Inward Investment - update on the work of MIDAS
Decision status: Recommendations Approved
Is Key decision?: No
Is subject to call in?: No
The Committee considered a report of the Group Chief Executive of the Growth Company, which provided an update on the work of MIDAS in attracting inward investment to the city, including details of performance over the last two years and MIDAS’ forward strategy.
The main points and themes within the report included:-
· The work of MIDAS, which included:-
· Driving the promotion of Greater Manchester (GM) as a business location;
· Attracting new investment in to Greater Manchester – both Corporate and Capital;
· Providing aftercare services to recent investors; and
· Account management of the significant Foreign Direct Investment (FDI) and UK businesses in Greater Manchester;
· An overview of Inward Investment trends at a UK, GM and Manchester level;
· Key drivers for FDI, which in terms of GM, the most common driver behind GM’s successes was talent, followed by strength of the GM economy;
· An outline of initiatives and work areas developed by MIDAs to counter-act uncertainty and a decreasing level of global investment, which included:-
· The MIDAS Partnership;
· An enhanced Account Management Programme; and
· A more focused Business Development Strategy;
· Details of two sector specific high potential opportunity inward investment propositions within Advanced Materials and Sustainable Packaging;
· Support offered to Enterprise Zones (Airport City and The Corridor); and
· The economic impact to Manchester and Greater Manchester as a result of the work of MIDAS
Some of the key points that arose from the Committees discussions were:-
· What work took place in terms of making sure jobs created were sustainable should an investor exit the market;
· Was there any specific reason why the number of jobs created within the Life Sciences sector had fallen as this was a sector of growth that underpinned part of the Local Industrial Strategy;
· What long term benefits did technology companies bring to the conurbation;
· A more detail explanation was sought in reference to the quality of leads coming through DIT;
· To what extent did Officers think that Brexit would have on the attractiveness of FDI in Manchester;
· It was queried as to whether the increase in property prices was considered a positive sign given that this increase often outstripped wage growth;
· How were the deciding factors in successful FDI projects determined;
· What were the incentives for attracting businesses to locate to Manchester;
· What benefit would the NextGen campaign bring to the city and why was it hoped that this campaign would identify the next Facebook or Google, given the criticisms these organisations had faced in relation to their conduct; and
· What was the next main area that MIDAS would be concentrating on that the Committee needed to be mindful.
The Leader advised that attracting technology companies to the city was a positive thing as they provided good employment, good training and good salaries. He commented that the extent to which some of the very large tech companies appeared to avoid their national taxation requirements was a failure of central government to resolve, and was not a reason for Manchester to forego employment opportunities that these companies provided. In terms of the potential impact of Brexit, it was acknowledged that there had undoubtedly been some business leads that had been lost due to the threat of Brexit. What was impossible to determine was the extent to which businesses would be impacted by the uncertainty of operating in the UK post Brexit. He added that wage growth made it more attractive for individuals to relocate to the area and stay in Manchester but acknowledged that there were positives and negatives to be taken from the increase in property values.
The Group Chief Executive of the Growth Company reported that the integration of companies and their operation into Manchester, Greater Manchester and the wider economy was a key role of MIDAS in helping ensure their sustainability.
In terms of the quality of leads coming through DIT it was reported that the relationship worked well when DIT understood what Greater Manchester had to offer and there was room for improvement in improving their understanding, especially in terms of oversees posts as to what Greater Manchester could offer. As such, MIDAS could not be reliant in the DIT for the generation of leads and opportunities for Manchester. As for the reduction in the Life Science sector, this could be attributed to the potential impact of Brexit and although there was a reduction, Manchester still attracted quarter of all jobs created in this sector in 2018/19.
The Group Chief Executive of the Growth Company advised that in terms of incentives, it was a combination of factors, but in the main, the most influential factor for businesses was having access to a talented, diverse pool of potential employees in and around Manchester. In terms of the NextGen campaign, it was important to distinguish between having large numbers of high quality jobs that could exist in the type of businesses that the campaign aimed to attract and the conduct of the owners of these types of businesses. The inference was that the campaign was looking for high quality, large scale businesses which could deliver growth and inward investment. It was also noted that there were a number of indigenous companies from within Greater Manchester that were very successful in the e-commerce sector.
Furthermore, the Group Chief Executive of the Growth Company advised that one of the next key areas of focus for MIDAS would be the outcome of Brexit and also what was happening in the global economy in terms of growth.
The Committee notes the report
Publication date: 18/10/2019
Date of decision: 10/10/2019
Decided at meeting: 10/10/2019 - Economy Scrutiny Committee