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Ian McCartney - Former Minister of State for Competitiveness (May 1997 - Jun 1999)"Stimulating Inward Investment within the North West" |
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Government Commitment to Inward Investment Let me begin by a statement of the obvious. Governments do not create wealth and jobs. Businesses create wealth and jobs. Countries don't compete. Firms and companies compete. It is entrepreneurs who take risks in the face of uncertainty and open up new markets. We know there are a number of factors crucial to any business, whether a UK or foreign company. As a Government, our task is to create a stable economy and business environment, within which business can compete and win in world markets. Economic stability is the key to encouraging investment and a longer term prospective. We must focus on giving business the freedom, the incentives and the support they need to survive and prosper. Inward Investment Most inward investment projects come here on the strength of the UK's overall commercial case, rather than purely as a result of financial incentives. Overseas companies have been attracted in their hundreds by our scientific and technological excellence, our open and frank ways of doing business, and the positive welcome that we give them. But we must recognise that there is always more we can do to increase our attractiveness as an investment location. Other countries aren't standing still, and neither must we. We must have a competitive economy to attract and retain investment. Over the last decade the UK has proved itself as the most attractive location in Europe for inward investors. This remains as true today as then. There is so much the UK - and the North West - is able to offer as an attractive location. And it can only get better as we strengthen still further our science and technology base, increase the skills of our workforce and invest in the technology for tomorrow's industries. These are the cornerstones to our future. The twenty first century is almost upon us. A future that is going to be dominated by knowledge; Britain is second only to the US in the number of Nobel prizes for science it has received. We will need to exploit all of our natural advantages, including the English language. Regional Development Agencies All of you here this evening will be aware that Regional Development Agencies opened for business, in each of the English Regions, on the first of April. Not as a new tier of bureaucracy, but to provide economic leadership at the regional level. RDAs will play an important role in improving each region's ability to attract new investment :
RDAs will provide, for the first time, a focus for the co-ordination of economic activity at the regional level. As I am sure you are aware, the North West Development Agency is in the process of developing a Regional Economic Strategy. I have been impressed by the level of consultation undertaken in the North West, which is unprecedented among the English regions. This has included gathering statements of evidence from the region's prime sectors - 31 in all. There has been two open consultation meetings in Liverpool and Manchester, in which the region's SME's were able to contribute. There has also been over 1500 written submissions to the Agency from organisations in both the private and public sectors - all keen to contribute to the future development of the region. I understand the draft Regional Economic Strategy will be launched at an event in Liverpool on 2 July. Following this, there will be a further period of consultation, before being formally agreed and adopted in the Autumn. The key themes beginning to emerge - none of which I am sure will be a surprise to you - include:
Clearly the Regional Economic Strategy and the level of consultation undertaken will assist us in Government to understand even more clearly the issues affecting business in the region. It will help us to continue to develop policies which provide for the on-going success of the North West in attracting new inward investment - both from overseas and indigenous growth. The Agency will have an important role to play in the overall effort to win inward investment for the UK. My Department continues to part-fund the Agency's inward investment promotion activities, and works closely with the Agency on converting opportunities into jobs on the ground. Small Firms / Small Business Service This Government recognises the important role that SMEs play in a dynamic economy. We need to work in partnership with SMEs. Not only do they create jobs, they are the suppliers to many of our inward investors. March 1999 Budget, new 10p corporation tax rates for small companies and extension of 40% capital allowances for SMEs to encourage entrepreneurial activity and innovative investment was announced. New R&D tax credit in 2000 to encourage small business investment in R&D. New £100 million Small Business Service to act as a strong voice for small business at the heart of Government, and improve the quality and coherence and delivery of government support programmes for small business and ensure they address their needs. £100 million will boost the Smart scheme helping SMEs to research, develop and acquire the technologies needed to bring innovative products to the market place. The 'North West' The North West makes a major contribution to the performance of the UK's economy. It has strong performers over the whole range of industrial sectors. From chemicals to engineering, banking and finance to creative industries. Perhaps one of its greatest assets - but undersold - is its large number of further and higher education institutions. These have a critical role to play in developing the region's knowledge and skill base. The North West needs more people, with more skills to match the demand for emerging products and technologies. And in fact with an annual output of over 30,000 graduates, the North West makes a major contribution to educating the UK as well as itself. 'Aftercare' But helping inward investors to set up in the UK is only one part of the picture. Our effort does not stop there. Half of all overseas investments made in the UK are now expansions by existing investors. Having once established themselves here they are treated just the same as British companies. Pro-actively looking after the needs of existing investors is designed to ensure that we are alive to their needs; to the possibilities for expansion, and where we can help. I too have taken part in this 'aftercare' process by visiting companies to hear at first hand of their experiences - warts and all - a practical demonstration of the Government's commitment. Benefits Every part of the UK benefits from inward investment, whether directly or indirectly. The North West has been no exception. Over the past 3 years, the Invest in Britain Bureau has logged 174 projects won in the North West. All together they are expected to create over a total 9,500 new jobs and safeguard nearly 17,000 existing jobs. A striking vote of confidence in the North West. I am told there are a number of projects in the pipeline at the moment, and I am hopeful a number of these will decide to locate their investment in the North West. There is no doubt that inward investment has been a catalyst for change throughout the economy. Not only through creating jobs in tomorrow's industries, but also by bringing in best practice, with exciting potential throughout the local supply chain. Inward investors often are involved in vibrant supply chains, actively helping their suppliers to improve performance and supporting innovation at all stages of the chain. But companies of all sizes often find the process of locating new suppliers both difficult and time consuming. The DTI's Regional Supply Network was established specifically to help companies improve their competitiveness. It will do this by reviewing their purchasing requirements and then suggesting suitable local or regional suppliers which meet their criteria in full. And inward investors also contribute to the economy in many other ways. They currently account for:
None of this detracts from the contributions to the economy by our home grown companies, many of whom are world class themselves. But with the ever increasing globalisation of business, we would be very short-sighted indeed not to do everything we can to attract inward investors as well. Partnership Inward investment is all about partnership. National, regional and local organisations and individuals from the private, public and central government organisations all working together to provide a quality service for inward investors. My Department's Invest in Britain Bureau's experience clearly indicates that inward investors need to be convinced of the benefits of locating in the UK first, before they consider the merits of different regions. But partnership and cohesion by themselves will win nothing. They need to be translated into practical results. Regions will need to be able to offer attractive premises and services sites with good infrastructure that will prove attractive to inward investors. Ask not what the investor can do for you, but what you can do for him. We need to move the agenda forward in partnership with the North West Development Agency to keep winning projects and new jobs for the North West. It is the positive factors shared by every part of the UK we have to thank for our success in attracting more foreign investment than any other developed country in the world, apart from the US. Past success is no guarantee for the future. Inward investment is a fiercely competitive world - never more so. There is no quick fix solution. It involves a long term cultivation process. The Future Looking to the future, the UK continues to face ever-growing competition. To put this in perspective, worldwide it is estimated that there are around 120 national inward investment agencies, and another three to four thousand regional agencies. Our performance must be constantly improved to ensure we provide the highest standard of customer care. We cannot afford to sit back and rest on our laurels. The market is changing. No longer are there the large greenfield projects providing thousands of jobs on a single site. We need to focus our efforts in future on those investments which play to our strengths. Those providing high skilled well paid jobs in the knowledge based industries which will be the main stay of our economy into the next Millennium. We also need to encourage 2nd and 3rd generation investments by companies that are already here, as well as stimulating their overseas suppliers to follow their customers to the UK. Finally I strongly believe the way forward is by together creating an environment in which business can plan and invest for the future. And together we must encourage, recognise and reward business for its involvement in the wider social and regional issues which are of concern to us all. Finally, at the end of the 1990s, the UK is embarked on a new transformation. An exciting time of change and renewal. We will continue to look forward and develop a strategic response for the long term which plays to the UK's strengths. We need to move up the value chain in terms of the benefits we want to secure from inward investment. Regional and national boundaries are becoming increasingly irrelevant in the global trade and investment. To succeed in this environment, the North West has to raise its game. I want to see the North West taking its place as a thriving regional economy, competing on the talent of its people, and the range of opportunities it can offer. Thank you. |
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Other speeches by Ian McCartney - Former Minister of State for Competitiveness (May 1997 - Jun 1999)
(the following are available from the archive) |
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