Abstract
In this policy briefing, Dr Fengjie Pan and Professor Simon Collinson look at why some firms and sectors make a larger contribution to local and regional economies than others.
These findings are relevant for policymakers looking to support businesses that are particularly important to the growth of the region as a whole.
Summary and policy recommendations
The success of firms and regions is interdependent and reciprocal…
- Firms tend to be more competitive and perform better if they are located in regions that have good infrastructure, skills, suppliers, customers and support for innovation.
- Regions grow faster and are more resilient in the face of economic shocks if they host strong, competitive and innovative firms.
But, regional growth depends more on some kinds of firms than others …
- The regional impact of any firm is related to both its size and its local embeddedness – that is the proportion of its assets and employment in the region and how much it buys and sells to other firms or customers in the region.
- Our survey of 300 businesses in the West Midlands region, covering four sectors, has shown that firms in Hospitality and the Business Professional and Financial Services (BPFS) sector are more embedded in the region, with a larger proportion of local suppliers and customers than those in Retail and Advanced Manufacturing.
Policymakers need to consider this and other evidence to improve the targeting of interventions and support to benefit firms that contribute most to local growth.
This work is part of City-REDI's Productivity and Prosperity: Inclusive Growth for the West Midlands project.
These findings are relevant for policymakers looking to support businesses that are particularly important to the growth of the region as a whole.
Summary and policy recommendations
The success of firms and regions is interdependent and reciprocal…
- Firms tend to be more competitive and perform better if they are located in regions that have good infrastructure, skills, suppliers, customers and support for innovation.
- Regions grow faster and are more resilient in the face of economic shocks if they host strong, competitive and innovative firms.
But, regional growth depends more on some kinds of firms than others …
- The regional impact of any firm is related to both its size and its local embeddedness – that is the proportion of its assets and employment in the region and how much it buys and sells to other firms or customers in the region.
- Our survey of 300 businesses in the West Midlands region, covering four sectors, has shown that firms in Hospitality and the Business Professional and Financial Services (BPFS) sector are more embedded in the region, with a larger proportion of local suppliers and customers than those in Retail and Advanced Manufacturing.
Policymakers need to consider this and other evidence to improve the targeting of interventions and support to benefit firms that contribute most to local growth.
This work is part of City-REDI's Productivity and Prosperity: Inclusive Growth for the West Midlands project.
| Original language | English |
|---|---|
| Number of pages | 7 |
| Publication status | Published - 1 Sept 2020 |
Keywords
- Regional growth
- Firms
- Business
