Alun Thorne speaks to Marketing Birmingham boss Neil Rami about a new era for inward investment in the city
When it comes to attracting inward investment, Birmingham’s performance could be equated to its two Premier League football teams – lots of endeavour, flashes of brilliance... but distinctly mid-table.
There have certainly been successes – the much-vaunted move to Brindleyplace by Deutsche Bank being a case in point – but the city only attracted five per cent of foreign investment in the UK in recent years.
However, rather than slipping in the same direction as Villa and Blues appear to be, Birmingham decided last year it was time to restructure its approach and dip into the transfer market.
Marketing Birmingham – which had overall responsibility for driving the city’s visitor economy – announced it would be moving in with Locate in Birmingham, the organisation tasked with attracting inward investment into the city.
This was not just a case of sharing office space but was the starting point for a complete overhaul of how the city marketed itself to potential investors and, ultimately, a fundamental shift in the remit of Marketing Birmingham.
As of now, Locate in Birmingham is no more and will be replaced by the new streamlined Business Birmingham, which will fall under the umbrella of Marketing Birmingham along with Visit Birmingham, which will focus on visitors to the city, and Meet Birmingham, which will work to attract events.
It has certainly not been a transition without some pain. Overall, Marketing Birmingham has seen its headcount reduced by a quarter since its chief executive Neil Rami took on the role in 2004 and the new Business Birmingham will be made up of a six-strong dedicated investment sales team headed by an investment director, compared with a previous staff at Locate of 16, although Business Birmingham will enjoy back office support from Marketing Birmingham.
From a funding point of view, Marketing Birmingham can no longer rely on an AWM contribution but still enjoys a £1.6 million investment from the private sector and, as of next April, Birmingham City Council will be increasing its contribution from £2 million to £2.5 million, at least £1 million of which will be targeted at Business Birmingham every year for the next five years.
And like any good Premier League team, Business Birmingham will be using a good chunk of this budget to ensure it has the right players on the pitch.
The organisation has already secured the signature of Wouter Schuitemaker as its new investment director – currently head of Asia Pacific at the capital’s inward investment agency Think London – and only now he is in place will the interviews begin for the six members of the sales team.
But getting the right man at the helm was the first hurdle that needed to be negotiated.
“This was a truly international search,” said Mr Rami. “And the response we had for this role and the rest of the team has been phenomenal. Three of the interviews were done via video conference to places like Amsterdam and New York.”
But it is not just about getting the right people. Despite a number of successes in recent years, Birmingham remains in greater need than many other urban centres in the UK. At 11.6 per cent, unemployment remains twice the national average, while jobs created through inward investment have shrunk year on year with just 3,700 new jobs on offer from such investment in 2008.
To successfully push Birmingham up the inward investment league is also about having the right information, according to Mr Rami, and over the last few months Marketing Birmingham has been working with global location specialists IBM-PLI to better understand where Business Birmingham needs to be looking.
“The work that IBM has done has been crucial,” said Mr Rami. “They have provided the market intelligence we need to discover where the low hanging fruit are in terms of inward investment.
“At the moment in terms of attracting international investment, we are mid-table, and we need to improve that. We now have a better understanding as to where the end-user investment is already coming from and so enabling us to focus on retaining what we already have but also looking to attract new investment. In reality what the IBM work has allowed us to do is create a route map around areas that can be good for us.”
The study identified a number of key areas which Birmingham could exploit in the years to come including financial services and shared services and business process outsourcing.
Mr Rami said: “There is clearly a big consolidation taking place in the banking sector so we want to retain what we have and there is a real opportunity there for growth as well.
“In terms of shared services and business process outsourcing, this is an exciting area wih significant long-term potential. The various reports over the past few years regarding public sector relocation have delivered to a point, and in the current climate the wholesale relocation of entire government departments is unlikely.
“However, the fact that office costs in Birmingham are effectively half the cost of London means there may be opportunities in the future should some of the functions of these departments be relocated.”
Other areas where Mr Rami believes there will be opportunities include transport technologies and the drive towards low carbon products, particularly in the automotive sector and around the digital media sector and medical technologies.
“The numbers in terms of the growth of electric cars over the next 10 years are staggering and we are well positioned to take advantage of this in terms of the work that is already being done by manufacturers and our universities.”
Indeed, Mr Rami is clear that the region’s universities will play a key role in helping to attract international investment. “If you look around it is the universities that do most of the international marketing and that is something that we need to capture,” he said.
And it is marketing, as well as personnel and information, that makes up the third strand of Business Birmingham’s strategy for success.
One of the areas where Birmingham has been lacking according to respected surveys such as the Cushman & Wakefield city monitor report, is that while the city enjoys huge advantages over others in Europe when looking at indices such as available grade A space, transport and graduate talent, it still does not register sufficiently on the radar of the European chief executive.
To combat this Business Birmingham will be embarking on a major advertising campaign at some of the major gateways across the UK using an “unlimited” theme as well as launching the new businessbirmingham.com website, which will be a one stop shop for all potential investors, providing up-to-date information about the city.
The new venture will also be focusing on a number of key events in the coming months including a shared services forum next month as well as events with German and Indian delegations before the end of the year while looking at an Islamic Banking conference and MIPIM in the first half of next year.
Mike Whitby, leader of Birmingham City Council, has thrown his weight behind the new approach and believes Birmingham is now in a strong position to increase its share of this market.
“We have set our new inward investment team a challenging target – deliver almost 7,000 new jobs to the city and elevate Birmingham’s position as a leading business destination. To do this at a time when public resources are under real pressure will require strategic and targeted activity, and strong collaboration with the city’s business community.”
Jerry Blackett, chief executive of Birmingham Chamber Group, has also backed the new strategy.
But while the building blocks are falling into place to give Business Birmingham a real chance to bring new investment to the city, Mr Rami is under no illusions about the challenges that lie ahead. “Our target is to create 7,000 jobs by 2015 – overall we will have less money but we need to create twice the jobs.”
That sounds like Champions League talk.