Appendices Schedule
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BLACK COUNTRY LOCAL ENTERPRISE PARTNERSHIP MEETING OF THE PARTNERSHIP BOARD Monday 22nd October 2018 at 3.00pm at Dudley College, The Broadway, Dudley PUBLIC APPENDICES SCHEDULE No Item Presenter Report Appendices 5 Black Country Strategic Companies Barometer SM Yes Yes 2018 1. Black Country Strategic Barometers 2018: Full Report 6a WMCA Update including Local Industrial Strategy SM Yes Yes 2. WM Local Industrial Strategy Consultation 6b Black Country Local Industrial Strategy SM Yes Yes 3. Black Country Local Industrial Strategy October 2018 Draft 13 PR and Communications Report Comms Yes Yes Members 4. PR Coverage September 2018 October 2018 DRAFT 1 Strategic Companies Barometer Black Country 2018 Strategic Companies Barometer 2018 0 Introduction Our Strategic Economic Plan (SEP) identifies 12 strategic programmes aimed at enabling businesses in our priority sectors to grow and deliver our contribution to the implementation of the UK Industrial Strategy. It is critical that the Black Country has the economic, social and physical infrastructure to enable those companies to grow. This report seeks to highlight the importance of the Strategic Companies in the Black Country to achieving the aims of the SEP. At the core of the strategy are seven priority propositions which are intended to focus action to enable growth in the Black Country and demonstrate our ambition and vision. A key feature of our approach is to focus our effort on 10 identified leading sectors that are crucial in securing economic growth, jobs and productivity in the Black Country. There are a range of activities currently underway to deliver these programmes. Understanding the impact of current activity against our ambitions and identifying what additional activity is required is important to assessing for 2033 vision targets. Key to achieving the business aims of the SEP are the Black Country Strategic Companies. These companies are vital to creating economic growth and reducing the £10 billion productivity gap with the national economy and generating future growth. Page 1 Black Country Business Base The Black Country is home to a diverse business base of 37,490 enterprises. (Office for National Statistics, Business Demography, 2016). An enterprise can be thought of as the overall business, made up of all the individual sites or workplaces. It is defined as the smallest combination of legal units (generally based on VAT and/or PAYE records) that has a certain degree of autonomy within an enterprise group (Nomis, 2017). 3,590 companies have a turnover of >£1m out of 33,570 companies for which this breakdown is available for. 2,160 companies are included on the 2018 ‘Black Country Strategic Companies List’. Retail and Advanced Manufacturing the two leading sectors in terms of the high turnover (£5m+) business concentration. These firms have been categorised into five groups based on their turnover band1: 1. There are 955 “High Achiever” companies, these firms have a turnover of more than £5 million a year and account for 3% of the business base. 2. “Growth Pioneers” are second-tier growth firms turning over £1m-£4.99m - 2,635 companies account for 3% of the business base. 3. The 6,545 “Potential Gazelles” companies turning over £250k to £999k account for 19% of the business base. 4. The 9,555 SMEs with a turnover between £100k to £249k are classified as “Solid Performers” account for 28% of the business base. 5. Firms turning over less than £100k are classed as “Lifestylers”, this includes micro enterprises - 13,880. This account for 41% of the total business base in 2017 which is a 1% increase from 2016 (40%). Source: ONS Business Demography, 2017 Identifying the barriers to growth for our entire business base (37,490 companies) is key to the growth of the Black Country economy. 80% of businesses in the Black Country generate less than £1million turnover and 99.6% of businesses employ less than 250 employees2, further highlighting the need to support smaller as well as larger businesses. Overall, our strategic companies are the bedrock to Black Country economy, leading on growth opportunities through exporting and supply chain opportunities for firms in the area. The London Stock Exchange’s ‘1000 Companies To Inspire Britain 2018’ features 21 Black Country firms - 48% of the featured Black Country companies operate within the manufacturing, construction, and engineering sectors. 1 Currently the Business Demography dataset does not provide a breakdown by turnover of the 37,490 registered enterprises. However, this breakdown can be obtained via the UK Business Count Dataset, which is a snapshot (March 2017) of the Business Demography dataset. At the time of the snapshot there were 33,570 enterprises in the Black Country which has been used for the turnover analysis. 2 Nomis: UK Business County by Industry and Employment Size Band, 2017 figures. Page 2 Defining a Strategic Company A survey conducted in the Black Country identified that businesses with a turnover of more than £1m are significantly more likely to grow - the Black Country is home to 3,590 companies with turnover level of greater than £1m. In order to get a list of Black Country Strategic Companies a filtering process is applied to these High Turnover firms with information available via the Financial Analysis Made Easy (FAME)3 database. The following parameters are applied: 1. Turnover & Trading Address - Strategic companies should have a minimum estimated turnover of £1m a year and have a registered or trading office in the Black Country. 2. Parent Company - If a company has many subsidiaries the parent company is chosen for the Strategic Companies list. 3. Signs of Activity - Holding companies that don’t appear to trade are also excluded from the list based on the premise that they do not contribute to the productivity of the Black Country business base. 4. Private Sector - Many public sector establishments such as schools are identified through the initial strategic search but are subsequently excluded from the final Strategic Companies list which measures private sector productivity in the Black Country. 5. Partner Information - Local intelligence is also applied to the list and it is updated on an annual basis. Local intelligence can suggest the addition of firms that that don’t strictly qualify for one of the parameters listed above but are seen to make a significant contribution to growth in the sub-region. We have identified 2,160 strategic companies in the Black Country from the BvD FAME database in July 2018. The following infographic illustrates the economic impact of the strategic companies. 3 FAME is a financial information database of 7 million companies in the UK and Rep. of Ireland updated daily, with up to 10 years of data. Detailed financial, descriptive and ownership information for these companies plus summary. The database allows users to search by a wide selection of criteria (name, code, location, size, and many others). Page 3 Value to the Black Country Economy Gross Value Added4 GVA Number of • These firms generate approximately £10.7bn Gross Value (GBP) Companies Added (GVA) both nationally and internationally, including > £500m 1 minimum GVA from the 1,951 unknown companies. Over half £250-500m 3 of the GVA is attributable to Jaguar Land Rover, West Bromwich Albion Football Club, Hydriades IV Ltd and A.F. Blakemore & £100-250m 7 Son Ltd. £50-100m 6 £20-50m 11 • Ensuring these companies remain in the Black Country and £15-20m 11 continue to grow is fundamental to the Sub-Region’s economy £10-15m 10 and addressing the £1 billion output gap. £5-10m 32 • Although the number of strategic companies is higher GVA is £1-5m 105 lower than previous years as Wolverhampton has experienced <£1m 22 the “largest ever trading liquidation” of Carillion PLC in January Unknown 1,952 2018. Turnover Turnover Number of • These 2,160 companies have a combined turnover of (GBP) Companies approximately £41bn. > £500m 8 £250-500m 2 • 2% of these strategic companies had a turnover of £100m £100-250m 25 or more. £50-100m 28 £20-50m 110 • 79% of these companies have an estimated turnover of less £15-20m 57 than £10m. £10-15m 105 £5-10m 117 £1-5m 163 Estimated £1m 1,545 Jobs Number of Number of • These 2,160 companies employ approximately 190,000 people. Employees Companies However, not all firms declared how many people they 500+ 41 employed. 250-500 45 • 100-250 142 17% employ between 10 and 250 people, compared to 25% of the 1,820 strategic companies in the 2017 report. 50-100 148 10-50 176 • 10% of these companies employ less than 50 people – down 1-10 43 4pp from 2017 report. Unknown 1,565 • 2% of these companies employ over 500 people this percentage has remained the same from the previous year strategic companies analysis. • There are currently 446,500 workforce jobs in total in the Black Country. 4 Please note data on these companies needs to be interpreted with caution as not all of the economic benefits will be to the Black Country economy. The data is based on the full company which may have branches outside of the Black Country. Page 4 Sector Analysis Transformational We have identified five priority sectors which will secure the most economic growth because of their export potential and supply chain opportunities. Transformational sectors are: Advanced Manufacturing, Building Technologies, Transport Technologies, Business Services and Environmental Technologies. These firms make up a large proportion of the strategic companies and make a large contribution to the Black Country. Our Economic model sectoral analysis sets out the composition of jobs by sector and shows that there are currently 220,000 jobs in our transformational sectors and our ambition is to grow to 273,000 jobs by 2030.