moves     Moves     Moves     Moves
Sector                           Total    Balance    Total    Balance    Total   Balance     Total   Balance
Agriculture, food processing        43       10       112           2     491        26       646           38
Life sciences                        6        0          9          1      14           1      29           2
High technology manufacture       143        18       302        15       197       -17       642           16
Automotive engineering              35        4         64          4      31        -1       130           7
Other manufacturing               832        22      1,453       71     2,357       128     4,642      221
Construction & other
production                        608        41      1,081       76     1,441        96     3,130      213
Retail and distribution           946        77      2,265      149     3,494       128     6,705      354
Transport gateways                  49        8       167        22       124        20       340           50
ICT                                 61        5       326        40       980           8   1,367           53
Creative                          151        27       283        26       384        10       818           63
Finance and business
services                          220        21       483        41     1,047        47     1,750      109
Tourism and leisure                 51        -5      133        13       273        15       457           23
Mainly public services              17        2         53          2     467        10       537           14
Mainly private services           536        22      1,631       85     3,030       146     5,197      253
Total                            3,698      253      8,362      549     14,330      624     26,390    1,426

Table 17         Sectoral Trends – Balance of Moves in Region over time




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Physical Development in the East of England

       58.    In addition to company moves, the CREDO database also includes a database of
              physical development. This database is built from planning applications with a
              deemed construction value of over £100,000, that are tracked through to the point of
              construction contracts being awarded. This is deemed as ‘virtual development’.

       59.    The database can be analysed over time, and at different stages in the planning
              process – from outline permission, through detailed permission, to contract award.
              However, for economic analysis we generally analyse the data at the contract
              awarded stage, to represent actual development on site. The data is available only at
              the local authority area, or aggregates thereof, so it has not been possible to produce
              analyses specifically of the Programme Areas.

       60.    However, we can identify those Districts and Unitary Authorities that contain all or
              part of one of the Programme Areas, and a summary is shown in Table 11, overleaf.




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                                                         Development £ per capital, 1991 - 2001
               District
                                                        Industrial      Offices         Retail
               Mid Bedfordshire                            517             61            159
               North Bedfordshire                          449            113            151
               South Bedfordshire                          341            144            114
               Luton                                       170            109             52
               Huntingdonshire                             278            238            100
               Peterborough                                224            170            125
               Fenland                                     721             25            184
               East Cambridgeshire                         474             82            112
               Cambridge                                   105            680            445
               South Cambridgeshire                        315            252             79
               Braintree                                    94             60            174
               Harlow                                      170            649            427
               Thurrock                                  1,005             43            364
               Tendring                                    180              5            130
               Southend-on-Sea                               9            166            184
               Rochford                                    140            164             26
               Maldon                                      246             16            250
               Epping Forest                               252             58            167
               Colchester                                   73             68            389
               Chelmsford                                  189            286            282
               Brentwood                                    35            659             21
               Uttlesford                                  154            281            260
               Basildon                                    334            363            259
               Castle Point                                  2              9            136
               Dacorum                                     365            186            218
               East Hertfordshire                          177            153             56
               Hertsmere                                   384             65            419
               North Hertfordshire                         176            308            107
               St Albans                                    51            162            305
               Stevenage                                   201            757            326
               Three Rivers                                 58            101            248
               Watford                                     151            586            814
               Welwyn Hatfield                             757            913            159
               Broxbourne                                  331            267             58
               Breckland                                   282             39            133
               South Norfolk                               133             59            240
               Norwich                                     316             81            186
               North Norfolk                               627              0            156
               King's Lynn and West Norfolk                200             15             90
               Broadland                                   131            139            137
               Great Yarmouth                               39             50             53
               Waveney                                     303             14              1
               Babergh                                     174             66            201
               Forest Heath                                103             18             94
               Ipswich                                     222            341            240
               Mid Suffolk                                 321             21             98
               St Edmundsbury                              346             51            215
               Suffolk Coastal                             125             43            266
               Regional Averages                          259             190            196

              Table 11       Physical Development in the East of England, 1991 – 2001, £ per
                             capita (Districts including Programme Areas in italics)

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       61.    This table shows the development value, on a per capita basis for each type of
              employment related development category – industrial/warehousing (B2/B8), offices
              (B1), and retail (A1). Figures more than 50% above the regional average are blocked
              in green, while those less than 50% of the regional average are blocked in red.

              The Districts containing Programme Areas
       62.    The picture within the Programme Area districts varies across the development types:

                            the industrial/warehousing development pattern is similar to that of the
                             region as a whole. In fact, if anything, with 3 of the 7 ‘high spot’ districts,
                             development of these types is actually a little above what might be
                             expected;
                            this pattern alters dramatically in relation to offices development,
                             however, where development is much more focused on the main urban
                             centres of the region, even in per capita terms. 9 of the 11 Programme
                             Area districts have ‘low spot’ figures. There was no recorded office
                             development in North Norfolk (with a deemed value of £100,000 or
                             more), in the entire decade. The position was little different in Kings Lynn
                             and West Norfolk, and Waveney;
                            the offices pattern is repeated to a lesser extent, in relation to retail
                             development, where 5 of the 8 ‘low spot’ districts contain Programme
                             Areas. Of course, this picture is also affected by the urban:rural
                             dimension, but it is notable that two of the ‘low spot’ Districts on this
                             criterion are Luton and Great Yarmouth.
       63.    There are some specific geographic concerns:

                            Great Yarmouth has ‘low spot’ status across all three development
                             categories;
                            Luton has a ‘low spot’ figure on retail, where this figure is very low for an
                             urban centre. It is also only marginally above ‘low spot’ status in relation
                             to the other two categories;
                            Mid-Suffolk, Suffolk Coastal and Waveney each have 2 ‘low spot’
                             categories.
       64.    On the following pages, we have mapped the development patterns for the three
              development types.




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     Industrial Development £ per Capita
                       1 9 9 1 -2 0 0 1
                     4 6 0 to 1 ,0 1 0 (6 )
                     2 6 0 to 4 6 0 (1 3 )
                      6 0 to 2 6 0 (2 3 )
                        0 to 6 0 (6 )




   Map 1     Industrial Development £ per capita, 1991 - 2001

       65.     In this map, we can observe two possible patterns. One is a concentration of
               industry/warehousing towards near motorway locations – the M25, M1 and possibly
               A14/M11 near Cambridge. The other is that some relatively rural parts also seem to
               have experienced fairly high development rates of industry and warehousing,
               although, of course, with small populations these high per capita figures do not
               necessarily amount to large quantities of development per se – they are large only in
               a relative sense.




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      Offices Development £ per Capita
                      1 9 9 1 -2 0 0 1
                     4 1 2 to 9 1 5    (6 )
                     1 9 0 to 4 1 1    (8 )
                      8 0 to 1 9 0    (1 3 )
                        0 to 7 9      (2 1 )




   Map 2     Offices Development £ per capita, 1991 – 2001

       66.     The pattern for office development could scarcely offer a more different picture, with a
               clear focus on the regional and sub-regional centres – Cambridge, Harlow,
               Chelmsford, Basildon, Watford, Welwyn Hatfield, and Ipswich - the latter centre
               standing out as an offices oasis within the relative desert of office development that
               characterises the eastern half of the region.

       67.     Within this overall story of urban focus, Norwich, Luton and Southend stand out as
               locations that have failed to attract their ‘share’ of office development. The figures for
               Peterborough, Colchester and St Albans are also perhaps lower than might have
               been expected (However, Peterborough’s figures may have been affected to some
               extent by old New Town permissions, not covered by this system).

       68.     Bedfordshire also looks low on office development, considering its proximity to
               London, and this may reflect a lack of dynamic centres in the County.




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        Retail Development £ per Capita
                      1 9 9 1 -2 0 0 1
                     3 3 8 to 8 1 4    (6 )
                     1 9 6 to 3 3 8   (1 3 )
                      5 4 to 1 9 6    (2 4 )
                        1 to 5 4       (5 )




      Map 3    Retail Development £ per capita, 1991 – 2001

       69.    Finally, retail development has tended to follow a similar pattern to that of the offices
              trend, although with a slightly better spread into the rural parts of the region,
              particularly in Suffolk and Essex. The emphasis is again very much on urban
              centres, however, with the top ranking ones being Watford, Cambridge, Harlow,
              Colchester, Thurrock, St Albans and Stevenage, Hertsmere being the more rural
              exception, but located right across the M25.

       70.    In summary, we would observe, on physical development trends, that the current
              shape of development is not doing a great deal to facilitate growth in the eastern half
              of the region, in those sectors in which jobs growth may be expected, and which are
              regional target sectors. The lack of offices development to attract service industries
              is a particular concern, although, no doubt, it reflects the difficulties in persuading
              developers to invest in locations that command rentals at the margin of profitability.

       71.    This finding may also be extended to Luton and Southend as districts containing
              Programme Areas.

       72.    The problem is illustrated by reference to office rentals. Whereas Cambridge and
              Watford command rentals comparable with the London fringe, the less commercially
              attractive locations (for example, Colchester, Luton, Bedford) were recently achieving
              rentals only in the range of £60-90 p. sq. m. - at the margin of interest to developers.
              No doubt, the position in lower order centres in the east is even more difficult.

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Summary

       73.    In summarising this data, it is perhaps worth emphasising that it relates to only one of
              the key processes through which economies change – namely:

                            start-ups and closures;
                            expansion and contraction of existing businesses;
                            inward and outward movements of businesses.
       74.    Furthermore, the database only includes overseas investments where there is also a
              movement of an existing UK operation.

       75.    Nevertheless, the CREDO database has been acknowledged as the only
              comprehensive source of intra-UK company movements, and was utilised as the core
              database for a pioneering study for the then DoE, on Corporate Relocation Trends in
              the South East, in the early 1990s.

       76.    What does this data reveal about the East of England? What are its implications for
              policy makers? We discuss these factors below.

              Key conclusions and issues
       77.    The overall picture of regional gains, in terms of businesses and jobs, is a positive
              one, but is rather less positive than some other key economic indicators, such as
              GDP growth, population growth, and innovation capability, which reveal the East of
              England as one of the leading provincial regions, behind London and the South East.

       78.    However, it is a picture that is fairly consistent with other indictors of inward
              investment, as an analysis of recent major FDI projects known to Invest in UK shows:


                                                           No. of projects
                Favoured Locations in 1998-99
                                                           Medium      Large      Major       Total
                East Midlands                                   5            -         -          5
                East of England                                 3            1         -          4
                London                                         27            2        1          30
                North East                                      7            -         -          7
                North West                                      8            -         -          8
                South East                                     13            -         -         13
                South West                                      5            -        1           6
                West Midlands                                   6            -        1           7
                West of England                                 2            -         -          2
                Yorkshire & The Humber                          8            -        1           9
                Scotland                                       11            4        3          18
                Wales                                          11            5        1          17
                Northern Ireland                                7            1         -          8
                Total                                         113         13          8        134
              Source: Invest in UK

              Table 18       Analysis of Significant Projects known to Invest in UK, 1998 – 1999




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       79.    This table shows that the East of England attracted only 2% of significant FDI projects
              over a recent two year period, a relatively scant return for a region that accounted for
              10.4% of national output in 1999.

       80.    In the same way that overseas investors tend to congregate for strong business
              location reasons, so too do those UK investors seeking to relocate their companies.
              Thus, London and the Heathrow Wedge tend to attract those overseas investors who
              need to be closest to international communications or to key clusters of finance
              houses, software/ICT businesses, or the creative sector.

       81.    Intra-UK movers have often tended to move to more cost effective locations, and
              grants, cheaper and more plentiful property and labour have been instrumental in the
              ability of good provincial locations to compete effectively for moves.

       82.    In general, the East of England has had neither the key clusters (with some notable
              exceptions, for example, Cambridge, Felixstowe, Luton) nor, to any great extent, the
              assisted areas, to provide compelling reasons for businesses to relocate to it.
              Tellingly, perhaps, the biggest focus of relations in the region has been within those
              parts benefiting from greatest proximity to London – Hertfordshire and Essex. Many
              of these relocations are from the capital into the so-called ‘doughnut’ around it.

              Programme Areas
       83.    The report highlights a number of issues in relation to the Programme Areas:

                     i)    first, the current trend in these areas indicates that most are failing to attract
                           net balances of moves, and in 5 of the 8 areas have experienced net job
                           losses through relocations. The ZGI – a measure of an area’s capacity to
                           retain the relocations it generates – is around 50% or below, in Luton,
                           Southend, and Rural East Suffolk. However, the latter two of these areas
                           have been relatively successful in attracting new investors;
                     ii)   second, in general, the rural areas change relatively little through this
                           process: there are relatively few significant businesses; up to a fifth are in
                           agricultural or related trades (with low propensity to move); and, the
                           businesses in these localities appear less prone to relocation;
                     iii) third, in terms of the target sectors, the moves balances do not suggest that
                          the Programme Areas are currently benefiting from investment inflows, the
                          exceptions being ICTs and Agriculture/food processing which have
                          experienced overall net gains, although these are not substantial in either
                          business or employment volumes;
                     iv) finally, although the numbers involved are small, the balances over the last
                         five years look a little more encouraging.

              Spatial trends
       84.    As noted above, it is the areas closest to London that appear to be benefiting most
              from net gains in moves and employment. More peripheral parts of the region are
              struggling to maintain balances, especially in employment terms, while Essex,
              Hertfordshire, and a little more surprisingly, perhaps, Suffolk, have all recorded
              significant gains over the last decade or so.

       85.    These trends apply in terms of both businesses and associated employment, with the
              jobs position a little less positive than the moves position.




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       86.    Of course, to the extent that Essex and Hertfordshire are by far the largest
              economies, it is to be expected that they would also account for the lion’s share of
              moves and move balances, and this they do with 58% of the county moves, and 65%
              of the positive balances of moves. Counting Suffolk into these figures raises the
              share to 67% and 77%, respectively.


Policy implications

       87.    In considering the policy implications for the region, we would perhaps first make the
              observation that the East of England is a region with less problems than many in the
              UK. While it is clear that there are both pockets of urban disadvantage, and marginal
              rural economies, reflected, indeed, in their Programme designations, these problems
              are not generally as severe as those in some of the more deprived parts of the nation,
              either in severity or extent.

       88.    It is within this context that we offer below some potential implications of the findings
              of this report for policy makers, as follows:

              i)      First, it is clear that it is the more peripheral areas of the region that are failing
                      to receive investment – whether from FDI, intra-UK company movement, or
                      from development investment. One obvious way of improving the locational
                      attractions of these would be to improve their communications. However,
                      given the Government’s views on roads, and on transport more generally,
                      there seems little likelihood of major investment in new roads, at least in
                      sufficient terms as to markedly improve the accessibility of areas such as
                      Norwich, and north and east Norfolk, and Suffolk;
              ii)     Second, if the more remote parts of the region are to overcome their natural
                      locational disadvantages, there will need at the least to be good marketing of
                      their virtues, as well as strategies which take account of these innate
                      locational disadvantages;
              iii)    Third, as it seems unlikely that improvements in the locational characteristics
                      of the majority of these more peripheral areas will be improved dramatically,
                      at least in the short to medium term, despite plans for east-west rail
                      improvements – this means focusing resources on other strategies to uplift
                      the economies of these areas, such as:
                      –      the encouragement of entrepreneurship, by providing suitable premises,
                             and training and guidance;
                      –      diversification at individual and business levels, by encouraging the take-
                             up of learning in new skills, (in ICTs, or journalism, for example, which
                             would enable local people to work from home, or at least in rural centres.)
                             Another diversification policy might be to encourage the growing in rural
                             areas of organic produce or to focus on crops, or animal rearing which
                             would substitute for imports;
              iv)     Fourth, there may be some opportunities to regenerate areas, based on local
                      clusters, for example, the small oil industry cluster in Lowestoft, or perhaps
                      tourism in north and east Norfolk, and Suffolk. The problems of global
                      warming and terrorism may yield a business opportunity for the ailing UK
                      seaside resort industry, from which local resorts could yield some benefit;




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              v)      Fifth, and finally, if local policy makers wanted to stimulate growth in the
                      region through the relocation (or indeed, FDI) process, planners would need
                      to give consideration to the potential for accommodating growth nodes, in
                      relation to key transport corridors in the region. It is along these corridors
                      from London, that we can observe the trickle-out of investment movement
                      from the conurbation, and/or concentrations of FDI. Examples include the
                      Thames Valley, Swindon and Bristol, along the M4; Ashford in Kent, along
                      the Chunnel Link; Milton Keynes, and Northampton along the M1 corridor;
                      Peterborough, on the East Coast main line, and, to a lesser extent, perhaps,
                      Felixstowe, in Suffolk. So long as the packages of premises and labour, with
                      suitable skills, on offer at competitive costs, are available along the vital links,
                      such centres will continue to attract the majority of both FDI (that is not grant-
                      driven) and intra-UK investment. This could mean looking at opportunities
                      available in the region along the A14, M11 and A12, and rail corridors, for
                      example.




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Annex 1

CREDO Relocations Database

              Relocations database formation
              The database is formed from data supplied by Dun & Bradstreet on a quarterly basis.
              Effectively, it is their UK Marketplace database. Currently, it comprises about 1.3mn
              records, excluding only the branches file (amounting to about 250,000 records).

              Moves are determined by a sequence of computerised checks on the address data
              supplied by D & B. Effectively, where a postcode is changed, a move is initially
              assumed. All such moves are visually inspected (about 6,000 a quarter), in case of
              post code errors, before inclusion in the movers database. Postcodes are allocated
              to local authority district using postzone, essentially a subset of Royal Mail’s PAF.
              Where postzone fails to find a match (this mainly affects London businesses) we
              attempt to allocate businesses to local authorities by other means.

              Definition of moves
              The definition of a move as in, out or within an area depends wholly on the definition
              of the area. Most moves are relatively local, therefore the larger the area, the more
              likely that a move will be defined as ‘within’ an area, rather than ‘into’ or ‘out of’ it. At
              a regional level, the vast majority of moves will be within (nearly 2 in 3 in the East of
              England), but at a district level the moves tend to be more evenly split between the
              three categories. At ward or part sector level, moves in and out tend to exceed within
              moves.

              In this report, we have mainly presented data either for individual programme areas
              or districts. It is important to understand that where aggregates are presented for the
              Objective 2 and Transitional areas, they are summations of individual Programme
              Area totals, not pictures of these areas as single entities.

              The data was aggregated in that way, because the Programme Areas are rather
              amorphous. If these individual areas formed a coherent, contiguous larger area,
              when put together, it would make sense to present data for the aggregated area, as a
              whole, but with Luton and Southend separated entirely and gaps within the other
              main block of areas, it made more sense to simply sum the results of the individual
              areas.

              The movement of firms may take many forms, including, particularly, merger and
              acquisition. Usually, there is some associated physical movement of jobs – losses in
              one place, gains at another, but there will be cases of ‘brass plate’ movement, where
              only the power base shifts. This may be a pre-cursor to more physical changes later
              on, and is still, in our view, a valid change to include and report. In general, the larger
              the company, the more likely it is to be M & A activity and that the jobs will not reflect
              the impact of the move. For this reason, we usually present analysis of employment
              for companies of less than 250 employees. Our experience suggests that there are
              very few private sector lock, stock & barrel moves over this size.

              Site status
              Site status is allocated by Dun & Bradstreet and relates to the specific financial
              reporting entity, regardless of whether the company may have a parent or not, or
              branches that are not legal entities.




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              Employment
              The nature of D & B’s database, with its unique identifier, means that only corporate
              entities are held, thus corporate employment is the data item supplied, which will
              include any subsidiaries and branches within that group, whether at a separate or the
              same location. For this reason, we describe the employment as that associated with
              the move.

              Dates of move
              The ‘period’ field indicates when the record was entered into the database as a move.
              Latest quarter (Apr – Jun 2001) is 36. However, the move may have taken place
              some time before the event is discovered by D & B and included in our update – there
              is thus a lag effect.




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Annex 2

            Target and Other Sector Definitions   Group   SIC92 Codes
            Agriculture, food processing            1          01
                                                               02
                                                               05
                                                               15.1
                                                               15.2
                                                               15.3
                                                               15.4
                                                               15.5
                                                               15.6
                                                               15.7
                                                               15.8
            Life sciences                           2          24.4
            High technology manufacture             3          30
                                                               32
                                                               33
                                                               35.3
            Automotive engineering                  4          34
            Other manufacturing                     5          16
                                                               17
                                                               18
                                                               19
                                                               20
                                                               21
                                                               22
                                                               23
                                                               24
                                                               25
                                                               26
                                                               27
                                                               28
                                                               29
                                                               31
                                                               35
                                                               36
                                                               37
            Construction & other production         6          40
                                                               41
                                                               42
                                                               43
                                                               44
                                                               45
            Retail and distribution                 7          50
                                                               51
                                                               52
            Transport gateways                      8          63.11
                                                               63.12
                                                               63.21
                                                               63.23
            ICT                                     9          64.2
                                                    9          72
            Creative                               10          22.11
                                                               22.12
                                                               22.13
                                                               22.14
                                                               22.15
                                                               74.4
                                                               92.11
                                                               92.13
                                                               92.2
                                                               92.31
                                                               92.32
                                                               92.34
                                                               92.4



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            Finance and business services   11   65
                                                 66
                                                 67
                                                 73
                                                 74.1
                                                 74.3
            Tourism and leisure             12   55
                                                 92.33
                                                 92.5
                                                 92.6
                                                 92.7
            Mainly public services          13   75
                                                 76
                                                 77
                                                 78
                                                 79
                                                 80
                                                 81
                                                 82
                                                 83
                                                 84
                                                 85
                                                 86
                                                 87
                                                 88
                                                 89
                                                 90
            Mainly private services         14   53
                                                 54
                                                 56
                                                 57
                                                 58
                                                 59
                                                 60
                                                 61
                                                 62
                                                 63
                                                 64
                                                 68
                                                 69
                                                 70
                                                 71
                                                 74
                                                 91
                                                 92
                                                 93
                                                 94
                                                 95
                                                 96
                                                 97
                                                 98
                                                 99




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