The region’s reliance on the professional services sector rather than looking to promote manufacturing will end in disaster according to a top industrialist.
Lord Kumar Bhattacharyya, who founded the Warwick Manufacturing Group, said the UK was destined to fall further behind if it did not re-focus on the industries that first elevated it onto the world stage.
He added that the obsession with the region’s oft-reported lack of skills was something of a red herring when it was up to companies to ensure there they had a sufficiently well-trained workforce.
“This region has been dominated by the professional sector but growth doesn’t come from there,” he said. “Across the world growth is being driven by manufacturing. I have just been to Singapore and it is manufacturing that is helping them grow – 22 per cent of its economy is manufacturing and not finance as many might assume. In Germany it is manufacturing that is getting them out of the recession.
“Everyone is talking about innovation and it has become a buzz word. Everybody is talking about skills and that has become a buzz word. But it is not the government’s role to deal with skills, it is up to employers to deal with skills.
“The region has been dependent on government loot for so long that the shock will take some time to get over but it happened in the 1980s under Margaret Thatcher and we recovered from it. Growth, growth, growth has to be the mantra over the next few years and unless we grow then the effects of what is happening now will be extremely negative.”
Lord Bhattacharyya cited Jaguar Land Rover as an example of what could be achieved when companies invested in their product and workforce but warned that there were no guarantees that the company would remain in the region if it did not get its act together.
“The company is currently negotiating with unions over pay and conditions as part of a five-year strategy that could see the closure of one of its major Midland plants although it is confident that across the business it could see the number of employees grow as sales have boomed over the past 12 months.
He said: “What happens with the current JLR negotiations over pay will be seen as a test case for the Midlands. The unions have to understand that JLR is a global company and the work has to be done to reduce the cost base if the company is going to remain in the Midlands.
“The region also has to see growth if we are going to ensure that companies like JLR or other global companies are going to remain here.”
He said that the abolition of regional development agency Advantage West Midlands would not assist with the process of supporting manufacturing and said it was important there was “something in place that looked at growth in the region” but added that maybe it was time to look beyond traditional partnerships after the different elements of the West Midlands conurbation could not form a single local enterprise partnership.
He said: “One of the big problems now is we are not united and there are many who do not realise that the region itself only exists as a hangover from World War Two because of the airfields and there is actually no real logic in it.
“Maybe we have to look at a mix and match solution and look beyond what is perceived as the West Midlands region but it is a pity that the Black Country, Birmingham and Coventry apparently can’t work together.”