1. Learning, Innovation and Economic Development: The Creative Sector in the Birmingham City Region Laura James LLAKES Centre, Institute of Education, University of London

2. Economic development in the creative sector in the Birmingham city-region Context: recession and political/policy changes post- 2010 How have innovative SMEs in the creative sector (TV production, website design, digital branding) been affected? Three groups of actors: – Policymakers at the regional and local scale – small and medium sized firms (SMEs) – intermediary organisations and individuals Interviews with firms at six month intervals; pre/post LEP interviews with policymakers

3. Economic development under New Labour: regional clusters Heavily influenced by cluster concept (Porter) – ‘a geographic concentration of interconnected companies, specialised suppliers, service providers, and firms in related industries and associated institutions’ Nine Regional Development Agencies (RDAs) Statutory powers and responsibilities Advantage West Midlands – Invested £300 million annually – Regional Economic Strategy – Economic development policies organised by ‘cluster’ – Digital media – film, animation, TV, interactive media, radio, music, computer games, photography, digital imaging

4. AWM Digital Media Cluster (2003- 2010) £4.8 million RDA fund, leveraging £2.8 million EU funds – Proof of concept funding (Creative Advantage Fund) – Infrastructure and facilities (Serious Games Institute) – Events and networking (Digital Event; Hello Digital) – General business support (through Business Link) Claim: 226% return on investment; 184 jobs safeguarded; 54 new businesses created or moved to region; 832 businesses supported; 140 collaborations

5. Post-2010: Local Enterprise Partnerships Coalition government rejected the regional scale in favour of ‘functional economic areas’ at the ‘local’ scale Boards chaired by private sector leader Include local authorities, local business leaders, learning providers. 39 LEPs in England, largely based on Local Authority areas (some overlaps) Former WM region split into six LEPs (focus on Greater Birmingham & Solihull)

7. What will LEPs do? LEPs will: – set economic priorities & support business development – coordinate bids to centralised funds – be involved in strategic planning – collaborate with JCP & learning providers – be ‘involved’ in delivery of other national priorities No statutory powers or on-going funding – Approx. £230,000 per LEP start-up/capacity funding – Can bid for Regional Growth Fund (£2.4bn 2011-15) – Can bid for Enterprise Zones

8. LEPs vs. RDAs Local vs. regional Bidding for pots of funding vs. core funding Variability/fragmentation vs. equalisation Private sector led vs. public sector Recession vs. growth

9. What difference has it made to SMEs? Several different processes – Recession – Public sector budget cuts (creative & cultural organisations/activities) – Abolition of business support/economic development organisations – Dissolution of networks and collaborative relationships – Policy gap

10. Loss of RDA There’s nothing really, no central hub for this sort of collaboration to happen, so you kind of see sort of pockets of things emerging without the formality around it and without the support (SME Owner). One thing AWM did do very well was providing a degree of coherence and packaging it all into a regional showcase. So what we’ve got at the moment is very disparate. They had people who were very active, whose job it was to know everyone’s business and put people together (SME employee)

11. Loss of RDA ‘I mean Business Link’s I guess more of a kind of start-up facilty, so for us it was “haven’t missed it that much” because we kind of made the most out of it when we needed to (SME Owner) For a little while every organisation working in digital media in the West Midlands was being constantly shunted towards this magical pot of funding…there were some companies that were being propped up by public funding (SME employee)

12. LEP: challenges & opportunities (1) Lack of clarity over role, funding, powers Fragmentation, duplication of effort, lack of strategy ‘The government mandate to LEPs was “go off and do what you like” and then everyone says “what does that mean?”’ (Business consultant) Partnership working Responsive ‘We’ve got a board of 18 people and a small secretariat so that’s not geared up to delivery…I think the key role of the LEP is really facilitation, bringing people together and trying to galvanise things’ (Local Authority executive)

13. LEP: challenges and opportunities (2) Scale – Markets – Need to be outward-looking – Strategy – Large scale funding ‘To be honest we’re looking outside of Birmingham for a lot of the work that we do now, so we’ve got a London office. We’re based here but we don’t really see it as a place for opportunity on the kind of scale we want to work on’ (SME owner)

14. Conclusions SMEs engaged with policymakers and business support agencies in different ways at different times. The RDA’s strategic role was highly valued as was targeted funding and business development support. LEPs will most likely take over some of this BUT… – Recession and budget cuts – Lack of statutory powers – Policy gap – Higher transactions costs – Localism or parochialism?