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					Walsall Sector Analysis Study


   Sector Analysis Paper
          Final Draft


         November 2010




                                1
                                                                      Walsall Sector Analysis Study – Sector Analysis Paper


Contents                                                                                                 Introduction............................................................................... 65
                                                                                                         Sub-Sector Employment ........................................................... 66
1      Introduction ...........................................................................4         GVA and Productivity................................................................ 69
2      The Walsall Economy ...........................................................5                  Projections for the Transport and Communication Sector ......... 70
    Employment ................................................................................5         The Needs of the Sector in Walsall ........................................... 71
    Sectoral Dynamics of Change .....................................................7                   Economic Infrastructure ............................................................ 71
    Highly Skilled Occupations ........................................................10                Opportunities for the Sector in Walsall ...................................... 72
    Summary - Sectoral Dynamics of Change .................................11                            Implications and Recommendations ......................................... 72
    Gross Value Added ...................................................................12              Wholesale and Retail, Hotels and Restaurants ......................... 73
    Business Base and Enterprise ..................................................14                    Introduction............................................................................... 73
    Sectoral Profile of the Workplace Base .....................................16                       Sub-Sector Employment ........................................................... 74
    The BME Business Base...........................................................18                   Distribution of Employment and Workplaces ............................. 74
3      Economic Projections..........................................................22                  GVA and Productivity................................................................ 77
                                                                                                         Projections for the Wholesale and Retail, Hotels and Restaurants
4      The Walsall Business Survey 2010 .....................................28
                                                                                                         Sector ....................................................................................... 78
    Sample Characteristics .............................................................29
                                                                                                         The Needs of the Sector in Walsall ........................................... 79
    Growth Expectations .................................................................31
                                                                                                         Opportunities for the Sector in Walsall ...................................... 80
    Market and Supply Chains ........................................................34
                                                                                                         Implications and Recommendations ......................................... 81
    Workforce, Skills and Training ...................................................37
                                                                                                         Creative and Digital Industries .................................................. 82
    Involvement in Training .............................................................40
                                                                                                         Introduction............................................................................... 82
    Innovation .................................................................................41
                                                                                                         Sub-Sector Employment ........................................................... 83
    Business Location and Premises ..............................................45
                                                                                                         Distribution of Employment and Workplaces ............................. 83
    General Business Constraints ...................................................48
                                                                                                         Opportunities for the Sector in Walsall ...................................... 85
    Conclusions ..............................................................................49
                                                                                                         Implications and Recommendations ......................................... 85
5      Sector Profiles .....................................................................53           Manufacturing – Revised Sector Profile .................................... 87
    Financial, Professional and Business Services .........................54                            Introduction............................................................................... 87
    Introduction ...............................................................................54          Sub-Sector Employment................................................................... 89
       Sub-Sector Employment .................................................................. 55          Distribution of Employment and Workplaces.................................... 90
       Distribution of Employment and Workplaces ................................... 56                     GVA and Productivity ....................................................................... 92
       GVA and Productivity ....................................................................... 58   Projections for the Manufacturing Sector .................................. 93
    Projections for the Financial, Professional and Business Services                                    The Needs of the Sector in Walsall ........................................... 94
    Sector .......................................................................................59     Opportunities for the Sector in Walsall ...................................... 96
    The Needs of the Sector in Walsall ...........................................61                     Implications and Recommendations ......................................... 96
    Opportunities for the Sector in Walsall ......................................63                     Construction ............................................................................. 98
    Transport and Communication ..................................................65                     Introduction............................................................................... 98


                                                                                                                                                                                             2
                                                                   Walsall Sector Analysis Study – Sector Analysis Paper


    Sub-Sector Employment ...........................................................99
    GVA and Productivity ..............................................................101
    The Needs of the Sector in Walsall .........................................103
    Opportunities for the Sector in Walsall ....................................104
    Implications and Recommendations ........................................104
    Public Services .......................................................................105
    Introduction .............................................................................105
    Sub-Sector Employment .........................................................106
    Distribution of Employment and Workplaces ...........................107
    GVA and Productivity ..............................................................109
    Projections for the Public Sector .............................................110
    The Needs of the Sector in Walsall .........................................111
    Economic Infrastructure ..........................................................111
    Opportunities for the Sector in Walsall ....................................112
6      Summary ...........................................................................113
    Employment Trends ................................................................113
    Sectoral Dynamics of Change .................................................113
    Gross Value Added .................................................................113
    Sector Representation and Performance ................................113
    Highly Skilled Occupations ......................................................115
    Business and Enterprise .........................................................115
    Projections ..............................................................................115
    Appendix A: Business Survey Supporting Cross Tabulations ..116




                                                                                                                           3
                                                          Walsall Sector Analysis Study – Sector Analysis Paper


                                                                                                Walsall Dialogue: A series of seminars supplementing the business
                                                                                                 survey and stakeholder engagement provided the opportunity for key
1        Introduction                                                                            issues resulting from the desk based analysis to be discussed and future
                                                                                                 options to be shaped by those involved in the local economy.
Walsall Borough Council is currently developing the Local Economic Assessment           This paper presents the findings of the main sectoral analysis, reviewing
(LEA) for the area. Originally a statutory requirement, the LEA is an opportunity for   employment, GVA and enterprise trends over the past ten years, including detailed
Walsall to assess economic performance, identify and understand the challenges          profiles for seven sectors.
the local economy now faces and to shape its future.
                                                                                        The employment figures presented in the report are based on workplace based
                                                                                        analysis and therefore capture all of those employed in jobs in Walsall regardless
The Council are developing a statement that captures the key challenges that the
                                                                                        of where they live. The latest employment data available through the Annual
local economy faces. One of these is the need to better understand the
                                                                                        Business Inquiry is 2008 and therefore predates the significant impact of the
opportunities for growth to articulate and drive forward sustainable economic
                                                                                        recession. Data available through the West Midlands Regional Observatory‟s
growth. This is currently limited by gaps in knowledge around both the current
                                                                                        Integrated Policy Model, provides employment and GVA projections to 2030, which
structure of Walsall‟s economy and the nature and scale of opportunities.
                                                                                        is the best available data for reviewing the projected impact of the recession. The
                                                                                        findings of the sector analysis is enhanced with data gathered through a business
Understanding the sectoral composition and opportunities is imperative and will
                                                                                        survey (with over 400 respondents) and consultations with key stakeholders.
inform the delivery of inward investment, business support and skills provision. As
such, the Council have commissioned ekosgen to undertake detailed sectoral              The first part of the paper provides an overview of the Walsall economy, and looks
analysis to review the composition of the local economy and its business base,          at the trends which have been experienced at broad sector level. More detailed
assess the area‟s relative strengths and weaknesses and to identify areas for           sub-sector analysis is provided in the sector profiles at the end of the paper.
future growth.

The study focuses on three themes:
        Sectoral Structure and Performance: the main strand of the research;
        Economic Infrastructure: reviewing the current infrastructure and future
         requirements to support sustainable economic growth; and
        Skills: identifying current and future skills requirements to support the
         development of key sectors.
The findings are based on a comprehensive research programme, with extensive
desk research supported by the following elements:
        Business Survey: An online and telephone business survey conducted
         with the local business base to explore areas, which are not captured by
         existing surveys and datasets. This includes innovation activities, supply
         chain linkages and opportunities presented by the development of the
         low carbon economy.
        Stakeholder Engagement: Throughout the research stakeholders
         related to each of the three themes have been consulted.




                                                                                                                                                               4
                                                          Walsall Sector Analysis Study – Sector Analysis Paper


                                                                                                                                        Total Employment 2008
2        The Walsall Economy                                                                        Birmingham

Employment                                                                                         Black Country
                                                                                                       Coventry
Walsall is the sixth largest Local Authority in the West Midlands in employment                        Sandwell
terms, with just under 99,400 employees. It is the smallest of the Black Country                         Dudley
Local Authorities and accounts for just over a fifth (22%) of the total Black Country           Wolverhampton
employment and 4% of regional employment. This is slightly lower than the                                Walsall
Borough‟s respective share of population (24% of the Black Country and 5% of the                         Solihull
Region) reflecting the low employment rate and flows of out-commuters.                                  Warwick
                                                                                              Stratford-on-Avon
Between 1998 and 2008 the national economy grew strongly and employment
                                                                                                          Rugby
increased by 9%. The Walsall economy, however, significantly under-performed
                                                                                            North Warwickshire
both the regional and national average and in contrast employment declined. The
                                                                                         Nuneaton and Bedworth
2.5% decline resulted in the loss of over 2,500 jobs.
                                                                                                Cannock Chase
                        Change in Employment 1998-2008                                              Wyre Forest
                        1998          2008         Change                 % Change           South Staffordshire

Walsall                   101,922       99,363         -2,559                  -2.5%                                0   50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000
Black Country             448,494      447,932           -562                  -0.1%
                                                                                                                                                         Source: Annual Business Inquiry, 2008
Birmingham                469,197      484,415         15,218                   3.2%
West Midlands           2,290,736    2,355,350         64,614                   2.8%
                                                                                                                                Total Employment 1998-2008
England                21,155,003   23,073,714      1,918,711                   9.1%
                                                                                         130,000
Source: Annual Business Inquiry 2008

This was also the case in Dudley and the combined losses of the two authorities
(some 5,600 jobs) slightly outweighed the gains in Sandwell and Wolverhampton            120,000
(just over 5,000 jobs), resulting in a small decline in total employment in the Black
Country.
                                                                                         110,000
The employment trend highlights that Walsall has not experienced year on year
decline and instead employment numbers have fluctuated. This has been a
common trend across the Black Country Local Authorities and is in contrast to the        100,000
continual upward trend of regional and national employment numbers.
The decline in the number of people employed in Walsall is not explained by the           90,000
size of the working age population (aged 16-59 for women and 16-64 for men),
which has fallen only very slightly (by 1.1%) over the same period.                       80,000
                                                                                                      1998     1999     2000     2001    2002     2003     2004    2005     2006    2007     2008
                                                                                                Walsall                               Wolverhampton                       Dudley
                                                                                                Sandwell                              West Midlands Trend                 England Trend

                                                                                                                                                         Source: Annual Business Inquiry, 2008



                                                                                                                                                                                       5
                                                         Walsall Sector Analysis Study – Sector Analysis Paper


As highlighted by the trend in Dudley, employment decline during this period of         much higher concentrations of male and full time employment, and which
strong national growth was not unique to Walsall. In total, nine of the thirty Local    experienced significant decline.
Authorities in the West Midlands experienced decline. Stoke-on-Trent and Stafford
to the north of the region experienced very high declines of -10% or more.                             Full Time and Part Time Employment Change 1998 - 2008
Neighbouring Authorities, Telford and Wrekin and Newcastle-under-Lyme                    16%
experienced a smaller decline of up to -10%. Wyre Forest to the south west of
Dudley is the other notable area of employment decline.                                  14%

                                                                                         12%

                                                                                         10%

                                                                                          8%

                                                                                          6%

                                                                                          4%

                                                                                          2%

                                                                                          0%
                                                                                                    Walsall        Black Country      West Midlands          England
                                                                                         -2%

                                                                                         -4%

                                                                                         -6%
                                                                                                                       Part time        Full time
                                                                                                                                        Source: Annual Business Inquiry, 2008

                                                                                                           Key Employment Indicators 1998-2008
                                                                                                                     Walsall        Black      West                 England
                                                                                                                                   Country   Midlands
                                                                                           Total Employment      -2,559    -2.5%      -0.1%     +2.8%                   +9.1%
                                                                                         Full Time Employment    -3,321    -4.4%      -5.2%     +1.0%                   +7.4%
                                                Source: Annual Business Inquiry, 2008    Part Time Employment       748   +2.7%     +14.5%        7.2%                 +12.9%
                                                                                           Male Employment       -2,185    -3.9%      -2.8%     +1.9%                   +9.2%
The employment decline in Walsall has been driven by a significant decline in the         Female Employment        -389    -0.8%     +3.1%      +3.9%                   +9.0%
number of full time positions, which fell by over 3,300 (-4%). While part-time                                 Source: Annual Business Inquiry, 2008
employment increased (+3%), it was at a much lower level than regional (+7%)
and national increases (+13%) and was not sufficient to fully offset the full-time
employment decline. This has resulted in a lower number of people in work and           Despite the variations in employment growth levels, the concentration of
reduced spending power.                                                                 employment across the Black Country has remained largely stable and Walsall has
                                                                                        maintained its share of the total employment base.
There are now lower numbers of both males and females in employment in
Walsall, although male employment has fallen much more sharply in both actual (-
2,200 in comparison to -400) and proportionate terms (-4% in comparison to -1%).
This reflects the wider structural changes with manufacturing, a sector which has



                                                                                                                                                                6
                                                         Walsall Sector Analysis Study – Sector Analysis Paper


                                                                                        Sectoral Dynamics of Change
                                                                                        The industrial structure of an economy – the way in which businesses and workers
                                                                                        are distributed between the sectors – is a key determinant of the levels of
                                                                                        productivity, output and wealth. The Walsall economy has experienced significant
                                                                                        structural changes over the past ten years, driven by the on-going decline in
                                                                                        manufacturing employment.
                                                                                        Wholesale and retail, hotels and restaurants is the largest broad employment
                                                                                        sector, with over 23,700 employees accounting for a quarter of total employment in
                                                                                        the Borough, 60% of whom work in the retail sub-sector. It is closely followed by
                                                                                        the public sector which has over 23,000 employees (23% of total employment).
                                                                                        Despite significant decline, manufacturing is the third largest employment sector
                                                                                        and with just over 18,200 employees accounts for a fifth of total employment.
                                                                                        The current employment structure is markedly different to that ten years ago
                                                                                        reflecting the major structural change which has occurred in the economy. This has
                                                                                        led to the role of the public sector and the private service sector as key employers
                                                                                        in the Borough increasing, while the role of manufacturing has diminished.



                                                Source: Annual Business Inquiry, 2008




                      Sector Analysis Context - Summary
Walsall‟s economy has significantly underperformed the national and regional
average over the past ten years. Between 1998 and 2008, when the UK was
benefiting from a period of sustained economic growth, employment in Walsall
declined by 2.5% resulting in the loss of over 2,500 jobs.
The decline was driven by a significant decline in full time employment, which was
not fully offset by a modest increase in part time employment. There was also a
much more significant decline in male employment.
As a result fewer people are now in employment in the Borough, which has
implications for the level of output produced and associated prosperity. Failure to
keep pace with the national and regional average during this strong growth period,
highlights the scale of the challenge which Walsall faces in more difficult economic
circumstances.

                                                                                                                                        Source: Annual Business Inquiry, 2008




                                                                                                                                                                7
                                                                        Walsall Sector Analysis Study – Sector Analysis Paper


The key drivers of the structural change between 1998 and 2008 have been:
                                                                                                                                                      Employment Change 1998 - 2008
            Significant decline in manufacturing: The historic backbone of the                           6000
             economy declined by over 45% resulting in the loss of almost 15,000
                                                                                                          4000
             jobs.
                                                                                                          2000
            Growth in Private Sector Services: The financial, professional and
             business services sector experienced significant growth (+45%), although                        0




                                                                                                                                                                Agriculture



                                                                                                                                                                              Other services
                                                                                                                    Manufacturing




                                                                                                                                                                                                  Construction
                                                                                                                                    Distribution,




                                                                                                                                                                                                                                  Public admin
                                                                                                                                                    Utilities




                                                                                                                                                                                                                 communications




                                                                                                                                                                                                                                                     Business
                                                                                                                                                                                                                                                     Services
                                                                                                                                    restaurants
             this was from a very low base and led to the creation of just over 5,000




                                                                                                                                     hotels and




                                                                                                                                                                                                                  Transport and
                                                                                                          -2000
             jobs.
                                                                                                          -4000
            Growth in the public sector: Employment in public administration, health                     -6000
             and education has increased by over a quarter with the creation of around
             4,800 jobs.                                                                                  -8000

                                                                                                         -10000
                                Walsall Sectoral Employment 1998-2008
 40,000                                                                                                  -12000

 35,000                                                                                                  -14000

                                                                                                         -16000
 30,000

 25,000                                                                                                                                                                                        Source: Annual Business Inquiry, 2008

 20,000                                                                                                 While the structural change in Walsall has broadly followed employment trends at
                                                                                                        the national level there have been some significant differences, which explain
 15,000                                                                                                 many of the challenges that the local economy now faces:

 10,000                                                                                                          The decline in manufacturing was much more pronounced than the
                                                                                                                  decline experienced nationally (-46% in comparison to –33%), reflecting
  5,000                                                                                                           the earlier loss of manufacturing employment in many other parts of the
                                                                                                                  country. This is particularly the case when considering the importance of
        0                                                                                                         the sector to the Walsall economy in 1998 when it accounted for a third
              1998    1999      2000   2001   2002   2003     2004     2005     2006    2007     2008             of total employment in Borough compared to 17% nationally.
            Business Services, 45%                          Manufacturing, -46%
                                                                                                                 The private sector service economy has accounted for a substantial part
            Public admin, 26%                               Distribution, hotels and restaurants, -4%
                                                                                                                  of employment growth nationally over the past ten years. While Walsall‟s
                                                            Source: Annual Business Inquiry, 2008
                                                                                                                  proportionate increase suggests that the sector has experienced a
It is important to note that the financial, professional and business services include                            greater increase than national levels (+45% in comparison to +28%), this
labour recruitment and the provision of personnel. This is the largest sub-sector in                              was from a very low base (just over 12,000 employees) and includes
Walsall, with over 6,000 employees (36% of the total sector employment) and has                                   labour recruitment and the provision of personnel (see above).
accounted for a large proportion of the sector‟s growth over the past ten years                                   Consequently the sector remains very weak in the Borough.
(66%), creating over 3,500 jobs. As this sub-sector includes recruitment agencies                                Similarly, the sectors which have experienced the highest levels of
(and the personnel listed on their payroll), it is likely that this employment will be                            growth in Walsall – construction and transport and communications – are
across a range of sectors and some of it may be outside Walsall. These figures                                    small and have resulted in low net employment increases. Further, one of
should therefore be treated with caution.                                                                         the most significant employment sectors –wholesale and retail, hotels


                                                                                                                                                                                                                                                 8
                                                                                                                              Walsall Sector Analysis Study – Sector Analysis Paper


                and restaurants declined in Walsall in contrast the growth experienced at                                                                                public administration are under-represented. Public administration has
                the national level.                                                                                                                                      also experienced employment decline, in contrast to regional and national
                                                                                                                                                                         trends.
                                                                  Employment Change 1998 - 2008                                                                         Financial, professional and business services: Despite strong growth over
  50%                                                                                                                                                                    the past ten years all of the sub-sectors, and especially financial services
  40%                                                                                                                                                                    remain under-represented in employment terms in Walsall. This is
                                                                                                                                                                         especially the case when labour recruitment and the provision of
  30%                                                                                                                                                                    personnel is excluded from property and other business services.
  20%                                                                                                                                                                   The construction sector grew rapidly in Walsall over the 1998-2008
  10%                                                                                                                                                                    period, but this growth is likely to have been halted by the recent
                                                                                                                                                                         recession.
   0%




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 -40%

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                                                                                     Walsall                 England


Source: Annual Business Inquiry, 2008

The relative strengths and employment specialism of the Walsall economy emerge
when comparing the proportion of employment in each of the sectors with the
national average (i.e. the Location Quotient). This clearly highlights the Borough‟s
continued reliance on the manufacturing sector, where levels of employment are
almost double the national average (with a Location Quotient of 1.8).
With the exception of manufacturing, at the broad sectoral level, employment
levels are largely below, and in some cases (construction and transport and
communications) in line with national levels. A more detailed breakdown highlights
significant variances with regards to sub-sectoral performance:
             Wholesale and retail, hotels and restaurants: Walsall has a large
              wholesale and retail sector with employment levels, which have remained
              relatively stable, slightly above the national average (accounting for 19%
              of total employment in comparison to 17%). In contrast, the hotels and
                                                                                                                                                                                                                      Source: Annual Business Inquiry, 2008
              restaurants sector is under-represented and has been declining.                                                                                   Note: The Location Quotient is a measure of the concentration of industry in an area
             Public sector: Walsall has an above average education sector in                                                                                   compared to the national average. It produces an index whereby a score of 1 indicates the
                                                                                                                                                                industry employment concentration is the same both in Walsall and nationally, more than 1
              employment terms, however, both health and social work and in particular                                                                          represents a higher concentration and less than 1 a lower concentration.



                                                                                                                                                                                                                                              9
                                                               Walsall Sector Analysis Study – Sector Analysis Paper


Highly Skilled Occupations1                                                                  While Walsall‟s level of growth in highly skilled occupations was in line with the
                                                                                             regional increase, it lagged behind the national increase (9%). In the context of the
As the private sector service economy has driven growth at the national level,               overall employment decline that occurred in the Borough over the same period, it
employment has become more knowledge intensive and the demand for highly                     shows that progress towards a more knowledge intensive economy was being
skilled workers has increased accordingly. Between 2004 and 2008, the number of              made.
people employed in highly skilled occupations in Walsall increased by 12,500 (3%)
                                                                                                                                       Highly Skilled Occupations
                              Highly Skilled Occupations
                                                                                                                  120
    50,000
    45,000                                                                                                        110
    40,000
                                                                                                                  100
    35,000




                                                                                               Index (2004=100)
    30,000
                                                                                                                   90
    25,000
    20,000                                                                                                         80
    15,000
                                                                                                                   70
    10,000
     5,000
                                                                                                                   60
        0                                                                                                                2004        2005        2006       2007         2008        2009
              2004         2005          2006         2007         2008          2009
                                                                                                                  Walsall (+3%)   Black Country (+9%)   West Midlands (+3%)     England (+9%)
        Sandwell (+19%)     Dudley (+13%)       Wolverhampton (+2%)       Walsall (+3%)                                                                   Source: Annual Population Survey, 2009
                                                   Source: Annual Population Survey, 2009
                                                                                             The levels of growth in highly skilled occupations also outpaced overall
This was part of a widespread trend across the Black Country and more widely,                employment growth over the same period at the Black Country, regional and
although the level of increase varied significantly by authority. The two smallest           national level. This has resulted in highly skilled occupations accounting for a
authorities in employment terms – Walsall and Wolverhampton – experienced a                  higher proportion of all occupations in 2009 when compared to 2004.
much lower level of increase compared to Dudley and especially Sandwell.
Walsall now has the lowest number of employees in highly skilled occupations of              Such occupations however, remain significantly under-represented in Walsall, a
the Black Country Authorities (compared to the second lowest in 2004). It is not             reflection of the sectoral structure, and now account for just over a third of all
clear whether the change in Sandwell reflects more local people moving into highly           occupations (compared to 41% regionally and 45% nationally). To close the gap
skilled occupations, or more people already in highly skilled occupations moving             with the regional average Walsall requires 5,900 employees to enter managerial,
into the Borough.                                                                            senior, professional or associate professional occupations. This increases to 9,800
                                                                                             to close the gap with national levels.
1
 Highly Skilled Occupations include Standard Occupational Classification 1-3: managerial;
professional; and associate professional and technical occupations. For a full list see
http://www.ons.gov.uk/about-statistics/classifications/current/soc2010/index.html


                                                                                                                                                                                   10
                                                                      Walsall Sector Analysis Study – Sector Analysis Paper



                                         Highly Skilled Occupations

                         50
                         45
                         40
  % of All Occupations




                         35
                         30
                         25
                         20
                         15
                         10
                          5
                          0
                              Walsall      Black County     West Midlands         England

                                                     2004   2009
                                                            Source: Annual Population Survey, 2009


                                   Summary - Sectoral Dynamics of Change
The markedly different sectoral profile of the Walsall economy when compared to
that in 1998 reflects the significant structural changes that have taken place in the
Borough over the past ten years. This has been driven by the substantial decline in
manufacturing employment – the historic backbone of the economy – which has
declined by over 45% resulting in the loss of almost 15,000 jobs. This has not been
fully offset by increases in the financial, professional and business services and
public sector (which have increased by 5,000 and 4,800 respectively).
Despite these changes, there is a continued high dependence on traditional
sectors as well as low value sectors, such as wholesale and retail, hotels and
restaurants. This is further reflected in the lower concentrations of highly skilled
occupations in Walsall. There is a need to grow the private service sector economy
and to establish a larger base of key knowledge intensive sectors, such as creative
and digital, which the Borough has not been able to grow as successfully as many
other areas across the West Midlands and the UK.
The sector profiles at the end of this paper provide more detail on sub-sector
performance and changes in employment and workplaces over the past ten years.


                                                                                                                              11
                                                         Walsall Sector Analysis Study – Sector Analysis Paper


                                                                                       As with employment, the sectoral structure of GVA differs from the regional and
Gross Value Added                                                                      national profile, where financial, professional and business services now make the
                                                                                       greatest contribution. This reflects both the continued importance of manufacturing
Gross Value Added (GVA) is an important indicator of economic performance used
                                                                                       to the Walsall economy and the comparatively lower levels of employment and
to measure the economic output produced in a particular geographical area and/or
                                                                                       productivity in the financial, professional and business services sector.
sector. The West Midlands Regional Observatory‟s Integrated Policy Model
contains current and future estimates of GVA and for the purpose of this study         GVA per FTE
information has been made available for Walsall and the West Midlands.
                                                                                       GVA per head of population is the standard indicator used to compare the levels of
In 2008, the Walsall economy generated £3.3bn of GVA, accounting for 4% of the         economic output between economies. The measure does not, however, take local
total £81.5bn generated in the West Midlands region. This is in line with the          employment rates and commuter flows into account. An alternative measure which
Borough‟s share of employment, reflecting that Walsall‟s overall productivity levels   overcomes this and provides a measure of productivity is GVA per full time
are in line with the regional average. The levels of output generated and the          equivalent employee (FTE).
associated productivity levels vary greatly by sector. This is highlighted by the
differences in the sectoral breakdown of GVA compared to employment.                   The average GVA generated by FTE employee in Walsall is just under £35,000,
                                                                                       which is slightly lower than the regional average of just under £36,000. There are
                                                                                       significant variations in the productivity levels by sector. Six of the fourteen broad
                                                                                       sections of the economy, have above average levels of productivity (when
                                                                                       compared to Walsall and the regional average). With the exceptions of
                                                                                       manufacturing and transport and communications, however, most of these sectors
                                                                                       are small in terms of employment and output.
                                                                                                                      GVA and Productivity
                                                                                                                                                 Walsall               WM
                                                                                                                                            GVA £m GVA Per           GVA Per
                                                                                                                                                      FTE £           FTE £
                                                                                       Manufacturing                                          740.4     40,109         43,323
                                                                                       Wholesale and retail                                   519.9     30,460         31,043
                                                                                       Real estate, renting and business services             368.0     24,775         30,928
                                                                                       Transport, storage and communication                   301.8     47,246         43,514
                                                                                       Health and social work                                 271.0     30,019         30,281
                                                                                       Finance                                                251.1     90,090         97,079
                                                                                       Construction                                           247.4     33,255         33,539
                                                                                       Education                                              235.3     31,118         32,371
                                                                                       Other services                                         201.6     34,229         33,444
Source: WMRO, Integrated Policy Model                                                  Hotels and restaurants                                  91.7     26,006         25,288
                                                                                       Public administration                                   86.9     37,212         37,864
Despite significant employment decline, manufacturing generated around £740m           Utilities                                               29.9     87,854        129,025
of GVA in 2008 - the highest economic output of all sectors, accounting for over a     Agriculture                                              1.9     17,427         13,658
fifth (22%) of the total GVA generated in Walsall (compared to 18% of                  Mining and quarrying                                     1.1   112,800          89,730
employment). It was followed by financial, professional and business services, the     Total                                                 3348.2     34,949         35,965
fourth largest employment sector in Walsall, which generated around £619m (19%         Source: WMRO, Integrated Policy Model
of total).



                                                                                                                                                                12
                                                                                                                                     Walsall Sector Analysis Study – Sector Analysis Paper


The gap between GVA per FTE in Walsall and the West Midlands also varies
                                                                                                                                                                                                                                Summary – Gross Value Added
considerably by sector. There are five sectors in which the levels of productivity in
Walsall exceed the regional average. Again, however, with the exception of                                                                                                                             The Walsall economy generated £3.3bn of GVA in 2008, accounting for 4% of the
transport and communications these tend to be smaller sectors within the local                                                                                                                         Regional total. This is in line with the Borough‟s respective share of employment
economy.                                                                                                                                                                                               and highlights that overall productivity levels are close to the regional average.
A significant proportion of the economy is accounted for by the seven sectors in                                                                                                                       There are, however, significant variances in the levels of output and associated
which GVA per FTE is at least 90% of the regional average. This includes                                                                                                                               productivity by sector. Despite significant employment decline, manufacturing
wholesale and retail, the public sector and manufacturing. There is however a                                                                                                                          continues to make the largest contribution to Walsall‟s output. This does not,
significant productivity gap in the property and business sectors, with the average                                                                                                                    however, reflect high productivity levels in the sector (which are 93% of the
GVA per FTE just 80% of the regional average. This partly explains the                                                                                                                                 regional average), instead it reflects the low levels of productivity of the financial,
comparatively low contribution that the sector makes to the Borough‟s total GVA.                                                                                                                       professional and business services (80% of the regional average) and low levels of
As with all of the underperforming sectors the gap is likely to increase when                                                                                                                          employment in the sector, when compared to the regional and national average.
compared to national productivity levels.
                                                                                                                                                                                                       If the Borough were to increase the productivity of these two large sectors in
                                                                                                                                                                                                       particular, this would have the greatest impact on increasing overall output and
                                                                                                                                                                                                       begin to close the prosperity gap between Walsall and the national average.
                             Walsall GVA per FTE as a percentage of West Midlands
     160                                                                                                                                                                                               The low levels of productivity in financial, professional and business services, is
                                                                                                                                                                                                       partly a reflection of the lower value activities within these sectors which the
     140
                                                                                                                                                                                                       Borough has been successful in attracting, and highlights the need to attract more
     120                                                                                                                                                                                               knowledge intensive sectors, which offer higher value employment opportunities.
     100

      80
 %




      60

      40

      20

       0
           Agriculture




                                                            Construction
                                           Other services
                         communication




                                                                                                                                      Education




                                                                                                                                                                            Real estate,



                                                                                                                                                                                           Utilities
                                                                                         administration
                                                                                                           Wholesale and




                                                                                                                                                  Finance
                             restaurants
                              Mining and




                                                                                                                                                            Manufacturing
                                                                           social work




                                                                                                                                                                            renting and
                              Hotels and




                                                                           Health and




                                                                                                                           Average
                              quarrying




                                                                                                                                                                             business
                           storage and
                            Transport,




                                                                                            Public



                                                                                                               retail




                                                                                                          Source: WMRO, Integrated Policy Model




                                                                                                                                                                                                                                                                                 13
                                                          Walsall Sector Analysis Study – Sector Analysis Paper


Business Base and Enterprise
The analysis relating to enterprise and the business base is based on statistics        Business density, expressed as a proportion of the working age population, allows
presented in the ONS Business Demography data series, which captures VAT and            the business base to be compared between areas. In Walsall there are around 50
PAYE registrations and de-registrations and the workplace analysis of the Annual        businesses for every 1,000 of the working population, which is in line with the
Business Inquiry. When interpreting the latter its is important to remember that this   Black Country‟s business density. It does, however, lag behind the regional and
counts workplaces as opposed to businesses, therefore a business with multiple          national level (58 and 63 business per 1,000 of the working age population
sites may be counted more than once. Nevertheless, the Annual Business Inquiry          respectively). Walsall requires over 1,200 additional businesses to reach regional
is one of the most detailed datasets which allows a wide range of analysis to be        levels of density and this increases to over 2,000 businesses when considering
undertaken.                                                                             national level.

In 2008, there were almost 7,500 active enterprises in Walsall giving the Borough a                                                                        Business Density 2008
business base of a comparable scale to Sandwell. Overall, Walsall is home to over                                                     65
a fifth of the Black Country‟s enterprises and 4% of the region‟s base, in line with




                                                                                         Businesses per '000 Working Age Population
                                                                                                                                      60
its share of employment.
                                                                                                                                      55
                           Total Number of Businesses 2008                                                                            50
                                                                                                                                      45
 12,000
                                                                                                                                      40
                                                                                                                                      35
 10,000
                                                                                                                                      30
                                                                                                                                      25
  8,000
                                                                                                                                      20
                                                                                                                                      15
  6,000
                                                                                                                                      10
                                                                                                                                      5
  4,000                                                                                                                               0
                                                                                                                                           Black Country   Walsall        West Midlands       England
  2,000
                                                                                                                                                                            Source: Business Demography, 2008
      0                                                                                 This gap is partly linked to a lack of growth in the Walsall (and wider Black
           Wolverhampton         Walsall           Sandwell            Dudley           Country) business base between 2004 and 2008, as the number of businesses
                                                                                        and the density remained relatively static. In the West Midlands and England,
                                                  Source: Business Demography, 2008     business levels grew (by 5% and 7% respectively) and as this outpaced population
                                                                                        growth, the density also increased.




                                                                                                                                                                                                14
                                                                                              Walsall Sector Analysis Study – Sector Analysis Paper


 Businesses per '000 Working Age Population                   Business Density 2004 - 2008                                                                                                    Business Start up Rate 2008
                                              65
                                                                                                                                                           15


                                              60




                                                                                                                             Registrations as % of Stock
                                                                                                                                                           10
                                              55




                                              50                                                                                                                    5




                                              45
                                                   2004      2005            2006            2007          2008                                                     0
                                                                                                                                                                               Walsall         West Midlands      Black Country           England
                                                   Walsall   Black Country          West Midlands      England

                                                                                                                                                                                                                     Source: Business Demography, 2008
                                                                                      Source: Business Demography, 2008

In 2008 the business start up rate in Walsall (10.2%), expressed as registrations as                                                                                           Business Registrations and Deregistrations, 1994-2007
a proportion of business stocks, was slightly below the Black Country (11.1%),
regional (10.8%) and national average (11.8%). This was, however, due to a                                                                                          12
poorer performance in 2008 when compared to previous years, when the start up
rate had been very close to, and in 2004 exceeded, each of the averages. This is                                                                                    11
further highlighted by the fact that if Walsall had been consistently performing in




                                                                                                                                              % of business stock
line with the national start up rate, it would only have created an additional 200                                                                                  10
businesses.
                                                                                                                                                                        9
If data covering a longer time period is considered, it becomes clear that the lower
number of businesses in Walsall, rather than being due to a particularly low
                                                                                                                                                                        8
business start-up rate, is in fact a result of the higher level of VAT deregistrations
in the Borough compared to England as a whole. Since 1997, Walsall has
consistently had a higher level of deregistrations (most commonly the result of                                                                                         7
business failure although occasionally due to businesses shrinking so that their
turnover falls below the VAT threshold) than England, which over time has led to a                                                                                      6
significant gap opening up between levels of business density in Walsall and                                                                                                1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
England as a whole.                                                                                                                                                                      Registrations Walsall       Deregistrations Walsall
                                                                                                                                                                                         Registrations England       Deregistrations England

                                                                                                                                                                                                         Source: VAT Registrations / Deregistrations, 2007



                                                                                                                                                                                                                                            15
                                                           Walsall Sector Analysis Study – Sector Analysis Paper


Workplaces                                                                                                      Employees by Size Band % 2008
                                                                                                              1 – 10       11 – 49        50-200               200+
The Annual Business Inquiry reports that there are almost 8,000 workplaces in                               Employees    Employees      Employees            Employees
Walsall, accounting for just over a fifth of the total workplaces in the Black Country   Walsall                     19            26            23                  31
and 4% of the region‟s base. This is in line with the Borough‟s share of                 Black Country               19            25            26                  29
employment.
                                                                                         West Midlands               20            24            25                  31
                             Workplaces 2008                                             England                     21            24            24                  31
                             1998                              2008                      Source: ABI 2008
                     Number         %                  Number               %
                                                                                         Sectoral Profile of the Workplace Base
Dudley                  10,194           30               10,915                 30
Sandwell                 8,762           25                8,919                 25
Walsall                  8,361           24                7,989                 22      There are differences between the sectoral breakdown of the total workplaces and
                                                                                         employment in Walsall, reflecting the varying average workplace size by sector. In
Wolverhampton            7,056           21                8,216                 23
                                                                                         2008, wholesale and retail, hotels and restaurants accounted for just under a third
Total                   34,373          100               36,039                100
                                                                                         (31%) of total workplaces, which was much higher that the sector‟s respective
Source: ABI 2008
                                                                                         share of employment (25%), highlighting the small/medium scale of many retail
The workplace profile, in terms of size, is similar to the Black Country and the         and hospitality business. This is also the case for financial, professional and
regional and national averages. The slight variation being that Walsall (and the         business services and construction.
Black Country) has a higher level of small businesses (with between 11 and 49
                                                                                         In contrast, manufacturing and, particularly, the public sector have a much lower
employees) and corresponding lower level of micro businesses (with up to ten
                                                                                         share of workplaces when compared to their respective shares of employment,
employees).
                                                                                         reflecting large average workplace sizes. This was also the case in 1998.
                        Workplaces by Size Band % 2008
                       1 – 10       11 – 49        50-200               200+
                    Employees     Employees      Employees            Employees
Walsall            6,532      82 1,125      14    263     3            69      1
Black Country                 82            14            4                    1
West Midlands                 84            12            3                    1
England                       85            11            3                    1
Source: ABI 2008

While micro and small businesses dominate the workplace profile, they account for
less than half of total employment in the borough, reflecting the importance of
medium (with between 50 and 200 employees) and, in particular, large employers
(with more than 200 employees). The 69 large workplaces in Walsall employ over
31,200 people, accounting for almost a third of employment in the Borough.
Overall, the distribution of employment across the workplaces is largely in line with
the regional and national profile.




                                                                                                                                                               16
                                                         Walsall Sector Analysis Study – Sector Analysis Paper




                                                                                                          Summary – Business Base and Enterprise
                                                                                       Walsall‟s business density is in line with the Black Country average, although it
                                                                                       lags behind regional and national levels. The Borough requires an additional 1,250
                                                                                       businesses to reach regional levels and density and this increase to over 2,000
                                                                                       when considering national levels. The gap, in part, reflects the lack of growth in the
                                                                                       business base in Walsall between 2004 and 2008.
                                                                                       Walsall‟s performance relating to start ups has been closer to the regional and
                                                                                       national in recent years, although poor performance in 2008 led to the start up gap
                                                                                       increasing. The start up rate partly reflects the comparatively smaller business
                                                                                       base (with the start up rate expressed as a proportion of active enterprises). The
                                                                                       gap in business density is explained by the higher levels of business failure in
                                                                                       Walsall, with VAT deregistration levels exceeding the England average every year
                                                                                       between 1997 and 2007.
                                                                                       While micro and small businesses dominate the workplace profile, they account for
                                                                                       less than half of total employment, reflecting the importance of medium and, in
                                                                                       particular, large employers in the Borough. The 69 large workplaces in Walsall
                                                                                       employ over 31,000 people, accounting for almost a third of total employment.
                                                             Source: ABI, 1998, 2008   There is the need to create a thriving environment in Walsall to attract new
                                                                                       businesses in targeted growth sectors. This will help to maximise business start
Over the past ten years the largest change in the workplace base has been the          ups, grow the business base and also increase employment in sectors which are
decline of manufacturing workplaces, with the loss of over 500 workplaces (-33%).      currently under-represented. To achieve this, appropriate infrastructure must be
This was much less significant than the fall in manufacturing employment reflecting    put in place to attract companies in target growth sectors.
employment losses in large workplaces.




                                                                                                                                                                17
                                                               Walsall Sector Analysis Study – Sector Analysis Paper


The BME Business Base                                                                        employment for all these groups have increased since 2001. All other groups are
                                                                                             less likely to be self-employed than the White British average.
Approximately one in six of the Walsall population is non-white, with the majority of
the Black and Minority Ethnic (BME) population having an Asian or Asian British
                                                                                                                             Self-Employment Rates in the West Midlands, 2001 & 2005-07
heritage – of whom 40% were Indian, 27% Pakistani and 7% Bangladeshi at the
time of the 2001 census. The BME population makes up a slightly lower proportion
                                                                                                                        25
of the total than in the West Midlands as a whole, and significantly lower than parts
of the region such as Birmingham.




                                                                                               % of all in employment
                                                                                                                        20
There is considerable interest in the role of BME owned and managed businesses
in the Walsall economy, but this is an area which has been little studied to date,
                                                                                                                        15
with no primary research or mapping activity undertaken. This section of the report
therefore draws on research undertaken at the regional level by MEECOE, the
                                                2                                                                       10
Minority Ethnic Enterprise Centre of Expertise (based at De Montfort University),
and consultations with BME business representatives.
                                                                                                                         5
Enterprise and Self-Employment
As there is no official data which measures the number of ethnic minority                                                0




                                                                                                                               All people




                                                                                                                                            British




                                                                                                                                                                                           Caribbean
                                                                                                                                                      Indian




                                                                                                                                                                             Bangladeshi
                                                                                                                                                               Pakistani




                                                                                                                                                                                                       Mixed White




                                                                                                                                                                                                                      Mixed White
businesses, the self-employment rate is used as a proxy for business ownership.




                                                                                                                                            White




                                                                                                                                                                                                        Caribbean



                                                                                                                                                                                                                       and Asian
                                                                                                                                                                                                         & Black
                                                                                                                                                                                             Black
This is an imperfect alternative because some of those classed as self-employed
do not own a business in the traditional sense (e.g. construction contractors, taxi
drivers), whilst others might own a number of companies. However, it provides a
useful indicator and data is available for different ethnic groups at the regional
level, from the Annual Population Survey.                                                                                                                      2001        2005-07

Unfortunately, due to the small samples size, self-employment rates for different                                             Source: Ethnic Minority Businesses in the West Midlands, MEECOE, AWM, 2009
ethnic groups are not available for Walsall. However, it is worth nothing that the
overall level of self-employment in the Borough (10.5% of all those in employment)
                                                                                             Traditional Patterns of BME Enterprise
                                                                  3
is lower than the regional (12.7%) and national (13.6%) averages .                           The importance of BME owned businesses in the West Midlands has increased
Although there is often a perception that “BME communities have a strong culture             since the 1970s, when job losses in the manufacturing sector resulted in many
              4
of enterprise” , in fact levels of self-employment amongst the BME community as a            immigrant communities losing their main source of employment, and acted to push
                                                                                             people into self-employment and business ownership. The early BME businesses
whole are very similar to the white population. There are, however, significant
                                                                                             tended to be in low value activities where the entry and set-up costs were low,
differences between different ethnic groups. The chart opposite shows levels of
                                                                                             such as corner shop retailing and restaurants, and often served an ethnic
self-employment in the different ethnic communities in the West Midlands,
                                                                                             community market. There is evidence that this is starting to change, as a second
focussing on the ethnic communities which are most significant to Walsall.
                                                                                             generation of UK born and educated BME individuals have increasing levels of
At the West Midlands level, individuals from the Chinese, Pakistani and                      choice in the labour market and have begun to diversify into different sectors.
Bangladeshi communities are most likely to be self-employed, and rates of self-
                                                                                             Enterprise Experience of Walsall’s Main BME Communities
                                                                                             There are significant differences between the enterprise experiences of different
2
    Ethnic Minority Businesses in the West Midlands, MEECOE, AWM, 2009                       BME groups. This section draws on regional-level data to examine the trends
3
    APS March 2010                                                                           affecting the most significant BME groups in Walsall.
4
    Engaging Black and Minority Ethnic Entrepreneurs in Business Support, SBS, 2003


                                                                                                                                                                                                                 18
                                                         Walsall Sector Analysis Study – Sector Analysis Paper


The Indian community is long-settled in the region and is the largest BME group        The evidence is less clear in relation to mixed ethnic groups, largely because of
in Walsall. Having arrived in the region to work in low level occupations in the       their relatively recent appearance in the official data and young age profiles. Self-
post-war period, many Indian workers were displaced by deindustrialisation and         employment is low amongst the White / Asian (4.3%) and White / Black Caribbean
shifted into self-employment, often in restaurants or clothing manufacture. The        (2.4%) groups.
level of competition in these sectors meant that Indian entrepreneurship tended to
result in considerable hard work for relatively low reward.                            Diversification
Levels of self-employment amongst the Indian community at the regional level           The traditional concentration of BME businesses in a few activities and markets –
have fallen since 1991, and are now lower than amongst the White British               mainly retailing (including corner shops and ethnic food retailers), catering
population – particularly amongst those born in the UK. Children of Indian descent     (restaurants and take-aways) and clothing manufacture – has generally been
have tended to perform very well academically, and as a result have moved into         considered a weakness, and a sign of labour market disadvantage rather than
higher skilled and paid employment rather than the traditional self-employment         entrepreneurialism. Activity has been concentred in sectors which are cheap and
sectors.                                                                               relatively easy to enter, and this has led to high levels of competition and low rates
                                                                                       of return.
Levels of self-employment are rising amongst the Pakistani community, but
British-born Pakistanis are less likely to be self-employed than the White British     BME businesses in these sectors are often vulnerable to external market threats
population. There are very high levels of self-employment amongst those born           that they cannot influence, such as the major supermarkets in the case of food
overseas (30%), although this partially reflects the lower overall level of economic   retail, and foreign competition in the case of clothing manufacture.
activity amongst this group.                                                           For a number of years business support organisations, particularly those with a
Self-employment in the Pakistani community tends to be concentrated in lower           focus on BME businesses, have worked to support BME businesses to diversify
level activities such as taxi-driving. Although this is captured as self-employment,   into more lucrative sectors. There is some evidence that this is beginning to
it does not really represent business ownership in the traditional sense (unless the   happen, with second-generation BME communities generally better qualified and
taxi company is BME owned).                                                            having more choices about their jobs and careers than their parents, including
                                                                                       choosing not to pursue business ownership but to go into more lucrative
Self-employment is also rising amongst the Bangladeshi community at the West           employment instead.
Midlands level. Again, self-employment is much more common amongst those
born overseas (25.5%) than those born in Britain (7.7%), and the relatively low        At the West Midlands level, evidence of diversification includes:
overall level of economic activity amongst the Bangladeshi community also makes                   The proportion of Indian self-employment in retail has fallen from 51% in
the self-employment rate appear higher.                                                            2001 to 33.5% in 2005-07.
Bangladeshi-owned businesses tend to operate at the more marginal end of the                      The proportion of Indian self-employment in non-traditional sectors has
                                                                                                                                                                           5
economy, with much activity focused in the catering sector (mainly restaurants and                 increased from 16% in 2001 to 26% in 2005-07.
take-aways) which tends to be highly competitive and generates low rewards.
                                                                                                  The proportion of Black Caribbean self-employment in non-traditional
The Black Caribbean community has tended to have a lower level of self-                            sectors has risen from 35% in 2001 to 42% in 2005-07.
employment and although this has increased over time, it remains around half of
the level amongst the White British population (6.3% compared to 11.7% in 2005-        However, this is not occurring at the same rate across all parts of the BME
07). There is little difference in the rate between those born overseas and those      community, with the proportion of Pakistani self-employment in transport rising
born in the UK.                                                                        from 40% in 2001 to 53.5% in 2005-07 and self-employment amongst
                                                                                       Bangladeshis switching from hospitality to transport, another highly competitive
Self-employment amongst the Black Caribbean population tends to be less                and low value sector.
concentrated in a small number of sectors than for other BME groups, with sectors
including construction, hair-dressing and music retailing in addition to the more
traditional corner shops and catering.
                                                                                       5
                                                                                           Real estate, public administration, education, health and other services


                                                                                                                                                                      19
                                                         Walsall Sector Analysis Study – Sector Analysis Paper


Consultations with Sandra Croasdale of the African Caribbean Business
                                                                                       Summary – BME Business Base: Implications for Walsall
Association suggested that a level of diversification is now occurring within the
BME business community in Walsall. Her database of Walsall companies includes          The BME business base is under-researched but evidence from the regional
solicitors, accountants, hair salons, and security / bailiff services as well as the   level suggests that it is likely to play an important role in the local economy.
more traditional retail and catering.                                                  BME businesses play a number of roles: providing employment and services in
A major challenge faced by BME businesses moving into non-traditional sectors is       specific areas of the Borough, particularly the more deprived areas; helping to
a lack of capital, a problem also raised more generally by the Walsall business        diversify the economy away from the reliance on manufacturing; and generating a
                                                                                       level of enterprise and entrepreneurialism within Walsall. Further research would
community (see Walsall Business Survey chapter). Whilst finance for traditional
                                                                                       be useful to quantify the size and importance of BME businesses to the
enterprises had often been raised within the family or wider community, this may
                                                                                       Walsall economy, in terms of employment and output.
not be possible given the higher start-up costs associated with some of the newer
types of BME business. It was also suggested in the consultations that BME             BME businesses also offer the potential to help the Walsall economy
businesses in Walsall are less likely to be family businesses than was previously      increase exports and move into new markets by building on existing family and
the case, even within the Asian community, leading to increased isolation and          cultural ties overseas. Many businesses in Walsall are very dependent on local
reduced levels of support from the community.                                          and regional markets, and expanding the market horizons of local companies
                                                                                       provides an opportunity to increase sales and profitability. BME businesses are
Issues Faced by Walsall’s BME Businesses                                               well-placed to do this either directly themselves or by providing support to other
Consultation with BME business representatives in Walsall identified a number of       Walsall companies looking to export.
issues faced by BME businesses in the Borough. All link to a lack of knowledge         There is an on-going need to support BME entrepreneurs to break out of
about the support available:                                                           traditional sectors and into higher value activity. Progress to date at the
        Isolation / apathy – experience suggests that it is harder to engage with     regional level has been uneven with some communities benefitting more from the
         the BME business community in Walsall than in other parts of the West         move into non-traditional sectors, whilst Pakistani and Bangladeshi entrepreneurs
         Midlands, particularly Birmingham.     Businesses in Walsall “keep            remain concentrated in lower value activity. It is also important to ensure that the
         themselves to themselves” and may not be aware of the wider business          education system supports children from BME backgrounds to attain qualifications
         support networks which could help them to overcome the issues they            that will give them greater choice in the labour market than their parents have had.
         face.                                                                         Business support to BME entrepreneurs needs to be tailored to their specific
        Business planning / management – BME business owners tend to be               needs, but as they become more diverse and enter a broader range of sectors
         “too busy working in the business to work on the business” and are not        their needs have also diversified and community-based business support may no
         always aware of the support available to them from mainstream business        longer be able to address them all. Access to mainstream business support needs
         support organisations.                                                        to be highlighted (e.g. through existing BME business networks) so that a full range
                                                                                       of support and advice is available to BME business owners.
        Cost of training – BME businesses are often unaware of the type of
         training which is available to help them meet their skills needs, and the     Another priority for business support providers is to ensure the focus is on the
         support available to help them pay for it. This finding is in line with the   development of high quality BME businesses rather than encouraging quantity.
         business survey which found that cost was the biggest barrier to              For many years the level of competition within sectors dominated by BME
         undertaking training.                                                         businesses, e.g. take-aways, corner shops, has acted to reduce profitability and
                                                                                       led to the need to work very long hours to make a living. Encouraging
                                                                                       diversification into higher value sectors should be the focus for publicly-funded
                                                                                       business support, alongside recognition of the social role played by less
                                                                                       dynamic BME businesses, in terms of the provision of employment and
                                                                                       services in often deprived parts of the Borough.




                                                                                                                                                              20
                                                                 Walsall Sector Analysis Study – Sector Analysis Paper



Spending Power – Average Earnings                                                                                     Median Annual Earnings in Walsall
The Annual Survey of Hours and Earnings provides data relating to spending
                                                                                                98
power in two ways – resident and workplace based. Resident estimates are based
on the work patterns of those that live in the selected area and are in employment              96
regardless of where this may be. Workplace estimates are based on the work
                                                                                                94
patterns of those that work in a selected area regardless of where they may live.
                                                                                                92
In 2008, the median resident based annual earnings in Walsall was just under
£18,500 while the workplace based median was around £18,300. This suggests                      90
that the people that live in Walsall and travel elsewhere to work (almost 40% of the            88
total residents in employment according to the 2001 Census, of whom 17% work
elsewhere in the Black Country and 14% in Birmingham) are in slightly better paid               86
jobs than those that either live and work in Walsall or that commute to Walsall for             84
work.
                                                                                                82
In both cases the median annual earnings are below the regional and national
averages – a long term trend.                                                                   80
                                                                                                         % of WM          % of England           % of WM          % of England
                                Median Annual Earnings
                                                                                                           Workplace based Median                       Resident Based
                                   Resident Based*                  Workplace Based**
Walsall                                         18,497                           18,327                                              Base Year   2008
Black Country                                   18,753                           17,988
West Midlands                                   19,672                           19,482                                                                         Source: ASHE, 2008
England                                         21,172                           21,170        The combined effect of the below average growth in average earnings and the loss
* Based of people in work (anywhere) that live in Walsall, **Based on people that live in
                                                                                               of employment has been an increase the gap between spending power in Walsall
Walsall and are employed (anywhere). Source: ASHE, 2008
                                                                                               and the regional and national averages. While the overall level of income that
Workplace based data is available from 1999 onwards. This shows that over the                  residents and employees of Walsall have has increased (not taking account of
past nine years median earnings for those that work in Walsall have increased by               inflation), this has been at a much slower rate than national and average
around a third, rising by £4,500. This was, however, behind the regional (36%) and             increases, which have befitted from greater increases in median earnings and
particularly the national (41%) average increase.                                              more people in employment.
Resident based data is only available for 2002 onwards, although it follows the
same pattern with the median earnings for Walsall residents in employment                      Changes in total level of income
increasing at a lower level than the regional and national average (20% in                                                  Resident (% change)            Workplace (% change)
comparison to 21%). In this case the net increase was just over £3,000.                                                          2002-2008                      1999-2008
                                                                                               Walsall                              18.6 (+£311m)                  23.3 (+£343m)
In both cases this is likely to be linked to the significant loss of manufacturing jobs,
in which median annual salaries tend to be above the overall average (£23,956 per              West Midlands                                  23.8                           38.5
annum compared to £19,485 in the North West). Overall, the slower levels of                    England                                        30.9                           50.5
                                                                                               Source: ekosgen, based on ASHE 2008
improvement has led to the gap between Walsall and regional and national
averages widening.




                                                                                                                                                                         21
                                                         Walsall Sector Analysis Study – Sector Analysis Paper


                                                                                                                  Forcast Employment 2008-2020
3        Economic Projections                                                           102
The West Midlands Regional Observatory‟s Integrated Policy Model contains GVA
projections to 2030. For the purpose of this study, data for Walsall and the West       100
Midlands has been made available. This section presents an analysis of the
employment, GVA and associated productivity trends to 2020.
                                                                                         98
Employment
In both Walsall and the West Midlands employment levels are expected to be               96
lower in 2020 than they are in 2008. The decline in Walsall, with a forecast loss of
over 6,800 jobs, is expected to be greater than the regional average (-6% in             94
comparison to -4%).
                        Change in Employment 2008-2020                                   92
                        2008          2020         Change                % Change
Walsall                   111,192      104,390         -6,802                    -6      90
West Midlands           2,657,302    2,551,302       -106,000                    -4            2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: WMRO
                                                                                                              Walsall                      West Midlands
As shown by the employment trend line, this decline is largely linked to the                                                                               Source: WMRO IPM
employment impact of the recession, with employment falling significantly, and
more severely in Walsall than regionally, between 2008 and 2010 and then               Sectoral Employment Trends
stabilising before entering a period of employment growth from 2012 onwards.
                                                                                       Splitting the sectoral employment trends into two periods (2008-2012 and 2010-
Evidence of the impact of previous recessions clearly highlights that the              2020) in line with the overall employment trend in Walsall allows the sectoral
employment impact begins later than the fall in output, as employers try other cost    dynamics of change to be seen more clearly.
cutting measures before reducing staff numbers, and is much more prolonged with
                                                                                       At the broad level, all sectors, except for the public sector are forecast to have
recovery to pre-recession taking a number of years. This trend is shown in the
                                                                                       experienced employment decrease between 2008 and 2010. In particular:
current forecasts, with the severity of the impact highlighted by employment having
only recovered to 96% of 2008 levels by 2020 in the West Midlands and only 94%                 In both net and proportionate terms this is expected to have been greatest
in Walsall.                                                                                     in Manufacturing as the recession accelerated the long term employment
                                                                                                decline trend. It is anticipated that employment in the sector will have
While employment is forecast to grow from 2012 in Walsall it is expected to occur
                                                                                                fallen by a quarter, resulting in the loss of over 4,700 jobs.
at a lower level than the regional average (1% between 2012 and 2020 compared
to 2% regionally) and result in just over 1,200 additional jobs.                               The net job losses in both professional, financial and business services
                                                                                                and wholesale and retail, hotels and restaurants are expected to have
                                                                                                been less severe and of a similar magnitude, resulting in the loss of
                                                                                                around 1,500 jobs in each sector over the same time period.




                                                                                                                                                                22
                                                               Walsall Sector Analysis Study – Sector Analysis Paper


                                Sectoral Employment 2008-2020                                Sub-Sector Employment Trends
 30,000
                                                                                             Overall, eight sub-sectors in Walsall are expected to experience a net increase in
                                                                                             employment between 2008 and 2020. This shows that employment growth in the
 25,000                                                                                      Borough is anticipated to be service driven and, in particular:
                                                                                                    By far the largest of these increases is expected to be in health and social
 20,000                                                                                              work, which as highlighted, reflects the increasing demand for such
                                                                                                     services as the population ages. The importance of the growth in this
 15,000                                                                                              sector to the Walsall economy is highlighted by this accounting for almost
                                                                                                     two thirds of the total employment growth expected in the Borough by
                                                                                                     2020.
 10,000
                                                                                                    The second largest net increase is expected to be in retail, although in
  5,000                                                                                              actual terms the forecast growth is quite modest at less than a fifth of the
                                                                                                     anticipated grow in health and social work.

        0                                                                                           Three of the eight sub-sectors anticipated to grow are within the boarder
             2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020                        financial, professional and business services growth, combined they are
            Manufacturing (-32%)               Public Sector (+8%)                                   expected to result in around 400 jobs. (These and the retail figures
            Business Services (-5%)            Distribution, hotels and restuarants (-4%)            increase when discounting the decline during the recession).
                                                                       Source: WMRO IPM
                                                                                                                        Largest Net Employment Increase 2008 - 2020
                                                                                              2500
Between 2012 and 2020, employment is expected to grow in all broad sectors
except Manufacturing. The forecasts show that:                                                2000
            The greatest proportionate and net increase is expected to occur in the
             public sector, with growth of 6% resulting in over 1,300 additional jobs.        1500
             Analysis at the sub-sectoral level shows that these are all expected to be
             in the health and social work sector (which is forecast to increase by 14%,
             creating over 1,700 jobs). This reflects the increasing demand for services      1000
             which will arise from an ageing population.
                                                                                               500
            Financial, professional and business services and wholesale and retail,
             hotels and restaurants are both forecast to experience modest growth
             over the 8 years to 2020, creating some 500 and 400 jobs respectively.              0




                                                                                                                    Retailing




                                                                                                                                            Construction




                                                                                                                                                           Transport


                                                                                                                                                                       Computing




                                                                                                                                                                                   Banking and
                                                                                                      Social Work




                                                                                                                                Insurance




                                                                                                                                                                                                      Transport
                                                                                                      Health and




                                                                                                                                                                        Services
            The decline in manufacturing is expected to slow from 2012 onwards, with




                                                                                                                                                                                                        Water
                                                                                                                                                                                     Finance
                                                                                                                                                             Land
             a further 1,300 jobs expected to be lost by 2020. The overall level of
             decline, however, is expected to be much less significant (-9%) than
             levels witnessed over the past ten years (-46%).
                                                                                                                                                                                   Source: WMRO IPM




                                                                                                                                                                                                 23
                                                                                                                                  Walsall Sector Analysis Study – Sector Analysis Paper


The continued decline of the manufacturing sector is further highlights with six of                                                                                                                                         Employment Change 2008 - 2020
the ten largest net decreases expected to be in manufacturing sub-sectors. The                                                                                                    25%
manufacture of metals and the basic metals (which is currently the Borough‟s
largest manufacturing sub-sector) is expected to experience the largest net                                                                                                       20%
decline, resulting in the loss of over 3,400 jobs.
                                                                                                                                                                                  15%
                                      Largest Net Employment Decline 2008 - 2020
                                                                                                                                                                                  10%




                                                                                                                        Communications
                                        Other Business




                                                                                      Motor Vehicles




                                                                                                                                         Misc. Services
                                                                                                       Electrical and
                                                                                                       Instrumental
                                                                                                        Engineering




                                                                                                                                                            Clothing and
                       Basic Metals
         Metal Goods




                                                                        Engineering
                                           Services


                                                         Distribution


                                                                        Mechanical
                                                                                                                                                                                  5%




                                                                                                                                                              Textiles,

                                                                                                                                                              Leather
                                                                                                                                                                                  0%




                                                                                                                                                                                                                                                                                                                     Agriculture
                                                                                                                                                                                                                                                                      Other services
                                                                                                                                                                                                                                    Manufacturing



                                                                                                                                                                                                                                                     Construction




                                                                                                                                                                                                                                                                                       Communication
                                                                                                                                                                                         Public Sector


                                                                                                                                                                                                         Distribution,




                                                                                                                                                                                                                         Business




                                                                                                                                                                                                                                                                                                        Utilities
                                                                                                                                                                                                                         Services
                                                                                                                                                                                                         restuarants




                                                                                                                                                                                                                                                                                        Transport and
                                                                                                                                                                                                          hotels and
    0


  -500


 -1000
                                                                                                                                                                                                                                              2008                  2020

 -1500                                                                                                                                                                                                                                                                                                  Source: WMRO IPM
                                                                                                                                                                             By 2020, the sectoral structure (in terms of the proportion of employment in each
 -2000                                                                                                                                                                       sector) is largely expected to reflect that of the wider Region. It is however
                                                                                                                                                                             expected that manufacturing will continue to be highly concentred in Walsall
 -2500                                                                                                                                                                       compared to the national average and financial, professional and business
                                                                                                                                                                             services, in contrast, underrepresented. This is a reflection of the manufacturing
                                                                                                                                                          Source: WMRO IPM   decline slowing and very limited growth in the private service sector.
Other sub-sectors which are expected to decline include other business services
and distribution. In the case of business services, this reflects the significant
decline that is expected to have occurred during 2008 and 2010 due to the impact
of the recession. From 2010 the sub-sector is expected to experience employment
growth; however this is anticipated to be at a low level and not sufficient to offset
the substantial losses.

The Sectoral Composition
The trends clearly show that the Borough is set to continue with the structural shift
from manufacturing to a more service based, and knowledge intensive economy.
The modest performance over the past ten years has now been exacerbated by
the recession, however overall employment levels in Walsall are expected to
increase post-recession, as service sectors (especially public health services) grow
and the manufacturing decline is forecast to slow. The strong growth in public
health services is expected to result in the public sector being the largest employer
in the Borough by 2020.




                                                                                                                                                                                                                                                                                                                    24
                                                                                                               Walsall Sector Analysis Study – Sector Analysis Paper


                                                           Sectoral Employment 2020                                                                                         respective growth in employment (which is modest and behind the public
         30%                                                                                                                                                                sector), reflecting the sector‟s higher and increasing levels of productivity
                                                                                                                                                                            and the higher value of the associated activities.
         25%
                                                                                                                                                                           This is followed by an increase of around £140m in the public sector,
         20%                                                                                                                                                                (reflecting the forecast employment growth in health and social care),
         15%
                                                                                                                                                                            and an increase of around £111 in distribution, hotels and restaurants. In
                                                                                                                                                                            both cases GVA growth outpaces employment growth, reflecting
         10%                                                                                                                                                                increases in productivity.
         5%                                                                                                                                                                Manufacturing‟s contribution is forecast to decline by around £106m – a
                                                                                                                                                                            decline of 17%. This is much lower than the anticipated fall in
         0%                                                                                                                                                                 employment between 2008 and 2020 (-32%), reflecting productivity




                                                                                                                                                   Agriculture
                                                                                              Other services
                                                               Manufacturing



                                                                               Construction




                                                                                                                 Communication
                Public Sector


                                Distribution,




                                                Business




                                                                                                                                     Utilities
                                                Services
                                restuarants




                                                                                                                  Transport and
                                 hotels and




                                                                                                                                                                            increases across the remaining manufacturing base.
                                                                                                                                                                         Sectoral GVA
                                                                                                                                                                         Sector                 2008           2020          Net            %
                                                                                                                                                                         Manufacturing            740.4          634.3       -106.1         -14.3
                                                           Walsall                West Midlands                                                                          Finance                  619.1          778.0        158.9          25.7
                                                                                                                                  Source: WMRO IPM                       Distribution             611.7          722.8        111.1          18.2
                                                                                                                                                                         Public                   593.3          733.7        140.5          23.7
                                                                                                                                                                         Transport                301.8          385.0         83.2          27.6
Gross Value Added                                                                                                                                                        Construction             247.4          261.8         14.4           5.8
In contrast to employment, GVA levels in Walsall and the West Midlands are                                                                                               Other services           201.6          221.4         19.8           9.8
expected to be higher in 2008 than 2020, reflecting the shorter recovery period for                                                                                      Utilities                 31.1           32.0           1.0          3.1
output compared to employment following the recession and increasing                                                                                                     Agriculture                 1.9            1.3        -0.6         -31.4
productivity levels. By 2020, Walsall‟s GVA is expected to have increased by £422                                                                                        Total                    3,348          3,770        422.2          12.6
million, resulting in the generation of £3.7bn – an increase of 13%, which is slightly                                                                                   Source: WMRO
lower than the anticipated increase at the regional level (17%).                                                                                                 As these changes occur, the sectoral structure of the Borough‟s GVA contribution
                                           Change in GVA 2008-2020                                                                                               will also continue to change. The main anticipated changes are:
                                       2008           2020         Change                                                                        % Change                 Manufacturing will become only the fourth largest generator of GVA
Walsall                                   3,348          3,770           422                                                                            13                 (having made the greatest contribution in 2008);
West Midlands                            81,520         95,525        14,005                                                                            17
Source: WMRO                                                                                                                                                              The largest contribution will be made by financial, professional and
                                                                                                                                                                           business services, followed by the public sector (which made the fourth
Sectoral GVA Trends                                                                                                                                                        largest contribution in 2008), and distribution, hotels and restaurants.
As with employment, GVA is forecast to increase in all of the larger broad sectors,
except Manufacturing by 2020. The forecasts show that:
         The largest net increase is expected to be in financial, professional and
          business services, which is expected to increase its contribution by
          £159m, generating £778m in 2020. This is much greater than the sector‟s



                                                                                                                                                                                                                                            25
                                                                                                        Walsall Sector Analysis Study – Sector Analysis Paper


                                                    GVA Change 2008 - 2020                                                                                                                                                GVA 2020
 25%                                                                                                                                                  30%

 20%                                                                                                                                                  25%

                                                                                                                                                      20%
 15%
                                                                                                                                                      15%
 10%
                                                                                                                                                      10%
  5%                                                                                                                                                   5%

  0%                                                                                                                                                   0%




                                                                                                                                       Agriculture




                                                                                                                                                                                                                                                                                               Agriculture
                                                                                                          Other services




                                                                                                                                                                                                                                                             Other services
         Manufacturing




                                                                                         Construction




                                                                                                                                                                                                          Manufacturing




                                                                                                                                                                                                                                              Construction
                                    Distribution,




                                                                                                                                                                                        Distribution,
                         Business




                                                       Public Sector




                                                                                                                           Utilities
                                                                       Communications




                                                                                                                                                             Business




                                                                                                                                                                        Public Sector




                                                                                                                                                                                                                                                                              Utilities
                                                                                                                                                                                                                             Communications
                                    Restaurants




                                                                                                                                                                                        Restaurants
                         Services




                                                                                                                                                             Services
                                     Hotels and




                                                                                                                                                                                         Hotels and
                                                                        Transport and




                                                                                                                                                                                                                              Transport and
                                                      2008                              2020                                                                                                            Walsall                          West Midlands
                                                                                                                                Source: WMRO                                                                                                                                       Source: WMRO

By 2020, the sectoral structure (in terms of the proportion of GVA generated by                                                                      Productivity
each sector) is largely expected to reflect that of the wider Region. It is however
expected that, as with employment, manufacturing‟s contribution will continue to be                                                                  The variations between the GVA and employment forecasts highlight that there are
above average and financial, professional and business services, in contrast, will                                                                   also going to be changes in productivity levels between 2008 and 2020. On
be below average. Again this is largely a result of slow growth in the financial,                                                                    average, The GVA per FTE in Walsall is expected to increase by £7,381 (21%) to
professional and business services sector and the gap between the productivity of                                                                    £42,330, which is slightly lower than the increase at the regional level of £8,186 to
the Walsall and regional sector increasing.                                                                                                          £44,151 per FTE (23%) reflecting that the prosperity gap is forecast to widen. In
                                                                                                                                                     2020, the average productivity levels in Walsall will be 96% of the regional average
                                                                                                                                                     (compared to 97% in 2008).
                                                                                                                                                     The increase is forecast to occur across all of the main larger sectors in Walsall,
                                                                                                                                                     with the largest net increases expected in financial services, transport and
                                                                                                                                                     communication and manufacturing. Increases in the latter are expected to allow
                                                                                                                                                     the decline in manufacturing‟s GVA to be less significant than the decline in
                                                                                                                                                     employment.




                                                                                                                                                                                                                                                                                          26
                                                           Walsall Sector Analysis Study – Sector Analysis Paper


                       GVA and Productivity – Walsall                                                                     Walsall GVA per FTE as a percentage of West Midlands
                                       GVA per FTE                   Change                    140
                                     2008        2020               Net     %                  120
Utilities                            87,854     138,573            50,719  57.7
                                                                                               100
Finance                              90,090     105,512            15,422  17.1
Mining and quarrying                112,800      95,125           -17,675 -15.7                 80
Transport and communication          47,246      62,004            14,758  31.2




                                                                                           %
                                                                                                60
Manufacturing                        40,109      50,443            10,334  25.8
Public administration                37,212      45,208             7,996  21.5                 40
Other services                       34,229      38,993             4,764  13.9                 20
Wholesale and retail                 30,460      38,191             7,730  25.4
Health and social work               30,019      35,414             5,396  18.0                  0




                                                                                                     Agriculture




                                                                                                                                                      Construction
                                                                                                                                     Other services
                                                                                                                   communication




                                                                                                                                                                                                                    Education




                                                                                                                                                                                                                                                                                 Utilities
                                                                                                                                                                                                                                                                  Real estate,
                                                                                                                                                                                   administration
                                                                                                                                                                                                    Wholesale and




                                                                                                                                                                                                                                                        Finance
                                                                                                                       restaurants




                                                                                                                                                                                                                                        Manufacturing
                                                                                                                                                                     social work




                                                                                                                                                                                                                                                                  renting and
                                                                                                                        Hotels and




                                                                                                                                                                     Health and




                                                                                                                                                                                                                                Total




                                                                                                                                                                                                                                                                   business
Education                            31,118      34,576             3,458  11.1




                                                                                                                     storage and
                                                                                                                      Transport,




                                                                                                                                                                                      Public



                                                                                                                                                                                                        retail
Construction                         33,255      34,290             1,035   3.1
Real estate, renting and business    24,775      32,972             8,197  33.1
Agriculture                          17,427      31,062            13,634  78.2
                                                                                                                                                                                   2008                  2020
Hotels and restaurants               26,006      30,883             4,877  18.8
Total                                34,949      42,330             7,382  21.1                                                                                                                                                                                                              Source: WMRO
Source: WMRO, Integrated Policy Model

                                                                                                                                                                     Summary – Projections
For the majority of sectors, the gap between the average GVA per FTE in Walsall
and the West Midlands is expected to remain largely unchanged. The decrease in            The West Midlands Regional Observatory‟s Integrated Policy Model shows that the
the relative performance at the overall level is linked to lower growth in productivity   employment impact of the recession is expected to be significant in Walsall, with
levels in manufacturing and particularly financial, professional and business             low levels of employment growth between 2012 and 2020 not being sufficient to
services. In 2020, the average GVA per FTE in financial services is expected to be        offset the sharp decline between 2008 and 2010. By 2020, employment levels are
80% of the regional average (compared to 93% in 2008) with professional                   only expected to be 94% of 2008 levels. The lower number of people in
business services at 78% (compared to 84% previously).                                    employment will further reduce the spending power generated by those that live
                                                                                          and work in Walsall. GVA is expected to have increased, however, reflecting the
                                                                                          shorter post recession recovery period for output when compared to employment,
                                                                                          and increasing productivity levels.
                                                                                          Sectoral employment and GVA forecasts shows the structural change is set to
                                                                                          continue. Manufacturing will continue to decline, although at a lower level than
                                                                                          witnessed between 1998 and 2008 and employment growth will occur in the
                                                                                          service sector. It is, however, expected to be driven by increases in health and
                                                                                          social work as opposed to financial, professional and business services. While
                                                                                          productivity is forecast to increase in Walsall, this is expected to be at a lower rate
                                                                                          than regionally, largely linked to below average growth in productivity in
                                                                                          manufacturing and financial, professional and business services. This will lead to a
                                                                                          widening in the prosperity gap between the Borough and the regional average
                                                                                          (which will also further increase at the national level).



                                                                                                                                                                                                                                                                                              27
                                                              Walsall Sector Analysis Study – Sector Analysis Paper


                                                                                            This left approximately 4,000 apparent businesses from the source databases
4        The Walsall Business Survey 2010                                                   uncontacted by the survey due to lack of valid contact details.
An integral part of the Walsall sector analysis has involved gauging the views of           Using the valid contact base as the study target group, the response rate overall is
Walsall businesses across core research areas. This level of information could              estimated to be 12% which allows a 95% level of confidence in the results (+/- 4
only be obtained through bespoke primary research and in order to achieve this, a           percentage points). The outcome summary for the 3,428 businesses invited to
survey of Walsall businesses was carried out between August and September                   take part is presented below.
2010. This short paper presents the methodology behind the survey and analysis
                                                                                             Sample Profile
of the results.
                                                                                                                                  Online      Online      Total
Analysis of the official statistics suggests that there were approximately 7,500                                  Telephone       Direct     Indirect    Sample
                                6
businesses in Walsall in 2005 , and the business survey took a census approach               Sample                      606        2,792          30      3,428
of attempting to contact each of these. This built upon the previous Borough-wide            - Invalid contacts          230          689    unknown         230
business needs survey undertaken by Walsall MBC in 2008. The sample of                       - No response               176        2,103          14      2,293
business contacts was subsequently drawn from three main sources:                            Responded                   200          210          16        426
        Walsall MBC (6,278 contacts);                                                       Response rate              33%           8%          2%        12%

        Business Link West Midlands (8,630 contacts); and                                  The telephone element has provided in-depth findings and has allowed for chosen
                                                                                            sub-sets of the sample to be surveyed in detail. This is important as it provides
        Walsall beneficiaries of the Enhanced Innovation and SME Sustainability            greater rigour to the sub-sector benchmarking undertaken later in the report. The
         Programmes (70 contacts).                                                          telephone survey approach also proved adaptable in allowing survey questions to
                                                                                            be modified during the research based on emerging business feedback.
These sources provided a total of 14,978 contacts, of which 1,201 were identical
          7
duplicates . Removing known duplicates provided a potential sample of 13,777                The online survey allowed the wider business population to participate and
known businesses, of which 3,398 had useable contact details. However, it should            required much less intrusion into business manager‟s schedules. For this reason,
be noted that national business registry records indicate that there are 7,500              online surveys have become increasingly popular research tools in recent years.
businesses in Walsall so a further 6,500 of the 13,777 contacts are either                  For this assignment, the online survey proved most useful in topping up the more
duplicates, smaller companies not recorded by VAT or PAYE registration, or                  structured telephone surveys.
companies that have ceased trading or started up very recently.
                                                                                            Alongside the business survey, a variety of other mechanisms have been used to
The research itself took a blended approach whereby surveys were undertaken                 seek the views of businesses, both to feed into the LEA and more widely, including
both over the telephone and online. Within the known sample, 606 businesses                 a breakfast seminar held with businesses to discuss the barriers to creating local
were selected for telephone interview with the target of achieving 200 interviews.          jobs and wealth in Walsall. Many of the findings echo the results of the business
This selection was based on those that were largest and/or in target sectors                survey and together represent a considerable weight of evidence on the views and
(manufacturing, construction, finance, professional and business services).                 support needs of local businesses.
The remainder of the known sample for which email addresses were known
(2,792) were sent links to an online version of the survey, and this link was also
circulated to a further 30 businesses that are Walsall MBC enterprise partners.


6
 Walsall MBC/ekosgen (2010) Walsall Sector Analysis Paper
7
 Data-cleansing found that 1,201 companies in both databases were identical duplicates. A
much higher number were duplicates that had slightly different names but referred to the
same business.


                                                                                                                                                                   28
                                                                                          Walsall Sector Analysis Study – Sector Analysis Paper


Sample Characteristics                                                                                                      The sample base also provides a relatively accurate profile of the full business
                                                                                                                            base in terms of employment sizebands. The main difference between the two
The survey received responses from the full range of industrial sectors with the                                            bases is the relatively low number of sample businesses with one to ten staff, and
highest proportion operating in manufacturing (30%), followed by high proportions                                           this is the result of deliberately targeting the telephone surveys at larger
of business respondents operating in retail and hotels (19%), construction (18%)                                            businesses within the Borough.
and business services (11%). This response distribution allows results to be
analysed by sector for the above groups. Where numbers allow, findings have                                                  Surveyed Businesses by Employment Sizeband
                                                                                                                             Source: Walsall Business Survey 2010 + Annual Business Inquiry (2008)
also been split to show retail, hotels and restaurants, finance, professional and                                            n = 376 responses
business services separately. The sample breakdown by sector is illustrated in the
figure below.                                                                                                                                           100%
                                                                                                                                                                      82%
 Surveyed Businesses by Sector                                                                                                                          80%




                                                                                                                                % of survey responses
 Source: Walsall Business Survey 2010 + Annual Business Inquiry (2008)
 n = 344 responses (excluding 60 responses for other, and 3 DK/NA)                                                                                              56%
                                                                                                                                                        60%
                            40%
                                  31%          31%                                                                                                      40%                       31%
    % of survey responses




                            30%
                                                                          23%                                                                           20%                             14%            10%
                                            19%          18%                                                                                                                                                 3%        2% 1%
                            20%
                                                                                                                                                         0%
                                   13%                      12%       11%           9%                                                                         1 to 10 staff    11 to 49 staff       50 to 199 staff   200+ staff
                                                                                      7%                          8%
                            10%                                                                  5%6%
                                                                                                              3%                                                    Walsall Business Survey   Walsall Business Base

                            0%
                                  Manuf'   Retail, Hotels Construction   Finance,   Com m unity Transport      Public
                                             & Res'ts                  Prof' & Bus'  Services   and Com m s adm in, educ,
                                                                        Services                               h'care

                                                Survey Responses        Business Base


Respondents from the four largest sectors in Walsall (by number of businesses)
make up 78% of the sample base and this is comparable to the full Walsall
business base where they account for 79% of the total.
The sample profile was deliberately chosen to focus on important and growth
sectors and this is reflected in the comparison with the Walsall business base. For
example, respondents from the retail, hotels and restaurants sector are relatively
under-represented in the sample base whereas manufacturing and construction
sector respondents account for a relatively high proportion of the total. Whilst the
finance, professional and business services sector makes up 23% of the Walsall
business base and includes a number of high-growth sub-sectors, the survey has
captured a relatively small proportion of these businesses (11%) despite specific
targeting.


                                                                                                                                                                                                                          29
                                                                               Walsall Sector Analysis Study – Sector Analysis Paper


Business respondents were asked about the gender profile of their workforce and                              A similarly balanced profile emerges when examining the job status of the sample
an analysis of this reveals that the sample businesses appear slightly over-                                 business‟ workforce. As shown in the figure below, the sample profile is
represented by male staff when compared to the profile for the Walsall business                              comparable to the Walsall employment base, with only a slight over-representation
base as a whole. Despite this, the sample businesses can be viewed as having a                               of full-time staff.
fairly balanced representation of both male and female members of the workforce
(see figure overleaf).                                                                                        Surveyed Business Workforce by Job Status
                                                                                                              Source: Walsall Business Survey 2010 + Annual Business Inquiry (2008)
                                                                                                              n = 376 responses
 Surveyed Business Workforce by Gender
 Source: Walsall Business Survey 2010 + Annual Business Inquiry (2008)                                                                   100%
 n = 375 responses

                            100%                                                                                                                  76%
                                                                                                                                         80%                 72%




                                                                                                                 % of survey responses
                            80%                                                                                                          60%
    % of survey responses




                                     63%
                            60%                   54%                                                                                    40%
                                                                                        46%                                                                                                          28%
                                                                                                                                                                                           24%
                                                                              37%
                            40%                                                                                                          20%

                            20%                                                                                                           0%
                                                                                                                                                     Full-time                                Part-time
                             0%
                                                                                                                                                Walsall Business Survey      Walsall Business Base
                                           Male                                   Female
                                   Walsall Business Survey      Walsall Business Base                        The survey also asked businesses about the age characteristics of their business.
                                                                                                             Approximately one in ten (11%) of those employed in surveyed businesses are
                                                                                                             aged under 25.




                                                                                                                                                                                                           30
                                                                  Walsall Sector Analysis Study – Sector Analysis Paper


Turnover analysis reveals that 78% of all surveyed Walsall businesses have
turnovers of up to £5m per annum. One quarter (24%) can be thought of as small                   Growth Expectations for Next Two Years
                                                                                                 Source: Walsall Business Survey
businesses with turnover of up to £100,000 per annum.                                            n = 403 responses
                                                                                                                            Don't know,
 Survey Responses by Turnover Sizeband                                                                                         10%
 Source: w alsall Business Survey
 n = 403 responses                                                                                             Expect
                    Less than £50,000                                14%                                    size/turnover                                       Expect
                         Up to £100,000                         12%                                         to decrease,                                    size/turnover
                         Up to £400,000                                    16%                                    8%                                         to increase,
                                                                                                                                                                 57%
                         Up to £999,999                                 15%
                                Up to £5m                                        21%
                               Up to £10m         4%                                                                  Expect
                               Up to £20m        3%                                                               size/turnover
                                                 3%                                                                 to stay the
                                Over £20m
                                                                                                                   same, 25%
   Don’t Know / Prefer not to say                                 12%

                                            0%   5%     10%         15%        20%     25%      In greater detail, the hotel and restaurant sector has the most positive growth
                                                                                                forecast with 88% of respondents expecting to grow over the next two years. Two
                                                       % of survey responses
                                                                                                other sectors also have relatively positive growth forecasts when compared to the
                                                                                                sample average, specifically, financial, professional and business services (62%),
Finance, professional and business service firms are more likely to be smaller
                                                                                                and manufacturing (59%). Respondents from the construction sector are less
firms with turnovers up to £100,000 (27%) whereas this figure is 21% for retailers,
                                                                                                likely to have positive growth expectations (48%) compared to the sample average.
hotels and restaurants, 18% for construction businesses, and 14% for
manufacturers. The proportion of businesses with a turnover of over £5m is 19%                  This is in keeping with the IPM‟s forecast of growth across all sectors (except
for construction respondents, 14% for manufacturers, 9% for finance, professional               agriculture) as the economy recovers from the recent recession. The IPM forecast
and business service firms, and 8% for retailers, hotels and restaurants.                       also expects strongest performance in service industries, as part of Walsall‟s
                                                                                                continuing transition towards a service sector economy, whilst growth in
Growth Expectations                                                                             construction and manufacturing industries is expected to be weaker. That said, the
                                                                                                scale of the manufacturing sector and its importance to the local economy in
The survey was conducted between August and September 2010 when UK                              Walsall means that further dialogue with these businesses is needed to explore
economic conditions were influenced by the recent change of government and the                  how their growth expectations can be realised.
continuing economic recovery several months after recession. With this in mind,
the surveyed Walsall businesses presented a largely positive view of their
business futures. Over half (57%) expect their size / turnover to increase over the
next two years whilst a further 25% expect their business to remain the same size.
A smaller proportion (8%) were expecting their business to decrease in size.
This outlook compares favourably to forecasts by the West Midlands Regional
Observatory‟s (WMRO) Integrated Policy Model (IPM) which is more cautious in
anticipating growth between 2010 and 2020.


                                                                                                                                                                      31
                                                        Walsall Sector Analysis Study – Sector Analysis Paper


 Growth Expectations for Next Two Years (by Sector)
                      Increase    Stay the same  Decrease           Don’t know
                                                                                       Reasons for Business Growth
                                                                                       Source: Walsall Business Survey
 Manufacturing             59%               29%       4%                   7%         n = 226 responses
 Construction              48%               35%       9%                   8%           New business within existing market                                                               73%
 Retail                    56%               27%      11%                   6%
 Hotels & Rest             88%               13%       0%                   0%                Developed new product / service                                 34%
 Fin. Profess. &
 Business Services         62%               21%       0%                   18%                                 Entered new market                           32%
 All Businesses            57%               25%       8%                   10%                                  Expanded facilities              15%
 Source: Walsall Business Survey 2010
                                                                                                               Expanded workforce             12%
By sizeband, the largest businesses (over £5m turnover) are most likely to
anticipate growth over the next two years (72% of businesses). Conversely,                                                     Other         10%
smaller businesses (less than £1m turnover) are more likely than average to
anticipate decreasing company size.                                                                               International trade        9%

 Growth Expectations for Next Two Years (by Turnover)                                                                                   0%        20%           40%             60%         80%
                                       Stay the                        Don’t
                                                                                                                                                        % of survey responses
                              Increase   same     Decrease             Know
 Less than £100,000                52%      24%       11%                 13%
                                                                                      A number of growth factors are of greater importance within specific sectors.
 £100,001 - £400,000               59%      25%       13%                   3%
                                                                                      Exploitation of the existing business market is important to 86% of hotel and
 £400,001 - £999,999               55%      25%       13%                   7%
                                                                                      restaurant respondents who expect to grow, and to 77% of construction
 £1 million - £5 million           57%      28%        6%                   9%        businesses. Growth through new products and services is most cited by retailers
 Over £5 million                   72%      19%        3%                   6%        (46%) and manufacturers (39%). The manufacturing sector has the highest
 All Businesses                    57%      25%        8%                 10%         proportion of businesses attributing future growth to entering new markets (39%),
 Source: Walsall Business Survey 2010                                                 and this sector is similarly most likely to exploit international trade (15%).
For those businesses forecasting growth, the most cited reason behind this outlook
was the expectation of new business generated within their existing markets
(applicable to 73% of businesses expecting growth). Other factors behind growth
forecasts included the development of new products / services (34%), entering
new markets (32%), expanding facilities (15%) and expanding the workforce
(12%).




                                                                                                                                                                                      32
                                                                                            Walsall Sector Analysis Study – Sector Analysis Paper


                                                                                                                            respondent business‟ markets (49%). Other factors included lack of expansion
 Reasons for Business Growth                                                                                                finance (17%), limiting exposure to risk (10%) and personal reasons (9%). Those
 Source: Walsall Business Survey 2010
 n = 226 responses                                                                                                          selecting „other‟ typically referred to market and lending difficulties of the post-
                                                                                                                            recession business climate.
                            100%
                                   86%
                                                                                                                             Barriers to Business Growth
                            80%                                                                                              Source: Walsall Business Survey
    % of survey responses




                                              67%
                                                                                                                             n = 134 responses
                            60%                                                                                                   Market limitations / competition                                                49%
                                                 46%
                                                                 39%
                            40%                                                                                                      Lack of finance for expansion                      17%
                                                                              29%
                                                          25%
                                                                                                                                               Limit exposure to risk             10%
                                                                        17%                  14%          15%
                            20%                                                                                 10%
                                                                                        8%           8%                                              Personal reasons             9%
                             0%                                                                                                 Just undergone period of growth               7%
                                      New        New product Entered new      Expanded       Expanded     International
                                    business       / service    market         facilities    workforce        trade              Lack of land/premises to expand             5%
   Manufacturing                         Construction   Retail   Hotels & Restaurants   Finance, Prof' & Bus Services          Want to stay below VAT threshold              4%
                                                                                                                                                               Other                           25%
The proportion of businesses attributing future growth to new business within
existing markets and to international trade is highest for larger companies. In                                                                                         0%    10%       20%     30%       40%    50%    60%
comparison, smaller businesses are more likely to cite the development of new
                                                                                                                                                                                         % of survey responses
products / services, or expanded facilities.
 Reasons for Business Growth (by Turnover)                                                                                  Considering four of the largest sectors in greater detail, there are clear variations
                   Up to      Up to   Up to                                         Up to      Over           All           between the sectors. Two thirds of the surveyed manufacturing businesses which
                 £100,000 £400,000    £1m                                           £5m        £5m        Businesses        do not expect to grow feel constrained by market limitations whereas the
 New                                                                                                                        proportion is 19% for retailers, hotels and restaurants.
 business             64%        68%   71%                                           80%           87%                73%   Lack of finance is a particular issue for construction businesses, affecting 21% of
 New product /                                                                                                              respondents in this sector compared to 17% for the total sample. Restricted
 service              36%        47%   31%                                           26%           39%                34%   growth due to personal reasons is particularly prevalent among professional and
 Entered new                                                                                                                business service businesses (13%) compared to the total sample (9%).
 market               33%        21%   51%                                           28%           42%                32%
 Expanded
 facilities           16%        15%   14%                                           14%           19%                15%
 Expanded
 workforce             9%        21%   14%                                           10%           16%                12%
 International
 trade                 9%         9%     6%                                          10%           10%                9%
 Source: Walsall Business Survey 2010
For those businesses that are not expecting growth over the next two years, the
most cited reason for this was the presence of limitations or competition within the


                                                                                                                                                                                                                 33
                                                                                       Walsall Sector Analysis Study – Sector Analysis Paper



Barriers to Business Growth                                                                                           Market and Supply Chains
Source: Walsall Business Survey 2010
n = 134 responses                                                                                                     The geographic distribution of Walsall businesses‟ customers and clients is
                           80%                                                                                        important intelligence to inform how best to support their needs. For the sample as
                                 66%                                                                                  a whole, 80% of respondents report that they serve clients or customers based in
                                                                                                                      Walsall. A high proportion (69%) report trade within the Black Country and West
                           60%
   % of survey responses




                                                                                                                      Midlands metropolitan area, whereas only 31% report trading overseas.

                           40%                                                                                         Where are Customers / Clients Located?
                                                                                                                       Source: Walsall Business Survey 2010
                                                                                                    25%                n = 366 responses
                                            19%   21%
                           20%                                                                         15%                                 100%
                                                         12%      11%                13%
                                                                          4%                  3%                                                  80%
                           0%                                                                                                              80%                69%        69%
                                                                                                                                                                                                62%




                                                                                                                        % of respondents
                                    Market /      Lack of finance Limit exposure      Personal     Just undergone                                                                   59%
                                  competition      for expansion      to risk         reasons          growth                              60%
  Manufacturing                        Construction   Retail, Hotels & Restaurants   Finance, Prof' & Bus' Services
                                                                                                                                           40%                                                                  31%
Growth Expectations:
                                                                                                                                           20%
                            The growth expectations of Walsall's businesses reflect the recovery from
                             the recession of 2008/09, with nearly 60% of those surveyed expecting                                          0%
                             growth over the next two years.                                                                                      Walsall      Black     West        West     Rest of UK    Overseas
                                                                                                                                                              Country   Midlands   Midlands
                            There are clear differences between the sectors, with construction                                                                          Metro      Region
                             companies more cautious (perhaps understandable given the severe
                             impact of the financial crisis on house-building and expectations of limited
                             public sector-funded activity over the next few years) and businesses in                 Of all businesses in Walsall, the survey results indicate that manufacturers have
                             the hotels and restaurants sector most optimistic.                                       the widest geographical reach for their sales with 45% of respondents serving the
                                                                                                                      overseas market compared to 19% of retailers, hotels and restaurants, 10% of
                            Interestingly, over 10% of retailers are expecting turnover to decrease,                 construction firms and 9% of finance, professional and business service firms.
                             perhaps reflecting the low levels of consumer confidence at the time the
                             survey was conducted and the forthcoming rise in VAT.
                            Nearly three-quarters of businesses expecting to grow say that this
                             will be through securing new business within their existing market.
                             Manufacturers are most likely to say they will grow through entering
                             new markets (39%) and international trade (15%).
                            The most common barrier to growth identified was competition /
                             market limitations, indicating that support to access new markets
                             could help Walsall's businesses to grow.




                                                                                                                                                                                                           34
                                                           Walsall Sector Analysis Study – Sector Analysis Paper


At the local level, 83% of retailers, hotels and restaurants serve customers or
clients based in Walsall, compared to 79% of finance, professional and business            Walsall Business Sales by Market Location
                                                                                           Source: Walsall Business Survey 2010
service firms, 76% of construction businesses, and 60% of manufacturers.                                                              Overseas
                                                                                           n = 360 responses
                                                                                                                                         7%
 Customer / Client Location (by Sector)                                                                                                                          Walsall
               Manuf’ Const’n         Retail,          Finance,            All                                                                                    26%
                                    Hotels &          Prof’ & Bus’     Businesses
                                      Res’ts           Services
                                                                                                               Rest of UK
 Walsall          60%         76%        83%                   79%              80%                               26%
 Black
 Country          61%         73%        71%                   69%              69%
 WM Metro         66%         74%        74%                   63%              69%
 WM Region        63%         65%        56%                   49%              59%
 Rest of UK       84%         66%        56%                   43%              62%                                                                                    Black Country
 Overseas         45%         10%        19%                    9%              31%                                                                                         15%
 Source: Walsall Business Survey 2010                                                                                 West Midlands
                                                                                                                         Region
Finance, professional and business services companies are the most localised,                                              11%                   West Midlands Metro
                                                                                                                                                         15%
with the lowest level of clients outside of the region. This partly reflects the nature
of the sector in Walsall, relatively small companies serving local markets.
                                                                                          Whereas the sales analysis illustrates the monetary inflows for Walsall businesses
The survey also asked Walsall businesses to estimate the value of their sales to          (business income), the survey also asked about suppliers and monetary outflows
the six geographic scales as shown in the figure below. These sales figures were          (business expenditure).
then aggregated up across all respondent companies to find an aggregate sales
value for each geographic scale. This analysis finds that the highest proportion of       In comparison to the proportion of Walsall businesses serving clients based in the
Walsall business‟ sales value is attributable either to local areas within Walsall        Borough, a smaller proportion source supplies from local businesses (71%). Just
(26% of sales value) or to other parts of the UK outside of the West Midlands             over half (54%) of Walsall businesses have suppliers based in the Black Country
region (26%). Other parts of the Black Country and of the West Midlands                   whereas 62% draw supplies from UK businesses based outside of the region.
metropolitan area also constitute important markets for Walsall businesses                Only 29% of businesses source supplies from overseas.
(constituting 30% of their sales market when combined).




                                                                                                                                                                                       35
                                                                        Walsall Sector Analysis Study – Sector Analysis Paper


                                                                                                        Monetary value analysis of supply chains is presented in the figure below and finds
 Where are Suppliers Located?                                                                           that the highest proportion of Walsall business‟ supplier expenditure is directed to
 Source: Walsall Business Survey 2010
 n = 360 responses                                                                                      UK suppliers based outside of the West Midlands region (33% of supplier
                                                                                                        expenditure). Just over a quarter (26%) of Walsall business‟ supplier expenditure
                     100%
                                                                                                        is retained within the Borough, whilst 24% is retained within other parts of the
                                                                                                        Black Country and West Midlands metropolitan area.
                     80%    71%
                                                                            62%
  % of respondents




                                        54%                                                              Walsall Business Supplies by Source Market
                     60%                           50%                                                   Source: Walsall Business Survey 2010
                                                                                                         n = 349 responses                      Overseas
                                                              39%                                                                                 10%
                     40%                                                                29%                                                                           Walsall
                                                                                                                                                                       26%
                     20%

                      0%
                            Walsall      Black     West        West       Rest of UK   Overseas
                                        Country   Midlands   Midlands                                                       Rest of UK
                                                   Metro      Region                                                           33%



The predominant source market for Walsall businesses differs greatly by sector.                                                                                            Black Country
                                                                                                                                                                                12%
According to the survey results, whereas 39% of retailers and 30% of
manufacturers reported sourcing supplies from overseas, this figure was only 0%-
6% for those in the finance, professional and business services sector.                                                                         West Midlands   West Midlands Metro
                                                                                                                                                   Region               12%
The construction sector has the highest proportion of businesses that source from                                                                    7%
within Walsall (79%), and this compares to 67% for finance businesses and hotels
and restaurants, 63% for manufacturers and 57% of retailers.                                            Those businesses sourcing supplies from outside of Walsall and the Black Country
                                                                                                        cited several reasons why they sourced from these alternative markets rather than
 Supplier Location (by Sector)
                                                                                                        more locally. By far the most common reason, reported by 70% of relevant
               Manuf’    Const’n                    Retail    Hotels       Finance     Prof’ &    All   respondents, was that local suppliers for their market either do not exist or do not
                                                                &                       Bus’            provide appropriate products / services. Smaller proportions noted that suppliers
                                                              Res’ts                    Serv’           from outside of Walsall and the Black Country were cheaper (22%) or offered
 Walsall           63%         79%                     57%      67%            67%        62%     71%   better quality (9%).
 Black
 Country           62%         60%                     38%       78%           50%        42%     54%   Manufacturers are more likely than average to source supplies from outside
 WM Metro          57%         61%                     43%       67%            8%        47%     50%   Walsall due to quality reasons, whilst the same can be said of construction firms
 WM Region         44%         45%                     28%       67%            8%        23%     39%   due to price of supplies.
 Rest of UK        72%         65%                     67%       44%           42%        55%     62%
 Overseas          30%         11%                     39%       22%            0%         6%     29%
 Source: Walsall Business Survey 2010




                                                                                                                                                                                           36
                                                        Walsall Sector Analysis Study – Sector Analysis Paper


 Reasons for Sourcing Supplies Outside of Walsall (by Sector)                         Workforce, Skills and Training
                               Can’t get what Better quality           Cheaper
                                  we need       elsewhere             elsewhere       Employers were asked where their Walsall employees were resident. The largest
 Manufacturing                           69%             11%               23%        proportion of the workforce live within Walsall (60%) whilst a further 20% live
 Construction                            66%              5%               24%        elsewhere in the Black Country. Outside of this local area, 18% of staff live
 Retail, Hotels & Restaurants            61%              8%               19%        elsewhere in the West Midlands region and 2% outside of the region.
 Finance, Prof‟ & Bus‟ Serv‟             21%              3%                6%
 All Businesses                          70%              9%               22%         Walsall Workforce Commuting                       Rest
 Source: Walsall Business Survey 2010                                                  Source: Walsall Business          West Midlands   of UK
                                                                                       Survey 2010                          Region        2%
                                                                                       n = 355 responses                      9%

Markets and Supply Chains:                                                                             West Midlands Metro
                                                                                                               9%
       Whilst four in five businesses surveyed serve local markets, over 60%
        have customers in the rest of the UK outside the West Midlands region,
        and over three in ten have overseas customers. International trade is
        much more important to the manufacturing sector (45% have overseas
        customers) than the finance, professional and business sector (9%).
                                                                                                         Black Country
       Local and regional markets are extremely important to Walsall                                         20%
                                                                                                                                                 Walsall
                                                                                                                                                  60%
        businesses. By volume, just over one-quarter of sales are made within
        Walsall, with a further 41% in the rest of the region including the Black
        Country. Only one-third of sales occur outside the region, leaving Walsall
        companies very dependent on the health of the regional economy.
       There is potential to increase the proportion of businesses serving non-
        local markets and increase the volume of non-local sales to bring
        additional revenue into the Walsall economy. To achieve this, businesses      Businesses were asked whether they faced skills gaps in their current workforce, in
        will need support to identify and access target markets both in the rest of   other words, whether their business would benefit from additional employee
        the UK and overseas.                                                          training. A relatively small proportion (18%) reported that this was the case, whilst
       There are significant supply chain linkages within the Walsall                a further 9% were unsure.
        economy, with over seven in ten companies surveyed using
        suppliers from within the Borough. Construction companies are
        most likely to use local suppliers and retail firms least likely.
        Despite this, only just over one-quarter of all supplies by value are
        purchased locally, with 74% of spending on supplies being lost to
        the local economy. Capturing an increased proportion of this
        expenditure within Walsall would boost local multipliers and
        increase wealth generation.




                                                                                                                                                              37
                                                           Walsall Sector Analysis Study – Sector Analysis Paper


                                                                                         Skills gaps are more commonly reported among smaller (lower turnover)
 Skills Gaps in Current Workforce                                                        businesses (23%-26%).
 Source: Walsall Business Survey 2010   Don't know
 n = 362 responses                          5%       Yes                                  Skills Gaps in Current Workforce? (by Turnover)
                                                     18%
                                                                                                                          Yes         No                                         Don’t Know
                                                                                          Less than £100,000                 26%          61%                                           13%
                                                                                          £100,001 - £400,000                24%          68%                                            8%
                                                                                          £400,001 - £999,999                23%          77%                                            0%
                                                                                          £1 million - £5 million            10%          87%                                            3%
                                                                                          Over £5 million                    15%          85%                                            0%
                                                                                          All Businesses                     18%          77%                                            5%
                                                                                          Source: Walsall Business Survey 2010
                                                                                         For those businesses reporting skills gaps, the survey asked what type of skills
                                                                                         were lacking. This finds that businesses have greatest skills gaps in technical
                                                                                         skills (27% of responses), ICT (19%), management (17%), core job readiness skills
                                                                                         (14%) and communication (14%).
                                         No
                                        77%                                              A further consideration is the types of skills in demand by businesses that prove
                                                                                         challenging to find when recruiting new staff, otherwise known as skills shortages.
The proportion of businesses facing skills gaps is slightly higher for those in the      According to the survey results, the skills in greatest need when recruiting are
construction (24%), hotels and restaurants (22%) and manufacturing (20%)                 technical skills (22% of responses), core job readiness skills (14%) and customer
sectors, whereas, it is relatively low for retail (14%) and finance, professional and    service (8%).
business services (0%-15%).
                                                                                          Skills Gaps and Shortages by Type
 Skills Gaps in Current Workforce? (by Sector)                                            Source: Walsall Business Survey 2010
                              Yes              No                   Don’t know            n = 64 responses
                                                                                                                                                                                                        27%
 Manufacturing                     20%                     76%                4%             Technical / Skilled trades                                                                 22%
 Construction                      24%                     75%                2%                                       ICT                                                     19%
                                                                                                                                      3%
 Retail                            14%                     76%               10%                Business management                                                        17%
                                                                                                                                      3%
 Hotels & Restaurants              22%                     67%               11%                                                                                   14%
                                                                                                          Job Readiness                                            14%
 Finance                            0%                     92%                8%                                                                                   14%
                                                                                                        Communication
 Prof‟ & Business                  15%                     80%                6%                                                           5%
                                                                                                                     Other                                 11%
 Services                                                                                                                                       6%
 All Businesses                    18%                     77%                 5%                      Customer service                                    11%
                                                                                                                                                     8%
 Source: Walsall Business Survey 2010                                                                        Supervisory         2%
                                                                                                                                                     8%

                                                                                                                  Literacy            3%
                                                                                                                                      3%
                                                                                                                                      3%
                                                                                                               Numeracy          2%

                                                                                                                           0%          5%            10%         15%          20%           25%               30%
                                                                                                                                           % of survey respondents that are facing skills issues
                                                                                                               Skills shortages when recruiting           Skills gaps in existing workforce




                                                                                                                                                                                                   38
                                                           Walsall Sector Analysis Study – Sector Analysis Paper


Looking at sector-specific skills issues, manufacturers are most likely to identify
skills gaps in technical / skilled trades with over 25% of businesses in retail, hotels    Effects of Skills Gaps and Shortages
                                                                                           Source: Walsall Business Survey 2010
and restaurants also highlighting gaps in these skills. Among finance, professional        n = 42 responses
and business service firms, the most prevalent skills gap is in business                                                                                                       31%
                                                                                                                        No effect                                                     36%
management skills (13% of employers reporting skills gaps).
                                                                                                    Technical / Skilled trades                                                                      48%
Demand for ICT and business management skills is relatively low from the four                                                                                             29%
                                                                                                                              ICT                                       26%
sector groupings presented below. Instead, these skills are in relatively high                                                                            17%
demand by community service, transport and communications businesses.                                          Communication                      12%
                                                                                                                                                     17%
                                                                                                                                                       19%
 Skills gaps (by Sector)                                                                                  Senior management                          17%
                                     Technical /                       Business                                  Job Readiness                         19%
                                                                                                                                                   14%
                                    Skilled trades         ICT        management
                                                                                                                            Other                12%
 Manufacturing                                 39%            13%            13%                                                               10%
 Construction                                  13%             0%             7%                              Customer service                     14%
                                                                                                                                               10%
 Retail, Hotels & Restaurants                  27%            18%             0%              Supervisory (e.g. team leader)                       14%
                                                                                                                                               10%
 Finance, Prof‟ & Bus‟                                                                                                                           12%
 Services                                       0%             0%               13%                                      Literacy      2%
 All Businesses                                27%            19%               17%                                   Numeracy                    12%
                                                                                                                                       2%
 Source: Walsall Business Survey 2010
                                                                                                                                  0%        10%           20%            30%            40%         50%
The significance of skills gaps and/or skills shortages varies between businesses.                                                          % of survey respondents that are facing skills issues
Approximately a third of businesses reporting skills gaps or shortages do not think
this has a significant effect either on their current business performance (36%) or                                         Affecting Business Now      Will Affect Business in Future
their future activity (31%).
                                                                                          With regard to businesses‟ recruitment plans, 33% of businesses plan to recruit
For those respondents that do ascertain an impact on their business, this is              over the next twelve months whereas 39% do not and 27% are unsure. This varies
typically viewed as being of greater importance to their future activity rather than      by sector with relatively high proportions of manufacturing, finance, professional
their current activity. The only exception to this is for communication skills where      and business services, retail, hotels and restaurants anticipating recruitment (37%-
businesses report that the skills constraint is affecting them more now than it will in   39%), compared to only 23% of construction firms.
the future.




                                                                                                                                                                                              39
                                                             Walsall Sector Analysis Study – Sector Analysis Paper


 Recruitment Plans (by Sector)                                                              Of those undertaking training, 85% reported that this is conducted in-house. The
                                      Yes            No         Don’t Know                  proportion using external training providers is much smaller, ranging from 28% that
 Manufacturing                          39%            35%             26%                  use local Walsall-based training providers to 14% using UK providers outside of
 Construction                           23%            45%             32%                  the region.
 Retail, Hotels & Restaurants           37%            43%             20%                  Hotel and restaurant businesses are most likely to conduct training in-house (100%
 Finance, Prof‟ & Bus‟                                                                      of respondents) followed by manufacturers (85%). The professional and business
 Services                           38%                41%               21%                services sector has the highest proportion of firms that source training from
 All Businesses                     33%                39%               27%                providers based in Walsall (41%), followed by the construction sector (35%). In
 Source: Walsall Business Survey 2010                                                       contrast, only 18% of manufacturers and 15% of finance firms source training
                                                                                            within Walsall.
In keeping with the analysis of growth expectations, larger businesses are more
likely to anticipate increased recruitment.
                                                                                             Where are Business Training Providers Located?
 Recruitment Plans (by Turnover)                                                             Source: Walsall Business Survey 2010
                                                                                             n = 291 responses
                                Yes               No         Don't Know
 Less than £100,000               32%              38%              30%                                                                           100%




                                                                                                   % of respondents that provide staff training
                                                                                                                                                          85%
 £100,001 - £400,000              35%              39%              26%
 £400,001 - £999,999              41%              27%              31%                                                                           80%
 £1 million - £5 million          35%              41%              24%
 Over £5 million                  43%              33%              25%                                                                           60%
 All Businesses                   33%              39%              27%
 Source: Walsall Business Survey 2010                                                                                                             40%
                                                                                                                                                                     28%       25%
Aggregating the responses from the sample businesses expecting to recruit, it is                                                                  20%
                                                                                                                                                                                         15%                       14%
estimated that over 600 jobs will be created within these businesses alone. Of                                                                                                                       7%
these jobs, the largest proportions are in sales and customer services (45%),
                                                                                                                                                   0%
skilled trades (16%), and other professions (11%). Other occupation levels
                                                                                                                                                         In-house   Walsall    Black      West       West     Rest of UK
include: professional (8%); associate professional and technical (7%);                                                                                                        Country   Midlands   Midlands
administrative and secretarial (7%); and managers and senior officials (5%).                                                                                                             Metro      Region
For those businesses that do not plan to recruit, the main reason for this relates to
insufficient work in the current business climate to sustain new employment.                Responses from the full business sample suggest a number of factors constraining
Three respondents report personal preferences for maintaining the current                   (greater) provision and uptake of training. The most cited constraints were
business size. Three respondents find it difficult to recruit staff with the right skills   perceptions that courses are too expensive (expressed by 45% of businesses),
and aptitudes. Two respondents note that employment costs are too high,                     that they are irrelevant (29%), and that they are only available at inconvenient
especially combined with employer regulation costs.                                         dates / times (14%). Overall, a relatively small proportion (19%) of respondents
                                                                                            report having training needs that are not being met in Walsall, most frequently cited
Involvement in Training                                                                     as IT training needs or other industry-specific skills.

Businesses were asked about their workforce development practices and 84%                   Across all sectors, the most cited constraint is that training is too expensive,
reported that they undertake staff training. By sector, this varies between 79% for         followed by the perception that courses are irrelevant to the business. The
retailers, finance, professional and business services, 83% for manufacturers, 87%          construction sector is more likely to view training dates or times as inconvenient
for construction firms, and 100% of hotels and restaurants.



                                                                                                                                                                                                              40
                                                                                        Walsall Sector Analysis Study – Sector Analysis Paper


(12%) whilst hotels and restaurant businesses are more likely to view the quality of
training as unsatisfactory (14%).                                                                                          Workforce, Skills and Training:
                                                                                                                                   40% of the jobs in businesses participating in the survey were held by
 What is Constraining Provision of Training?                                                                                        workers living outside Walsall. Improving the match between demand
 Source: Walsall Business Survey 2010                                                                                               from local employers and the skills and aptitudes of local residents could
 n = 225
                                                                                                                                    help to increase the employment rate in the Borough, raising incomes and
                          50%      45%                                                                                              aspirations.
                                                                                                                                   Fewer than one in five companies reported skills gaps within their existing
                          40%
                                                                                                                                    workforce, although the rate was higher in the construction, hotels and
       % of respondents




                                                   29%                                                                              restaurants, and manufacturing sectors and amongst companies with
                          30%                                                                                                       turnover below £1m. The biggest skills gap was in technical and trade
                                                                                                                                    skills.
                          20%
                                                                  14%                                                              Two-thirds of companies with skills gaps in the current workforce say it is
                                                                                  9%            8%                                  affecting their business now, and this is expected to increase in the future,
                          10%                                                                                  6%
                                                                                                                                    indicating the potential to improve business competitiveness in Walsall by
                                                                                                                                    providing relevant training to companies affected.
                          0%
                                 Courses are    Courses are    Inconvenient      No local   Unsatisfactory Negative past           A minimum of one-third of companies surveyed are planning to recruit
                                too expensive   not relevant   dates / tim es    training     quality of   experiences
                                                                                                                                    workers over the next twelve months, with a further 27% unsure.
                                                                                providers      training     of training
                                                                                                                                    Companies in the construction sector and with turnover levels below
                                                                                                                                    £400,000 are most cautious about recruiting.
                                                                                                                                   Although the vast majority of companies surveyed undertake training,
                                                                                                                                    much of this is in-house. The level of training undertaken is constrained
                                                                                                                                    by cost, relevance and the times at which training is provided – indicating
                                                                                                                                    either that training in Walsall remains unresponsive to employers‟ needs,
                                                                                                                                    or that employers are not fully aware of the training available to them.



                                                                                                                           The extent to which businesses are active in introducing people into the workforce
                                                                                                                           was assessed through the survey. This found that 76% of respondent businesses
                                                                                                                           do not currently employ any graduates or apprentices. Further, 85% do not want
                                                                                                                           help with recruiting graduates or apprentices.

                                                                                                                           Innovation

                                                                                                                           The survey asked a series of questions to assess the extent to which innovation is
                                                                                                                           embedded within Walsall businesses‟ activities. This found that the majority of
                                                                                                                           survey respondents (66%) believe that they have a culture of innovation at their
                                                                                                                           business, and a similarly high proportion (63%) report that they have experience of
                                                                                                                           adapting new technologies and practices for their work. The high response rates



                                                                                                                                                                                                    41
                                                                                Walsall Sector Analysis Study – Sector Analysis Paper


also continue across several other innovation indicators. Half of businesses report                            Business Innovation Activities Undertaken (by Sector)
that they have experience of refining product design and useability, adopting new                                                Culture     Tech /    Design /      Business                                   Collab’
business models and collaborating with other firms on innovation.                                                               of innov’   practices  usability      models
                                                                                                               Manuf‟                69%          74%       64%           49%                                      51%
One of the most frequently used measures of innovation is the proportion of
businesses that have submitted innovation protection or patent applications, and                               Construction          67%          63%       40%           57%                                      59%
this is applicable to 14% of the Walsall business respondents, which is                                        Retail                65%          59%       53%           57%                                      49%
considerably higher than national research which suggests that only 3% of UK                                   Hotels &
companies have experience of applying for patents and 5% have experience of                                    Restaurants           63%          25%       57%           71%                                      29%
registering trademarks.
                        8                                                                                      Finance               62%          62%       38%           46%                                      46%
                                                                                                               Prof‟ & Bus‟
    Business Innovation Activities Undertaken                                                                  Services              73%          62%       48%           53%                                      54%
    Source: Walsall Business Survey                                                                            All
    n = 335 responses                                                                                          Businesses            66%          63%       50%           50%                                      50%
              Innovation culture at company                     66%                           28%    7%        Source: Walsall Business Survey 2010
     Adopted new technologies / practices                       63%                         33%      5%       Examining business‟ collaboration in closer detail, 36% of survey respondents
       Refined product design and usability                   50%                       42%          8%       have undertaken joint-working with clients or customers, whilst 31% have
                                                                                                              experience of collaborating with suppliers. The proportions working with other
              Adopted new business models                 50%                           43%          8%       organisations are lower: 18% have worked with competitor / similar enterprises;
     Collaborate with others on innovation                50%                           46%          5%       15% have worked with universities or HEIs; and 12% have worked with
                                                                                                              commercial R&D facilities.
          Apply expertise from other sectors              49%                           45%          7%

                          R&D stategy in place           43%                         45%            12%        Business Collaboration Undertaken
                                                                                                               Source: Walsall Business Survey
                 Links with Higher Education            33%                         63%              4%        n = 330 responses
      Taken innovation protection / patents       14%                        78%                     8%                        Not undertaken any joint work                                                     45%
                                                                                                                                           Clients or customers                                           36%
                                             0%         20%          40%         60%        80%      100%
                                                                                                                                                     Suppliers                                     31%
                                                                    % of survey responses
                                                                                                                          Competitors or other enterprises                            18%
                                            Yes   No     Don't know                                                                 Universities or other HEIs                    15%
                                                                                                                              Commercial / private R&D labs                   12%
The professional and business services and manufacturing sectors are most likely
                                                                                                                 Government / public research institutes                5%
to report a culture of innovation within their businesses (73% and 69%
                                                                                                                                                    Don’t know          4%
respectively), whilst this is lower for the finance sector (62%). Manufacturing
businesses are also more likely to have adopted new combinations of technologies                                                 Knowledge Transfer P'ships            3%
(74%), whereas the other main Walsall sectors are below the sample average                                                                               Other         2%
(construction 63%, finance, professional and business services 62%, retail 59%
and hotels and restaurants 25%).                                                                                                                                  0%        10%     20%        30%        40%     50%
                                                                                                                                                                                  % of survey responses


8
  BIS (2010) Community Innovation Survey 2009
http://www.statistics.gov.uk/elmr/03_10/downloads/ELMR_Mar10_Robson.pdf


                                                                                                                                                                                                           42
                                                           Walsall Sector Analysis Study – Sector Analysis Paper


Relatively high proportions of surveyed companies in the construction (39%), retail
(37%) and professional and business services (33%) sectors have experience of             Businesses Identifying Low Carbon Opportunities
                                                                                          Source: Walsall Business Survey 2010
collaborating with suppliers, whereas the proportion is only 15% for finance firms.       n = 334 responses
Manufacturing is the only sector in Walsall where businesses are less likely than                                                           Not considered
average to undertake collaboration, and this is the case for collaboration activity of                                                            22%
all types.
 Business Collaboration Undertaken (by Sector)
                         Clients or Suppliers Competitors               Universities
                         customers              or other                  or HEIs
                                               enterprises
 Manufacturing                 33%       31%           14%                       14%                                                                Already identified
 Construction                  53%       39%           20%                       16%                             Don’t know                               13%
                                                                                                                    61%
 Retail                        41%       37%           19%                       13%
 Hotels & Restaurants            0%      29%           14%                        0%
                                                                                                                                             Under consideration
 Finance                       23%       15%           15%                       15%                                                                 4%
 Prof‟ & Bus‟ Services         38%       33%           25%                       21%
 All Businesses                36%       31%           18%                       15%
 Source: Walsall Business Survey 2010
For the full sample, 37% are partially or very aware of innovation support that is       Of the latter group, the highest proportion of respondents that have identified low
available.    Respondents in the professional and business services and                  carbon opportunities are in the hotel and restaurant sector (29%), followed by
manufacturing sectors are most likely to be partially or very aware (44% and 40%         construction and retail (both 19%).         The proportions are lower for the
respectively), and this compares to 29% of construction and retail businesses, and       manufacturing (12%) and professional and business service sectors (8%).
13% of hotels and restaurants.                                                            Businesses Identifying Low Carbon Opportunities (by Sector)
In keeping with the findings so far, the majority of the surveyed businesses (56%)                                 Identified     Under           Not                    Don’t
believe innovation is important, very important or essential to their business.                                      opp’s     consideration considered                  know
Specifically, 11% believe it is essential. In contrast, 15% believe it is not at all      Manufacturing                   12%             6%          26%                 56%
important.                                                                                Construction                    19%             8%          37%                 37%
                                                                                          Retail                          19%             3%          18%                 60%
Professional and business service and manufacturing businesses are more likely
                                                                                          Hotels & Restaurants            29%           14%           14%                 43%
to view innovation as essential or important (64% and 61%), and this is in keeping
                                                                                          Finance                           0%            8%           8%                 85%
with the high extent of activities they currently undertake (as presented above).
                                                                                          Prof‟ & Bus‟ Services             8%            0%          25%                 67%
Over half of finance firms (54%) perceive that innovation is not important to their
business.                                                                                 All Businesses                  13%             4%          22%                 61%
                                                                                          Source: Walsall Business Survey 2010
The opportunities presented by the low carbon sector appear to create a high
degree of uncertainty among respondents with 22% that are aware of the low               When businesses were asked about the challenges they face in exploiting low
carbon sector but have not considered market opportunities and 61% registering a         carbon opportunities, just under half (48%) were unable to identify any. Of those
don‟t know response. In contrast, 4% are in the process of actively identifying low      that could determine challenges, the top three were financial constraints (19%),
carbon opportunities and 13% have already done so.                                       insufficient knowledge of opportunities (19%) and time constraints (13%).
                                                                                         The reasons for the manufacturing and professional and business service sectors‟
                                                                                         relatively low engagement in low carbon opportunities appears to differ. For


                                                                                                                                                                    43
                                                                     Walsall Sector Analysis Study – Sector Analysis Paper


manufacturers, the main reason is reported as time constraints (36%) followed by
insufficient knowledge (33%). For professional and business services, this is the
other way around (19% and 42% respectively).                                                        Innovation:

For hotels and restaurants, where a relatively high proportion of businesses are                           Innovation appears to be embedded in the working practices of many
already identifying opportunities, 50% report that they face time constraints in                            Walsall companies, with two-thirds of respondents stating their
exploiting these.                                                                                           company has a culture of innovation. This is reflected in the use of
                                                                                                            new technologies and practices, refinements to products and new
 Constraints to Low Carbon Opportunities                                                                    business models.
 Source: Walsall Business Survey 2010
 n = 303 responses
                                                                                                           Half of businesses have collaborated with others on innovation,
                                                          Financial constraints
                                                                                                            including with clients, suppliers and other businesses. There remain
                                                                   19%                                      opportunities to increase the level of innovation amongst businesses
                                                                                                            in Walsall, with nearly two-thirds not aware of the support which is
                                                                                                            available to them in relation to innovation.
                                                                                                           Whilst 17% of businesses have considered, or are considering, the
                      Don’t know                                                                            opportunities presented by the low carbon economy, over 80% have
                         48%                                            Insufficient                        yet to do so or are not sure. Given the impact that environmental
                                                                        know ledge                          legislation and rising energy costs are expected to have over the
                                                                            15%
                                                                                                            coming years, there is a clear need for additional information and
                                                                                                            support to be made available to Walsall businesses in relation to low
                                                                                                            carbon issues, with advice on reducing energy costs, assessing the
                                                                                                            business‟ carbon footprint and support on environmental legislation
                                                             Tim e constraints                              identified as areas in which support is needed.
                                                                    13%
                                        Other   Lack of skills
                                         2%          3%


Despite relative uncertainty among businesses in this area, only 18% of
businesses report a need for support in reducing carbon emissions, energy bills or
exploiting low carbon opportunities, of which the greatest business interest is in
reducing energy bills. For those reporting insufficient knowledge of low carbon
opportunities, responses centre on environmental legislation, how to contact the
right people with the expertise, how to assess carbon footprint, and how to improve
or retro-fit facilities.
Regarding waste management and recycling, 59% of businesses report that waste
management facilities in Walsall are adequate to meet their needs, although nearly
a quarter (23%) disagree. The survey finds that 17% of respondents would like
support in this area, particularly the provision of (free) commercial paper recycling
services.




                                                                                                                                                                       44
                                                                             Walsall Sector Analysis Study – Sector Analysis Paper


Business Location and Premises                                                                                    Business Location Factors (by Sector)
                                                                                                                                                               Retail,      Finance,         All
This section presents businesses‟ views regarding their location and premises                                                                                 Hotels &       Prof’ &       Business
within Walsall, and their future plans related to this.                                                                              Manuf’     Const’n        Rest’s      Bus’ Serv’         es
                                                                                                                  Proximity to
Firstly, businesses were asked what factors influenced (and continue to influence)                                labour force           67%        64%            65%             47%           60%
the decision over where to locate their business. Referring to the figure below, it                               Proximity to
appears that the size of the business space is the most decisive factor in their                                  suppliers              31%        38%            30%             24%           30%
location choice (important or very important to 67% of businesses). However, if the                               Proximity to
„not applicable‟ option is removed, the other overwhelming factor becomes rental                                  market                 33%        51%            52%             59%           48%
levels (72%). Other influential factors include the proximity to the labour force                                 Proximity to
(60%), proximity to transport links (59%) and quality of the local environment                                    transport links        56%        52%            56%             54%           59%
(57%).                                                                                                            Size of space          70%        61%            66%             47%           67%
                                                                                                                  Rental levels          51%        42%            56%             50%           51%
 Business Location Factors                                                                                        Businesses
 Source: Walsall Business Survey
 n = 331 responses
                                                                                                                  based nearby           26%        22%            32%             39%           29%
                           Size of space          29%                 38%           12%       15%    8%           ICT /
                                                                                                                  Telecomms              45%        51%            44%             64%           49%
                Labour force proximity           24%                36%            18%         14%   7%
                                                                                                                  Energy
               Transport link proximity          24%                35%           17%          18%   5%
                                                                                                                  efficiency /
                   Quality environment        21%               36%               16%     15%        8%           utilities              46%        52%            44%             42%           47%
                            Rental levels        27%            24%        5% 11%              30%                Waste
                       ICT / Telecomms        22%              27%          16%           24%        7%           management             35%        55%            33%             27%           38%
             Energy efficiency/Utilities     14%          33%               20%           20%        7%           Quality
                       Market proximity      20%              28%           19%           26%        6%
                                                                                                                  environment            53%        53%            62%             51%           57%
                                                                                                                  Source: Walsall Business Survey 2010
  Waste management infrastructure           12%         26%           21%               29%          9%
                     Supplier proximity     9%      21%              29%                33%          6%          Linked to these desirable location factors, businesses were asked what limitations
  Types of businesses based nearby          9%      19%         21%                 41%              8%          they face in their current location and premises. Lack of space is reported as a
                                                                                                                 constraint by 33% of respondents, and this fits with businesses‟ earlier response
                                        0%          20%         40%         60%           80%        100%        that size of space is one of their strongest location determinants. Other limitations
                                                               % of survey responses                             cited by high proportions of the sample include lack of adequate security (29%),
                                                                                                                 condition of premises (26%) and lack of suitable road access (24%).
       Very important       Important   Not very important       Not at all important         Don’t Know   N/A
                                                                                                                 If the „not applicable‟ categories are removed, two more limitations are also
For manufacturers, retailers, hotels and restaurants, the main factor shaping their                              prominent among relevant business responses. Firstly, the expense of lease
business location / premises is the size of the site. For construction firms,                                    terms (reported by 27% of applicable respondents) and, secondly, the inflexibility
proximity to the labour force is cited most frequently, and for finance and                                      of lease terms (21%).
professional and business services, ICT and telecomm infrastructure is cited most
frequently.




                                                                                                                                                                                         45
                                                                               Walsall Sector Analysis Study – Sector Analysis Paper


                                                                                                                Business Location Limitations (by Sector)
 Business Location Limitations                                                                                                                                              Finance,
 Source: Walsall Business Survey
 n = 328 responses                                                                                                                                              Retail,      Prof’ &
                                   Lack of space     9% 13% 11%                     59%             8%                                                         Hotels &       Bus’          All
                                                                                                                                       Manuf’     Const’n       Res’ts      Services    Businesses
                   Lack of adequate security         9% 9% 11%                      65%             6%
                                                                                                                Lack of security         36%         39%            22%         16%             28%
                       Condition of premises 6% 8% 12%                             64%             9%           Lack of suitable
               Lack of suitable road access 7% 9% 8%                            69%                 7%          road access               31%        22%             20%         20%             24%
                       Expensive lease terms         8% 5%6%            47%                  30%                Inflexible lease          21%         9%             18%         13%             14%
                                                                                                                Expensive lease           28%        13%             30%         16%             19%
                       Poor ICT / Telecomms              6%                   74%                  8%
                                                                                                                Lack of space             41%        30%             26%         20%             33%
                        Inflexible lease terms           5%            51%                  31%                 Condition of
                     Lack of public transport           8%                    76%                  9%           premises                  27%        24%             17%         25%             27%
  Poor waste management infrastructure                  7%                   74%                   11%          Distance from
                                                                                                                customers /
        Distance from customers/suppliers              5%                    76%                   11%
                                                                                                                suppliers                 14%         4%              8%         16%             12%
                                                0%           20%       40%         60%     80%     100%         Lack of public
                                                                                                                transport                 13%        11%             10%         11%             14%
                                                                   % of survey responses
                                                                                                                Poor ICT /
      Significant limitation       Limitation      Slight Limitation   Not a Limitation    Don’t Know    N/A    telecomms                 18%        11%             10%         16%             16%
                                                                                                                Poor waste
Lack of space is the most frequently cited constraint by manufacturing firms (41%)                              management                13%        15%             11%         11%             13%
whereas lack of adequate security is most frequently cited by construction firms                                Source: Walsall Business Survey 2010
(39%). The top constraint for retail, hotels and restaurants is expensive leas terms
                                                                                                               Regarding businesses‟ location plans for the next five years, over a quarter of
(30%), whereas it is condition of premises for finance, professional and business
                                                                                                               respondents (28%) plan to upsize whilst 68% expect to stay in same premises. A
service firms.
                                                                                                               relatively small proportion (4%) plan to downsize their business premises.
                                                                                                               The proportion of businesses expecting to upsize their premises is highest for the
                                                                                                               manufacturing sector (37%). This proportion is 33% for finance, professional and
                                                                                                               business services, 30% for retail, hotels and restaurants, and 17% for construction
                                                                                                               firms.
                                                                                                                Future Business Location Expectations (by Sector)
                                                                                                                                                            Remain at the
                                                                                                                                                   Upsize  same premises            Downsize
                                                                                                                Manufacturing                        37%              42%               20%
                                                                                                                Construction                         17%              77%                 6%
                                                                                                                Retail, Hotels & Restaurants         30%              68%                 2%
                                                                                                                Finance, Professional & Business
                                                                                                                Services                             33%              61%                   6%
                                                                                                                All Businesses                       28%              68%                   4%
                                                                                                                Source: Walsall Business Survey 2010


                                                                                                                                                                                     46
                                                              Walsall Sector Analysis Study – Sector Analysis Paper


For those businesses that are considering moving premises, other sites within               Of relevance to Walsall MBC, 33% of businesses considering moving premises
Walsall were viewed as the most popular alternative locations (reported by 32% of           would be interested in relocation support, and this is particularly important for
respondents). Further afield, similarly high proportions of businesses would                ensuring businesses remain within the Borough if possible.
consider moving elsewhere in the West Midlands region (29%) or the Black
Country (20%).
Considering specific sites within Walsall, the most popular locations are the town           Business Location and Premises:
centre (favourable to 20% of respondents), several locations in Aldridge                             Consultations with businesses, business support advisors and
(Middlemore 19%, Northgate 18%, Westgate 16% and Aldridge Fields 14%), and                            planning officers highlighted the limitations of much of Walsall‟s
Walsall Enterprise Park (13%). Fewer respondents would consider sites at                              industrial and commercial premises, with few modern, high quality
Ashmore Lake, Willenhall, Darlaston, Green Lane, Leamore, Longacre and                                units. Constraints identified by businesses include a lack of space
Gigaport (5%-9%). Some of these latter sites have been developed for businesses                       and expensive lease terms.
in need of specialised or especially large premises and so the demand is therefore
limited to a small number of businesses.                                                             Despite this, most firms expect to remain in their current premises,
                                                                                                      with one-third planning to move, in most cases to larger premises.
 Alternative Business Locations                                                                       Half of those thinking of relocating would consider moving outside
 Source: Walsall Business Survey                                                                      Walsall, although one-third would welcome support with re-location.
 n = 103 responses                                                                                    Any support Walsall Council is able to offer could help to increase the
                     Elsewhere in Walsall                                          32%
          Elsewhere in the West Midlands                                     29%
                                                                                                      number of businesses remaining within the Borough
           Elsewhere in the Black Country                          20%
          Walsall Town Centre (excluding                           20%
  Aldridge – Middlemore Industrial Estate                         19%
                     Aldridge – Northgate                        18%
                      Aldridge - Westgate                  16%
     Aldridge – Aldridge Fields Enterprise               14%
             Outside of the West Midlands              13%
                   Walsall Enterprise Park             13%
                   Aldridge – Optical Park           11%
                            Ashmore Lake           9%
                         Willenhall Centre        8%
                                 Darlaston        8%
             Green Lane – Newfield Close        6%
                                 Leamore        6%
                                 Longacre       6%
                                  Gigaport      6%
             Green Lane – Stockton Close       5%

                                         0%   5%   10% 15% 20% 25% 30% 35%
                                                     % of survey responses


Sector analysis finds that manufacturing companies are relatively more likely to
consider business locations at sites in Aldridge (20%-44%) rather than elsewhere
in Walsall (27%). In contrast, the proportions considering locations elsewhere in
Walsall are relatively high for construction (45%), retail, hotels and restaurants
(40%) and financial, professional and business services (40%).



                                                                                                                                                                  47
                                                                            Walsall Sector Analysis Study – Sector Analysis Paper


General Business Constraints
                                                                                                           Business Constraints (by Sector)
The final section of the survey asked businesses about the general constraints                                                                                Energy         Obtaining
they face in achieving business growth and improved productivity. Business                                                                 Competition        prices          finance
competition was recognised as a constraint by the largest proportion of                                    Manufacturing                          78%              70%              54%
respondents (67%) whilst over half of businesses (53%) cited energy prices as a                            Construction                           76%              50%              48%
business constraint.                                                                                       Retail, Hotels & Restaurants           70%              51%              32%
Other constraints included accessing new markets (49%), changes to legislation or                          Finance, Prof‟ & Bus‟
business regulations (45%), obtaining finance (43%) and the cost of training (38%).                        Services                                  59%            33%               30%
Removing the „not applicable‟ category also finds that premises availability /                             All Businesses                            67%            54%               45%
affordability is a strongly cited constraint (reported by 38% of relevant businesses).                     Source: Walsall Business Survey 2010
                                                                                                          Just under half (49%) of respondent businesses would be interested in receiving
 Business Constraints
 Source: Walsall Business Survey
 n = 327 responses
                              Competition       16%          28%           23%            30%              Business Constraints:
                             Energy prices     13%       23%         18%            38%           5%
                                               9%      20%         20%             46%
                                                                                                                   Businesses in Walsall face a wide range of constraints which limit
                 Accessing new markets
                  Changes to legislation14%  18%    13%                           45%             4%
                                                                                                                    their capacity to operate profitably and create employment. The
                   Obtaining finance     20%  11% 13%                              49%
                                                                                                                    Council and its partners have a role to play in tackling a number of
                      Cost of training 8% 16%   14%                              57%              5%
                                                                                                                    these constraints, which would enable greater levels of wealth
   Employment skills gaps / shortages 6% 10% 15%                                64%               4%
                                                                                                                    generation and increased prosperity in the Borough.
   Premises availability / affordability     10% 10% 9%                  46%                25%                    Many of Walsall‟s businesses are intensive energy users, and face
           Access to business advice          8% 11%                        70%                   5%                particular challenges from the drive to reduce carbon emissions.
                 ICT / Telecomms                6% 7%                     75%                      5%               Providing support for such companies to reduce their energy costs
    Waste management infrastructure            4% 10%                    71%                      8%                would improve the competitiveness of the local manufacturing sector
      Access to international markets           4%6%               50%                    33%                       and increase the resilience of individual companies.
  Distance from customers / suppliers          4%8%                      76%                      8%
                                                                                                                   Support to access new markets would help Walsall‟s businesses
                                         0%            20%         40%      60%          80%      100%              diversify their customer base and reduce the reliance on the local and
                                                               % of survey responses                                regional market.
                      Significant Constraint    Constraint                 Slight Constraint
                      No Constraint at all      Don’t Know                 N/A                            support associated with overcoming the barriers listed above.
Competition was reported as a business constraint by 78% of manufacturing
companies, compared to 59% of finance, professional and business services firms.
Unsurprisingly, energy prices was more of a constraint for sectors with high energy
needs such as manufacturing (70%). Obtaining finance was most cited by
manufacturing and construction firms (54% and 48% respectively).




                                                                                                                                                                               48
                                                                                                           locally. Supply chain initiatives to increase the proportion of local
Conclusions                                                                                                expenditure on supplies would boost local multipliers and increase wealth
                                                                                                           generation.
The Walsall Business Survey 2010 provides a rich source of data and intelligence
                                                                                                   Workforce, Skills and Training
on the Walsall business base. The survey was designed to fill the information
gaps identified in preparing the Sector Analysis to support the Walsall Local                             Less than one in five companies reported skills gaps within their existing
Economic Assessment, whilst also generating the intelligence Walsall Council                               workforce, although the rate was higher in the construction, hotels and
needs to plan and implement its support businesses in the Borough.                                         restaurants, and manufacturing sectors and amongst companies with
To meet the needs of the LEA, the survey was targeted at larger businesses, key                            turnover below £1m.
sectors and those expected to grow in importance to the Walsall economy in the                            Skills gaps have a real impact on company competitiveness and
             9
coming years .                                                                                             productivity, with two-thirds of companies with skills stating that it is
Growth Expectations                                                                                        affecting their business. Business competitiveness in Walsall could be
                                                                                                           improved by providing relevant training to companies affected.
         Nearly 60% of those surveyed expected to grow over the next two years,
          with construction companies more cautious and businesses in the hotels                          A minimum of one-third of companies surveyed are planning to recruit
          and restaurants sector most optimistic.                                                          workers over the next twelve months, with a further 27% unsure.

         Nearly three-quarters of businesses expecting to grow say that this will be                     The vast majority of companies surveyed undertake training, with much of
          through securing new business within their existing market.                                      this carried out in-house. The main barrier to training is cost, which limits
          Manufacturers are most likely to say they will grow through entering new                         the provision of training in 45% of businesses.
          markets (39%) and international trade (15%).                                             Innovation
         The most common barrier to growth identified was competition / market                           Walsall companies report a range of innovative practices, including the
          limitations, indicating that support to access new markets could help                            use of new technologies and practices, refinements to products and new
          Walsall's businesses to grow.                                                                    business models and over half say innovation is important to the
Markets and Supply Chains                                                                                  business.

         Whilst four in five businesses surveyed serve local markets, over 60%                           There remain opportunities to increase the level of innovation amongst
          have customers in the rest of the UK outside the West Midlands region,                           businesses in Walsall, with nearly two-thirds not aware of the support
          and over three in ten have overseas customers. International trade is                            which is available and 30% believing that innovation is not important.
          very important to the manufacturing sector where 45% have overseas                              Over 80% of businesses have yet to consider the opportunities presented
          customers.                                                                                       by the low carbon economy. Walsall businesses need additional
         Local and regional markets are extremely important to Walsall                                    information and support in relation to low carbon issues, including advice
          businesses. By volume, one-quarter of sales are made within Walsall,                             on reducing energy costs and support on environmental legislation.
          with a further 41% in the rest of the region including the Black Country.
         Increasing the proportion of businesses serving non-local markets and the
          volume of non-local sales will bring additional revenue into the Walsall
          economy. Businesses should be supported to identify and access new
          markets both in the rest of the UK and overseas.
         There are significant supply chain linkages between Walsall businesses,
          but only just over one-quarter of all supplies by value are purchased

9
 As far as was possible, given the availability of sector information and contact details on the
business databases used to construct the sample.
                                                                                                                                                                                     49
                                                       Walsall Sector Analysis Study – Sector Analysis Paper

Business Location and Premises                                                       Manufacturing
      Many of Walsall‟s industrial and commercial premises are of relatively         Summary Findings - Manufacturing
       poor quality, with few modern, purpose-built units. Constraints identified     Growth            Relatively optimistic view of growth over next two years,
       by businesses include a lack of space and expensive lease terms.               Expectations       primarily attributed to growth within existing markets
                                                                                                        Relatively more likely to attribute growth to entering new
      One-third of businesses surveyed are planning to move premises over the
                                                                                                         markets and international trade
       next five years, in most cases to larger premises. Encouraging these
                                                                                                        Market competition most cited barrier to growth, and this
       businesses to remain in the Borough, by providing support with re-
                                                                                                         affects manufacturers relatively highly
       location and better quality premises, is a key priority to retain jobs and
                                                                                      Markets and       Most cited market is wider UK (outside of the West
       enable local companies to expand.
                                                                                      Supply             Midlands)
General Business Constraints                                                          Chains            Relatively less likely to serve clients in Walsall, and
                                                                                                         relatively more likely to serve overseas clients
      Businesses in Walsall face a wide range of constraints which limit their                         Supplies primarily sourced from businesses based in
       capacity to operate profitably and create employment. The Council and                             Walsall (although less likely than average) and elsewhere in
       its partners have a role to play in tackling a number of these constraints,                       the UK (outside of the West Midlands). More likely than
       which would enable greater levels of wealth generation and increased                              average to source from overseas
       prosperity in the Borough.
                                                                                      Workforce,        Relatively more likely to face skills gaps, especially in
      Many of Walsall‟s businesses are intensive energy users, and face              Skills and         technical / skilled trades
       particular challenges from the drive to reduce carbon emissions.               Training          Relatively likely to plan recruitment over the next year
       Providing support for such companies to reduce their energy costs would                          Slightly less likely to undertake staff training
       improve the competitiveness of the local manufacturing sector and              Innovation        More likely than average to be active in innovation,
       increase the resilience of individual companies.                                                  particularly introducing new technologies
                                                                                                        Less likely to take part in collaboration activities or to have
      Support to access new markets would help Walsall‟s businesses diversify                           identified low carbon / sustainability opportunities
       their customer base and reduce the reliance on the local and regional          Business          Relatively more likely to be considering upsizing premises
       market.                                                                        Location and       over next five years
                                                                                      Premises          Most cited factors affecting location decision are size of
                                                                                                         space and proximity to workforce
                                                                                                        Manufacturers particularly interested in sites in Aldridge and
                                                                                                         surrounds
                                                                                      General           Relatively more likely to be experiencing business
                                                                                      Business           constraints in general, especially around competition and
                                                                                      Constraints        energy prices
                                                                                      Source: Walsall Business Survey 2010




                                                                                                                                                             50
                                                         Walsall Sector Analysis Study – Sector Analysis Paper

Finance, Professional and Business Services                                            Construction
 Summary Findings - Finance, Professional & Business Services                           Summary Findings - Construction
 Growth            Relatively optimistic view of growth over next two years,           Growth            Sector with least positive view of growth over the next two
 Expectations       primarily as a result of growth within existing markets             Expectations       years
                   Market competition most cited barrier to growth, and this is                          Growth primarily attributed to growth within existing markets
                    slightly above average                                                                More likely than average to cite access to finance as a
                   Relatively more likely to cite a recent period of expansion or                         constraint to growth
                    personal reasons as constraints to growth                           Markets and       Less likely to serve Walsall or international markets. More
 Markets and                                                                            Supply             likely to serve wider Black Country and West Midlands
 Supply            Primarily serve Walsall and local Black Country markets             Chains            Relatively more likely to source supplies locally, and
 Chains            More likely to source supplies from these local areas too                              elsewhere in the wider West Midlands
 Workforce,        15% of professional and business service firms report skills        Workforce,        More likely than average to be experiencing skills gaps
 Skills and         gaps, whereas the figure is 0% for finance firms, both below        Skills and        Much less likely than average to be planning recruitment
 Training           average. Where reported, skills gaps mostly exist in                Training           over the next year
                    business management                                                                   More likely than average to undertake staff training
                   Much more likely than average to expect recruitment over            Innovation        More likely than average to report culture of innovation and
                    the next year                                                                          experience of introducing new processes, materials and
                   Slightly less likely than average to undertake training                                expertise
 Innovation        Professional and business services more likely to report an                           More likely to undertake collaboration, and to have
                    innovation culture, particularly introducing new business                              identified low carbon / sustainability opportunities
                    models and collaborating, whereas finance businesses are            Business          Relatively few businesses plan to change business location
                    less likely to innovate                                             Location and       over the next five years
                   Both less likely than average to have identified, or be             Premises          Of those that are considering moving, other sites in Walsall
                    considering, low carbon opportunities                                                  are viewed relatively favourably (compared to average)
 Business          Relatively more likely to expect moving premises over the                             Most cited factors affecting location decision are size of
 Location and       next five years, and more likely than average to be                                    space and proximity to workforce
 Premises           interested in premises elsewhere in Walsall                         General           Relatively more likely to be experiencing business
                   ICT and proximity to the market of greatest importance to           Business           constraints in general, especially around competition and
                    business location                                                   Constraints        access to finance
 General           Less likely than average to cite general business                   Source: Walsall Business Survey 2010
 Business           constraints
 Constraints       Of these, competition is seen as most important constraint
 Source: Walsall Business Survey 2010




                                                                                                                                                             51
                                                         Walsall Sector Analysis Study – Sector Analysis Paper

Retail, Hotels and Restaurants
 Summary Findings - Retail, Hotels & Restaurants
 Growth            Hotels and restaurants highly optimistic of growth over next
 Expectations       two years whereas retailers slightly less optimistic
                    (compared to average)
                   Growth primarily attributed to growth within existing markets
                   Retail relatively more likely to attribute growth to new
                    products, whereas hotels and restaurants more likely to
                    attribute growth to expanded facilities
                   Market competition most cited barrier to growth
 Markets and       More likely than average to serve local markets and
 Supply             elsewhere in West Midlands metro area.
 Chains            Retail more likely to source supplies from overseas or the
                    wider UK. Hotels and restaurants more likely to source
                    from Black Country and wider West Midlands
 Workforce,        Hotels and restaurants more likely to be experiencing skills
 Skills and         gaps, whereas retailers slightly less likely
 Training          Both relatively more likely than average to forecast
                    recruitment over the next year
                   100% of hotels and restaurants undertake training,
                    compared to 79% of retailers (the latter being slightly below
                    average).
 Innovation        Both less likely than average to report culture of innovation
                   Retailers more likely than average to undertake
                    collaboration, whereas hotels and restaurants are less likely
                    to collaborate
                   Most cited factors affecting location decision are size of
                    space and proximity to workforce
                   Both relatively more likely to have identified low carbon
                    opportunities
 Business          Slightly more likely than average to expect to move
 Location and       premises over the next five years
 Premises          Quality of environment a significant business location factor
                   More likely than average to consider sites elsewhere in
                    Walsall
 General           More likely than average to cite competition as a business
 Business           constraint, whereas other factors are viewed as relatively
 Constraints        less important
 Source: Walsall Business Survey 2010




                                                                                                                 52
                                                          Walsall Sector Analysis Study – Sector Analysis Paper


5        Sector Profiles
The following section of the report uses data from the Annual Business Inquiry to
examine employment trends in key sectors in more detail. The sectors analysed
are:

        Financial, professional and business services
        Transport and communication
        Wholesale and retail, hotels and restaurants
        Creative and digital Industries
        Manufacturing
        Construction
        Public services, including public administration, education and health

The analysis includes an examination of the distribution of employment and the
size profile of workplaces within each sector. Summaries for each sector are
provided at the start of each section. Each section also identifies areas for further
investigation during later stages of the study, particularly the company survey and
consultation with sector organisations and experts.




                                                                                                                  53
                                                         Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                       Introduction
Financial, Professional and Business Services
                                                                                       This section provides an overview of the Financial, Professional and Business
                                   Summary                                             Services sector in Walsall, and reviews some of the most important sub-sectors in
      The financial, professional and business services sector is the fourth          more detail.
       largest in Walsall in employment terms, accounting for 17,400 jobs in           Sources of information used to produce the profile include national and regional
       2008. This equates to 18% of Walsall‟s total employment, on a par with          research studies, including the IER / UKCES Working Futures report 2007-2017,
       the manufacturing sector.                                                       AWM Cluster Plans and documents and other secondary sources. Much of the
      The sector makes the second largest contribution to Walsall‟s GVA, 19%          data on the sector in Walsall is drawn from official statistics including the Annual
       of the total, and had the fastest rate of growth in GVA between 2006 and        Business Inquiry.
       2008. Output per FTE employee is slightly above the Walsall average at          Projections and information on productivity and output levels are taken from the
       just over £35,000, and is expected to rise significantly in future years.       West Midlands Regional Observatory‟s IPM model. The sector profile also draws
      The sector as a whole is one of the fastest growing in Walsall in               on the findings of the Walsall Business Survey 2010, consultations with sector and
       employment, with growth of 45% between 1998 and 2008, adding almost             local economic experts and discussions with Walsall businesses and business
       5,400 additional jobs. Although this decreases significantly when labour,       support / representative organisations undertaken as part of the sector analysis
       recruitment and the provision of personnel is excluded.                         study.

      Labour recruitment and the provision of personnel is the largest sub-           Drivers of Change
       sector, employing over 6,000, 35% of the total in the sector – this includes    There have been major changes in the Financial, Professional and Business
       workers employed through employment agencies, working across a range            Services sector, particularly within financial services. The financial crisis of 2008
       of sectors (and outside of the Borough).                                        caused a significant slowdown in output for banking and finance and the
      If this sub-sector is excluded from the analysis, employment in financial,      subsequent housing downturn led to substantial contraction in the real estate sub-
       professional and business services falls to just over 11,200, however the       sector. For Walsall‟s financial, professional and business services sector, the key
       sector remains the fourth largest in Walsall, with employment growth of         drivers of change in employment and output are:
       19%.                                                                                 Specialisation and sub-contracting, and the separation of business
      Despite this growth, the sector‟s share of employment still lags behind the           processes has been a major driver of growth within the business services
       national average of 23%, reflecting its under-representation in the                   sub-sector. This trend is likely to continue as the needs of government and
       Borough.                                                                              businesses become more specialised leading to greater demand for high
                                                                                             value services and service centre functions. It is important to note that
      The majority of financial, professional and business services sub-sectors             government out-sourcing has been a major driver of growth in business
       have experienced employment growth since 1998, although with the                      services and the effects of reduced public sector funding on this sub-sector
       exception of labour recruitment and rental services all sub-sectors remain            are unclear.
       under-represented in Walsall.
                                                                                            Technological change, and the proliferation of ICT has led to an increase in
      The office and town centre offer in Walsall makes it difficult to attract             employment in businesses involved in processing and handling information.
       significant inward investors, with very limited high quality modern office            The impact on financial services has been less positive as increased
       accommodation available.                                                              productivity has resulted in a decline in demand for frontline staff, especially
                                                                                             administrative, clerical and secretarial occupations.
                                                                                            E-commerce, and its growth has benefitted the other business services
                                                                                             sector and there is a strong demand for professional advice and services
                                                                                             across the West Midlands. However, many local business services providers


                                                                                                                                                                54
                                                         Walsall Sector Analysis Study – Sector Analysis Paper

      lack the specialist skills to deal with complex issues arising from the growth   Sub-Sector Employment
      of e-commerce (e.g. cross border trading).
                                                                                       The financial, professional and business services sector comprises eight sub-
     Demographic changes, and in particular an ageing population has created          sectors:
      an increasing demand for pension, inheritance, tax planning and wills and
      probate services. These areas are expected to be a major source of growth                Financial services;
      in financial and legal services.                                                         Property services;
                                                                                               Architecture and technical consultancy;
                                                                                               Labour recruitment and provision of personnel;
Walsall’s Financial, Professional and Business Services Sector                                 Rental services;
                                                                                               Computer and related activities;
The financial, professional and business services sector is the fourth largest in              Accountancy, legal, consultancy; and
Walsall in employment terms, accounting for 17,400 jobs in 2008, and 18% of total              Other business services.
employment. The sector‟s share of employment is slightly below the national
average of 23%, but on par with the manufacturing sector‟s share of employment         Labour recruitment and provision of personnel is the largest employing around
in the Borough, suggesting a move towards a more service-based economy.                6,200, 35% of total employment in the sector. In comparison to national levels, the
                                                                                       sub-sector is highly concentrated in Walsall, at almost twice the national average.
The sector as a whole is one of the fastest growing in Walsall in employment           It should be noted that workplaces in this sub-sector include employment agencies
terms, with growth of 45% between 1998 and 2008, adding almost 5,400 additional        that have offices in Walsall but whose employees work outside of the Borough, or
jobs over the period.                                                                  who work in the Borough across a wide range of sectors. The exact place of work
                                                                                       for employees in this sub-sector cannot be ascertained from the official statistics.
If labour recruitment and provision of personnel is excluded from the analysis,
                                                                                       The second largest sub-sector is other business services, employing almost
employment in financial, professional and business services falls to just over
                                                                                       3,500, followed by financial services, employing almost 2,900. These sub-sectors
11,200, with employment growth of 19%. This means that since 1998, over 1,800
                                                                                       are under-represented in Walsall when compared to national levels.
additional positions have been created in the sector, making it one of Walsall‟s
growing sectors. Without labour recruitment and provision of personnel, the            With the exception of other business services and architecture and technical
sector‟s share of total employment (11%), severely lags the national average of        consultancy, all of the financial, professional and business sub-sectors have
23%, reflecting its overall under-representation in the Borough.                       experienced employment growth since 1998:

Finance, Professional and Business Services                                                    Property services have experienced the highest growth rate, although its
                                                                                                employment remains below the national average.
                        1998         2008             Change        % Change
Workplaces                 1,735       1,843               108            6%                   The greatest absolute increase in employment has been in labour
Employment                12,011      17,402             5,391           45%                    recruitment and provision of personnel. Since 1998, the number
Male employees             5,481      10,004             4,523           83%                    employed in this sub-sector has risen by over 3,500 although as noted
Female employees           6,529       7,396               867           13%                    above many of these people are workers provided to employers across a
Part time employees        4,294       4,158              -136           -3%                    range of sectors on temporary contracts.
Source: ABI 2008
Financial, professional and business services (including labour recruitment and the
provision of personnel) is the second largest contributor to Walsall‟s GVA,
generating £619m in 2008 (19% of total GVA). The sector also experienced the
highest increase in GVA between 2006 and 2008, adding over £50m to the local
economy. In terms of productivity, financial, professional and business services is
in line with the Borough‟s average with GVA per FTE employee being just over
£35,000.


                                                                                                                                                              55
                                                             Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                            Distribution of Financial, Professional and Business Services Employment in
                                                                                            Black Country
                                                                                                                           Employment                Change, 1998 - 2008
                                                                                                               1998 No.     %     2008 No.     %        No.         %
                                                                                            Walsall               12,011     12      17,402     18       5,391        45
                                                                                            Black Country         57,670     13      74,149     17      16,479        29
                                                                                            West Midlands        356,629     16     439,092     19      82,463        23
                                                                                            England            4,079,158     19   5,241,649     23   1,162,491        28
                                                                                            Source: ABI, 2008

                                                                                            In 2008, there were over 1,800 financial, professional and business services
                                                                                            workplaces in Walsall, more than one-fifth (23%) of total workplaces in the
                                                                                            Borough. The number of workplaces has increased by 6% since 1998, resulting in
                                                                                            108 additional entities being registered.
                                                                                            Walsall‟s share of the Black County financial, professional and business services
                                                                                            workplaces is similar to its share of total employment (22%). However, its growth in
                                                                                            workplaces lags behind other authorities in the Black Country, recording the lowest
                                                                                            change of 6%, in spite of having the second largest increase in employment,
                                                                                            suggesting the overall expansion of existing workplaces in Walsall. In 2008, the
                                                                                            average number of employees per workplace was almost 10, an increase on the
                                                                                            1998 average of almost 7 employees per workplace.
                                                                                            Distribution of Financial, Professional and Business Services Workplaces
                                                                                                                           Workplaces               Change, 1998 - 2008
                                                                        Source: ABI, 2008                      1998 No.     %    2008 No.     %         No.        %
Note: The Location Quotient is a measure of the concentration of industry in an area        Walsall               1,735      21      1,843     23          108        6
compared to the national average. It produces an index whereby a score of 1 indicates the
industry employment concentration is the same both in Walsall and nationally, more than 1
                                                                                            Black Country         6,672      19      8,990     25        2,318       35
represents a higher concentration and less than 1 a lower concentration                     West Midlands        39,780      22     63,008     30       23,228       58
                                                                                            England             493,241      27   742,130      34      248,889       50
                                                                                            Source: ABI, 2008
Distribution of Employment and Workplaces
                                                                                            The distribution of financial, professional and business services workplaces by size
Since 1998, Walsall has experienced a faster growth in employment in this sector
                                                                                            in Walsall, the Black Country, the West Midlands and England is very similar.
than the Black Country as a whole, the West Midlands or England, in part reflecting
                                                                                            Walsall has more than tripled the number of large businesses since 1998,
its low starting point. Although the share of employment in the sector is now
                                                                                            significantly outperforming the regional and national averages. In contrast, it has
slightly above the Black Country average, it continues to lag behind the regional
                                                                                            seen a decline in the number of small workplaces.
and national levels.
                                                                                            Further analysis of the profile of the 12 large workplaces in Walsall indicates that
                                                                                            seven of these were in the labour recruitment and the provision of personnel sub-
                                                                                            sector.




                                                                                                                                                                   56
                                                         Walsall Sector Analysis Study – Sector Analysis Paper

Distribution of Financial, Professional and Business Services Workplaces by Size    The map below provides an indication of the areas in the Black Country having the
Band, 2008                                                                          highest concentration of employment in financial, professional and business
                  1-10             11-49         50-199         200+         Total services employment. In Walsall, the sectors employment is concentrated in the
                  Employees        Employees     Employees      Employees           town centre and Aldridge North.
                      No.      %      No.     %     No.     %     No.   %        No.
                                                                                    Financial, Professional and Business Services Employment in Walsall and
Walsall             1,678 91%         124    7%      29    2%      12 1%       1,843the Black Country, 2008
Black Country       8,152 91%         630    7%     162    2%      46 1%       8,990
West Midlands      57,868 92%       3,897    6%     931    1%    312 0%       63,008
England           682,818 92% 44,578         6% 11,329     2% 3,405 0% 742,130
Source: ABI, 2008

Almost half of employees in the financial, professional and business services
sector are employed in the 12 large workplaces, which is significantly higher than
the Black Country, regional and national average. This reflects the size and
dominance of the labour recruitment and provision of personnel workplaces in
Walsall.
Distribution of Financial, Professional and Business Services Employment
by Workplace Size Band, 2008
                     2008, % of area total
                              1-10         11-49        50-199        200+
Walsall                       20.9          15.5          16.9         46.6
Black Country                 24.5          18.0          20.5         37.0
West Midlands                 27.2          18.9          20.4         33.5
England                       26.4          18.2          20.5         34.8
Source: ABI, 2008

When excluded the level of employment in large financial, professional and
business services falls and is in line with the national average. This profile also                                                                  Source: ABI, 2008
presents a clearer and more accurate picture of the sector in Walsall with a higher
portion of employees working in micro (1-10 employees) and small businesses (11-
49 employees). Almost a third of the sectors employees in Walsall (32%) work in
business with between one and ten employees. This highlights the smaller and
fragmented nature of the sector in the Borough.
Distribution of Financial, Professional and Business Services Employment
by Workplace Size Band, 2008
                     2008, % of area total
                              1-10         11-49        50-199        200+
Walsall                       31.5          20.4          14.6         33.5
Black Country                 29.6          20.2          16.0         34.3
West Midlands                 32.2          20.4          17.0         30.4
England                       29.9          19.2          17.6         33.2
Source: ABI, 2008



                                                                                                                                                         57
                                                         Walsall Sector Analysis Study – Sector Analysis Paper

The map below shows where employment gains and losses in the financial,
professional and business services sector have been concentrated since 1998.                                    Contribution to Walsall GVA 2008, by Sector
Significant job gains have been recorded in Aldridge North, whilst Aldridge Central
                                                                                                     800.0
and Bloxwich have seen the number of people employed in the sector decline.
                                                                                                     700.0
Change in Financial, Professional and Business Services Employment in                                600.0
Walsall and the Black Country, 1998-2008                                                             500.0




                                                                                         £m
                                                                                                     400.0
                                                                                                     300.0
                                                                                                     200.0
                                                                                                     100.0
                                                                                                       0.0




                                                                                                                                                                      es
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                                                                   Source: ABI, 2008

GVA and Productivity
In 2008, the financial, professional and business services sector contributed
£619.1m of GVA to the Walsall economy, 18.5% of the total. This made it the
second most important sector to the Borough in terms of wealth generation,
creating a similar level of wealth as the next most important sectors: wholesale and
retail, hotels and restaurants and public services.




                                                                                                                                                                             58
                                                                  Walsall Sector Analysis Study – Sector Analysis Paper

Output per FTE in the Financial, Professional and Business Services sector in                   Projections for the Financial, Professional and Business
Walsall was £35,093 in 2008, almost exactly the same as the Walsall average
across all sectors. The sector in Walsall is less productive than in the West                   Services Sector
Midlands as a whole with GVA per FTE at 88% of the regional average. GVA per
FTE in the Real Estate, Renting and Business Services sub-sector is particularly                Employment in financial, professional and business services is projected to
low at 80% of the West Midlands average.                                                        decline by 1,500 jobs, between 2008 and 2012, to 18,500. The decline exceeds
                                                                                                that projected at the regional level (-8% compared to -6%). Post 2012,
                                                                                                employment is projected to rise to over 19,000 by 2020, resulting in a net decline
                                  Output per FTE Worker, by Sector                              over the period of 965 jobs.

     60,000
                 £87,854                                                                        Financial, Professional and Business Services Employment
                                                                                                                          2008        2020      Change               % Change
     50,000
                                                                                                Walsall                    20,021      19,056        -965                   -5
     40,000                                                                                     West Midlands             502,300     507,300       5,000                    1
     30,000
                                                                                                Source: WMRO 2010
 £




     20,000                                                                                     The decline is driven by a fall in employment in other business services, the largest
                                                                                                sub-sector, forecast to lose 1,260 jobs (-11%). Insurance and computing services
     10,000
                                                                                                are projected to grow over the period, increasing by 12% and 11% respectively,
         0                                                                                      contributing an additional 340 jobs.
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                                                                                                2020, this is expected to rise to 20.6%, making the sector the largest contributor to
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                                                                                                GVA in Walsall.
                                          GVA per FTE   Walsall Average
                                                                                                Financial, Professional and Business Services GVA £m
                                                                     Source: WMRO IPM, 2010                               2008        2020      Change               % Change
                                                                                                Walsall                       619         778         159                  26
                                                                                                West Midlands              17,680      24,329       6,649                  38
                                                                                                Source: WMRO 2010

                                                                                                Three of the sub-sectors with the greatest growth in GVA in Walsall are expected
                                                                                                to be from the Financial, Professional and Business Services sector: professional
                                                                                                services, insurance and banking and finance.




                                                                                                                                                                         59
                                                                                                           Walsall Sector Analysis Study – Sector Analysis Paper

                                      Largest Net GVA Increase 2008 - 2020, £m                                                                                             FPB Services Forecast GVA and Employment
 120                                                                                                                                                        130

 100

  80                                                                                                                                                        120

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                                                                                Finance




                                                                                                                             Services
                                                                                                                                                             90
                                                                                                                                                                  2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
                                                                                                                                                                  FPB Services GVA                FPB Services Employment
                                                                                                                                                                  Walsall average GVA             Walsall average employment
                                                                                                            Source: WMRO, IPM 2010
There are distinct differences in productivity across the financial, professional                                                                                                                              Source: WMRO, IPM 2010
and business services sector. GVA per FTE in the Finance sub-sector is
projected to reach £105,512 by 2020, an increase of £15,422 (17%), the second
largest net increase after utilities. However, Real Estate and Business Services
GVA per FTE is lower, reaching £32,972 in 2020, despite a faster rate of increase
(33%).
Despite the large net increase in the Borough, GVA per FTE expressed as a
percentage of the West Midlands demonstrates an increasing gap in productivity.
By 2020, finance is expected to fall to 84% of the regional level, the largest
sectoral decline (-9 percentage points), and real estate and business services to
78%, a decline of 2 percentage points.
The chart below shows how the sector in Walsall is projected to perform, relative to
the Walsall economy as a whole. Employment, and especially GVA in the
financial, professional and business services sector will increase above the
Borough average for total employment.




                                                                                                                                                                                                                         60
                                                         Walsall Sector Analysis Study – Sector Analysis Paper

The Needs of the Sector in Walsall                                                     Innovation
                                                                                       Businesses in the Professional and Business Services sector are most likely to
The Business Survey undertaken as part of the Sector Analysis included                 report a culture of innovation within the company (73% compared to 66% across
responses from 36 companies in the Financial, Professional and Business                the sample), although this is lower for the finance sector (62%). Amongst
Services sector, 11% of the total sample. Over a quarter of the businesses             professional and business services firms the most common type of innovation is
surveyed in this sector had a turnover of less than £100,000 (21% had a turnover       adopting new technologies/practices (62%) and businesses were more likely than
of £50,000 - £100,000 compared to 12% across the whole sample). As shown in            average to have collaborated with others on innovation (54% compared to 50%)
the workplace profile this reflects the sector‟s business base. This section draws     and have adopted new business models (53% compared to 50%).
on the analysis of the survey as well as consultations with sector experts and other
local economic experts in Walsall.                                                     Low carbon industries have been considered by few respondents, with 8% of
Growth Prospects                                                                       business and professional services companies and no finance businesses stating
                                                                                       that they had identified opportunities (compared to the sample average of 17%).
Businesses in the sector appeared relatively optimistic. The majority of               Insufficient sector knowledge was the main challenge in exploiting low carbon
respondents anticipated the business would increase in size or turnover over the       opportunities, cited by 47% of business and professional services companies and
next two years (62%), which was lightly higher than the views of the total business    50% of finance businesses.
sample (57%). The most common reasons cited for the projected increase were:
obtaining new business within existing market (67%), entering new markets (17%)        Skills Needs
and developing new products or services (25%).                                         The proportion of professional and business service companies reporting skills
Market limitations and competitions was the most frequently citied barrier to growth   gaps is marginally below the average – 15% compared to 18% across the wider
among the financial, professional and business services businesses, although this      sample, while the financial businesses did not report any gaps. Where reported the
was more of an issue in other sectors. Where as restricted growth due to a period      skills gap for professional and business services companies most exist in business
of recent expansion (25%) and personal reasons (13%) were most prevalent               management skills.
among the sector‟s businesses compared to the total sample (7% and 9%                  Professional and business services companies are slightly less likely than average
respectively).                                                                         to undertake staff staring (79% compared to 84% across the total sample),
Markets and Supply Chains                                                              although the proportion increases for finance businesses (85%). In both cases the
                                                                                       most commonly cited barrier was the cost of training, followed by courses not
Finance, professional and business services companies are the most localised,          being relevant in the case of professional and business service companies.
with the lowest level of clients outside of the West Midlands Metropolitan Region.     Ensuring that this provision is relevant is important given that professional and
This reflects the nature of the sector in Walsall, with a high level of small          business services sector has the highest proportion of firms that source training
companies serving local markets, and a strong sense of self-containment that was       from providers in Walsall (41% compared to 208% across the total sample).
commented on during the business workshop.
                                                                                       Economic Infrastructure
While this increases the links of these companies to the local economy it ultimately
has implications for the future expansion of the sector and its presence in Walsall,   Walsall has a very limited town centre office sector or distinct business quarter and
as a dependence on local markets limits opportunities. This may also deter             has not developed major out of town office business parks. The property
indigenous entrepreneurs from starting up businesses in the sector locally.            requirements of financial, professional and business services sector companies
Further, the small and fragmented business base dilutes the presence of the sector     vary significantly depending on the scale and nature of the occupier. However, key
to investors, weakening Walsall‟s ability to advertise as a credible financial,        points to note include:
professional and business services location.
                                                                                               High quality office space in attractive landscaped settings or surrounded
In terms of supply chain, however, financial, professional and business services                by high quality public realm / environment is desirable;
companies are less localised, with below average levels of purchasing from                     Companies often demand proximity to a good town centre environment,
suppliers within Walsall.                                                                       quality supporting services and easy access by car and public transport;


                                                                                                                                                               61
                                                          Walsall Sector Analysis Study – Sector Analysis Paper

        Often businesses in the sector require flexible developments that can be       economic growth – under the current climate, the vision and aspirations for the
         sub-divided or broken down into smaller elements;                              area need to be revisited.
        Proximity to a large, highly skilled and qualified workforce is desirable;
        There is a significant difference in the requirements of HQ developments       The business survey found that ICT / telecommunications infrastructure (64%) is
         (city centre, prestige office focus) and back office functions (tend to look   the most important factor for financial, professional and business service
         for less expensive premises, with a ready supply of suitable labour). A        companies when choosing business premises, and such infrastructure is most
         large proportion of recent growth has been in back office function).           important to this sector (49% across business sample). Reflecting the localised
                                                                                        nature of the sector proximity to market (59%) was also more important for
It is clear that very little space is currently available within Walsall to meet the    financial, professional and business services than the overall business community
varying needs of the modern occupier. Currently, the limitations of the town centre     (48%).
with respect to the lack of quality office premises and a high quality environment      The sector reported fewer limitations at their current location, with the most
means that Walsall is a difficult sell to major businesses in the financial and         common being the condition of premises. Despite this, businesses within the
professional services sector, even in terms of a location for back office functions.    sector are more likely to consider moving over the next five years and a third are
                                                                                        looking to upsize their premises (compared to 28% across the total sample).
In 2007, prior to the recession and at a peak time for the sector, a Walsall Office     Businesses that are considering moving are more likely than average to be
Demand Study report concluded that the Walsall office market is very limited and        interested in premises elsewhere in Walsall.
there is a lack of both supply and demand for office space in the town. There has
been a major difficulty in delivering speculative office development without public     Other Support Needs
sector assistance. The current economic climate means that the potential to deliver     Financial, Professional and Business Services companies are less likely than
the supporting economic infrastructure to raise the profile of Walsall as an office     average to cite general business constraints. Where constraints were identified the
location and attract developers and businesses within the sector is even more           most common was competition and market initiations, which is partly linked to the
constrained.                                                                            rapid expansion of the sector over the past decade nationally and this is likely to
                                                                                        increase as private service sectors drive employment growth in the future.
Despite the above, there are some opportunities for the town. These include the
area‟s location close to Birmingham and its relatively good transport links. The        The second greatest constraint is the cost of energy, although as with the other
presence of a new college and the University of Wolverhampton in the town is            constraints this was less of a concern for financial and professional business
important, and Walsall‟s access to a large pool of labour is likely to be seen as a     services than other sectors. This reflects the nature of the sector‟s activities which
positive attribute. In theory Walsall has the potential to attract a certain type of    are less energy intensive, especially when compared to manufacturing activities.
occupier in this sector – the cost conscious occupier unable to afford a central        This is however an issue which could become more pressing as government action
Birmingham address or the back office activities of a major company. Whilst these       to tackle climate change steps up.
do not represent the most prestigious jobs within the sector, they nonetheless
                                                                                        Just under a third of financial, professional and business services companies
represent a useful source of employment to replace decline within the area‟s
                                                                                        highlighted the difficulty of obtaining finance as a constraint on their business and
traditional manufacturing base. In order to achieve this however, Walsall needs to
                                                                                        this was also discussed in the business focus group undertaken as part of the
differentiate itself from other areas and develop a quality product offer.
                                                                                        study, Accessing finance from traditional sources such as banks has become very
                                                                                        difficult in recent years, and alternative sources tend to be very expensive and
The Gigaport concept has been seen as Walsall‟s key scheme to deliver a
                                                                                        smaller in scale. Businesses need to assemble finance packages from a range of
concentration of quality office development in a new business quarter for the town
                                                                                        sources in order to meet their growth/expansion needs. The danger is that without
centre. If delivered, the concept has the potential to improve the attractiveness of
                                                                                        financial support companies will stagnate and become less competitive.
Walsall to such sectors. However there are a series of obstacles to overcome,
notably the cost of the scheme and the lack of a development partner. There are
also issues with attracting a private sector anchor and relating to land ownership
and the physical environment. Finally, the concept was developed at a time of




                                                                                                                                                                 62
                                                          Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                                created by the city‟s diverse population such as Islamic banking.
                                                                                                Birmingham is expected to become majority ethnic by 2020 and there will
Opportunities for the Sector in Walsall                                                         be an increase in the demand for more specialist services. Similarly, an
                                                                                                ageing population will drive the demand for specialist financial services
The Financial, Professional and Business Services sector is a growing sector                    (e.g. pension, tax planning, wills and probate services).
which provides an opportunity for Walsall to diversify its economy. The service
sector is likely to continue to be a key driver of economic growth over the next few
decades, despite the recent economic downturn. The priority if Walsall is to build      Implications and Recommendations
on what is a relatively small business base (when recruitment activities are            The following implications have emerged from the financial, professional and
excluded) develop momentum in the sector‟s expansion and to establish a larger          business services profile:
financial, professional and business services, which widens the Borough‟s service
sector offer.                                                                                  There is a need to encourage and support local firms to engage with
                                                                                                existing sub-regional networks so that they can access new markets and
The opportunities include:                                                                      strengthen links with Birmingham. This might involve showcasing
                                                                                                examples of where such collaborations have been beneficial to existing
        Capturing a larger share of inward investment by providing a lower                     businesses in Walsall. Local businesses need to be supported to
         cost office for small and medium sized back office functions through                   access networks and major hubs as this does not appear to be
         the provision of modern premises in attractive locations, including in and             happening naturally.
         near to the Town Centre, and on an appropriate scale, the District
         Centres.                                                                              The sector is quite diverse and some sub-sectors have relatively low
                                                                                                levels of output per worker. Therefore, it is crucial that as well as growing
        Supporting existing businesses to identify new markets. The                            the sector in employment terms, support is also focussed on increasing
         localised nature of the sector‟s market is limiting the potential of                   the productivity and added value generated by existing companies.
         companies to grow and expand. To boost the Borough‟s employment                        Sector support should be targeted at existing businesses with
         levels, local companies will need to widen their markets and generate a                growth potential as well as activities to attract new businesses to
         higher proportion of their income from outside the local area. Given that              the Borough.
         only one in four companies in the sector expect to grow by entering new
         markets, there is a need to ensure that local companies are aware of                  There are natural synergies between some businesses for example,
         market opportunities and importantly are considering those that are                    through serving a similar customer base and businesses should be
         available in markets beyond Walsall. Better access to new markets will be              encouraged to exploit these linkages where present to improve
         important if the full potential of the sector is to be achieved .                      competitiveness. Encouraging multi-disciplinary consortiums among
                                                                                                the business base to increase product and service offerings should
        Encouraging better linkages with major hubs. Walsall is close to                       be a priority.
         Birmingham - one the country‟s major financial and professional services              Companies in this sector require new office accommodation, with
         hubs. Building on its locational advantages, combined with good transport              adequate car parking and ease of access for their workforce. It is
         links and lower cost premises, there is an opportunity for Walsall to                  important to ensure that the right infrastructure is in place to encourage
         position itself as a support area for some of the City‟s key businesses, for           the growth of the sector. There is a need to improve the provision of
         example, by being the location for back office functions. To achieve this,             high quality office space to attract larger companies in this sector,
         local firms and the Council will need to proactively seek opportunities and            with a focus on back office functions.
         partnerships in Birmingham and other major hubs, for example
         Manchester. This could be facilitated through existing professional                   The ability of the town to become an attractive location to accommodate
         networks and projects such as Birmingham Professional DiverCity project.               growth will be extremely important in replacing jobs lost in other sectors.
        Diversifying existing skills into emerging niche areas. Better links                   Walsall town centre has a crucial role to play and there is a need to
         with Birmingham will also enable local businesses to exploit opportunities             update the vision and delivery plans for the town centre and



                                                                                                                                                                63
                                              Walsall Sector Analysis Study – Sector Analysis Paper

developments such as Gigaport (or a similar scheme) to ensure a
suitable pipeline of new and high quality office accommodation is
available. This is likely to require a phased approach and public sector
intervention to de-risk early investment.




                                                                                                      64
                                                      Walsall Sector Analysis Study – Sector Analysis Paper

Transport and Communication                                                         Introduction
                                                                                    This section provides an overview of the Transport and Communication sector in
                                                                                    Walsall, and reviews some of the most important sub-sectors in more detail.
                               Summary
                                                                                    Sources of information used to produce the profile include national and regional
                                                                                    background research studies, including the IER / UKCES Working Futures report
     The transport and communication sector is the fifth largest                   2007-2017, AWM Cluster Plans and documents and specific sector documents.
      employment sector, employing over 6,200 employees (6% of total                Much of the data on the sector in Walsall is drawn from official statistics including
      employment).                                                                  the Annual Business Inquiry. Projections and information on productivity and
     It contributes 9% of GVA in the Borough and has above average GVA             output levels are taken from the West Midlands Regional Observatory‟s IPM
      per FTE employee.                                                             model. The sector profile also draws on the findings of the Walsall Business
                                                                                    Survey 2010, consultations with sector and local economic experts and
     Between 1998 and 2008, employment in the sector increased by 36%,             discussions with Walsall businesses and business support / representative
      adding almost 1,700 jobs.                                                     organisations undertaken as part of the sector analysis study.
     The sector is a particularly important source of male employment, with        Drivers of Change
      87% of the additional jobs created between 1998 and 2008 filled by
      men.                                                                          Reviewing the drivers of change that will influence the development of transport
                                                                                    and communication is complex as the two broad sub-sectors are subjected to a
     Transport is the largest sub-sector, employing 3,500 employees.
                                                                                    unique set of drivers and challenges. The primary issue for transport is
     Post and courier activities are highly concentrated in the Borough,           sustainability and climate change, whilst communication is driven by fast paced
      with employment levels at more than twice the national average.               technological changes which has created new products and markets. This section
                                                                                    highlights some of the most significant drivers of current and future changes in
     Between 1998 and 2008, the sector grew more rapidly in Walsall than           Transport and Communication.
      in the Black Country, the West Midlands and England as a whole.
                                                                                    For Walsall‟s transport and communication sector, the key drivers of change in
     Projections suggest that transport employment will remain relatively          employment and output are the following:
      stable in the Borough despite the downturn with a low level of year on
      year growth.                                                                       Technological development, is the primary driver of the communications
                                                                                          market, in particular developments in telecommunications and wireless
     While communication employment is projected to decline, the output                  connectivity. The convergence of technologies that were previously
      of the sub sector is expected to increase significantly, the second                 independent has facilitated the emergence of cross platform products and
      highest net increase of all sub sectors.                                            services, which create new markets and make others obsolete. On the
     The Borough‟s position makes it well placed for distribution and                    transport side, new technologies such as radio-frequency identification
      logistics related employment, although frequent motorway congestion                 (RFID), GSM and Galileo will make logistics and handling of goods more
      will undermine efforts to attract new employers.                                    efficient and improve just-in time deliveries.

     While the toll road has opened up new sites for development, the                   Sustainability/climate change, is an important driver as demand increases
      scale of new investment has been modest to date.                                    for more efficient, sustainable and safe transport systems. Government
                                                                                          targets to reduce the UK‟s greenhouse gas emissions by at least 80% by
     Opportunities for the sector in Walsall are linked to the Borough‟s                 2050, will involve moving to a low carbon transport system. This will have a
      strategic location, the expansion of home delivery networks and                     notable impact on the nature of the transport sector and the use of bio fuels,
      providing specialist transport for manufacturing companies in growing               hydrogen, and electrical vehicles will lead to fundamental changes in the
      niche areas.                                                                        transport sector.
  

                                                                                                                                                            65
                                                             Walsall Sector Analysis Study – Sector Analysis Paper

        Cost: as more goods are imported and distributed, the pressure to reduce
         costs is leading to larger, more efficient distribution centres benefiting from
         economies of scale. The trend is likely to be an important market driver and
         result in rationalisation at the company level.

The Transport and Communication Sector in Walsall
Transport and communication is the fifth largest sector, employing over 6,200
people (6% of total employment). Since 1998, the sector has grown by 36%,
adding over 1,600 jobs.
The sector generated GVA of just over £300m in 2008, equating to 9% of Walsall‟s
total GVA. Transport and communication is one of the most productive of all the
sectors, having average GVA per FTE employee of over £47,000.
Transport and Communication
                      1998                   2008         Change       % Change
Workplaces                 339                   461           122          36%
Employment               4,601                 6,268         1,667          36%
Male employees           3,610                 5,064         1,454          40%
Female employees           992                 1,203           211          21%
Part time employees        547                   877           330          60%
Source: ABI 2008

Sub-Sector Employment
                                                                                                                                                                   Source: ABI 2008
Transport and communication covers three key sub-sectors.                                  Note: The Location Quotient is a measure of the concentration of industry in an area
                                                                                           compared to the national average. It produces an index whereby a score of 1 indicates the
           Transport including passenger and freight transport as well as storage         industry employment concentration is the same both in Walsall and nationally, more than 1
            and warehousing is the largest sub-sector, employing over 3,500                represents a higher concentration and less than 1 a lower concentration
            employees, although it is under-represented in Walsall.
                                                                                           Distribution of Employment and Workplaces
           Post and courier activities is the second largest sub-sector, employing
            over 2,300 Employees. This sector is strongly represented in Walsall, at       Employment in the transport and communications sector grew by 36% in Walsall,
            more than twice the national average. It has experienced the fastest           between 1998 and 2008. The employment growth rate in Walsall, the Black
            growth in employment numbers since 1998.                                       Country and the West Midlands as a whole is significantly above the national
                                                                                           average of 9%.
           Telecommunications is the smallest subsector, which has declined by
            more than 3% since 1998.




                                                                                                                                                                      66
                                                         Walsall Sector Analysis Study – Sector Analysis Paper

Distribution of Transport and Communication Employment                                 Whilst over 87% of transport and communication workplaces are micro
                               Employment                          Change, 1998 -      businesses, these workplaces employ less than a fifth (13%) of workers in the
                                                                        2008           sector. The nine large workplaces including Travel West Midlands, City Link Ltd
                    1998 No.       %       2008 No.      %          No.       %        and Azzurri Communications Ltd, accounted for almost 60% of the sector‟s total
Walsall                  4,601         5       6,268         6       1,667        36   employment in 2008 in Walsall, highlighting the importance of these workplaces to
Black Country           19,371         4      24,063         5       4,692        24   Walsall.
West Midlands          107,910         5     137,340         6      29,430        27   Distribution of Transport and Communication Employment by Workplace
England              1,259,144         6   1,373,769         6     114,625         9   Size Band, 2008
Source: ABI 2008                                                                                           2008, % of area total
Walsall increased its number of transport and communication workplaces by 36%                                      1-10          11-49    50-199          200+
between 1998 and 2008, which resulted in the registration of over 120 additional       Walsall                     13.3           17.2      10.7           58.8
workplaces. This is a faster rate of increase than in the Black Country, regionally    Black Country               16.1           17.9      20.1           45.9
and nationally, and matches the increase in employment.                                West Midlands               14.7           16.2      24.2           44.8
                                                                                       England                     14.1           17.2      25.2           43.5
Distribution of Transport and Communication Workplaces                                 Source: ABI 2008
                              Workplaces             Change, 1998 - 2008
                   1998 No.    %   2008 No.   %        No.          %
Walsall                 339      4       461     6        122         36
Black Country         1,586      5     1,971     5        385         24
West Midlands         8,202      5     9,939     5      1,737         21
England              83,751      5    91,263     4      7,512          9
Source: ABI 2008

Almost half of large transport and communication workplaces (employing 200 and
more) in the Black Country are located in Walsall. The number of workplaces
employing over 200 has increased by five since 1998, of which four are located in
Walsall.
Walsall has also experienced an increase in the number of micro-workplaces
employing ten or fewer of 43%, which is four times the level of increase observed
nationally and also significantly above the Black Country and West Midlands
averages.
Distribution of Transport and Communication Workplaces by Size Band, 2008
                 1-10           11-49         50-199         200+         Total
                 Employees      Employees     Employees      Employees
                      No.    %     No.    %      No.    %      No.    %       No.
Walsall               402 87%       41   9%        9   2%        9 2%         461
Black Country       1,708 87%      191 10%        52   3%       20 1%       1,971
West Midlands       8,455 85%      990 10%       356   4%      138 1%       9,939
England            75,977 83% 10,439 11%       3,661   4% 1,186 1%         91,263
Source: ABI 2008




                                                                                                                                                            67
                                                       Walsall Sector Analysis Study – Sector Analysis Paper

The following map provides an indication of the areas in the Black Country having    The following map shows where employment gains and losses in the transport and
the highest concentration of employment in transport and communication.              communications sector have been concentrated since 2003. Shepwell Green and
Shepwell Green to the west of the Borough and Aldridge to the east have the          Aldridge have experienced the highest gains in employment. A small area in
highest level of employment.                                                         Aldridge has also experienced the largest decline in the Borough.
Transport and Communication Employment in Walsall and the Black                      Change in Transport and Communication Employment, 2003- 2008
Country, 2008




                                                                 Source: ABI 2008                                                                   Source: ABI 2008




                                                                                                                                                       68
                                                                    Walsall Sector Analysis Study – Sector Analysis Paper


GVA and Productivity                                                                                                                   Output per FTE Worker, by Sector
Transport and communication contributed £301.8m to the Walsall                                            60,000
                                                                                                                      £87,854
economy in 2008, 9% of the total. The sector has the fifth largest output,
                                                                                                          50,000
and its relative size and scale is reflected by this being somewhat below
the contribution of the four largest sectors. The sector‟s much higher share                              40,000
of total output when compared to employment reflects the high productivity                                30,000




                                                                                                      £
levels in the communication sector. In 2008, GVA per FTE in                                               20,000
communication was £67,491 compared to £33,980 in transport. This
                                                                                                          10,000
combines to give the transport and communication sector the second
highest GVA per FTE after utilities at £47,246 - nearly £12,300 above the                                     0
Walsall average (£34,949) and above the regional sector average for




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                                                                                                                                                                                 69
                                                             Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                            experience the second largest net increase within the Walsall economy,
Projections for the Transport and Communication Sector                                      accounting for over 90% of the total increase in the transport and communications
Employment in the transport and communication sector is projected to decline                sector.
by around 300 jobs between 2008 and 2010 to 6,500. The decline is double the
regional average (-4% compared to -2%). Post 2010, employment is projected to                                                          Largest Net GVA Increase 2008 - 2020
                                                                                             120
increase, although while this recovery is expected to begin a year earlier in
Walsall, overall growth to 2020 is expected to be lower (1% compared to 5%).                 100
It is anticipated that fewer than 100 jobs will be created over the ten year period,
                                                                                              80
resulting in a net decline of just over 200 jobs between 2008 and 2020. The low
level of decline in actual terms means that the sector is expected to maintain its
                                                                                              60
share of total employment in the Borough.
Transport and Communication Employment                                                        40
                      2008        2020                    Change        % Change
                                                                                              20
Walsall                  6,794      6,590                     -204             -3
West Midlands         151,900     156,000                    4,100              3              0
Source: WMRO 2010




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                                                                                                   Social Work


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                                                                                                   Health and




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                                                                                                                                                                           Finance




                                                                                                                                                                                                                       Services
This hides disparities between the sub sectors, with the overall decline driven by
communication which is expected to lose almost 350 jobs between 2008 and 2010.
Following this, it is anticipated that the sub sector will enter a short recovery period,
creating almost 100 jobs before entering another period of decline between 2013
and 2020 (with the projected loss of almost 200 jobs). Overall the sub sector is
expected to experience a net decline of over 300 jobs between 2008 and 2020.                                                                                                                          Source: WMRO, IPM 2010
In contrast land transport (including both passenger and freight) is projected to           Overall, productivity in the transport and communication sector is expected to
increase with the creation of over 160 jobs. This is anticipated to result from a low       increase. With an increase of over £14,758, the GVA per FTE within the sector is
level of year on year growth and the sub sector is expected to remain relatively            projected to increase by almost a third (31%) to £62,004 in 2020. This increase is
stable, while other sub sectors decline as a result of the recession.                       anticipated to be greater than the regional average for the sector, with GVA per
By 2020, transport and communication GVA is projected to increase by £83                    FTE in Walsall‟s transport and communication sector projected to be 177% of the
million (28%) to £385 million. The increase of over a quarter is above the projected        West Midlands average in 2020 (compared to 109% in 2008).
regional increase and the overall average for the Walsall economy. This will                As with the GVA increase this is driven by increases in productivity within the
increase the relative importance of the sector in terms of wealth creation with             communication sub-sector, with GVA per FTE projected to increase by £46,447
transport and communication share of total GVA in Walsall increasing to 10%.                (the greatest increase following utilities) to £113,939 in parallel with declining
Transport and Communication GVA £m                                                          employment. In contrast, the low levels of GVA growth in transport are expected to
                      2008        2020                    Change        % Change            result in a slight decrease (-£229) in GVA per FTE to £33,751, significantly
Walsall                    302        385                       83            28            increasing the gap with average productivity levels across the Walsall economy
West Midlands            6,210      7,813                    1,604            26            (from £969 to £8,579).
Source: WMRO 2010

In contrast to employment this increase is expected to be driven by a significant
increase in the GVA generated by the communication sector, reflecting increases
in productivity. With an increase of over £78.5 million, the sub sector is projected to


                                                                                                                                                                                                                              70
                                                           Walsall Sector Analysis Study – Sector Analysis Paper

The following chart summarises how the sector in Walsall is projected to perform,        Economic Infrastructure
relative to the Walsall economy as a whole. The sector‟s employment and
especially GVA growth is expected to outpace the Borough wide average, with the          Given Walsall‟s location at the heart of the UK‟s strategic transport network and
former being driven by increases in transport employment and the latter increases        with a ready available pool of labour, in theory it should have the potential to be
in communication output.                                                                 attractive to major distribution and logistics companies. However, whilst the sector
                                                                                         remains important to the local economy, the distribution sector is forecast to
                                                                                         decline between 2008-2020, although the forecast for logistics are more positive.
             Transport and Communication Forecast GVA and Employment

   130                                                                                   The sector is often criticised in economic development circles for its low
                                                                                         employment density when compared with other sectors such as manufacturing and
                                                                                         professional services. It often requires sizeable sites which provide a relatively
                                                                                         small return in terms of jobs per square metre. Despite this, the sector does have
   120                                                                                   some advantages in terms of offering full time work with reasonable wages,
                                                                                                                                                                  10
                                                                                         training opportunities and a higher GVA than some other sectors . There are
                                                                                         opportunities for the West Midlands to accommodate employment particularly
   110                                                                                   within the higher value end of the sector. Walsall‟s ability to attract such occupiers
                                                                                         will be dependent on its ability to meet the requirements of such companies. These
                                                                                         include:
   100
                                                                                                 Well located and large sites (often in excess of 25,000 sq m) with quality
                                                                                                  access to the major strategic rail and highways networks;
                                                                                                 Good access to local labour;
    90
                                                                                                 Locations in employment areas away from housing estates due to the 24
          2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020                        hour nature of the sector;
                                                                                                 Bespoke developments which are increasingly a newer, higher quality of
        Transport & Comms GVA                 Transport & Comms Employment
                                                                                                  stock – often occupiers will require a choice of sites;
        Walsall average GVA                   Walsall average employment
                                                                                                 High quality landscaping, design and environmental standards;
                                                                                                 Fully serviced, easily accessible sites suitable for large HGVs;
                                                              Source: WMRO, IPM 2010             Large building heights.

The Needs of the Sector in Walsall                                                       Walsall has had some successes in this area (for instance distribution centres for
                                                                                         major retailers TK Maxx and Poundland) and there are some smaller sites (or the
The business survey received 16 responses from businesses in the Transport and           potential for existing sites to be reconfigured) that can respond to certain demand.
Communication sector. This sample is not large enough to undertake a full                However the Borough has only a limited ability to cater for market demand for
analysis, however some key points are noted below:                                       higher value, larger developments in the sector. This is reflective of the trend within
                                                                                         the wider West Midlands as set out in the West Midlands 2009 Regional Logistics
         The majority are positive about the business growth prospects, with                  11
                                                                                         Study although Walsall has a particularly small supply of large, readily available
          eleven expecting to increase in size, a further five expect to remain the
          same size;
         Five respondents reported skills gaps in the organisation;                     10 Wonderful Walsall, the Strategic framework of the AFP, Roger Tym and
                                                                                         Partners plus Associates, for the Walsall Regeneration Company, April 2005
         Eight stated there was a culture of innovation within the organisation.        11 West Midlands Regional Logistics Study, 2009 Update, MDS Transmodal Ltd
                                                                                         and Savills, A Technical Report for the West Midlands Employment Land Advisory
                                                                                         Group


                                                                                                                                                                   71
                                                         Walsall Sector Analysis Study – Sector Analysis Paper

and suitable sites with good access to the road and motorway network when                     Working with employers to provide more qualified local people,
compared with elsewhere. The size and configuration of existing industrial sites               capable of taking on employment opportunities arising from replacement
may not be appropriate to accommodate the type of buildings required in the                    demand.
sector meaning that new logistics sites will be required.
                                                                                              Providing pre-recruitment training to support new employers.
Opportunities for the Sector in Walsall                                                       Providing local transport solutions to allow residents of the Borough to
Growth in transport and communication has been concentrated in post and courier                take up employment opportunities in the industry and ensure employment
activities / communications, although employment numbers are expected to fall in               sites are sustainable.
the years to 2020. Nevertheless, this is an important specialism for Walsall and
one where the Borough appears to have a competitive advantage.
The opportunities for the sector include:
        The sector's key competitive advantage is the Borough's location at the
         heart of the UK's transport network: the difficulties in accessing the
         strategic road network from many of Walsall's key industrial locations is a
         serious weakness. Tackling the bottlenecks and improving linkages
         should be a key economic priority for the Borough.
        Opportunities are also likely to exist for local transport companies to
         provide specialist transport for manufacturing in growing niche areas such
         as waste management and recycling.
        Home delivery networks will become increasingly important in the
         transport and retail sectors as online trading becomes the norm for
         customers and retailers. Walsall‟s strategic location in the transport
         network should give its local transport firms an advantage in this growing
         area, assuming improvement of the road network in the Borough and its
         connectivity to the motorway network.

Implications and Recommendations
The implications and recommendations arising from the opportunities for the
transport and communication sector are:
        Providing high quality employment sites to attract new logistics and
         distribution centres, with good access to the motorway network. This
         should include re-examining employment land priorities to ensure Walsall
         capitalises in sub sectors that offer opportunities.
        Realise more land in areas where distribution and logistics
         businesses are most likely to invest, offering a range of sites in a
         branded destination, with good access to the motorway network.
        Promote the Borough as a national logistics hub (as Wakefield in
         Yorkshire and Warrington in the North West have done), targeting
         national and regional companies.


                                                                                                                                                           72
                                                     Walsall Sector Analysis Study – Sector Analysis Paper

Wholesale and Retail, Hotels and Restaurants                                       Introduction
                                                                                   This section provides an overview of the wholesale and retail, hotels and
                                 Summary                                           restaurants sector in Walsall, and reviews some of the most important sub sectors
                                                                                   in more detail. It is important to note that whilst retail companies generally serve a
                                                                                   local market, wholesalers are not dependent on local demand.
       The wholesale and retail, hotels and restaurants sector is the largest
        sector in Walsall in employment terms, accounting for 24% of total         Sources of information used to produce the profile include national and regional
        employment or almost 23,800 jobs.                                          research studies, including the IER / UKCES Working Futures report 2007-2017,
                                                                                                                                                  12
                                                                                   AWM Cluster Plans and documents and sector specific reports . Much of the data
       The majority of employment is accounted for by retail (14,046),
                                                                                   on the sector in Walsall is drawn from official statistics including the Annual
        although numbers are substantial in distribution (5,076) and
                                                                                   Business Inquiry. Projections and information on productivity and output levels are
        restaurants and catering (4,136).
                                                                                   taken from the West Midlands Regional Observatory‟s IPM model. The sector
       Along with manufacturing, employment in the wholesale and retail,          profile also draws on the findings of the Walsall Business Survey 2010,
        hotels and restaurants sector has declined since 1998, with 1,100          consultations with sector and local economic experts and discussions with Walsall
        fewer people employed by 2008.                                             businesses and business support / representative organisations undertaken as
                                                                                   part of the sector analysis study.
       Job losses were concentrated amongst females, whilst the number of
        male employees in the sector rose slightly. Nearly 60% of jobs lost        Drivers of Change
        were full-time positions.
                                                                                   The economic downturn has had a negative impact on activity in the wholesale and
       Due to the large numbers employed, the sector makes the third              retail, hotel and restaurants sector as a whole. Consumer spending has been hit
        largest contribution to Walsall‟s GVA. However, productivity in the        amidst job losses, economic uncertainty and the housing downturn, although some
        sector is low with GVA per FTE employee just over £29,500.                 sub sectors have fared better than others. The key drivers of change for the sector
                                                                                   are:
       The retail sub-sector is the only one to have experienced employment
        growth since 1998, and is highly represented in Walsall compared to                Long term increased income and personal expenditure: the past twenty
        the national average. In contrast, employment in the hotels and                     years has witnessed an increase in personal consumption as incomes have
        accomodation sub-sector has fallen significantly since 1998.                        risen and the costs of many goods, such as clothes, have reduced. This
                                                                                            trend is likely to continue in the medium to long term, increasing demand in
       The number of workplaces within Walsall has fallen by nearly 10%
                                                                                            many parts of the retail, leisure and entertainment sectors, including hotels
        since 1998, a trend matched at national level.
                                                                                            and restaurants.
       A far higher proportion (23%) of the sector‟s employment in Walsall is
                                                                                           Changing consumer trends: greater price sensitivity among consumers is
        concentrated in large firms (employing more than 200) than in the
                                                                                            expected to increase as technological changes enable the wider availability
        Black Country, regionally or nationally.
                                                                                            of price information. Similarly, the growth in internet usage and the
                                                                                            emergence of social websites will continue to provide consumers with
                                                                                            greater control in the buying process through product and service reviews.
                                                                                           e-commerce: has caused fundamental changes in the sector, with most
                                                                                            retailers not only having an online presence and anticipating major growth in
                                                                                            their e-commerce activities and turnover.

                                                                                   12
                                                                                        NESTA (2007) Innovation in the UK Retail Sector
                                                                                        DTI (2003) Competitive Analysis of the Retail Sector in the UK


                                                                                                                                                            73
                                                          Walsall Sector Analysis Study – Sector Analysis Paper

     Sustainability/localism: climate change places increased pressure on
      retailers to demonstrate greater social responsibility adopting more
      sustainable processes (including ethical sourcing of inputs). Consumers are
      becoming more concerned with issues such as health, environment, climate
      change and fair trade which will impact on spending choices.
     Market concentration: an increase in merger and acquisition activity of
      retailers and hoteliers will be a continuing feature, although e commerce is
      providing opportunities for niche businesses.

The Wholesale and Retail, Hotels and Restaurants Sector in
Walsall
The wholesale and retail, hotel and restaurants sector is the largest sector in
Walsall, accounting for 24% of the total employment or almost 23,800 jobs. The
sector is one of two declining sectors in the Borough, having lost over 1,000 jobs
since 1998; however its share of total employment has remained unchanged.
Wholesale and retail, hotel and restaurants is the third largest sector in terms of
GVA, having generated £612m in 2008, which equates to slightly less than 18% of
total GVA and an increase of £32m on the 2006 level. When compared to other
sectors, productivity is relatively low with average GVA per FTE of around £29,500,
the lowest of all sectors (as it is elsewhere in the UK).
Wholesale and Retail, Hotels and Restaurants
                        1998         2008              Change        % Change
Workplaces                 2,736        2,483              -253           -9%
Employment                24,855       23,742            -1,113           -4%
                                                                                                                                                                 Source: ABI 2008
Male employees            11,744       11,994               250            2%           Note: The Location Quotient is a measure of the concentration of industry in an area
Female employees          13,111       11,748            -1,363          -10%           compared to the national average. It produces an index whereby a score of 1 indicates the
Part time employees       10,366        9,901              -465           -4%           industry employment concentration is the same both in Walsall and nationally, more than 1
Source: ABI 2008                                                                        represents a higher concentration and less than 1 a lower concentration.

Sub-Sector Employment                                                                   Distribution of Employment and Workplaces
The sector covers wholesale, retail, hotels and restaurants. The retail sub-sector is   The decline in employment in the sector experienced in Walsall is mirrored in the
the largest as well as the only sub-sector to have experienced employment growth        rest of the Black Country, where the fall in the number of jobs has been slightly
since 1998, employing over 14,000 people.                                               higher (5% compared to 4% in Walsall). This is in contrast to increases at the
                                                                                        regional and national level between 1998 and 2008.
Both the wholesale and retail sub-sectors are strongly represented in Walsall
compared to the national average. Employment in the restaurants and hotels sub-
sectors has declined since 1998, and are significantly under-represented when
compared to the national average.




                                                                                                                                                                   74
                                                         Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                      Distribution of Wholesale and Retail, Hotels and Restaurants Workplaces by Size
Wholesale and Retail, Hotels and Restaurants Employment                               Band, 2008
                              Employment                Change, 1998 -                                 1-10            11-49           50-199        200+          Total
                                                             2008                                      Employees       Employees       Employees     Employees
                 1998 No.      %     2008 No.     %      No.       %                                       No.    %        No.     %      No.     %    No.    %        No.
Walsall              24,855     24      23,742     24     -1,113      -4              Walsall            2,083 84%         334 13%         51   2%      15 1%        2,483
Black Country      112,919      25     106,720     24     -6,199      -5              Black Country      9,367 83%      1,575 14%         280   2%      51 0%       11,273
West Midlands      540,441      24     556,449     24    16,008        3              West Midlands     49,587 84%      8,170 14%       1,288   2%     259 0%       59,304
England          5,155,857      24   5,419,154     23   263,297        5              England          483,276 83% 80,652 14% 12,255            2% 2,603 0% 578,786
Source: ABI 2008                                                                      Source: ABI 2008

In 2008 there were just under 2,500 wholesale and retail, hotels and restaurants            Micro and small workplaces account for almost 60% of employment in the retail
workplaces in Walsall, a fall of 9% on ten years earlier. This is greater than the          sector. The 15 large workplaces (employing 200 or more) account for more than a
decrease in employment and has resulted in a slight increase in the average                 fifth of employment in the sector (23%), a higher proportion than in the Black
number of jobs per workplace in Walsall to 9.4 in 2008.                                     Country, regionally or nationally, although low when compared to other sectors.
Wholesale and Retail, Hotels and Restaurants Workplaces                                     The number of workplaces is likely to be an overestimate of the number of
                             Workplaces               Change, 1998 - 2008                   businesses, as in the retail sector in particular, many businesses will have multiple
                1998 No.      %    2008 No.    %        No.          %                      outlets and locations.
Walsall              2,736     33     2,483      31       -253          -9                  Distribution of Wholesale and Retail, Hotels and Restaurants Employment by
Black Country        8,938     26    11,273      31      2,335         26                   Workplace Size Band, 2008
West Midlands      59,308      33    59,304      29         -4           0                                      2008, % of area total
England          572,070       32   578,786      27       -253          -9                                              1-10          11-49        50-199         200+
Source: ABI 2008
                                                                                            Walsall                     29.0            30.6          17.7         22.7
The profile of Walsall‟s wholesale and retail, hotels and restaurants workplaces is         Black Country               29.5            31.6          22.1         16.9
similar to the regional and national profile (and the Borough‟s overall workplace           West Midlands               30.1            31.3          19.9         18.8
base). The majority of workplaces in the sector in Walsall have fewer than ten              England                     30.4            31.6          19.4         18.6
employees (84%), and only fifteen workplaces have 200 or more employees. Other              Source: ABI 2008
key findings are:
        Walsall has seen a 36% increase in workplaces employing over 200,
         from 11 to 15, despite an overall decline in the number of workplaces
         since 1998.
        The number of micro businesses in the sector has fallen by 210 since
         1998, a decline of 9%.




                                                                                                                                                                    75
                                                        Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                      Change in Wholesale and Retail, Hotels and Restaurants Employment, 2003-
                                                                                      2008
The following map provides an indication of the areas in the Black Country having
the highest concentration of employment in the wholesale and retail, hotels and
restaurants sector. The town centre shows the greatest concentration, particularly
around Birchills.
Wholesale and Retail, Hotels and Restaurants Employment in Walsall and the
Black Country, 2008




                                                                                                                                               Source: ABI, 2008




                                                                 Source: ABI, 2008

The following map shows employment change in the wholesale and retail, hotels
and restaurants sector since 2003. The largest gains and losses in the Black
Country have been outside the Borough. Within Walsall, the largest gains have
been in Leamore along with gains in the south east of the Borough, while the
steepest decline was around New Mills in the south of the Borough.




                                                                                                                                                   76
                                                                    Walsall Sector Analysis Study – Sector Analysis Paper

GVA and Productivity
                                                                                                                                       Output per FTE Worker, by Sector
The wholesale and retail, hotels and restaurants sector is the third largest in terms                                 £87,854
                                                                                                          60,000
of GVA in Walsall, contributing £611.7m to the Walsall economy in 2008, 18.3% of
the total. This is of a similar scale to financial, professional and business services                    50,000
and public services sector.                                                                               40,000

                                Contribution to Walsall GVA 2008, by Sector                               30,000




                                                                                                      £
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                                                                                                                                               GVA per FTE   Walsall Average




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                                                                     Source: WMRO, IPM 2010

While wholesale and retail, hotels and restaurants is the largest employment sector
in the Borough, its proportionally smaller contribution to GVA reflects low levels of
productivity. The sector has the second lowest level of GVA in the Borough. Output
per FTE in 2008 was £29,697, over £5,250 lower than the Borough wide average
(£34,949). This highlights the lower value nature of the sector, with the sector‟s
GVA per FTE in Walsall largely in line with the regional sector (£29,680).




                                                                                                                                                                                   77
                                                           Walsall Sector Analysis Study – Sector Analysis Paper

Projections       for    the    Wholesale         and     Retail,     Hotels     and      anticipated to increase (by £24m and £13m respectively), in contrast to
                                                                                          employment decline, reflecting productivity increases.
Restaurants Sector

Wholesale and retail, hotels and restaurants employment is projected to                                                              Largest Net GVA Increase 2008 - 2020
decline by around 1,600 jobs between 2008 and 2010 to 24,140. The decline (-6%)            120
is slightly lower than the regional average (-7%). Post 2010, employment is
projected to increase to 24,780 with the creation of over 600 jobs. The growth             100
indicates that recovery in the sector is slower than the regional average (+3%
compared to +5%) and overall between 2008 and 2020 there is a net decline of                80
just over 1,000 jobs – around 1% of the current employment base.
                                                                                            60
Wholesale and Retail, Hotels and Restaurants Employment
                        2008          2020      Change                % Change              40
Walsall                   25,813       24,779      -1,034                    -4
West Midlands            604,800      590,900     -13,900                    -2             20
Source: WMRO 2010
                                                                                             0
The decline is driven by the distribution sub-sector, which is projected to lose




                                                                                                                                                                                                                                   Misc. Services
                                                                                                                                Retailing




                                                                                                                                                                                                      Education
                                                                                                                                                                       Banking and
                                                                                                                                            Professional




                                                                                                                                                                                     Distribution
                                                                                                 Social Work


                                                                                                               Communications




                                                                                                                                                           Insurance




                                                                                                                                                                                                                  Other Business
                                                                                                 Health and




                                                                                                                                              Services




                                                                                                                                                                         Finance
around 1,230 jobs – the fourth largest net decrease in the Borough. Hotels and




                                                                                                                                                                                                                     Services
catering is also projected to decline – a continuation of the sub sector‟s long term
trend, while retail is projected to grow with the creation of just under 400 jobs. This
is the second largest net employment increase in the Borough.
While the sector share of employment is projected to increase slightly (from 23% in
2008 to 24% in 2020), this is a result of a lack of growth across a number of other                                                                                                                 Source: WMRO, IPM 2010
sectors, and the Borough generally. The strong growth in the public sector is
expected to result in wholesale and retail, hotels and restaurants becoming the           Productivity is projected to increase in all of the wholesale and retail, hotels and
second largest sector in employment terms in Walsall.                                     restaurant sub-sectors. Wholesale and retail is expected to experience an above
                                                                                          average increase (25% compared to 21%) increasing GVA per FTE by 7,730 to
By 2020 wholesale and retail, hotels and restaurants GVA is expected to                   £38,191. In contrast the growth in productivity in Walsall‟s hotel and catering sector
increase by £111m to £723m (18%) despite the decline in employment, reflecting            is expected to be below the overall average (19% compared to 21%), with a net
increasing productivity in the sector. The increase is however below the regional         increase of just over 4,800 taking GVA per FTE to £30,833.
average.
                                                                                          In both cases these will remain below the overall average productivity levels in the
Wholesale and Retail, Hotels and Restaurants GVA £m                                       Borough, and the hotel and catering sector will continue to have the lowest level of
                        2008         2020      Change                 % Change            GVA per FTE. Although this reflects the lower value nature of the sector with
Walsall                      612         723         111                    18            productivity levels anticipated to continue to be in line with the regional average.
West Midlands            14,257       17,194       2,938                    21
Source: WMRO 2010
                                                                                          The following chart shows how the sector in Walsall is projected to perform,
                                                                                          relative to the Walsall economy as a whole. The sector‟s GVA growth is expected
The increase is largely driven by the retail sector, the largest sub-sector, with an      to outpace the Borough wide average, with employment in the wholesale and
expected increase of £70m (30%), to £318m in 2020. This is in line with regional          retail, hotel and restaurants sector experiencing a less severe decline than the total
trends and represents the third largest net increase in GVA in the Borough. The           employment base.
GVA generated by the distribution and hotels and catering sub sectors is also



                                                                                                                                                                                                                            78
                                                         Walsall Sector Analysis Study – Sector Analysis Paper

              Distribution, Hotels & Restaurants Forecast GVA and                      compared to 15%). The latter would allow such businesses to accommodate more
                                                                                       customers on a daily basis.
              Employment
                                                                                       The most commonly citied barrier to growth in the sector is market limitations and
                                                                                       competition. Although this was mentioned by two in ten wholesale and retail, hotels
   120                                                                                 and restaurants businesses compared to half of the total business sample.
                                                                                       Businesses in the sector were more likely than others to report that future growth
                                                                                       was limited due to a recent period of expansion.
   110                                                                                 Market and Supply Chains
                                                                                       Wholesale and retail, hotel and restaurant businesses are the most localised with
                                                                                       the highest proportion of companies (83%) serving clients within Walsall. This
   100                                                                                 largely reflects the nature of the sector with retail outlets and restaurants serving
                                                                                       local residents. The sector also has above average levels of customers within the
                                                                                       Black Country and the West Midlands Metropolitan region.
    90                                                                                 The town centre‟s ability to draw customers from a wider area was commented on
         2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020              during the sector study workshops. In particular the discussion focused on the
                                                                                       need to ensure that there is a critical mass of outlets, cohesion and connectivity
      Dist, Hotels and Rest GVA                Dist, Hotels and Rest Employment        between outlets and services and a well balanced offer for both the daytime and
      Walsall average GVA                      Walsall average employment              evening economy. This would allow the town centre‟s offer to be articulated to
                                                                                       market the Borough.
                                                           Source: WMRO, IPM 2010      The sector suppliers are less localised and there are distinct differences between
                                                                                       the retail and hotel and restaurant supply chains. While a below average proportion
The Needs of the Sector in Walsall                                                     of hotels and restaurants purchase supplies from within Walsall (57% compared to
                                                                                       71%), they are most likely to purchase from within the Black Country (78%) and
The business survey undertaken as part of the Sector Analysis included responses       West Midlands (67%).
from 64 wholesale and retail, hotels and restaurants companies located in the
Borough (accounting for 19% of the total business sample). This section draws on       In contrast, retail had the highest proportion of businesses that purchase supplies
the analysis of the survey as well as consultations with sector experts and local      from overseas (37% compared to 29%) and the second highest purchasing from
economic experts in Walsall.                                                           across the UK (67%). This reflects the type of businesses within the sector, many
                                                                                       of which are nationally owned chains, which are able to take advantage of
Growth Prospects                                                                       economies of scales with suppliers located across the UK and internationally.
Businesses in the hotel and restaurant sector are optimistic about the future. The     Innovation
sector has the highest proportion of businesses expecting to grow over the next
two years (88% compared to the average of 57%). Wholesale and retail                   Businesses in the wholesale and retail, hotel and restaurant sector are slightly less
businesses were less optimistic with just over half (56%) expecting growth.            likely than average to report a culture of innovation. The most commonly cited
                                                                                       innovation activity amongst retail businesses is adopting new technologies and
The projected growth was primarily attributed to expansion within existing markets     practices (59%), although this was lower than the average across the total
(86% of hotels and restaurants and 76% of retail businesses). Retail businesses        business sample (62%). Retail businesses were more likely than others to have
were also more likely to expect growth as a result of developing a new product or      adopted new business models (57%) and refined product design and usability
service (cited by 46% compared to 34% in total sample), while hotels and               (53%).
restaurants were more likely to attribute growth to the expansion of facilities (29%



                                                                                                                                                               79
                                                            Walsall Sector Analysis Study – Sector Analysis Paper

The hotels and restaurants sector had the highest proportion of businesses that            The development of a major new supermarket store within the town centre has the
have adopted new business models (71%). It also had an above average level of              potential to both revitalise the shopping centre and take further trade away from
businesses that had refined product design and usability (57%). However, the level         some of the town centre stores. Ensuring more effective and clearer links within
of businesses that had been involved in collaborations (29% compared to 50% in             the town centre are key to ensuring that this development is a positive for the town,
the total sample) and adopting new technologies and practices (25% compared to             larger numbers of linked trips are generated and some of the lost expenditure to
63% in the total sample) was particularly low. The level of retail companies               other areas is recaptured. Better integration with the town centre will also help to
collaborating on innovation activities was also below the average (49%). This links        ensure that expenditure is maximised from other developments, for instance the
with findings from the consultations where comments were made regarding a lack             presence of hundreds more students within the town attending the new College
of general collaboration across the sector. While the businesses are in competition        supports town centre businesses.
this may affect the town centres ability to present a joined up offer.
                                                                                           The quality of the retail and service offer within the town centre has a major impact
Low carbon opportunities have been identified by a higher than average (13%)               on perceptions of the town, and indirectly impacts on the towns role as an
proportion of retail outlets (19%) and hotel and restaurants (29%). There is also a        employment centre for sectors such as financial and professional services and
high proportion of hotel and restaurants which are currently considering low carbon        creative industries to flourish. Changing the image, perceptions, function and role
opportunities. Time constraints were the main challenge businesses reporting               of the town centre should be a key priority over the coming years given the knock
facing in exploiting low carbon opportunities followed by insufficient knowledge of        on effect on a number of areas of the economy.
the sector. Hotels and restaurants, along with finance, also had the highest
proportion of businesses reporting that they felt they had a lack of relevant skills for   There is a need to consider the role of the District Centres as retail and leisure
the low carbon sector (25%).                                                               destinations, and as employment centres for small and medium sized companies.
Skills Needs                                                                               District Centres play an important role in business and community perceptions of
                                                                                           Walsall as a place to invest and live.
The proportion of respondents reporting skills gaps is marginally below the
average for retailers - 14% compared to 18% across the wider sample. Where                 In choosing business premises, size of the available premises (66%), proximity to
reported, retailers reported a relatively high rate of gaps in ICT skills. For hotels      the labour force (65%) and quality of the local environment (62%) are the most
and restaurants, the proportion is slightly above average and gaps exist in                important factors. There are fewer business limitations caused by premises
technical skills.                                                                          reported by the sector relative to the wider sample. The most common are
                                                                                           expensive lease terms (30%), lack of space (26%) and lack of security (22%).
Four in five businesses undertake staff training and this is broadly in line with the
total sample profile. The main reasons for retailers, hotels and restaurants not           One third of businesses are looking to upsize their property in the next three years,
undertaking training are cost and a sense that available training is not tailored to       while the majority (61%) expect to remain in the same premises.
their needs. In line with other sectors, the majority of training in the sector is         Other Support Needs
undertaken in-house, and the proportion reporting training by Walsall based
companies is below the average as a whole.                                                 The extent to which retailers, hotels and restaurants face business constraints is
                                                                                           largely in line with the Walsall average. Sector businesses most frequently report
Economic Infrastructure
                                                                                           being restricted by market competition (70%) and this rate is slightly above the
The underperformance of Walsall town centre has been a recurring theme                     average for Walsall. In contrast, the sector is less likely than average to face
throughout the research and consultation undertaken as part of this sectoral study.        constraints in accessing finance (cited by 32% of respondents).
This includes the lack of a quality evening and late night economy and significant
retail expenditure lost to other centres within the West Midlands. Despite this,
                                                                                           Opportunities for the Sector in Walsall
some elements of the current retail offer are adequate for a town of Walsall‟s size        Although the wholesale and retail, hotels and restaurants sector has been
and the town benefits from having a central market area. In addition, there are            declining in Walsall, it is expected to stabilise and recover slightly following the
plans to improve the retail offer through planned development around the St                economic downturn.
Matthews Quarter of the town.
                                                                                           The opportunities include:


                                                                                                                                                                   80
                                                       Walsall Sector Analysis Study – Sector Analysis Paper

   Improving the town centre and in particular developing a competitive retail       Implications and Recommendations
    and evening economy offer to reinforce Walsall‟s sense of place. This will
    help to make the Borough more attractive to office based investors, and           The implications and recommendations arising from the sector profile are:
    provide an attractive environment especially for firms in the financial,                 Major improvement to the town centre is crucial and necessary to the
    professional and business services sector.                                                development of the retail sector and will act as a catalyst for others such
   Selling local produce in local shops and using local produce in local hotels              as financial, professional and business services. There is a need to
    and restaurants. While the nature of the sector, which includes some                      produce a long term spatial plan for the town centre which sets out its
    national outlets and franchises, limits the extent to which a local supply                function in terms of retail, leisure and culture, education, office based
    chain can realistically be developed, there are some opportunities to                     employment and housing. There is also a need to attract investment in
    increase the linkages between local suppliers and local retail outlets,                   the evening and night time economy to expand the town‟s leisure offer.
    hotels and restaurants. The availability and use of local produce is                      If Walsall is going to attract visitors from a wider area it will be important
    becoming an increasing consumer demand and developing this offer                          to ensure that the relevant services and facilities are available, such as
    could help to strengthen the competitiveness of local outlets in the sector.              hotels.

   Increasing linkages between local suppliers and national outlets and                     Increasing collaboration across the sector to ensure that the town
    franchises. While national outlets and franchises will maintain their current             centre offer is cohesive and that the offer can be clearly articulated and
    purchasing patterns, in light of the increasing demand for local produce                  marketed to attract additional visitors. This could be facilitated through the
    amongst customers, large national chains are also beginning to forge                      town and district centre partnerships and the Council‟s business
    more links with local suppliers to enable them to add such products to                    engagement team. Consideration should be given to new mechanisms
    their offer.                                                                              which involve business in improving the centre, such as Business
                                                                                              Improvement Districts.
   Capitalising on the Borough‟s strategic location and attracting wholesale
    businesses to Walsall. The Borough‟s good transport links allow Walsall                  Provide quality sites for distribution investment: the growth of e-
    to position itself as a wholesale hub, serving local retail outlets, hotels and           commerce has led to the growth of companies without a high street
    restaurants as well as those within the West Midlands and, in some                        presence and existing retailers are distributing more goods via distribution
    cases, more widely. This would also help to improve supply chain                          centres. Walsall has a relatively good location and the provision of quality
    linkages within Borough‟s sector.                                                         employment sites could attract new investments and jobs.

   Capturing a larger share of the accommodation market, including budget                   Ensuring that appropriate training and recruitment programmes are
    hotels, taking advantage of Walsall strategic location.                                   in place to help local residents into entry level, customer facing
                                                                                              jobs. This includes projects and programmes that help residents to
   The provision of entry level, customer facing jobs. The sector offers a high              become work ready and to develop basic skills such a punctuality and
    level of entry level jobs with opportunities for progression. New jobs                    reliability. (This was highlighted as an important need in the sector study
    created within the sector present the opportunity for those with lower level              workshops and survey).
    skills and that are currently unemployed to enter the labour market.
    Should Walsall be successful in attracting larger businesses to the                      Ensuring that appropriate progression opportunities and career
    Borough, there could also be the opportunity to develop local recruitment                 paths are available and promoted to young people and residents.
    programmes, which offer guaranteed interviews to encourage people into                    The sector also offers progression opportunities and ensuring that these
    work and help them to become job ready where needed.                                      are appropriately set up will be important to both develop the skills of
                                                                                              those with no or low level qualifications and to attract higher skilled
                                                                                              workers to meet the demand for supervisory and management roles.




                                                                                                                                                               81
                                                       Walsall Sector Analysis Study – Sector Analysis Paper



Creative and Digital Industries
                                                                                     Introduction

                                                                                     This section provides an overview of the creative and digital sector in Walsall, and
                                  Summary                                            reviews some of the most important sub-sectors in more detail.
       The creative and digital sector is currently very small in Walsall,          Sources of information used to produce the profile include national and regional
        employing under 2,000 (2% of total employment).                              research studies, including the IER / UKCES Working Futures report 2007-2017,
                                                                                                                                                            13
       The sector is under-represented in Walsall, lagging the national             AWM Cluster Plans and documents and other sector specific reports . Much of
        average for the sector of 5%, and has the potential to build on its          the data on the sector in Walsall is drawn from official statistics including the
        growth over the past ten years which has created an additional 250           Annual Business Inquiry. Projections and information on productivity and output
        jobs in the Borough.                                                         levels are taken from the West Midlands Regional Observatory‟s IPM model. The
                                                                                     sector profile also draws on the findings of consultations with sector and local
       The sector comprises four sub-sectors: design; ICT; media and new            economic experts and discussions with Walsall businesses and business support /
        media and print and packaging. Almost one-third of employment in             representative organisations undertaken as part of the sector analysis study.
        the creative and digital sector in Walsall is in the design sub-sector.
                                                                                     Drivers of Change
       Employment in each of the four sub-sectors is below the national
        average, although the design and print and packaging sub-sectors are         This section of the profile identifies some the broad drivers of employment and
        closest to the national level.                                               output growth in Walsall‟s creative and digital sector:
       The ICT and media / new media sub-sectors are very small compared                   International competition encouraged by globalisation and trade
        to the national average and have grown relatively slowly over the past               liberalisation led to massive contraction in production operations, although
        ten years.                                                                           high level technical and design functions such as design and product
                                                                                             development were retained in the UK. As the capability of overseas
       The number of workplaces has grown slightly faster than the number                   producers improves, however, there is a threat that these functions will also
        of employees, and the vast majority of workplaces employ fewer than                  be transferred overseas. This means that the designer industry will continue
        ten employees.                                                                       to face increasing pressure from international competition.
       Nationally, creative and digital industries is forecast to grow                     Availability of key skills will remain an important driver of growth in the
        considerably over the next ten years, and is regarded as important to                sector. Obtaining the right balance and appropriate supply of technical skills
        national competitiveness. Walsall has relatively few assets or                       (in areas such as digital technology and multi-platform capability) will
        advantages and will need to create demand and support local                          determine the growth and development of the sector.
        companies to grow.
                                                                                            Technological convergence is driving the development of cross-platform
       The ability of Walsall to attract businesses in creative and digital                 media content in the sector. The continued growth of digital media content,
        sectors is currently hindered by the lack of a critical mass of activity.            including user –led content will cause further losses in the print sub-sector,
        The Borough needs to ensure that adequate flexible, smaller                          as consumers access information electronically.
        incubation space is available for start ups.
                                                                                            Distance and micro-working, the digital technology and connectivity allows
       Opportunities for the sector are linked to growing the Borough‟s                     for working remotely and micro tasking allows access to new markets and
        creative and digital sector and residents working in the sector in                   the provision of specialist services and expertise.
        Birmingham, which has a very large and diverse business base.

                                                                                     13
                                                                                          Skillset (2010) „The Strategic Assessment for the Creative Media Industry‟.


                                                                                                                                                               82
                                                           Walsall Sector Analysis Study – Sector Analysis Paper



The Creative and Digital Sector in Walsall
Creative and digital is relatively small in employment terms, employing almost
2,000 (2% of total employment). The sector is under-represented in Walsall,
lagging the national average for the sector of 5%. creative and digital is one of the
growing sectors in Walsall, adding almost 250 jobs since 1998.
Creative and Digital Industries
                          1998            2008         Change       % Change
Workplaces                     374            428            54          15%
Employment                   1,701          1,946          246           14%
Male employees                 944          1,281          337           36%
Female employees               756            666           -90         -12%
Part time employees            342            441          100           29%
Source: ABI 2008

Sub-Sector Employment
Creative and digital is made up of four key sub-sectors:
        Design is the largest sub-sector, employing almost 650, one third of
         employment in the creative and digital sector. This sub-sector has
         experienced the highest growth since 1998, adding almost 350 jobs.
        ICT employs 490, with a slower average annual growth rate of less than
         2%.
        Media and new media is very small, employing just 270, and increasing                                                                                    Source: ABI, 2008
         by only 16 additional jobs since 1998.                                          Note: The Location Quotient is a measure of the concentration of industry in an area
                                                                                         compared to the national average. It produces an index whereby a score of 1 indicates the
        Print and packaging is the second largest sub-sector, employing almost          industry employment concentration is the same both in Walsall and nationally, more than 1
         550, and the only sub-sector to have declined since 1998.                       represents a higher concentration and less than 1 a lower concentration.

In spite of the growth of most of the sub-sectors, they are significantly under-         Distribution of Employment and Workplaces
represented in Walsall compared to national average, and remain very small in
                                                                                         In the Black Country, creative and digital industries experienced an increase in
relation to the economy as a whole. In contrast to many other areas, particularly
                                                                                         employment, creating over 1,000 additional jobs and growing by 12% between
the larger cities, Walsall did not capture significant new investment and
                                                                                         1998 and 2008. Walsall‟s share of employment in the sector is about one-fifth,
employment over the past ten years. As a consequence the sector is under-
                                                                                         which is less than its overall share of total employment, which indicates an under-
developed with relatively few assets to build upon. The single exception is design,
                                                                                         representation of the sector. Despite this, the Borough‟s employment growth in
although employment numbers are still below the national average.
                                                                                         creative and digital since 1998 is on par with the national average and slightly
                                                                                         above the Black Country‟s employment growth rate.




                                                                                                                                                                     83
                                                          Walsall Sector Analysis Study – Sector Analysis Paper



Creative and Digital Industries Employment                                              Distribution of Creative and Digital Industries Employment by Workplace
                               Employment                       Change, 1998 - 2008     Size Band, 2008
                  1998 No.      %    2008 No.         %           No.          %                             2008, % of area total
Walsall                1,509      2      1,946             2         246         14                                  1-10           11-49      50-199          200+
Black Country          8,892      2      9,942             2       1,050         12     Walsall                      39.0            22.0         25.1          13.9
West Midlands        70,245       3     80,867             3      10,622         15     Black Country                39.5            25.2         16.7          18.6
England            984,676        5  1,126,617             5     141,941         14     West Midlands                36.7            23.5         16.3          23.4
Source: ABI 2008                                                                        England                      32.7            20.7         20.5          26.2
                                                                                        Source: ABI 2008
Since 1998, Walsall has increased its number of creative and digital workplaces by
15%, which is below the rate of increase seen in the Black Country and nationally.
                                                                                        The map below illustrates the distribution of employment in creative and digital
Creative and Digital Industries Workplaces
                                                                                        industries in the Black Country. It shows areas with high levels of employment in
                              Workplaces                       Change, 1998 - 2008
                                                                                        the sector are outside of the Borough. Within the Borough, the town centre and
                  1998 No.      %   2008 No.         %           No.          %         Aldridge to the east have the highest number of creative and digital industries jobs.
Walsall                  374      4       428          5             54         15
Black Country          1,659      5     2,097          6            438         26      Creative and Digital Industries Employment in Walsall and the Black Country,
West Midlands        11,794       7    15,968          8          4,174         35      2008
England            171,289        9  210,272          10         38,984         23
Source: ABI 2008

Micro workplaces, with 10 or less employees, account for more than 90% of
workplaces in Walsall and the Black Country. Since 1998 only one workplace
employing 200 or more has been added to the Black Country‟s creative and digital
workplace base and this is based in Walsall.
Distribution of Creative and Digital Industries Workplaces by Size Band, 2008
                 1-10             11-49          50-199         200+          Total
                 Employees        Employees      Employees      Employees
                     No.     %        No.     %     No.     %     No.     %       No.
Walsall              399 93%           23    5%       6    1%       1 0.1%        428
Black Country      1,952 93%          121    6%      21    1%       4 0.2%      2,097
West
Midlands          14,894 93%          879    6%     150    1%      45 0.3%     15,968
England          196,449 93% 10,712          5%   2,499    1%     612 0.3% 210,272
Source: ABI 2008

Walsall‟s micro workplaces account for more than a third of total employment in the
creative and digital sector, whilst its seven largest workplaces (employing 50 or
more) are also responsible for a similar proportion of employment, reflecting their
importance in the sector.

                                                                                                                                                            Source: ABI, 2008



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                                                           Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                                 Close to business support opportunities; and
                                                                                                 Access to a highly skilled and creative workforce
The map below shows where employment gains and losses in the creative and
digital industries sector have been concentrated since 2003. Leamore and the             The ability of Walsall to attract businesses in these sectors is hindered by the lack
west of the town centre have both experienced the largest decrease in                    of critical mass of activity to stimulate innovation. There is also a shortage of
employment.                                                                              flexible, smaller incubation space and the image of the town centre does not
Change in Creative and Digital Industries Employment, 2003- 2008                         support the attraction of knowledge based businesses. The town centre suffers
                                                                                         from some of its major assets (the Art Gallery, FE offer and the Theatre) being
                                                                                         fragmented and there is no distinctive creative/cultural quarter in which businesses
                                                                                         flourish.

                                                                                         Opportunities for the Sector in Walsall
                                                                                         The creative and digital sector in Walsall is small and the length of time and the
                                                                                         scale of support needed to generate significant employment and GVA should not
                                                                                         be underestimated (as seen in Sheffield Cultural Industries).
                                                                                         As the sector grows nationally, there are opportunities to develop the sector in the
                                                                                         Borough and also to benefit from the growth occurring in existing creative and
                                                                                         digital hubs. The opportunities include:
                                                                                                 Expanding Walsall‟s emerging creative and digital sector, creating jobs
                                                                                                  and generating wealth. This includes growing existing companies as well
                                                                                                  as attracting new companies to the Borough. This also presents the
                                                                                                  opportunity to develop Walsall‟s business services sector.
                                                                                                 Walsall residents working within the sector in nearby major creative and
                                                                                                  digital centres such as Birmingham. In some cases, the jobs will be more
                                                                                                  highly skilled and better paid that those available within Walsall.
                                                                                                 Understanding and building on the design sub sector, particularly where it
                                                                                                  relates to manufacturing products and services and new media.
                                                                     Source: ABI, 2008   Implications and Recommendations
Economic Infrastructure Needs of the Sector                                              The implications and recommendations linked to the development of the creative
                                                                                         and digital sector are:
Although the sector is diverse, typically creative and digital businesses require:
                                                                                                 The growth of the sector, like financial, professional and business
        Small workspaces (the vast majority of workplaces involve fewer than ten                 services, depends on the availability of attractive and high quality office
         employees) - these may include incubation space often in buildings which                 space. There is a need to ensure that adequate flexible, smaller
         contain a staffed reception service;                                                     incubation space is available to attract companies to the Borough.
        A location close to assets such as cultural attractions, HE institutions or              There may be an opportunity to use redundant office space which could
         colleges is desirable – a thriving cultural and educational environment is               arise from the rationalisation of public sector services.
         often important;                                                                        It will also be important to update the vision and delivery plans for the
        A location which is at the heart of knowledge and business networks;                     town centre and developments such as Gigaport (or a similar scheme)



                                                                                                                                                                 85
                                                    Walsall Sector Analysis Study – Sector Analysis Paper

    to ensure a suitable pipeline of new and high quality office
    accommodation is available. This is likely to require a phased approach
    and public sector intervention to de-risk early investment.
   Appropriate office space also needs to be accompanied by a thriving town
    centre to make Walsall an attractive location to the sector. Developing a
    clear vision for the town centre which focuses on the development
    of both the daytime and evening economy is a key priority. This will
    also support the development of the financial, professional and business
    services sector.
   Focus on higher level skills training (NVQ level 3 and above) to
    ensure that residents have the appropriate skills to work in the sector in
    Walsall and elsewhere. This requires close partnership between Walsall
    College and the emerging sector. The lack of a higher education facility
    will limit the extent to which some skills can de developed though the
    education provision in Walsall. Apprenticeships in local companies may
    be a way of keeping creative talent in the Borough and attracting young
    people after they graduate.
   Providing business support to the design sub sector focusing on
    assisting companies to access new markets and linking design services
    to the needs of Walsall businesses, particularly the manufacturing base.




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                                                      Walsall Sector Analysis Study – Sector Analysis Paper

Manufacturing – Revised Sector Profile                                              Introduction
                                                                                    The Manufacturing sector is wide-ranging both in terms of the output produced and
                                                                                    the processes used to produce it. The sector incorporates activity ranging from
                                Summary                                             small-scale craft producers to major industrial production, and covers products
      Manufacturing is one of Walsall‟s largest employment sectors,                ranging from food and drink to musical instruments to the manufacture of nuclear
       employing over 18,000 people in 2008. This accounts for 18% of total         fuel. Of particular importance to the Walsall economy, in terms of employment
       employment compared to 10% nationally.                                       numbers, are the following sub-sectors:

      Manufacturing continues to make the largest contribution to Walsall‟s                  Basic metals and fabricated metals
       GVA, although the absolute value has fallen since 2006. The sector is                  Machinery and equipment
       one of the most productive in Walsall in terms of output per FTE
       employee.                                                                              Motor vehicles and transport equipment and
                                                                                                                                                                      14
      Between 1998 and 2008, manufacturing employment in Walsall                             Other manufacturing, including waste management and recycling
       declined by almost half (46%) with the loss of over 15,000 jobs. Male
                                                                                    The manufacture of leather and leather goods, whilst smaller in employment terms,
       employment in the sector fell by over 10,500 (two-thirds of the total
                                                                                    is one of the Walsall economy‟s key niche sectors, with a historic specialism and
       fall), and female employment by 4,500. Over 90% of the jobs lost were
                                                                                    international reputation for quality production.
       full-time positions.
                                                                                    This section provides an overview of the Manufacturing sector in Walsall, and
      Economic projections suggest the sector will continue to decline, in
                                                                                    reviews some of the most important sub-sectors in more detail. Sources of
       terms of employment, the value of total output, and relative importance
                                                                                    information used to produce the profile include national and regional background
       to the Walsall economy. The priority should be on managing change
                                                                                    research studies, including the IER / UKCES Working Futures report 2007-2017
       and working to stabilise employment in key sub-sectors and niches
                                                                                    and AWM Cluster Plans.
       where possible.
                                                                                    Much of the data on the sector in Walsall is drawn from official statistics including
      The majority of manufacturing sub-sectors are more highly
                                                                                    the Annual Business Inquiry. Projections and information on productivity and
       concentrated in Walsall compared to the national average. The
                                                                                    output levels are taken from the West Midlands Regional Observatory‟s IPM
       manufacture of non-metallic minerals and the manufacture of basic
                                                                                    model. The sector profile also draws on the findings of the Walsall Business
       metals and fabricated metals, both more than five times the national
                                                                                    Survey 2010, consultations with sector and local economic experts and
       average, are forecast to contract most significantly.
                                                                                    discussions with Walsall businesses and business support / representative
      Walsall‟s manufacturers have survived by adapting to international           organisations undertaken as part of the sector analysis study.
       competition, moving up the value chain or out-sourcing production to
       lower cost economies. The exchange rate has a direct bearing on the          Drivers of Change
       health of the sector locally, with many companies reliant on export          Reviewing and summarising the drivers of change that will influence the
       markets.                                                                     development of such a large and complex sector is a considerable challenge.
      To continue to survive the sector will need to upskill its workforce,        Different manufacturing sub-sectors, and different firms within each sub-sector, will
       move into higher value added areas and access new and emerging               each be subject to a unique set of drivers and challenges. This section of the
       markets.                                                                     profile highlights some of the broad drivers affecting the manufacturing sector in
                                                                                    Walsall.

                                                                                    14
                                                                                      The definition of manufacturing used in this profile includes all aspects of waste
                                                                                    management and recycling including waste treatment, transfer and disposal, as per the 2007
                                                                                    Standard Industrial Classification.


                                                                                                                                                                 87
                                                        Walsall Sector Analysis Study – Sector Analysis Paper

A 2008 BERR report identified five dynamics of change that were driving the           The Manufacturing Sector in Walsall
manufacturing sector globally. These include: the prevalence and complexity of
global value chains; the accelerated pace of technology exploitation; the growing     Manufacturing is one of Walsall‟s largest employment sectors, employing over
importance of investment in intangibles; the increased recognition of the             18,000 in 2008. This accounts for 18% of total employment, a substantial decline in
importance of investment in people and skills; and a move towards a low carbon        its share since 1998 when it accounted for 33% of total employment. Despite this
economy. For Walsall‟s manufacturing sector the key drivers of change in              decline, the manufacturing sector remains highly concentrated in Walsall when
employment and output are the following:                                              compared to its share nationally of 10%.

    International competition has been a major driver of significant structural      Between 1998 and 2008, manufacturing employment almost halved (decline of
     changes in the manufacturing sector. Many local manufacturing companies          46%) with a loss of over 15,000 jobs. This decline is more severe than that
     have been unable to keep pace with developments in other countries, in           experienced in the Black Country as a whole (decline of 42%) and nationally
     particular the low labour costs of developing economies in Central and South     (33%). Walsall‟s experience is very similar to the other Black Country authorities,
     America, South East Asia, China and India. The decline of Walsall‟s textile      highlighting the overall dependence of this area on manufacturing, and more
     sub-sector is an example of this. Changes in the value of sterling relative to   specifically less advanced and robust sub-sectors which remain at risk from low
     the currencies of major competitors will impact on the competitiveness of        cost competition overseas.
     Walsall‟s manufacturing sector over the coming years.                            Manufacturing
    Global supply chains, rapid developments in information and                                                 1998          2008         Change       % Change
     communication technologies have enabled the separation of different              Workplaces                   1,565         1,040          -525         -34%
     business functions, leading to increased specialisation and sub-contracting.     Employment                  33,722        18,275       -15,447         -46%
     Many auxiliary roles (e.g. cleaning and catering) and higher level functions     Male employees              24,586        13,983       -10,603         -43%
     (R&D and design) have been separated from mainstream activities, with            Female employees             8,284         3,726        -4,558         -55%
     volume production moving to low cost producers overseas. This has led to         Part time employees          2,223         1,251          -972         -44%
     substantial decline in employment in the sector.                                 Source: ABI 2008
    Globalisation brings many benefits including increased international trade,      Manufacturing is the largest sector in terms of GVA, contributing £740m in 2008,
     increased skills mobility across countries and increased FDI. These benefits     which equates to around 22% of the Borough‟s total GVA. Although significant, this
     come with increased competition, especially from international competitors,      represents a decline of over £100m from GVA generated in 2006, reflecting the
     which place additional pressure on local producers. Globalisation makes it       continued decline in manufacturing output. Productivity is considerably higher than
     difficult for Walsall producers to compete on a cost basis, which means a        the Walsall average, with the average GVA per FTE employee being over £40,000,
     shift towards higher value added and higher productivity goods and services.     which makes manufacturing one of the most productive sectors in Walsall.
     However success in higher value products is strongly dependent on the skills
     of the local workforce.
    The low carbon economy creates new opportunities as well as challenges
     for manufacturing firms. The Coalition Government has committed over
     £200m towards the development of low carbon technologies including
     offshore wind technology and manufacturing at port sites and up to £1bn of
     investment to create one of the world‟s first commercial scale carbon capture
     and storage demonstration plants. In Walsall these are most likely to be
     linked to supplying parts for low carbon developments elsewhere. Not all of
     these investments will benefit manufacturing, but there will be opportunities
     for firms within the sector to diversify into the low carbon market.




                                                                                                                                                            88
                                                               Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                                        has tripled since 1998 (although remains small [c. 200] in absolute
Sub-Sector Employment                                                                                   terms).
                                                 15
Manufacturing comprises twelve sub-sectors which vary in their size, importance
to the Borough and employment growth. They are:
         Food, beverages and tobacco;
         Chemicals and fuel;
         Textiles and textile products;
         Leather and leather products;
         Rubber and plastic;
         Machinery and equipment;
         Paper and paper products;
         Wood and wood products;
         Transport equipment including motor vehicles;
         Basic metals and fabricated metals;
         Non-metallic minerals; and
         Other manufacturing, including waste management and recycling.
Employment in eight sub-sectors is above the national average, reflecting Walsall‟s
continued dependence on the Manufacturing sector. All sub-sectors have
experienced an annual decline in employment, with the manufacture of textiles and
textile products experiencing the greatest average annual decline since 1998.
Other key sub-sectoral trends are that:
         The manufacture of leather and leather products has the highest
          location quotient and still employs nearly 1,000 people in the Borough,
          although employment has fallen by 400 since 1998.
         The manufacture of non-metallic minerals and the manufacture of
          basic materials and fabricated metals have high location quotients,
                                                                                                                                                                       Source: ABI 2008,
          with employment more than five times the national average.                          Note: Chart excludes the manufacture of leather and leather products which has a location
         The manufacture of basic materials and fabricated metals is the most                quotient of 23.8
                                                                                              Note: The Location Quotient is a measure of the concentration of industry in an area
          important sub-sector, employing over 8,000, accounting for almost half of
                                                                                              compared to the national average. It produces an index whereby a score of 1 indicates the
          total manufacturing employment (47%) and nearly 9% of total                         industry employment concentration is the same both in Walsall and nationally, more than 1
          employment in Walsall.                                                              represents a higher concentration and less than 1 a lower concentration.
         The manufacture of transport equipment, paper and paper products
          and machinery and equipment are the other important sub-sectors.
         Within the other manufacturing sub-sector, job losses in furniture
          manufacturing have been partially offset by growth in recycling, which

15
  The manufacture of leather and leather products has not been separately identified in the
bubble diagram analysis due to its exceptionally high location quotient (23.8 times the
national average).


                                                                                                                                                                          89
                                                         Walsall Sector Analysis Study – Sector Analysis Paper

Employment in many sub-sectors remains at risk from the increasing quality of          The greatest proportionate decline in manufacturing workplaces has occurred
production in countries such as China and India, and the considerable wage             among the larger workplaces. Since 1998, Walsall has lost more than half of its
differential between these countries and Walsall which makes it very difficult for     medium-sized manufacturing workplaces (decline of 51%), which is significantly
Walsall manufacturers to compete on cost.                                              above the losses experienced in the Black Country (decline of 35%) and nationally
                                                                                       (decline of 31%).
Distribution of Employment and Workplaces                                              Manufacturing Workplaces by Size Band, 2008
Employment in the sector in Walsall is nearly twice as high as in England as a                     1-10 Employees   11-49            50-199           200+           Total
                                                                                                                    Employees        Employees        Employees
whole and remains higher than the regional and Black Country average, despite a
                                                                                                        No.     %       No.    %        No.     %        No.   %         No.
faster rate of decline in the 1998-2008 period. This leaves the Borough at risk from
                                                                                       Walsall          707   68%       249  24%         72    7%         12  1%       1,040
the continued decline in employment which is expected in the future.                   Black
Distribution of Manufacturing Employment                                               Country        2,963   68%     1,035    24%      300     7%        48    1%     4,346
                                                                                       West
                               Employment                           Change, 1998 -
                                                                                       Midlands      12,987   74%     3,381    19%      992     6%       245    1%    17,605
                                                                         2008          England      107,983   78%    22,541    16%    6,749     5%     1,789    1%   139,062
                    1998 No.        %      2008 No.          %         No.     %       Source: ABI 2008
Walsall                 33,722      33        18,275          18      -15,447  -46
Black Country          132,253      29        77,794          17      -54,459  -41     Although two-thirds of manufacturing workplaces in Walsall are micro (employing
West Midlands          554,727      24       324,560          14     -230,167  -41     10 or fewer), these entities account for less than one-fifth (14%) of employment in
England              3,504,656      17     2,337,082          10   -1,167,574  -33     the sector. Walsall‟s 12 largest manufacturing workplaces, including GKN
Source: ABI 2008                                                                       Driveline, MacNeillie, and Huf UK, represent just over 20% of employment. If
                                                                                       medium sized workplaces are included, this figure rises to over half of employment
There were 1,040 manufacturing workplaces in Walsall in 2008, a fall of 34% since      (54%), highlighting the importance of these workplaces to the sector.
1998, and accounting for 13% of total workplaces in the Borough. The percentage
decline in workplaces was smaller than the fall in manufacturing employment,           Manufacturing Employment by Workplace Size Band, 2008
reflecting employment losses in larger workplaces and resulting in a reduction in                        2008, % of total manufacturing employment in area
the average number of employees per workplace, from almost 22 to 18 in 2008.                                     1-10          11-49        50-199         200+
More than 90% of manufacturing workplaces in Walsall are micro and small               Walsall                   13.8           32.4          33.4          20.5
entities, which is in line with regional and national averages.                        Black Country             13.4           30.7          33.7          22.2
                                                                                       West Midlands             12.8           24.0          28.4          34.8
In a number of cases Walsall manufacturers have responded to international
                                                                                       England                   14.0           21.9          27.2          36.8
competition by moving their production to cheaper locations around the world, but      Source: ABI 2008
maintained a management / design / sales function locally. This has resulted in
significant job losses but ensure the survival of the business.
Distribution of Manufacturing Workplaces
                             Workplaces                        Change, 1998 - 2008
                  1998 No.    %    2008 No.            %          No.         %
Walsall              1,565     19     1,040             13           -525       -34
Black Country        6,152     18     4,346             12         -1,806       -29
West Midlands       22,252     13    17,605              9         -4,647       -21
England            165,570      9   139,062              6       -26,508        -16
Source: ABI 2008




                                                                                                                                                               90
                                                       Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                     Change in Manufacturing Employment, 2003- 2008
The map below provides an indication of the areas in Walsall and the Black
Country as a whole which have the highest concentration of employment in
manufacturing. Employment in Walsall is concentrated in Aldridge North, including
Wharf Approach, Middlemore and Westgate, with smaller numbers in Bloxwich,
Brownhills and Darlaston.
Manufacturing Employment in Walsall and the Black Country, 2008




                                                                                                                                      Source: ABI 2008




                                                                 Source: ABI 2008

 1: Willenhall South - Ashmore Lake, Willenhall Central and Longacre
 2: Bloxwich - Leamore Business Park
 3: Brownhills - Coppice Side
 4: Aldridge North - Aldridge North, Wharf Appraoch, Middlemore and Westgate
 5: Aldridge Central / South - Aldridge Park
 6: North Walsall - Green Lane
 7: Darlaston North - Central Darlaston and Darlaston Green Employment Area

The map below shows where employment gains and losses in the manufacturing
sector have been concentrated since 2003. Aldridge North has borne the brunt of
job losses. Jobs have also been lost in Willenhall with some growth recorded in
Aldridge Central / South.



                                                                                                                                         91
                                                                                                Walsall Sector Analysis Study – Sector Analysis Paper


                                                                                                                                                                        Output per FTE Worker, by Sector
GVA and Productivity
Despite being in long-run decline, in 2008, the Manufacturing sector contributed                                                           60,000
                                                                                                                                                       £87,854

£740.4m of GVA to the Walsall economy, 22.1% of the total. This made it the most
important sector to the Borough in terms of wealth generation, creating over                                                               50,000
£100m more than the next most important sectors: finance, professional and                                                                 40,000
business services and wholesale and retail, hotels and restaurants.                                                                        30,000




                                                                                                                                       £
                                                                                                                                           20,000
                                   Contribution to Walsall GVA 2008, by Sector                                                             10,000

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Output per FTE in the Manufacturing sector in Walsall was £40,109 in 2008,
almost 15% higher than the Walsall average across all sectors. Despite this, the
Manufacturing sector in Walsall is less productive than in the West Midlands as a
whole, with GVA per FTE around 93% of the regional average for Manufacturing.




                                                                                                                                                                                                                      92
                                                          Walsall Sector Analysis Study – Sector Analysis Paper


Projections for the Manufacturing Sector                                                                                       Largest Net GVA Decline 2008 - 2020, £m




                                                                                                                                                      Electical and
                                                                                                                                                      Instrumental



                                                                                                                                                                      Clothing and
                                                                                                              Basic Metals
                                                                                                Metal Goods




                                                                                                                             Engineering




                                                                                                                                                      Engineering
                                                                                                                             Mechanical




                                                                                                                                                                                                              Rubber and



                                                                                                                                                                                                                            Wood and
                                                                                                                                                                                                  Transport
                                                                                                                                                                                                 Equipment
                                                                                                                                                                        Textiles,




                                                                                                                                                                                     Chemicals
Manufacturing employment is projected to experience the largest net and




                                                                                                                                                                        Leather




                                                                                                                                                                                                    Other
                                                                                                                                           Vehicles




                                                                                                                                                                                                              Plastics
                                                                                                                                            Motor




                                                                                                                                                                                        nes
proportionate decline of all sectors in the Borough over the next ten years.




                                                                                                                                                                                                                           Paper
Between 2008 and 2012, employment is expected to fall by a quarter, a loss of a
further 4,700 jobs. Following the sharp decline during the recessionary period and        0
recovery period, Manufacturing is the only sector of the Walsall economy predicted
to continue declining in the period to 2020, with a further 1,300 jobs expected to be
lost.                                                                                    -10

Despite this, by 2020, Manufacturing employment will still be proportionately higher
in Walsall compared to the West Midlands as a whole, as the decline in                   -20
Manufacturing employment will slow and the growth of employment in private
services sectors in the Borough will remain limited.
Manufacturing Employment                                                                 -30
                      2008                2020         Change       % Change
Walsall                19,260              13,151        -6,109           -32
                                                                                         -40
West Midlands         343,900             250,700       -93,200           -27
Source: WMRO IPM, 2010
                                                                                                                                                                                                 Source: WMRO IPM, 2010
The largest sub-sectoral decline is expected to be in metal goods and basic
metals, which are forecast to lose 2,100 and 1,300 jobs respectively, accounting        The chart overleaf shows how the manufacturing sector in Walsall is projected to
for over half of the total decline in manufacturing employment. Six of the ten          perform, relative to the Walsall economy as a whole. Both GVA and employment
largest sub-sectoral employment declines are in manufacturing.                          will fall, in contrast to the post recession Borough wide trends, with a more
                                                                                        significant fall in employment, reducing the relative importance of the sector within
By 2020 Manufacturing GVA is expected to fall by £106m (17%) to £634m, the              Walsall.
only part of the Walsall economy in which GVA is projected to decline. GVA will
fall more slowly than the decline in employment, reflecting productivity increases
within the sector.
Manufacturing comprised over a fifth of Walsall GVA in 2008 (22.1%), the largest
contributor. The relative importance of the sector will decline as employment
continues to fall, and it is expected that the Manufacturing sector will be only the
fourth largest generator of GVA (16.7% of Walsall total GVA) by 2020.
Manufacturing GVA £m
                           2008           2020         Change       % Change
Walsall                        740            634          -106           -14
West Midlands               14,342         13,371          -971            -7
Source: WMRO IPM, 2010

The sub-sectors which are expected to experience the largest absolute decline in
GVA between 2008 and 2020 are all within the Manufacturing sector, as shown in
the diagram below.


                                                                                                                                                                                                                     93
                                                     Walsall Sector Analysis Study – Sector Analysis Paper


                Manufacturing Forecast GVA and Employment                          The Needs of the Sector in Walsall
  120
                                                                                   The Business Survey undertaken as part of the Sector Analysis included
  110                                                                              responses from over 100 Manufacturing companies located in the Borough. This
                                                                                   section draws on the analysis of the survey as well as consultations with sector
  100                                                                              experts and other local economic experts in Walsall.
                                                                                   Growth Prospects
   90
                                                                                   In contrast to WMRO projections, the majority of those consulted expected to grow
   80                                                                              over the next two years (in terms of company size or turnover - 60%) and a further
                                                                                   27% stated they would remain the same size. This is a similar proportion to the
   70                                                                              total sample of Walsall business consulted.

   60                                                                              For those expected to grow, reasons behind the expected increase included:
        2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
                                                                                   obtaining new business within an existing market (70%), entering a new market
                                                                                   (39%), and developing a new product or service (38%). Across all of the sectors,
        Manufacturing GVA                 Manufacturing Employment                 manufacturing has the highest proportion of businesses attributing future growth to
        Walsall average GVA               Walsall average employment
                                                                                   entering new markets, highlighting the need to diversity operation within the sector.
                                                                                   Market limitations and competition was the most common reason respondents
                                                       Source: WMRO IPM, 2010      cited for company size decreasing or staying the same (66%). This was seen as a
                                                                                   barrier for a much higher proportion of manufacturing businesses than any other
Although overall output levels will fall as employment declines, Manufacturing     sector (49% on average), reflecting trends in globalisation.
productivity is expected to increase by £10,334 to £50,443 per FTE in 2020, a
rise of over a quarter. Despite this, the gap with regional manufacturing          Markets and Supply Chains
productivity levels is expected to widen from 93% in 2008 to 91% in 2020.          The openness of the Manufacturing sector in Walsall is illustrated in the fact that
                                                                                   the sector has the widest geographical sales and purchasing market of any in
                                                                                   Walsall. Nearly a third of Manufacturing companies responding to the survey
                                                                                   generate over 84% of sales from across the UK (outside the West Midlands) and
                                                                                   45% cited overseas sales. Purchasing markets are smaller, with 72% purchasing
                                                                                   from across the UK, and 30% purchasing from overseas. This reflects industry
                                                                                   specialisms and dispersed supply chains.
                                                                                   Innovation
                                                                                   Regarding innovation, a higher proportion of Manufacturing companies reported
                                                                                   they had made changes to product and packaging design and usability (64%), and
                                                                                   adopted new combinations of existing technologies or new-to-the-firm practices
                                                                                   (74%) compared to other sectors.
                                                                                   Respondents have largely yet to realise low carbon opportunities, 12% stated they
                                                                                   had already identified low carbon prospects and a further 6% have considered
                                                                                   opportunities but not made business decisions. Time constraints (36%) and
                                                                                   insufficient knowledge about the sector (33%) are the most common challenges
                                                                                   respondents face in exploiting low carbon opportunities. These were both



                                                                                                                                                           94
                                                          Walsall Sector Analysis Study – Sector Analysis Paper

challenges for a much higher proportion of Manufacturing businesses when                        Many of the sites within Walsall, whilst located fairly close to the
compared to the overall average of 13% and 15% respectively.                                     Motorway network, face access issues both internally and to the major
                                                                                                 routes;
Skills Needs
                                                                                                Much of the existing land supply is of poor quality, particularly for inward
In line with findings from the National Employer Skills Survey, one in five                      investors. There are very few large, clean development sites, and the
respondents reported skills gaps in the company, marginally above the average for                majority require an element of capital public sector investment to become
Walsall as a whole (18%). In particular, manufacturing businesses are most likely                viable opportunities;
to face skills gap in technical and skilled trades (39% compared to 27% in the                  There has been a lack of recent development activity, meaning that much
business community). ICT and business management skills gaps were also                           of the stock is old and outworn with a lack of modern, higher quality units;
identified. The majority of companies undertake staff training (83%), although this             There are major cost constraints to development in a number of areas, in
is slightly lower than amongst the overall business community in Walsall (84%).                  particular access, contamination and ownership;
Around quarter of businesses feel that courses are not relevant (25%) of that costs             The general environment in many industrial areas is poor and
is a prohibitive factor (26%), although in both cases this is lower than overall                 unattractive.
business community (29% and 45% respectively).                                          In summary, the current land supply is adequate in terms of meeting demand from
Economic Infrastructure                                                                 the majority of current occupiers in their existing format. However, the lack of
                                                                                        quality sites places a constraint on the potential of existing businesses to grow,
Industrial employment remains an important feature of the landscape of many of          modernise and access new markets and also the ability of Walsall to attract inward
the centres around Walsall. As the employment land review notes, some locations         investment and new companies.
such as Brownhills, Pleck and parts of Darlaston have seen increasing vacancy
rates and derelict sites as a consequence of industrial decline over the past           The Darlaston SDA has been seen as the major new industrial location for Walsall
decades (see map on p5 for an illustration of areas in which manufacturing              with the ability to perform such a role. Recent investments include improvements to
employment has declined). This is particularly the case where the property is           transport routes in the area and some strategic acquisitions. However the abolition
unattractive to modern industrial occupiers.                                            of AWM with the uncertainty over their future assets and the decline of public
                                                                                        sector funding for capital schemes, means that the delivery of the concept is
The modern occupier, particularly in advanced and higher value manufacturing            unlikely to be achievable in full over the short or even medium term given major
(the types of sectors Walsall should seek to harness and attract) increasingly tends    issues of contamination, land ownership and access.
to require higher quality bespoke industrial space in areas with better access to the
Motorways and major routes as well as good access to labour. Often, particularly        A greater priority over the short term is likely to be in supporting and meeting the
in specialised areas, these may involve tailor made, customised buildings and           needs of the existing industrial base as opposed to any realistic prospect of large
smaller, light industrial units. While its location close to the M5 and M6 and          scale employment growth driven by the success of a major new and strategic
established manufacturing sector may make Walsall attractive to some advanced           industrial site. The Business Survey highlights that almost 30% of businesses in
manufacturing sectors, the lack of quality locations and the competitiveness of         the borough view the availability / affordability of land / premises as a constraint on
Warwick, Coventry and Solihull make securing investment in new sub sectors very         growth and productivity. In particular the lack of space is identified as a limitation
challenging.                                                                            for 41% of manufacturing businesses at their current location and this was higher
                                                                                        than all other sectors and the overall business community (33%). A lack of
Currently Walsall is home to a number of industrial estates which adequately serve      adequate security (36%), expensive lease terms (28%) and road accessibility
current occupiers particularly in some of the more successful areas such as             (31%) were also frequently cited as limitations.
Aldridge and Brownhills. In addition, the employment land review highlights the
potential to upgrade a number of the existing industrial estates, particularly where    In line with this a higher proportion of manufacturing businesses (37%) are
there is evidence of demand. However, the extent to which the needs of modern           considering upsizing their premises in the next five years, although 40% plan to
manufacturing and industrial companies are being met from a property perspective        remain in the same premises. Of those considering relocation, it is encouraging
is limited by a number of factors:                                                      that there appears to be a strong sense of loyalty to remain in Walsall whilst the
                                                                                        main competition would come from elsewhere in the West Midlands (as apposed to
                                                                                        elsewhere in the Black Country). Manufacturers appear to be particularly


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                                                             Walsall Sector Analysis Study – Sector Analysis Paper

interested in sites in Aldridge and surrounds. Given the recent economic downturn,                   them to continue to capture high levels of GVA, in the face of increasingly
business closures and employment losses, the provision of support to the existing                    high quality competition from abroad.
business base, including with regards to issues of land and economic
infrastructure, is a major priority to achieve the stabilisation of the industrial sector           Increasing international linkages to enable Walsall‟s manufacturing
and local economy.                                                                                   companies to benefit from lower cost production overseas whilst retaining
                                                                                                     higher value activity in Walsall. This could be through out-sourcing
Other Support Needs                                                                                  production or acquiring lower cost producers abroad. Although this may
                                                                                                     result in a higher proportion of production occurring outside Walsall, it
Manufacturing companies identified a number of constraints facing their business.                    would help to put remaining manufacturing businesses on sounder footing
The most common was competition / market limitations, which was highlighted by                       and increase business resilient.
nearly four out of five manufacturing companies, significantly higher than amongst
the general business population. This again highlights the issues Walsall                           Diversifying existing skills, design and manufacturing expertise into new
manufacturers are facing in dealing with lower cost competition from overseas, and                   markets and products. Manufacturing companies are amongst the most
their need for support in moving into new markets.                                                   likely in Walsall to have been involved in innovation, particularly improving
                                                                                                     product design and usability. Those companies that are expecting to
The second most important issue constraining manufacturing businesses is the                         grow over the next two years are more likely than the average to attribute
cost of energy. Many of Walsall‟s manufacturers are intensive users of energy, as                    this to entering new markets and international trade. Supporting more
a result of the nature of their production. High energy costs weaken their                           companies to expand into new products and markets, including those
competitive position and this issue is likely to become more pressing as                             opportunities being created by the growth of the low carbon economy, is a
government action to tackle climate change steps up.                                                 key priority for Walsall.
Over half of manufacturers surveyed highlighted the difficulty of obtaining finance                 Improving the competitiveness of the sector and reducing costs by
as a constraint on their business, and this was also discussed in the business                       improving resource efficiency, particularly supporting local manufacturers
focus group undertaken as part of the study. Accessing finance from traditional                      to reduce their use of energy.
sources such as banks has become more difficult in recent years, and alternative
sources tend to be very expensive and smaller in scale. Businesses need to                          Building on Walsall‟s existing sector of recycling / waste management
assemble finance packages from a range of sources in order to meet their growth /                    businesses as the focus on sustainable waste disposal increases in
expansion needs. The danger is that without financial support companies will                         coming years.
stagnate and become less competitive.
                                                                                            Implications and Recommendations
Opportunities for the Sector in Walsall
                                                                                            The implications arising from the manufacturing sector profile are:
Although the manufacturing sector as a whole is expected to decline, both in terms
of employment and output, over the coming years, it will remain very important to                   Manufacturing companies have already had to adapt to survive in a
the Walsall economy. The priority is to stabilise the sector where possible and                      globalised and highly competitive environment. On-going and increased
adapt to the declining employment base, whilst identifying and building on                           responsiveness to international trends and competition will be required
opportunities for business growth (even though this may be jobless growth in some                    from Walsall‟s manufacturing base if it is to survive into the middle of the
                                                                                                        st
                                                                                                     21 century. Business support activity should be focussed on
cases).
                                                                                                     helping manufacturers to adapt to changing circumstances as well
The opportunities include:                                                                           as creating new employment.
        Supporting existing and new companies to move into high value added                        Some 84 companies account for over half of all employment. The fortunes
         and niche markets. Walsall has a base to build on in the leather goods                      of these companies are critical to the prosperity of the Walsall economy.
         sector, and a number of its manufacturing companies across various sub-                     Understanding their changes and needs, and supporting their
         sectors including the manufacture of metal goods are operating in higher                    adjustment and growth is the key priority for Walsall partners.
         value markets. The challenge is to support these companies to enable



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                                                     Walsall Sector Analysis Study – Sector Analysis Paper

   There is a need to help companies move to more suitable premises, both
    those rationalising their accommodation and those seeking larger
    premises, and there is a demand to remain in Walsall. It is important
    that the existing industrial companies can find suitable
    accommodation in the Borough.
   Moving into higher value and niche activity will require increased skills
    within the manufacturing workforce. Manufacturing employers already
    identify skills gaps within their workforce, most commonly relating to
    technical skills. A move into higher value production will require
    increased creativity and design expertise, whilst coping with global
    markets and supply chains will require increased management, customer
    relationship management and sales skills. Improving the skills of the
    manufacturing workforce should be a key priority.
   A number of new market areas are emerging and higher value and niche
    manufacturing should be encouraged to sustain the competitiveness of
    manufacturing companies in Walsall.     To take advantage of the
    opportunities, companies need to be provided with support to
    investigate, target and access new markets, developing
    relationships with new suppliers and customers, both in the UK and
    overseas.
   Manufacturing companies in Walsall need to be supported to prepare for
    the low carbon economy. Reducing energy costs and improving
    resource efficiency could provide direct bottom-line business
    benefits. Identifying low carbon markets and business opportunities has
    yet to be addressed by 80% of Walsall‟s manufacturers. Support should
    be provided to help companies with this activity, which requires a
    greater commitment of time and resources.
   The focus on environmental issues and the low carbon economy creates
    the opportunity for linkages with other sectors. Walsall‟s recycling / waste
    management sector provides facilities for businesses across the borough,
    although the findings of the business survey suggest that these services
    and the overall offer could be expanded. The construction sector is
    increasingly using prefabricated products to build efficiently and to higher
    standards of energy efficiency. Walsall’s manufacturers should be
    supported to explore new markets across all sectors of the
    economy.




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                                                         Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                       Introduction
Construction
                                                                                       This section provides an overview of the Construction sector in Walsall, and
                                                                                       reviews some of the most important sub-sectors in more detail.
                              Summary
                                                                                       Sources of information used to produce the profile include national and regional
   Construction is the seventh largest sector in Walsall in employment
                                                                                       research studies, including the IER / UKCES Working Futures report 2007-2017,
    terms, employing over 4,800 people.
                                                                                       AWM Cluster Plans and documents and other sector specific documents. Much of
   The sector generates 7% of GVA in Walsall, although GVA per FTE                    the data on the sector in Walsall is drawn from official statistics including the
    employee is below the average.                                                     Annual Business Inquiry. Projections and information on productivity and output
                                                                                       levels are taken from the West Midlands Regional Observatory‟s IPM model. The
   Between 1998 and 2008, employment in construction increased by                     sector profile also draws on the findings of the Walsall Business Survey 2010,
    52%, making it the fastest growing sector in Walsall and creating over             consultations with sector and local economic experts and discussions with Walsall
    1,600 additional positions. This growth has been driven by a number                businesses and business support / representative organisations undertaken as
    of regeneration projects and major developments such as the new                    part of the sector analysis study.
    police station and Tesco.
   The sector is an important source of male employment. Men account
                                                                                       Drivers of Change
    for over 80% of employees in the sector and have taken up three-                   This section of the sector profile identifies some the broad drivers of employment
    quarters of the new jobs created since 1998.                                       and output growth in Walsall‟s construction sector. Primary among these will be an
                                                                                       increasing recognition of the impact of climate change, a growing demand to adopt
   The vast majority of employment in the sector is full-time, with 90% of
                                                                                       more environmentally friendly construction processes and public spending cuts to
    the new jobs created between 1998 and 2008 being full-time
                                                                                       major infrastructure projects. For Walsall‟s construction sector, the key drivers of
    positions.
                                                                                       change in employment and output are likely to be the following:
   Civil engineering is the largest sub-sector accounting for half of total
                                                                                            Environmental factors, including climate change and increasing demands
    employment in the sector (nearly 2,500).
                                                                                             to reduce the impact of the sector on the environment. The construction and
   Building installation is the fastest growing sub-sector, but is under-                   operation of buildings account for half of UK carbon emissions, half of the
    represented compared to the national average.                                            public water supply and 92 million tonnes of waste (AWM Building
                                                                                             Technologies Cluster Plan 2008-11). The demand for more environmentally
   Building completion and civil engineering are strongly represented in                    friendly construction techniques will increase overtime putting significant
    the Borough, compared with the national average.                                         pressure on companies.
   The sector faces considerable challenges over the next three years as                   Technological developments such as off-site construction, alternative
    slow economic recovery and reductions in public sector capital                           energy systems and the use of smart materials have revolutionised the
    investment add to the difficulties resulting from the credit crunch and                  construction industry. These new techniques offer several advantages
    its impact on the commercial and residential housing markets.                            compared to traditional construction including better energy efficiency, time
   Medium terms forecasts for new housing demand will lead to a major                       savings of over 60% and safer construction. The creation of Advantage
    construction programme, provided attractive sites can be provided to                     Offsite has positioned the West Midlands as a leading region in off-site
    the development industry.                                                                manufacturing of buildings and the sector is anticipated to grow by more than
                                                                                             30% each year.
                                                                                            Government targets, to make all new housing carbon neutral will require
                                                                                             significant changes in the industry. There will also be a substantial amount of
                                                                                             repair and maintenance work to bring the existing housing stock in line with
                                                                                             environmental and energy standards that currently only apply to new homes.


                                                                                                                                                               98
                                                           Walsall Sector Analysis Study – Sector Analysis Paper

         The government is also providing funding to the continued investment in
         flood and coastal erosion risk management which is expected to better
         protect 145,000 homes by the end of the end of the Spending Review period.
        Housing demand: there is a broad agreement of the need to significantly
         increase house building over the next n years to meet demand from a
         growing population and demographic changes.

The Construction Sector in Walsall
The construction sector is the seventh largest sector in terms of employment, with
over 4,800 jobs in 2008 (5% of total employment). The sector has experienced
high rate of growth in employment numbers (52%), which has added over 1,600
jobs, since 1998.
Construction generated almost £250m in GVA in 2008, approximately 7% of
Walsall‟s total GVA. Productivity in the sector is relatively low with average GVA
per FTE employee of just over £33,200.
Construction
                             1998          2008         Change       % Change
Workplaces                       730           936           206          28%
Employment                     3,173         4,827         1,654          52%
Male employees                 2,694         3,920         1,226          46%
Female employees                 478           907           429          90%
Part time employees              225           383           158          70%
Source: ABI 2008
                                                                                                                                                                 Source: ABI, 2008
Sub-Sector Employment                                                                    Note: The Location Quotient is a measure of the concentration of industry in an area
                                                                                         compared to the national average. It produces an index whereby a score of 1 indicates the
Construction is made up of five sub-sectors:
                                                                                         industry employment concentration is the same both in Walsall and nationally, more than 1
          Civil engineering is the largest sub-sector, employing over 2,400 people,     represents a higher concentration and less than 1 a lower concentration
           half of the total construction jobs in Walsall.                               Distribution of Employment and Workplaces
          Building completion is the third largest sub-sector, employing over 1,100
                                                                                         There are over 26,500 jobs in the construction sector in the Black Country, an
           and experienced the second fastest rate of growth between 1998 and
                                                                                         increase of 48% on 1998 levels. Walsall accounts for less than a fifth (4,827, 18%)
           2008.
                                                                                         of total sector employment, which is less than its share of overall employment in
          Building installation employs almost 1,200 and is the fastest growing sub-    the Black Country (22%). Employment growth in Walsall and the Black Country is
           sector, with an annual growth rate of 5.3% since 1998, but remains under-     significantly higher than the national average for the sector (16%).
           represented compared to national levels.
                                                                                         The Black Country accounted for a very high proportion of construction
Walsall is strongly represented in building completion and civil engineering             employment growth between 1998 and 2008, 8,500 out of 23,000 regionally,
compared to national levels.                                                             suggesting that the industry was under-represented at the start of the decade.




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                                                            Walsall Sector Analysis Study – Sector Analysis Paper

Distribution of Construction Employment                                                   The proportion of construction employment in micro workplaces in Walsall was
                              Employment                         Change, 1998 - 2008      40% in 2008, and the largest company accounted for a fifth of construction
                  1998 No.    %     2008 No.            %          No.          %         employment, reflecting its size and overall importance in the sector.
Walsall               3,173     3       4,827               5       1,654          52     Distribution of Construction Employment by Workplace Size Band, 2008
Black Country       17,939      4      26,583               6       8,644          48                         2008, % of area total
West Midlands       91,356      4     114,768               5      23,412          26                                 1-10          11-49      50-199                 200+
England            916,302      4   1,063,832               5     147,530          16     Walsall                      40.3          22.8        16.7                  20.2
Source: ABI 2008
                                                                                          Black Country                30.4          20.6        15.3                  33.7
In 2008, there were over 3,800 construction workplaces in the Black Country, an           West Midlands                39.7          21.9        17.5                  20.9
increase of 30% on 1998 numbers. Walsall has added over 200 workplaces, which             England                      41.1          22.7        19.2                  17.0
is 23% of the total increase in the Black Country. Despite experiencing                   Source: ABI 2008
employment growth in construction that is significantly above the national level, the
proportionate increase in construction workplaces in Walsall lags behind the              The following map shows the distribution of employment in the construction sector
national average of 39%.                                                                  in Walsall and the Black Country as a whole. The highest levels of employment in
                                                                                          the Borough are in the east around Aldridge.
Distribution of Construction Workplaces
                                                                                          Construction Employment in Walsall and the Black Country, 2008
                             Workplaces                         Change, 1998 - 2008
                  1998 No.    %    2008 No.           %           No.          %
Walsall                 730     9       936            12            206         28
Black Country         2,954     9     3,831            11            877         30
West Midlands       16,261      9    21,609            10          5,348         33
England            158,789      9   220,626            10         61,837         39
Source: ABI 2008

In terms of the distribution by workplace size:
        Over 90% of construction workplaces in Walsall are micro enterprises
         (employing 10 or fewer).
        There is only one construction company in Walsall, employing 200 or
         more, which is also one of only two large workplaces established in the
         Black Country since 1998.
Change in Construction Workplaces by Size Band, 2008
               1-10 Employees    11-49            50-199                      200+
                                 Employees        Employees                   Employees
                     No.     %       No.      %      No.     %                   No.     %
Walsall             200    30%         2     4%        3   60%                     1 100%
Black Country       777    28%        78    46%       20   71%                     2   22%
West Midlands     5,144    34%       150    15%       40   21%                    14   40%
England          60,350    41%     1,108    11%      340   18%                    39   11%                                                                 Source: ABI, 2008
Source: ABI 2008




                                                                                                                                                              100
                                                        Walsall Sector Analysis Study – Sector Analysis Paper


                                                                                                               Contribution to Walsall GVA 2008, by Sector
The following map shows where employment gains and losses in the construction
sector have been concentrated since 2003. The greatest increases and declines                       800.0
in the Black Country have occurred outside the Borough. Within Walsall, Aldridge                    700.0
gained the most construction jobs, while Birchills and Bescot experienced decline.
                                                                                                    600.0
Change in Manufacturing Employment, 2003- 2008                                                      500.0




                                                                                        £m
                                                                                                    400.0
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                                                                                                                                                     Source: WMRO, IPM 2010

                                                                                      Output per FTE in the construction sector in Walsall was £33,255 in 2008, slightly
                                                                                      below the Borough wide average (£39,494). Overall, the sector‟s productivity levels
                                                                                      are largely in line with regional levels, with GVA per FTE being close to the
                                                                                      average for the West Midlands construction sector (£33,539).


                                                                 Source: ABI, 2008



GVA and Productivity
Construction contributed £247.4m to the Walsall economy in 2008 making it the
sixth largest sector in terms of wealth generation, accounting for 7% of the
Borough‟s total GVA. This is slightly higher than the sectors share of total
employment in Walsall (5%).




                                                                                                                                                                       101
                                                                   Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                                                                  Largest Net Employment Increase 2008 - 2020
                                   Output per FTE Worker, by Sector                                      2500

                  £87,854
      60,000                                                                                             2000

      50,000
                                                                                                         1500
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                                                                                                                                                                                                   Source: WMRO, IPM 2010




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                                           GVA per FTE   Walsall Average
                                                                                                 By 2020 construction GVA is expected to increase from £247m to £262m (6%).
                                                                                                 The increase is anticipated to exceed the level of employment growth in the sector
                                                                                                 in Walsall, although it will not be as significant as the increase regionally. The
                                                                      Source: WMRO, IPM 2010     growth also lags behind the projected increase in GVA generated by the overall
                                                                                                 Walsall economy (13%), resulting in the sector slightly reducing its share of total
Projections for the Construction Sector                                                          GVA to 6.9%.
Construction employment is projected to decline between 2008 and 2011
                                                                                                 Construction GVA £m
resulting in the loss of almost 100 jobs. This amounts to 2% of the employment
                                                                                                                                          2008                          2020            Change                     % Change
base in 2008 making the decline much less pronounced than the projected
                                                                                                 Walsall                                      247                           262              14                           6
regional decline (-6%). Post 2011, employment is projected to increase with the
creation of around 300 jobs, although recovery in the sector is projected to be                  West Midlands                              5,854                         6,378             524                           9
                                                                                                 Source: WMRO 2010
slower than in the West Midlands (+4% in comparison to +13%).
                                                                                                 The greater increase in GVA when compared to employment reflects increasing
Construction Employment
                                                                                                 productivity. By 2020, GVA per FTE is projected to increase by £1,035 to £34,290
                      2008                         2020        Change        % Change
                                                                                                 although this is the most modest increase of any of the sectors. This will result in
Walsall                 7,748                        7,951          203             3
                                                                                                 the gap between the GVA generated per FTE in the construction sector and the
West Midlands         183,300                      193,700       10,400             6            overall Walsall economy increasing (from £1,694 to £8,040).
Source: WMRO 2010
                                                                                                 The following chart summarises how the sector in Walsall is projected to perform,
Overall between 2008 and 2010 it is anticipated that there will be a net increase in             relative to the Walsall economy as a whole. While the sector‟s employment growth
construction employment in Walsall (+200 jobs). This is the fourth largest net                   is anticipated to outpace the Borough wide average, the increase in GVA is
increase in the Borough and is expected to result in the sector slightly increasing              expected to lag behind.
its share of total employment in Walsall to 8%.



                                                                                                                                                                                                                      102
                                                         Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                       Where businesses did expect to grow, it is mainly expected to be as a result of
                  Construction Forecast GVA and Employment
 120                                                                                   obtaining new business within an existing market (77%), followed by developing a
                                                                                       new product or service (32%) and expanding facilities (23%).
                                                                                       Markets and Supply Chains
 110
                                                                                       While over three quarters of the construction companies serve clients in Walsall
                                                                                       (76%), this is lower than the average in the overall business community (80%). In
                                                                                       contrast, construction has the highest proportion of companies serving clients in
 100                                                                                   the Black County (73%), West Midlands Metropolitan Region (74%) and West
                                                                                       Midlands (65%). This in part reflects varying development rates, with companies
                                                                                       working largely in areas within easy reach of Walsall where construction activities
                                                                                       are required.
   90
                                                                                       Construction companies are the most likely to purchase supplies within Walsall,
                                                                                       with 79% respondents reporting local purchasing compared to the average of 71%.
                                                                                       They are also more likely than average to purchase supplies from within the Black
   80
                                                                                       Country (60%), West Midlands Metropolitan Region (61%) and West Midlands
        2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020               (45%). The similar patterns in market and supply chains suggest that the two are
        Construction GVA                    Construction Employment                    closely linked.
        Walsall average GVA                 Walsall average employment


                                                          Source: WMRO, IPM 2010       Innovation

The Needs of the Sector in Walsall                                                     Two thirds of construction businesses (67%) reported that they have a culture of
                                                                                       innovation, largely in line with the overall average (66%). Adopting new
The business survey undertaken as part of the Sector Analysis included responses       technologies and practices was the most commonly cited innovation activity and
from 62 companies in the construction sector located in the Borough (accounting        construction companies were more likely than others to have adopted new
for18% of the total sample). This section summarises the analysis of the survey.       business models (57% compared to 50%) and to have collaborated on innovation
                                                                                       activities (59% compared to average of 50%).
Growth Prospects
                                                                                       Companies within the sector are more likely than average to have identified low
Businesses in the construction sector are least optimistic about the future. The
                                                                                       carbon opportunities. Over a quarter of those surveyed have identified (19%) or
sector has the lowest proportion of businesses expecting to grow over the next two
                                                                                       are currently considering (8%) opportunities. This is partly a reflection of the most
years (48% compares to the average of 57%). This is likely to be a reflection of the
                                                                                       developed low carbon related legislation and policy developments being most
early impact that the credit crunch and the subsequent collapse of the housing
                                                                                       relevant to the construction sector, for example energy efficiency legislation linked
market had on the sector.
                                                                                       to house building and the Government‟s policies on retro-fitting.
This is also highlighted by two out of ten businesses citing a lack of finance as a
growth constraint; this was the highest of all sectors (average of 17%). As with
other sectors, the most commonly cited barrier to growth is market limitations and     Skills Needs
competition (reported by 45% of construction companies compared to the average
of 49%). Again this reflects the tighter trading conditions, which have emerged over   Skills gaps were reported by nearly a quarter of the Construction sector sample,
the past two years.                                                                    the highest proportion amongst the sectors and above the sample average of 18%.
                                                                                       This includes gaps in both technical and skilled trades and business management.




                                                                                                                                                              103
                                                           Walsall Sector Analysis Study – Sector Analysis Paper

The majority of businesses undertake staff training (87%), the second highest                     particular the new Green Investment Bank will make funding available for
proportion amongst the sectors. While over three quarters of businesses (77%)                     the retrofitting of houses and premises to meet the low carbon targets.
carry out in house training this is below the overall average (85%) with construction
businesses more likely than average to use training providers in Walsall (35%), the       Implications and Recommendations
Black Country (40%), regionally (13%) and nationally (27%).                               The implications and recommendations for the construction sector in Walsall are:
Economic Infrastructure                                                                          There is a need to increase building and construction activity through the
In choosing business premises, proximity to the labour market is the most                         provision of land and sites which are attractive to the residential and
important (64%), followed by the size of space (61%) and waste management                         commercial development industry.
infrastructure (55%). Being close to the labour market and waste management                      Encourage and promote collaborations between small contractors
infrastructure is more important for construction businesses than other sectors.                  and the large civil engineering companies in Walsall. This will include
A lack of security (39%), followed by lack of space (30%) and suitable road access                through business networks which will enable small construction
(22%), were the most commonly cited business location limitation. However, in line                companies to network with larger companies in the industry.
with the more limited growth expectations, construction has the highest proportion               Accessing sub regional and regional markets, it is important that local
of businesses (77%) than plan to remain in the same premises over the next five                   construction companies proactively look outside the Borough e.g. through
years.                                                                                            better engagement with the building technologies cluster in the region
Other Support Needs                                                                               which has identified key target markets for the sector and promoting best
                                                                                                  practice. This is particularly important to provide local companies with
Construction businesses are generally more likely than businesses in other sectors                intelligence about new markets, technologies and best practice.
to experience constraints. In particular an above average proportion of businesses
reported constraints linked to competition (76% compared to 67%) and obtaining                   To exploit low carbon technologies, local companies need to be
finance (48% compared to 45%). The impact of these factors is clear with                          encouraged to engage with relevant networks and technical
businesses also reporting these factors as barriers to growth over the next two                   developments, and to develop expertise in technologies which will
years.                                                                                            provide a competitive advantage.

Opportunities for the Sector in Walsall                                                          Upskilling of the current workforce as well as training of young
                                                                                                  people is required to enable local construction companies to exploit new
Despite recent difficulties the construction sector is expected to grow following the             opportunities as they arise.
end of the recession.
The opportunities include:
        Exploiting new market opportunities which will enable the local sector to
         tap into emerging regional specialisms (for example off-site
         manufacturing). Almost half of construction companies reported that they
         had insufficient knowledge of the sector.
        Over the next five to ten year period there will be substantial infrastructure
         works in the Black Country, including the repair and maintenance of the
         road network, which will create new opportunities for construction
         companies in Walsall.
        Assisting construction companies to identify and exploit low carbon
         opportunities will diversify the sector and ensure sustainability. In



                                                                                                                                                               104
                                                        Walsall Sector Analysis Study – Sector Analysis Paper


Public Services                                                                       Introduction

                                                                                      This section provides an overview of the public services sector in Walsall, and
                               Summary                                                reviews some of the most important sub-sectors in more detail.
                                                                                      Sources of information used to produce the profile include national and regional
    Public services includes education, public administration, health and            background research studies, including the IER / UKCES Working Futures report
     community services.                                                              2007-2017, AWM Cluster Plans and documents. Much of the data on the sector in
                                                                                      Walsall is drawn from official statistics including the Annual Business Inquiry.
    Public services is the second largest employment sector in Walsall,
                                                                                      Projections and information on productivity and output levels are taken from the
     with over 23,000 employees (23% of total employment).
                                                                                      West Midlands Regional Observatory‟s IPM model. The sector profile also draws
    It contributes 18% of GVA in the Borough, although GVA per FTE                   on the findings of the consultations with sector and local economic experts and
     employee is below the average.                                                   discussions with Walsall businesses and business support / representative
                                                                                      organisations undertaken as part of the sector analysis study.
    Between 1998 and 2008, employment in the public services sector
     increased by 26%, creating over 4,800 additional positions, of which             Drivers of Change
     over 40% were part-time jobs.
                                                                                      The public sector is currently experiencing a considerable amount of change. The
    The sector is a particularly important source of female employment,              UK‟s public deficit has led to a period of austerity, with significant spending cuts for
     with 93% of the additional jobs created between 1998 and 2008 filled             local authority budgets. Prior to this, change in the public sector was linked to
     by women.                                                                        improving efficiency and increasing the level of choice available to the public. A
    The sector has increased its importance to Walsall given the overall             report for 2020 Public Services Trust, „Drivers for Change‟, identified 5 overarching
     employment decline over the same period, although it did not grow as             drivers of the public services sector, which will also affect Walsall.
     quickly as in many other parts of the country over the same period.                   Public spending austerity will lead to substantial job losses in the public
    Health activities is the largest sub-sector employing nearly 7,000 and                 sector. These cuts will be focused on public administration, with plans to
     primary education is the largest education sector and second largest                   achieve 7.1% of savings in local government spending in each of the next
     sub-sector, employing over 5,000.                                                      four years. Health and education are currently safeguarded. The cuts will
                                                                                            affect all areas within the UK, although the impact may not be as severe in
    The concentration of employment in compulsory social security                          Walsall as in those areas with regional and national government department
     services is high (over twice the national average).                                    functions.
    The public spending cuts are likely to result in a significant number of              Productivity and efficiency gains have been the focus of government
     job losses in this sector over the coming three to four years.                         priorities in the public services sector since the 1990s and this is expected to
                                                                                            continue. There will be increasing pressure on the public sector to
    A growing population and more people living longer and on their own                    demonstrate value for money and efficiency savings in the delivery of front-
     will lead to an increase for social and healthcare services, with a                    line services, including the effective use of technology.
     consequent increase in employment.
                                                                                           Demographic trends, such as an ageing population and higher than
                                                                                            expected number of young families in the population will continue to place
                                                                                            increasing demands on public services. In addition to more people living
                                                                                            longer, more people are now living on their own, increasing latent demand
                                                                                            for housing.




                                                                                                                                                                105
                                                            Walsall Sector Analysis Study – Sector Analysis Paper

       Rising citizen expectations will result in demand for higher service                      Primary education is the second largest sub-sector, employing over
        standards from public services which will ultimately increase the pace of                  5,000 and has the highest rate of employment growth among the sub-
        privatisation of some services. For healthcare services the trend towards                  sectors;
        personalisation and a preference for local care will give the public greater
                                                                                                  Secondary education, employing 3,000;
        input in determining the type of care received and how it is delivered.
       Technological developments will have implications for the types of public                 Community services, employing 1,300;
        services that will be needed and the ways in which they are delivered.                    Adult and other education, employing 900;
Public Services in Walsall                                                                        Public administration is largely local government and is the only sub-
                                                                                                   sector that has declined since 1998 and employs over 700;
The public services sector includes education, public administration, health and
community services. Public services is the second largest employment sector in                    Compulsory social security activities is one of the smallest sub-
Walsall, employing over 23,000 (23% of total employment, which is an increase in                   sectors but has the highest location quotient, with employment levels
its share since 1998). Between 1998 and 2008, the sector experienced growth of                     twice the national average and the second highest growth rate amongst
26%, creating more than 4,800 additional positions.                                                the sub-sectors;
The sector has been an important source of female employment in Walsall, with                     Higher education is the smallest sub-sector (employs 480) and is the
women taking over 90% of all the new jobs created in the sector in Walsall                         only education sub-sector that is under represented in Walsall compared
between 1998 and 2008.                                                                             to the national average.
Public Sector                                                                             Employment in health activities is largely in line with the national average. In
                              1998          2008         Change       % Change            contrast, public administration is poorly represented and has experienced the
Workplaces                        639           658            19           3%            largest average annual decline in employment .
Employment                     18,366        23,199         4,833          26%
Male employees                  4,948         5,302           354           7%
Female employees               13,417        17,898         4,481          33%
Part time employees             7,454         9,477         2,023          27%
Source: ABI 2008

Public services is the fourth largest sector in terms of GVA having generated circa
£595m in 2008 (18% of total GVA). The sector was one of two to have experienced
a net decline in GVA of over £30m between 2006 and 2008. The average GVA
per FTE employee is around £31,300, which is the second lowest of the six sectors
                                 16
for which GVA data is available . This reflects lower levels of productivity in public
services in comparison to other sectors in Walsall.
Sub-Sector Employment
To obtain a complete picture of the public sector, the sub-sector analysis provides
details of the key activities comprising the sector. These include:
           Health activities: is the largest sub-sector which employs nearly 7,000;



16
     GVA data was not available for the creative and digital sector


                                                                                                                                                             106
                                                             Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                            Public Sector Employment
                                                                                                                            Employment                       Change, 1998 -
                                                                                                                                                                   2008
                                                                                                               1998 No.      %      2008 No.        %          No.      %
                                                                                            Walsall               18,366     18        23,199        23         4,833     26
                                                                                            Black Country         85,068     19       116,133        26        31,065     37
                                                                                            West Midlands        505,598     22       633,347        27       127,749     25
                                                                                            England            4,867,240     23     6,057,883        26     1,190,643     24
                                                                                            Source: ABI 2008

                                                                                            There were 658 public services workplaces in Walsall in 2008, which is 8% of all
                                                                                            workplaces in the Borough. The low growth in workplaces when compared to
                                                                                            employment is reflected in the average number of employees per workplace
                                                                                            increasing from 29 in 1998 to 35 in 2008.
                                                                                            Public Sector Workplaces
                                                                                                                           Workplaces                     Change, 1998 - 2008
                                                                                                               1998 No.    %    2008 No.        %           No.          %
                                                                                            Walsall                 639      8        658           8           19          3
                                                                                            Black Country         2,499      7      3,074           9          575         23
                                                                                            West Midlands        15,211      9     17,933           9        2,722         18
                                                                                            England             149,791      8    184,597           9       34,806         23
                                                                                            Source: ABI 2008
                                                                         Source: ABI 2008
Note: The Location Quotient is a measure of the concentration of industry in an area
                                                                                            Between 1998 and 2008, 19 additional public sector workplaces were registered in
compared to the national average. It produces an index whereby a score of 1 indicates the   Walsall. There is a higher level of medium workplaces in Walsall than regionally
industry employment concentration is the same both in Walsall and nationally, more than 1   and nationally as well as a lower level of micro workplaces. This reflects changes
represents a higher concentration and less than 1 a lower concentration.                    in the workplace base over the past ten years and efforts to rationalise premises.
                                                                                            Public Sector Workplaces by Size Band, 2008
The concentration of employment in adult and other education is higher than the
national average and is an indication of the success of Walsall College in providing                  1-10            11-49          50-199                 200+          Total
Further Education to local residents and students from further afield. Conversely,                    Employees       Employees      Employees              Employees
higher education is under-represented in Walsall, although it is one of the fastest                        No.    %      No.     %      No.    %              No.  %          No.
growing sub-sectors, reflecting investment made by the University of                        Walsall        317 48%       241 37%         86 13%                14 2%          658
Wolverhampton on its Walsall Campus over the 1998-2008 period.                              Black
                                                                                            Country      1,561 51%     1,001 33%        445 14%                67    2%     3,074
                                                                                            West
Distribution of Employment and Workplaces                                                   Midlands     9,705 54%     5,510 31%      2,333 13%               385    2%    17,933
                                                                                            England   104,200 56% 56,343 31% 20,205 11%                     3,849    2%   184,597
The size of Walsall‟s public services sector is relatively small compared to the
                                                                                            Source: ABI 2008
other Black Country authorities, and it grew more slowly than the sector in the
Black Country as a whole, although slightly faster than the national rate, between          Between 1998 and 2008, the number of small workplaces in the public services
1998 and 2008.                                                                              sector in Walsall fell by 49 (17%), which is significantly more than the decline
                                                                                            experienced in the West Midlands (7%) and three times the decline in England. In


                                                                                                                                                                    107
                                                           Walsall Sector Analysis Study – Sector Analysis Paper

contrast, there was significant growth in the number of medium-sized workplaces          Public Sector Employment in Walsall and the Black Country, 2008
(increase of 76%).
Whilst 85% of public services workplaces in Walsall are micro or small, such
workplaces employ less than a third (28%) of the sector‟s total employees. While
the 14 largest workplaces are important to the Walsall economy, accounting for
over a third of employment, this is lower than the large workplaces‟ share in the
region and the Black Country.
It is likely that there will be further rationalisation of public sector workplaces as
organisations seek to reduce overhead costs. While some sub sectors, such as
primary education have limited options, others may use multiple
bases/facilities/depots.
Distribution of Public Sector Employment by Workplace Size Band, 2008
                     2008, % of area total
                             1-10          11-49     50-199           200+
Walsall                       4.7           23.7        36.7           34.8
Black Country                 4.3           17.3        34.8           43.5
West Midlands                 4.3           16.9        33.2           45.6
England                       4.7           18.5        29.8           46.9
Source: ABI 2008

The following map provides an indication of the areas in Walsall and the Black
Country which have the highest concentration of employment in public services.
Employment in Walsall is concentrated around the hospital and Birchills, which                                                                      Source: ABI, 2008
includes schools and Walsall College.




                                                                                                                                                       108
                                                       Walsall Sector Analysis Study – Sector Analysis Paper

The following map shows where employment change in the public sector has been
concentrated since 2003. The greatest gains and losses in the Black Country have                              Contribution to Walsall GVA 2008, by Sector
not been experienced in Walsall. Birchills has experienced the largest decline in
the Borough, while Selfield has gained the most jobs.                                              800.0
                                                                                                   700.0
Change in Public Sector Employment, 2003- 2008
                                                                                                   600.0
                                                                                                   500.0




                                                                                       £m
                                                                                                   400.0
                                                                                                   300.0
                                                                                                   200.0
                                                                                                   100.0
                                                                                                     0.0




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                                                                                                                                                    Source: WMRO, IPM 2010

                                                                                     Output per FTE in the public sector in Walsall was £31,346 in 2008 compared to
                                                                                     the Borough wide average of £34,949. GVA per FTE in the public sector
                                                                                     expresses expenditure per full time equivalent job. This does not reflect
                                                                                     productivity per se, rather it is a factor of the different types of services which make
                                                                                     up the public sector in Walsall.
                                                                 Source: ABI, 2008

GVA and Productivity

Public services contributed £593.3m to the Walsall economy in 2008, 17.7% of the
total. The sector is the fourth largest in terms of GVA and the contribution is
largely in line with that of the finance, professional and business services and
wholesale and retail, hotels and restaurants sectors.




                                                                                                                                                                      109
                                                                   Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                                   Public Sector Employment
                                   Output per FTE Worker, by Sector                                                       2008                2020         Change        % Change
                  £87,854
                                                                                                   Walsall                  23,798             25,591         1,793             8
      60,000
                                                                                                   West Midlands          650,100             665,400        15,300             2
      50,000                                                                                       Source: WMRO 2010
      40,000                                                                                     In contrast, both public administration and education are expected         to decline
      30,000                                                                                     slightly with the loss of 200 and 130 jobs respectively. While the          decline in
  £




                                                                                                 education is projected to be in line with the regional decrease,           the public
      20,000
                                                                                                 administration decline is expected to be slightly less pronounced (-9%     in contrast
      10,000                                                                                     to -10%).
          0                                                                                      The overall growth will boost the service sector economy in Walsall and will result
                                                                                                 in the public sector being the largest employer in the Borough (as manufacturing
                   es



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                                                                                                 the second largest net increase across the Borough‟s sectors, making it the
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                                                                                                 Borough‟s second largest in GVA terms. As a result, the sector will increase its
                                           GVA per FTE   Walsall Average
                                                                                                 share of Walsall‟s total GVA along with its relative importance – in 2020, it is
                                                                      Source: WMRO, IPM 2010     expected that the public sector will almost account for a fifth of the Borough‟s total
                                                                                                 GVA.
Projections for the Public Sector
                                                                                                   Public Sector GVA £m
Public sector employment is one of only two sectors projected to experience                                                    2008           2020         Change        % Change
growth over the next ten years. Between 2008 and 2020, the sector is expected to                   Walsall                         593            734           140            24
experience the largest net and proportionate employment growth resulting in the                    West Midlands                16,648         19,666         3,018            18
creation of 1,800 jobs. Further, this increase (8%) is projected to be much greater                Source: WMRO 2010
than the regional increase (2%).
                                                                                                 As with employment this growth is driven by the expansion of the health and social
In contrast to the rest of the Borough‟s economy, employment in the public sector                care sector which, with an increase of around £109m, is projected to be the sub-
is not projected to have declined between 2008 and 2010 as a result of the                       sector experiencing the largest net increases in GVA in Walsall. The increase in
recession. There will, however, be a delayed impact on parts of the sector as                    GVA is expected to be more significant than the employment increase, reflecting
national spending cuts to reduce the public sector deficit are implemented.                      improvements in productivity.
The strong employment growth is expected to be driven by the health and social
work sector, which is expected to increase by 19% between 2008 and 2020
creating nearly 2,200 jobs, reflecting the increasing demand for such services as
the population ages. This employment growth is very important to the Borough,
accounting for two thirds of the total employment growth expected in Walsall by
2020.




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                                                                                                          Walsall Sector Analysis Study – Sector Analysis Paper

                                           Largest Net GVA Increase 2008 - 2020                                                                                               Public Sector Forecast GVA and Employment
 120
                                                                                                                                                              130
 100
                                                                                                                                                              120
  80

  60                                                                                                                                                          110

  40
                                                                                                                                                              100
  20
                                                                                                                                                               90
   0




                                                                                                                                          Misc. Services
                                      Retailing




                                                                                                             Education
                                                                             Banking and
                                                  Professional




                                                                                           Distribution
       Social Work


                     Communications




                                                                 Insurance




                                                                                                                         Other Business
       Health and




                                                    Services
                                                                                                                                                               80




                                                                               Finance




                                                                                                                            Services
                                                                                                                                                                     2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

                                                                                                                                                                    Public Sector GVA                      Public Sector Employment
                                                                                                                                                                    Walsall average GVA                    Walsall average employment

                                                                                                           Source: WMRO, IPM 2010
                                                                                                                                                                                                                         Source: WMRO, IPM 2010
Education and public administration will also experience growth in GVA of £21.7m
and £9.6m respectively. This is in contrast to employment decline and again                                                                                The Needs of the Sector in Walsall
reflects productivity improvements in the sector. Overall, public sector GVA per
FTE is expected to increase by £7,996 (21.5%) to £45,208. Expressed as a
                                                                                                                                                           The business survey received ten responses from public sector organisations.
proportion of the West Midlands GVA per FTE, Walsall is largely in line with
                                                                                                                                                           This sample is not large enough to undertake a full analysis however some key
regional trends (98% in both 2008 and 2020)
                                                                                                                                                           points are noted below:
The following chart shows how the public sector in Walsall is projected to perform
                                                                                                                                                                    Half of the respondents (five organisations) expect to increase in size and
relative to the Walsall economy as a whole. Both GVA and especially employment
                                                                                                                                                                     three expect to remain the same size;
are expected to increase more significantly than the average for the Borough as a
whole, largely as a result of the expansion of the health and social care sector,                                                                                   Eight of the ten respondents reported no skills gaps in the organisation;
increasing the relative importance of the sector to Walsall.
                                                                                                                                                                    Eight undertake staff training; and
The forecasts also suggest that employment will not fall below the 2008 level,
although this is dependant on how the local authority deals with the substantial                                                                                    Seven stated there was a culture of innovation within the organisation.
budget costs announced as part of the Comprehensive Spending Review.                                                                                       Economic Infrastructure

                                                                                                                                                           The public sector has played an important role as an employer over recent years
                                                                                                                                                           with nearly 5,000 new jobs created in Walsall by the sector during the period 1998-
                                                                                                                                                           2008. However, with the focus of the Coalition Government on reducing the
                                                                                                                                                           financial deficit and the resulting cuts to public sector funding, there is anticipated
                                                                                                                                                           to be significant job losses in this sector over the coming years. The rationalisation


                                                                                                                                                                                                                                    111
                                                            Walsall Sector Analysis Study – Sector Analysis Paper

of public sector assets and sharing of resources between departments and                   Implications and Recommendations
different service providers will have implications for the property market.
                                                                                           Although current spending cuts are severe, by the end of the current spending
The idea of a public sector/civic campus for Walsall over the longer term has been         period it is anticipated that overall public spending will be similar to 2007 levels. In
mentioned by partners as a means to rationalise and consolidate the activities of          order for Walsall‟s public services sector to minimise the impact of current austerity
the sector in a single location. The situation could also provide the opportunity for      policies a number of actions are required:
any redundant office space formerly used by the public sector, in particular smaller               There is a need to ensure that opportunities for growth in other areas of
workspaces, being re-targeted at private sector businesses, start up businesses                     public services (particularly heath and social care) are maximised. There
and enterprising individuals.                                                                       is a need to work with health and social care authorities and
Opportunities for the Sector in Walsall                                                             anticipate the skills needs of the care and health sector, including
                                                                                                    replacement demand, with a focus on helping local residents take up
                                                                                                    employment opportunities.
Whilst the sector as a whole will face tight spending restrictions over the next 4-5
years, there are areas of growth, largely linked to the expansion of health and                    To reduce the impact of pubic sector jobs losses on local communities
social care sector, which can be exploited. These opportunities include:                            there is a need to provide employability support and possibly re-
                                                                                                    training for redundant workers.
        Growing health and social care. As the population ages there will be an
         increase in demand on public services, in particular health and social                    Review the public sector property estate, including premises occupied
         care. This sub sector is very labour intensive and will continue to be an                  by regional and national organisations, with a view to developing long
         important source of employment growth in the Borough. Although health                      term proposals for the rationalisation of premises and the re-use of
         and social care is unlikely to generate significant wealth for Walsall, it will            redundant buildings.
         provide a significant number of jobs, in particular entry-level positions.
                                                                                                   Increase the extent of collaboration and partnership with the
        Growth in customer service employment. Increasing demand for                               community and voluntary sector and the private sector to align the
         higher standards from public services will mean that quality standards and                 delivery of public services with emerging government priorities.
         customer care needs are likely to rise. Customer care in public services
                                                                                                   Focus on higher level skills training (NVQ level 3 and above).
         will become more important, especially for health and social care clients
                                                                                                    Frontline staff will need to be equipped with the skillset (particularly
         who will gain greater control over their own care budgets.
                                                                                                    leadership and management skills) to undertake more responsibilities in a
        Aligning with the Big Society agenda. The Coalition Government‟s                           smaller public services workforce. Additional skills training will also be
         focus on localism and the big society agenda is expected to see a greater                  necessary for those made redundant who wish to become self-employed
         role for social and community enterprises. There is the potential to work                  providers of services that were previously publicly financed.
         with local companies and groups to ensure employment and business
         objectives contribute to the local economy.
        Exploiting the move from regional to local priorities. The
         establishment of local enterprise partnerships (LEPs) will give local
         authorities a greater say in areas that were previously the remit of
         Regional Development Agencies. Again, this process will be dependent
         on the strength of the relationship between the public sector and private
         partners and there will be opportunities for Walsall to harness the public
         services to encourage private sector growth and development.




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                                                          Walsall Sector Analysis Study – Sector Analysis Paper

                                                                                                Growth in private sector services: The financial, professional and
6        Summary                                                                                 business services sector experienced significant growth (+45%), although
Employment Trends                                                                                this was from a very low base and led to the creation of just over 5,000
                                                                                                 jobs. Consequently, the sector remains very weak in the Borough
With just under 99,400 employees, Walsall is the smallest of the Black Country
Local Authorities and accounts for just over a fifth (22%) of the total Black Country           Growth in the public sector: Employment in public administration, health
employment and 4% of regional employment. This is slightly lower than the                        and education has increased by over a quarter with the creation of around
Borough‟s respective share of population reflecting the low employment rate and                  4,800 jobs.
flows of out-commuters.                                                                 Gross Value Added
Between 1998 and 2008 the national economy grew strongly and employment
                                                                                        The Walsall economy generated £3.3bn of GVA in 2008, accounting for 4% of the
increased by 9%. The Walsall economy, however, significantly under-performed
                                                                                        regional total. This is in line with the Borough‟s respective share of employment
both the regional and national averages and,in contrast, employment declined. The
                                                                                        and highlights that overall productivity levels are close to the regional average.
2.5% decline resulted in the loss of over 2,500 jobs.
                                                                                        There are, however, significant variations in the levels of output and associated
The employment decline was driven by a significant decline in the number of full
                                                                                        productivity by sector. Despite significant employment decline, manufacturing
time positions, which was not fully offset by the modest increase in part time
                                                                                        continues to make the largest contribution to Walsall‟s output. This does not,
positions. This has resulted in a lower number of people in work and reduced
                                                                                        however, reflect high productivity levels in the sector (which are 93% of the
spending power. There was also a much more significant decline in male
                                                                                        regional average), instead it reflects the low levels of productivity of the financial
employment.
                                                                                        professional and business services (80% of the regional average) and low levels of
                   Key Employment Indicators 1998-2008                                  employment in the sector, when compared to the regional and national average.
                             Walsall        Black      West                  England    If the Borough were to increase the productivity of these two large sectors in
                                           Country   Midlands                           particular, this would have the greatest impact on increasing overall output and
Total Employment         -2,559    -2.5%      -0.1%     +2.8%                  +9.1%    begin to close the prosperity gap between Walsall and the national average.
Full Time Employment     -3,321    -4.4%      -5.2%     +1.0%                  +7.4%
Part Time Employment        748   +2.7%     +14.5%        7.2%                +12.9%    Sector Representation and Performance
Male Employment          -2,185    -3.9%      -2.8%     +1.9%                  +9.2%    With the exception of manufacturing, at the broad sectoral level, employment
Female Employment          -389    -0.8%     +3.1%      +3.9%                  +9.0%    levels are largely below, and in some cases (construction and transport and
Source: Annual Business Inquiry, 2008                                                   communications) in line with national levels. The following sections look at each
                                                                                        sector in turn.
Sectoral Dynamics of Change
                                                                                        Wholesale and retail, Hotels and Restaurants
The current employment structure is markedly different to that of ten years ago
reflecting the major structural change which has occurred in the local economy.         Wholesale and retail, hotel and restaurants is now the largest employment sector
This has led to the role of the public sector and the private service sector as key     in Walsall with 23,800 employees. There is a high concentration of wholesale and
employers in the Borough increasing, while the role of manufacturing has                retail employment in the Borough in contrast to low levels of hotel and restaurant
diminished.                                                                             employment. Retail – the largest sub-sector- is the only one to have experienced
                                                                                        employment growth. The sector makes the third largest contribution to Walsall‟s
The key drivers of the structural change between 1998 and 2008 have been:
                                                                                        GVA, reflecting low productivity levels.
        Significant decline in manufacturing: The historic backbone of the
                                                                                        Public Services
         economy declined by over 45% resulting in the loss of almost 15,000
         jobs. The decline in manufacturing in Walsall was much more pronounced         The public services sector is the second largest in employment terms with 23,000
         than the decline experienced nationally. This is particularly the case when    employees. Human health activities and primary education are the largest and two
         considering the importance of the sector to the Walsall economy in 1998.       of the fastest growing sub-sectors. There is a high concentration of employment in


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                                                           Walsall Sector Analysis Study – Sector Analysis Paper

adult and other education, reflecting the success of Walsall College in providing        sector‟s employment in the Borough is in design, which has experienced significant
further education to local residents and students from further afield.                   employment growth and is now one of the closest to national employment levels.
                                                                                         While ICT and new media have been growing relatively slowly, print and packaging
While higher education is significantly under-represented in Walsall, it is one of the   has experienced employment decline.
fastest growing sub-sectors, reflecting investment made by the University of
Wolverhampton in the Borough. Employment in public administration is                     Transport and Communications
significantly below the national average and has experienced significant
employment decline. Public services has one of the lowest levels of GVA per FTE          Transport and communications is fifth largest employment sector, employing over
in Walsall.                                                                              6,200. Transport is the largest sub-sector, although despite experiencing
                                                                                         employment growth over the past ten years, it remains under-represented when
Manufacturing                                                                            compared to national levels. The second largest sub-sector – post and courier
                                                                                         activities – has high levels of employment at more than twice the national average.
Manufacturing is now the third largest employment sector in Walsall employing            The sector has above average productivity levels.
over 18,000 people, following significant employment decline. The dependence on
manufacturing is highlighted by the majority of sectors being more highly                Within these sectors there are six key areas that will drive growth in Walsall,
concentrated in Walsall when compared to national levels. Basic metals and               although it will be important, especially in light of current market conditions, to
fabricated metals, by far the largest sub-sector, is a clear employment specialism,      continue to encourage growth across all broad sectors. The six areas are:
with employment six times the national average. The sub-sector remains
vulnerable to international competition although it does include some high value
added activity.                                                                          Key Sub Sectors
Other important sub-sectors are the manufacture of transport equipment, paper                   Health and Social Care, responding to increasing demand for services
and paper products and machinery and equipment. Manufacturing continues to                       linked to an ageing population.
make up the largest contribution of Walsall‟s GVA and is one of the most                        Niche and high value manufacturing, building on major sub sectors and
productive sectors in the Borough.                                                               manufacturing specialisms in the Borough to help to stabilise future
Financial, Professional and Business Services                                                    decline.

Financial, professional and business services is the fourth largest employment                  Waste Management/Recycling, expanding the current sector to provide
sector in Walsall, with around 17,400 employees. However, Labour recruitment                     facilities for businesses across the Borough.
and the provision of personnel is the largest sub sector, accounting for over a third           Financial, Professional and Business Services, expanding existing
of the sector‟s total employment and two thirds of employment growth. This                       businesses and attracting new businesses to the Borough continuing the
includes the staff registered on the payroll of recruitment agencies, which work                 transition to a more service based economy.
across a range of sectors and may work outside Walsall. With this excluded, the
sector has performed relatively poorly over the past ten years.                                 Creative and Digital, building on the small base in Walsall capturing
                                                                                                 some of the growth which is occurring at the national level.
The second largest sub-sector – Other Business Services – has experienced
employment decline, while most of the others have grown since 1998. However,                    Logistics, capitalising on the Borough‟s strategic location and supporting
with the exception of rental services and labour recruitment, all sub-sectors                    growth in other sub sectors, such as niche manufacturing.
continue to be under-represented in the Borough. The sector makes the second
largest contribution to Walsall‟s GVA.
Creative and Digital Industries
Largely a subset of the financial, professional and business services sector, the
creative and digital industries sector is currently very small and significantly
underrepresented in Walsall with under 2,000 employees. Almost a third of the



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                                                           Walsall Sector Analysis Study – Sector Analysis Paper

Highly Skilled Occupations                                                                       Manufacturing will continue to decline, although at a lower level than
                                                                                                  witnessed between 1998 and 2008 and employment growth will occur in
The number of jobs in highly skilled occupations has increased in Walsall, which in               the service sector.
the context of overall employment decline, highlights that progress has been made
towards a more highly skilled, knowledge intensive employment base. While this                   The service sector is, however, expected to be driven by increases in
has resulted in highly skilled occupations accounting for a higher proportion of all              health and social work as opposed to financial, professional and business
occupations in 2009 when compared to 2004, such                   occupations remain              services.
significantly under-represented in Walsall, a reflection of the sectoral structure.              The modest growth forecast for the latter will mean that the sector
To close the gap with the regional average Walsall requires 5,900 employees to                    continues to be underrepresented.
enter managerial, senior, professional or associate professional occupations. This       While overall productivity is expected to increase, the prosperity gap is forecast to
increases to 9,800 when considering national levels                                      widen with the regional (and national) averages. This is linked to below average
Business and Enterprise                                                                  growth in productivity in the Borough‟s two largest GVA generators - manufacturing
                                                                                         and financial, professional and business services.
Walsall‟s business density is in line with the Black Country average, although it
lags behind regional and national levels. The Borough requires an additional 1,250
businesses to reach average regional density and this increases to over 2,000
when considering national levels. The gap, in part, reflects the lack of growth in the
business base in Walsall between 2004 and 2008.
Walsall‟s start up performance has been closer to the regional and national in
recent years, although poor performance in 2008 led to the start up gap increasing.
Further, the strong start up rate partly reflects the comparatively smaller business
base (with the start up rate expressed as a proportion of active enterprises).
While micro and small businesses dominate the workplace profile, they account for
less than half of total employment, reflecting the importance of medium and, in
particular, large employers in the Borough. The 69 large workplaces in Walsall
employ over 31,000 people, accounting for almost a third of the regional and
national profile.

Projections
The West Midlands Regional Observatory‟s Integrated Policy Model shows a
forecast of slow employment growth in Walsall between 2012 and 2020. This is not
expected to be sufficient to offset the recession‟s severe impact highlighted by a
sharp employment decline between 2008 and 2010. By 2020, employment levels
are only expected to be 94% of 2008 levels. This will further reduce the spending
power generated by those that live and work in Walsall.
GVA is expected to have increased, however, reflecting the shorter post recession
recovery period for output when compared to employment, and increasing
productivity levels.
Sectoral employment and GVA forecasts show that the structural change that has
occurred in Walsall over the past ten years is set to continue:


                                                                                                                                                                115
Appendix A: Business Survey Supporting Cross Tabulations

Sample Characteristics
 Turnover Profile (by Sector)
                                                                                                       >£5        >£10
                                 Less                                                                million -   million -                Don't
                                 than      £50,000-      £100,001-    £400,001-      >£1 million -     £10         £20       Over £20     Know/
                                £50,000    £100,000      £400,000     £999,999        £5 million     million     million      million    Refused
 Manufacturing                       3%          11%           18%          22%              25%           6%          5%           3%        8%
 Construction                        3%          15%           18%           8%              31%           7%          5%           7%        7%
 Retail, Hotels &
 Restaurants                      13%            8%           24%            13%              21%         5%          0%          3%        14%
 Finance, Bus‟ & Prof‟
 Services                          6%           21%           12%             9%              18%         0%          3%          6%        26%
 All Businesses                   14%           12%           16%            15%              21%         4%          3%          3%        12%
 Source: Walsall Business Survey 2010


Growth Expectations
 Business Growth Factors (by Sector)
                     Obtained
                        new
                     business               Developed
                       within    Entered       new
                      existing     new       product /   Expanded    International   Expanded
                      market     market       service    workforce       trade        facilities
 Manufacturing            73%       39%            39%        11%             15%           18%
 Construction             77%       19%            32%        13%             10%           23%
 Retail                   76%       30%            46%        11%             14%             8%
 Hotels &
 Restaurants              86%       29%           29%         14%             0%           29%
 Finance, Bus‟ &
 Prof‟ Services           67%       17%           25%          8%             0%            8%
 All Businesses           73%       32%           34%         12%             9%           15%
 Source: Walsall Business Survey 2010




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                                                    Walsall Sector Analysis Study – Sector Analysis Paper


 Business Growth Constraints (by Sector)
                        Just                                            Lack of
                     undergone                               Limit      finance
                      period of     Market limitations/    exposure        for       Personal
                       growth         competition           to risk    expansion     reasons
 Manufacturing               0%                      66%        11%           13%         5%
 Construction                0%                      45%          7%          21%         3%
 Retail, Hotels &
 Restaurants                15%                      19%          4%        12%            8%
 Finance, Bus‟ &
 Prof‟ Services             25%                      50%        0%           0%            13%
 All Businesses              7%                      49%       10%          17%             9%
 Source: Walsall Business Survey 2010


Involvement in training
 Businesses Undertaking Staff Training (by Sector)
                                 Yes               No              Don’t know
 Manufacturing                      83%                     16%            1%
 Construction                       87%                     13%            0%
 Retail                             79%                     19%            2%
 Hotels & Restaurants              100%                      0%            0%
 Finance                            85%                     15%            0%
 Bus‟ & Prof‟ Services              79%                     17%            4%
 All Businesses                     84%                     16%            1%
 Source: Walsall Business Survey 2010


 Location of Training Providers (by Sector)
                                      Walsall    Black      West         West       Rest
                               In-              Country    Midlands    Midlands      of
                             house                          Metro       Region       UK
 Manufacturing                 85%       18%       24%           8%          1%       5%
 Construction                  77%       35%       40%          23%         13%      27%
 Retail                        77%       19%       13%          13%         10%      12%
 Hotels & Restaurants         100%       14%       29%          57%          0%       0%
 Finance                       77%       15%       15%           0%          0%       8%
 Bus‟ & Prof‟ Services         82%       41%       18%           9%          0%       0%
 All Businesses                85%       28%       25%          15%          7%      14%
 Source: Walsall Business Survey 2010


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                                                        Walsall Sector Analysis Study – Sector Analysis Paper



 Barriers to Training (by Sector)
                              Courses     Quality of     Dates/times                    Did not receive
                               are not    training is     of training     Training         expected           No training
                              relevant        not             are          is too        benefits from         providers
                                         satisfactory   inconvenient     expensive       past training          locally
 Manufacturing                    25%              8%               5%          26%                  7%                  9%
 Construction                     16%              8%             12%           35%                 12%                  2%
 Retail                           18%              4%               9%          18%                  5%                  0%
 Hotels & Restaurants             29%             14%               0%          29%                 14%                  0%
 Finance                           8%              0%               8%          15%                  0%                  8%
 Bus‟ & Prof‟ Services            20%              0%               4%          32%                  0%                  0%
 All Businesses                   29%              8%             14%           45%                  6%                  9%
 Source: Walsall Business Survey 2010


Innovation
 Innovation Activity (by Sector)
                                                    Links with                                     Adopted      Changes
                                                      Higher       Collaborate        Processes,     new        in design     Adopted new     Innovation
                          Culture of    R&D         Education       with other        materials,   business        and        technologies    protection
                         innovation   strategy     Institutions   organisations        expertise    models       usability     or practices    measures
 Manufacturing                  69%        46%             33%              51%             53%        49%            64%               74%         20%
 Construction                   67%        39%             31%              59%             69%        57%            40%               63%         13%
 Retail                         65%        44%             31%              49%             46%        57%            53%               59%         20%
 Hotels & Restaurants           63%        50%             29%              29%             14%        71%            57%               25%         14%
 Finance                        62%        38%               8%             46%             38%        46%            38%               62%         17%
 Bus‟ & Prof‟ Services          73%        40%             35%              54%             44%        53%            48%               62%           9%
 All Businesses                 66%        43%             33%              50%             49%        50%            50%               63%         14%
 Source: Walsall Business Survey 2010




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                                                     Walsall Sector Analysis Study – Sector Analysis Paper


Collaboration Activity (by Sector)
                                                     Competitors   Consultants,    Universities   Government
                                                       or other    commercial        or other       or other      Knowledge
                                                     enterprises     labs, or         higher         public        Transfer
                                        Clients or     in your     private R&D      education      research      Partnerships
                            Suppliers   customers     industry         labs         institutes     institutes       (KTPs)
Manufacturing                     31%         33%            14%            13%            14%              2%             2%
Construction                      39%         53%            20%            14%            16%              4%             4%
Retail                            37%         41%            19%             4%            13%              0%             0%
Hotels & Restaurants              29%          0%            14%            14%             0%              0%             0%
Finance                           15%         23%            15%             8%            15%            23%              8%
Bus‟ & Prof‟ Services             33%         38%            25%            21%            21%              8%             8%
All Businesses                    31%         36%            18%            12%            15%              5%             3%
Source: Walsall Business Survey 2010


Awareness of Innovation Support (by Sector)
                              Don’t                    Not very       Partially
                              know    Not aware         aware          aware       Very aware
Manufacturing                      8%       29%              22%             30%          10%
Construction                       6%       48%              17%             20%           9%
Retail                            21%       37%              13%             21%           8%
Hotels & Restaurants              25%       13%              50%             13%           0%
Finance                            8%       54%               0%             23%          15%
Bus‟ & Prof‟ Services              2%       38%              16%             24%          20%
All Businesses                     9%       38%              16%             24%          13%
Source: Walsall Business Survey 2010


Importance of Innovation (by Sector)
                              Don’t                                   Not at all     Not very        Very
                              know      Essential      Important     important      important      important
Manufacturing                     10%         9%             29%              9%           19%           23%
Construction                      15%         9%             30%             11%           17%           19%
Retail                            19%        14%             16%             16%           13%           22%
Hotels & Restaurants              25%        13%             25%             13%           13%           13%
Finance                            0%         0%             23%             38%           15%           23%
Bus‟ & Prof‟ Services              8%        16%             34%              4%           24%           14%
All Businesses                    15%        11%             26%             11%           19%           19%
Source: Walsall Business Survey 2010



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                                                    Walsall Sector Analysis Study – Sector Analysis Paper



Challenges to Exploiting Innovation (by Sector)
                                   Insufficient knowledge        Lack of relevant skills
                                     about the low carbon         for the low carbon                           Financial
                                            sector                       sector            Time constraints   constraints
Manufacturing                                           33%                        19%                 36%             12%
Construction                                            42%                        19%                 19%             19%
Retail                                                  29%                        11%                 39%             21%
Hotels & Restaurants                                    25%                        25%                 50%               0%
Finance                                                 50%                        25%                 25%               0%
Bus‟ & Prof‟ Services                                   47%                        20%                 20%             13%
All Businesses                                          15%                          3%                13%             19%
Source: Walsall Business Survey 2010


Business Location and Premises
Interest in Relocating Elsewhere in Walsall (by Sector)
                                                          Elsewhere in Walsall
Manufacturing                                                                     27%
Construction                                                                      45%
Retail, Hotels & Restaurants                                                      40%
Finance, Bus‟ & Prof‟ Services                                                    40%
All Businesses                                                                    32%
Source: Walsall Business Survey 2010




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