Taking the advantage

The new development agencies will reveal their plans for the UK’s regional economies later this month. Alex Stephenson, chairman of Advantage West Midlands, talks to Douglas Friedli about the task ahead

Since April, eight regional development agencies have been responsible for overseeing the economic wellbeing of the English regions. Their brief is centred on reducing unemployment, attracting inward investment and generally improving the local economy. But you could be forgiven for not having heard about them. `I imagine most of the population don’t even know we exist,’ says Alex Stephenson, chairman of the West Midlands agency, Advantage West Midlands.

The reason is that the RDAs have been spending the past six months developing their regional economic strategies. And their profile is set to change later this month when these plans are unveiled.

Fittingly for the chairman of the agency covering the UK’s manufacturing heartland, Stephenson is steeped in the engineering industry. He worked for Perkins Engines for 20 years, before being seconded to Land Rover in 1988 to manage the Discovery engine launch. He stayed on at Rover for another 11 years as managing director of the company’s powertrain division. An interesting feature of the Rover years was Stephenson’s double act with his brother Nick, who rose to become design director. In a joint interview with The Engineer in 1990 Alex said: `I am ambitious too, but it is not overt.’

Given his background, it is perhaps not surprising that the focus of Advantage West Midlands will be technology. `We have to put innovation, science and technology back on the map. That doesn’t mean we shouldn’t continue to build up our professional services sector. A lot of consultants, lawyers and accountants are at the cutting edge of management techniques and IT issues, so having them as a resource is also very important. The relationship is symbiotic.’

The West Midlands region includes the old metropolitan county of the same name, as well as the surrounding counties from Staffordshire to Herefordshire. It has a population of five million, equal to Scotland’s, and a manufacturing base which is proportionately 50% larger than the UK average. But the agency’s budget is modest £100m, in the same league as a medium-sized company or local authority.

Having limited resources means using them effectively becomes more important. The practical things the RDA can do include setting up conferences and meetings, commissioning research and making property available for companies that need to expand.

The distinctive regional approach will perhaps become more obvious in the one-off projects which agencies can support. `For example, the ceramics industry could benefit from having a common approach to exports, but each company may not be able to afford an exports expert. We could help fund that type of resource,’ Stephenson says.

`And we will also be able to spend a small amount of our money on something completely new, for instance if there was a need for a state-of-the art manufacturing technology centre, we could broker that. Potentially it could have a considerable effect.’

One potential problem with a regional approach to inward investment is that it could become an auction, with regions competing for the same business. The West Midlands is trying to address this problem by working with the East Midlands, for example by sharing resources in overseas offices and presenting Central England as a unit.

Stephenson gained some insight into the inward investment process during his time at Rover, where he was involved in the decision on where to site the new Mini’s Brazilian engine plant. `It made me think in a really structured way about the criteria that make somewhere a success. We scored the regions on availability of skills, access to transport, access to component manufacturers,’ he says. `Turning that thinking on its head, you can now think about what package a company would need to invest here.’

Rover itself could provide one of the agency’s first headaches, as BMW pursues a tougher sourcing policy which will mean lost business for UK suppliers. This threat was underlined last week by Rover chairman Werner Samann, who warned that BMW would buy Rover parts abroad unless there were steep price cuts from UK suppliers and that there would be no minimum safety net for UK content in Rover’s vehicles.

But Stephenson remains relatively sanguine. `You don’t have to be a genius to know that if 80% of Rovers were sourced in the UK and that goes down to 60% that can only mean a reduction in business,’ says Stephenson. `But to those companies which are part of conglomerates, it isn’t going to make much difference. It looks bad, but it won’t be cataclysmic. The good suppliers will remain competitive, and they will retain the business.’

Stephenson’s vision for the West Midlands over the next 10 years is part dream, part practical. `I’d like the view to be a lot better when you drive up the M6, with better architecture and design. People should be able to move around the area as freely as they can now, but with less environmental impact. I’d like to think there were more people designing things than making them – as processes become more efficient, there will always be a decreasing number of people making things, so let’s get more people doing the clever stuff.’

Alex Stephenson at a glance

Age: 54

Education: Bachelor of Marine Engineering, University of Liverpool.

First job: Graduate trainee, Perkins Engines

Current job: Chairman, Advantage West Midlands regional development agency.

Interests: Music, walking, gardening, sailing, motor racing and old MGs.