News

 

November 2001

London tops business poll for 12th consecutive year

London has been voted Europe's leading location for business in the annual European Cities Monitor - for the 12th year running. International property consultants Healey & Baker quizzed senior executives from 500 European companies on their favourite business locations and their investment plans, focusing on 30 main cities. Overall, London had a lead of 30 per cent over second-placed Paris. In third place was Frankfurt, followed by Brussels, Amsterdam and Barcelona. The top ten was completed by Zurich, Madrid, Berlin and Munich. Milan dropped three places from 8th to 11th, and was closely followed by Geneva, Dublin and Manchester.

The leading factors in deciding where to locate, in order of importance, were rated as access to markets, the availability of qualified staff and costs. Quality of life was seen as the least important. London rated first in five key criteria: ease of access to markets, qualified staff, external transport links, quality of telecommunications and languages spoken. It was a close second to Frankfurt in terms of staff productivity and, along with Dublin, Barcelona and Paris, was seen as one of the best cities at promoting itself as an investment destination.

Brussels was seen by a majority as the future political capital of Europe, but London increased its lead over Frankfurt as the perceived future financial capital, with 60 per cent nominating it. Fifty-five per cent of interviewees thought that the UK staying out of European monetary union had not harmed London's position until now, but 71 per cent felt that it was likely to have a negative effect over the longer term. Lisbon was thought to offer the best-value office space while Berlin had the best availability. Dublin came first in terms of the climate for business created by government.

Within Europe, Moscow, Warsaw, Prague and Budapest were rated as the most likely destinations for new investment, while of the more established Western centres, Milan, Madrid and Paris were the favoured targets for expansion. Companies said that the factor most likely to influence their business over the next ten years was the performance of the US economy, followed by enlargement of the European Union. The internet, seen as the most important factor in 2000, rated only third.

 

UK leads the way online

The annual International Benchmarking Study, which monitors the take-up and use of information and communications technology (ICT) shows that 94 per cent of UK companies now have access to the internet, up from 90 per cent last year. Commissioned by the Department of Trade and Industry, the survey also shows that 80 per cent of UK businesses have their own web sites, up from 66 per cent last year. This puts the UK joint first with Sweden of the eight countries studied; close behind are Germany with 78 per cent, the US with 77 per cent and Canada with 73 per cent. In Northern Ireland, 90 per cent of businesses have internet access and 69 per cent have their own web sites. On their web sites, UK companies are more likely than most to publish information about goods and services and after-sales information. They are less likely to publish information on purchasing requirements or on vacancies or jobs.

The number of small and medium-sized enterprises (SMEs) in the UK actually trading online grew from 450,000 in 2000 to 540,000, an increase of 20 per cent. This was due to a large number of micro businesses establishing online operations. The proportion of businesses allowing their customers to order online grew from 27 per cent in 2000 to 29 per cent in 2001, and the proportion allowing customers to pay online from 13 per cent to 16 per cent. However, the proportion of companies using these facilities themselves to order and pay for goods from their suppliers fell, from 45 per cent to 31 per cent and from 28 per cent to 15 per cent respectively. A similar downturn was seen in most of the countries studied.

E-commerce minister Douglas Alexander meanwhile has announced a $42 million package of regional funding to boost the development of fast internet access using broadband technology. Regional Development Agencies (RDAs) are being asked to put forward schemes to encourage the adoption of broadband and the growth of e-business. The UK currently has 160,000 broadband users.

 

Scotland and Wales embrace high-tech future

Scotland is repositioning itself as an investment destination whose strengths are based on knowledge, technology and skills, rather than relying as before on inward investment in manufacturing and exporting. A new organisation, Scottish Development International, has been created to promote the country as a world-class business partner. The organisation will combine the functions of inward investment bureau Locate in Scotland and Scottish Trade International, which promotes exports.

Wendy Alexander, Scotland's enterprise minister, said that "for a small country Scotland has had an incredible influence", giving the world the telephone, the television, the fax machine, the video recorder and radar, to name just a few innovations. Inward investment in manufacturing over the past 20 years had helped it to restructure its economy after the decline of traditional industries but it was now time to move on in the face of increasing globalisation. The new body would "take Scottish knowledge out into the world", using Scottish universities as research bases for international companies.

In Wales, meanwhile, the Welsh Development Agency (WDA) has announced plans to establish 20 Centres of Excellence for Technology and International Collaboration, in a bid to raise the profile of the principality as an R&D destination and to attract investment from overseas. Academic research groups from nine Welsh colleges and universities will collaborate with local industries, focusing on areas such as computing science and IT, advanced materials, product design and manufacturing.

It is hoped the initiative will attract more companies of the calibre of ICN Pharmaceuticals of California, which plans to establish a dedicated medical research centre in Swansea, South Wales. ICN produces a wide range of pharmaceuticals and biotechnology research products and employs 14,000 people worldwide. Its Swansea centre will carry out research into the combined use of pharmaceuticals and lasers, including the pioneering use of drug and laser therapy in the treatment of skin disease and cancer.

The WDA has also welcomed the decision to hold the 2010 Ryder Cup tournament in Wales. The premier golf event, which will be staged at the Celtic Manor Resort near Newport, will provide a gilt-edged opportunity to raise the profile of the principality globally. "It is tremendous news for Wales," said WDA chairman Sir David Rowe-Beddoe. "We intend to capitalise on the intense media interest and use it to endorse and promote one of our key messages to key audiences around the world - that Wales is world class."

 

Nobel prize highlights strengths in science

Two UK scientists working for the Imperial Cancer Research Fund, together with a colleague in the US, have won the centenary Nobel prize for medicine, for discovering how cells divide in living organisms. Their work opens up new possibilities in fighting the uncontrolled division of cells that is seen in cancer. Sir Paul Nurse, director-general of the ICRF, and Dr Tim Hunt, who is head of the institute's cell cycle laboratory, share the $896,000 prize with Dr Leland Hartwell, director of the Fred Hutchinson Cancer Research Centre in Seattle. "This is a team effort… made possible by the efforts of the many researchers I've worked with over the years," said Sir Paul, who made his breakthrough in 1987 when he discovered that a single gene was responsible for cell division in all living creatures.

A trio of US life sciences companies has recently set up operations in the UK. Ambion, a market leader in RNA-based biotechnology research and molecular diagnostics based in Austin, Texas, has established a subsidiary in Huntingdon, Eastern England. Binax Inc of Portland, Maine, has opened a European office in York. The company specialises in the development of rapid diagnostic tests, particularly for respiratory and other infectious diseases, and is currently working on clinical trials of a new test for streptococcus pneumoniae, a major cause of pneumonia. Scynexis Chemistry and Automation, based in North Carolina, has formed a European subsidiary to be based at Ongar in Eastern England. The company provides synthesis chemistry services to the life sciences industry.

The universities of Kent and Greenwich, both in South East England, are planning a pioneering joint campus at Chatham Marine, a site on the River Medway that was once one of Britain's biggest naval bases. The 350-acre site is being regenerated with office and housing developments, together with shopping, hotel and leisure facilities and a marina with 500 yacht berths. The campus will add 4,000 students to the 2,000 already studying at the site, and will offer joint schools of business and pharmacy, together with higher education access courses.

In South Yorkshire the Magna Centre, [see picture] a former steelworks converted into a science exhibit, has won the Royal Institute of British Architects' $28,000 Stirling prize, the UK's leading award for the best new building. The centre, which opened in April, is dedicated to the four elements - fire, earth, air and water - used to make steel. Its designers, Wilkinson Eyre Architects, beat the front-runners, Nicholas Grimshaw and Partners, who designed the $80 million Eden Project, a huge multi-climate greenhouse built in a former clay pit in Cornwall, South West England.

 

Car manufacturers increase production

Britain's car manufacturers recorded an increase in production of 30 per cent year-on-year in August, producing a total of 97,164 vehicles, according to the Office for National Statistics. The figures were slightly skewed by interruptions to production in August 2000, but nevertheless car production seems to be on an upward trend, fuelled by the introduction of new models such as BMW's Mini and the Jaguar X-Type. New car sales in August held up well, stimulated by the launch of new-format number plates, while the production of commercial vehicles more than doubled, to 11,960.

Both Nissan and Honda are gearing up for increased production and Peugeot's plant at Ryton, near Coventry in the West Midlands, is now working seven days a week. Ryton builds the Peugeot 206, the UK's best-selling retail car and the third best-selling car overall. The plant produced 103,385 vehicles in the first six months of 2001, a 2 per cent increase over 2000, and has more than doubled its output since the launch of the 206 at the end of 1998.

McLaren and Mercedes, partners on the Grand Prix race circuit, are to build a new supercar in Portsmouth, South West England - the first time a Mercedes model has been British-built. McLaren is to lease a 40,000 sq ft plant on the outskirts of the city, where it will begin producing the $350,000 luxury roadster by 2003. The car will incorporate Formula One-style features and will be powered by a 5.5 litre supercharged V8 engine, capable of 544bhp and up to 200mph.

 

London Crossrail plan returns to the agenda

The government has asked the Strategic Rail Authority and Transport for London to draw up a report by early 2002 on the feasibility of an east-west cross-London rail scheme. A new company, Cross London Rail Links, has been set up to look at costs and financing options, together with a wide range of options for routes and service patterns. The announcement follows transport secretary Stephen Byers' approval for two southerly extensions of the East London Line. One 2.5km link will connect with the railway network's South London Line while another will connect with the network at Croydon.

The idea of a mainline rail link between east and west London - generally known as Crossrail - has been floated before. A previous plan centred on a link running from Chelsea in the west to Hackney in the east. The new scheme is likely to run from Heathrow Airport in the west to central London, with trains being carried in twin tunnels between Paddington and Liverpool Street mainline stations via the West End. London's mayor, Ken Livingstone, wants to extend the line further east to Canary Wharf and Greenwich, which would relieve congestion in the City and help to revive east London. Other options for the scheme, which is likely to cost $4.2 billion, include an Underground connection at Whitechapel in east London and an extension downstream to the huge Thames Gateway regeneration area.

 

Britain keeps on trucking

Meanwhile Transport Statistics Great Britain 2001, the government's 27th annual transport survey, provides a compendium of interesting statistics. The average British resident, for example, travelled 6,800 miles in 2000, an increase of six per cent since 1990. Travel by car, van or lorry accounted for 81 per cent of total annual mileage, and the number of vehicles taxed for use on UK roads reached 28.9 million, of which more than 24 million were motor cars. Eighty-three per cent of households have access to a car, and 28 per cent have two or more cars. Some 32 million people, or 71 per cent of the population aged 17 or over, hold a driving licence.

Road freight accounted for four-fifths of all goods lifted (tonnes) and two-thirds of goods moved (tonne-kilometres). Some 158 billion tonne-kilometres of goods were moved by road in 2000, an increase of 1 per cent over 1999. Air cargo reached 2.3 million tonnes, an increase of 6 per cent. Between 1990 and 2000, the number of powered vehicles travelling to mainland Europe on ferries or via the Channel Tunnel more than doubled. In 2000, 83 per cent of these vehicles disembarked in France.

Heavy goods vehicle traffic on Britain's roads rose 2 per cent from 1999 to 2000, and traffic levels overall by 0.4 per cent. Motorways account for less than 1 per cent of total road length, but carried 20 per cent of total traffic and 42 per cent of goods vehicle traffic. The number of traffic accidents fell again in 2000, to a level 37 per cent below that in 1990. Passenger kilometres on the railways increased by 2 per cent, from 38.5 billion in 1999/2000 to 39.2 billion in 2000/2001. Overall, in 2000 energy consumption by transport represented 34 per cent of total UK energy use.

 

New minimum wage comes into force

The minimum wage for UK workers was raised from £3.70 ($5.20) to £4.10 ($5.75) an hour from October 1, meaning that more than a million low-paid workers will receive an extra $19.60 for a 35-hour week. More than 70 per cent of those benefiting will be women. The youth rate, for those aged 18-21, went up from £3.20 ($4.50) to £3.50 ($4.90) an hour. Changes have also been made to the Working Time Regulations to remove the qualifying period necessary before employees are entitled to paid annual leave. Workers now have the right to take leave from their first day of employment.

Meanwhile, the European Union has adopted a regulation to establish a new European company statute. From 2004, companies operating in more than one EU state will have the option of incorporating themselves as a 'Societas Europaea' or 'SE' for short. This will allow them to be established as a single company across the EU and to function with a single set of rules and a unified management system. The move will allow companies to expand across borders without needing to set up subsidiaries, and is seen as a practical step towards cutting red tape and reducing administrative costs.

 

High-tech firms establish a presence

US software company Endeca, based in Cambridge, Massachusetts, has opened a European head office in London. The company specialises in information-delivery systems for companies that need to handle large amounts of data. Bluestreak, an online marketing and advertising company, has also based its new European headquarters in the UK capital. Bluestreak provides technology to enable advertisers and web publishers to create and manage transactive advertising in real time.

Other business software providers from the US to establish a presence in the UK include Ingrian Networks, a leader in secure content networking from Redwood, California, which has set up an office in Tunbridge Wells, South East England; Courion of Framingham, Massachusetts, which provides password and directory management solutions and has opened an office in Milton Keynes; Noosh of Palo Alto, California, which offers cross-enterprise collaboration technology and has set up shop in Egham, also in South East England; Avaya of New Jersey, a provider of communications systems and enterprise software, which has established a European headquarters at nearby Guildford; and Telcontar of San Jose, which supplies software platforms for location-based services and has set up a European operation in London.

Hungarian-American-British company LaserBit Communications, which is based in Budapest and develops laser equipment for voice, data and video transmission, has launched a UK subsidiary in Manchester, North West England. Meanwhile Black Box of Pennsylvania, a leading international technical services company, has taken over UK company Optech Fibres, based in Dalton-in-Furness, also in North West England, which designs and installs business premises cabling throughout the UK.

 

Essex lays claim to the good life

London may be the best place to do business, but if you're looking for quality of life, head for Uttlesford in north-west Essex. This largely rural district in Eastern England came top in a survey of the quality of UK domestic life carried out by research company Experian for The Sunday Times. The survey examined eight key issues affecting the quality of life: employment, disposable income, traffic density, crime, shopping amenities, housing costs, schools and green space.

Uttlesford borders Hertfordshire and Cambridgeshire and has a population of 69,000. Its largest town is Saffron Walden, which has a population of 14,700, but many of its people live in rural villages and hamlets. Overall, residents enjoy some 2.5 acres of space per head - while most are still able to reach London in less than an hour by car or train. The M11 runs nearby and Stansted Airport and the city of Cambridge are within easy reach.

Other favoured parts of the country include the Malvern Hills in Worcestershire; Oxfordshire; South Norfolk; Derby; Hartlepool; and parts of Northamptonshire, Suffolk, Devon and Shropshire. At the other end of the scale are parts of South Yorkshire and Northumberland; Liverpool; Salford, Greater Manchester; Gateshead, Tyne and Wear, Sandwell in the West Midlands; and Lambeth, Barking and Dagenham and Waltham Forest (all London).

 

Chips with everything

Frozen food specialist McCain Foods of Canada, the world's largest producer of French fries, is to build a major new processing plant at Rugely, Staffordshire in the West Midlands. The $105 million factory will initially employ 150 people, rising to 450 with anticipated future expansion and, according to the company, will support a further 1,000 jobs in agriculture. Expected to be in operation by 2004, the plant will create demand for more than 350,000 tons of potatoes a year, or 6 per cent of the UK's total potato crop. It will produce 175,000 tonnes of French fries annually for the catering market. Chips have long been a staple part of the UK diet, and sales of frozen potato products have been rising at a steady 5 per cent a year for the past 30 years.

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