July 2009

NEWS

FDI grows despite effects of global downturn
Levels of foreign direct investment (FDI) into the UK rose again in the 2008/09 financial year, with 1,744 investment projects locating or expanding in the country, according to the annual report from UK Trade & Investment (UKTI), the Government’s international business development organisation. This compared with 1,573 projects in 2007/08 and 1,431 in 2006/07. Every day over the period, according to UKTI, five new FDI projects decided to locate in the UK. Despite some of the most difficult economic conditions for generations, it added, the country has maintained its position as the number one destination for foreign investors in Europe, and second in the world.

This year a total of 53 countries invested in the UK. The USA remained the biggest source of investment, with a 30 per cent increase year-on-year to 621 projects. FDI projects from India increased by 44 per cent to 108 projects, making it the UK’s second largest source of FDI. Other nations increasing their investment into the UK were Italy (up 45 per cent with 48 projects), France (up 15 per cent, 101 projects), Canada (up 25 per cent, 83 projects) and the Gulf states (up 25 per cent). Other significant investors included Japan (81 FDI projects), Australia (65), China (59), Ireland (57), Switzerland (50), Sweden (47), the Netherlands (41), Norway (30), Spain (28) and Denmark (26).

Overseas investments created over 35,000 new jobs over the year, with over 78,000 jobs created or safeguarded. This represented a rate of 215 jobs created or safeguarded every day, and 673 new jobs created every week. In the past six years, over 215,000 new jobs have been created due to inward investment projects, and a total of almost 500,000 created or safeguarded. The UK also continues to have the highest stock of FDI in Europe at $1,348 billion, according to the UNCTAD Stock Report for 2007, from the United Nations Conference on Trade and Development.

Overall, the biggest rise was in new investment projects, which were up 26 per cent year-on-year, rather than mergers and acquisitions (M&As), joint ventures or expansions. There were 827 new projects in 2008/09 (653 in 2007/08), compared with 460 expansions and 457 acquisitions, JVs and mergers. By type of operation, the biggest number of projects were services-based (830 projects), followed by manufacturing (327), HQ operations (251), R&D (202), contact centres (65), distribution (59) and e-commerce (10).

Business Secretary Lord Mandelson commented: “What the UK has to offer is one of the best and most productive investment climates in the world. At a time when companies across the world are tightening their belts and focusing their investment in the sectors and countries where it will bring the most benefit, these results are testament to the fundamental strengths of the UK’s economy and will prove our ability to come through this downturn stronger, and ready for success.”

Lord Davies, Minister for Trade, Investment and Business, said of the financial services sector: “The City of London remains fundamentally strong and attractive to overseas investors - a leading global hub for financial services and an unrivalled gateway to world markets for international companies looking for a place to grow.” Sir Andrew Cahn, chief executive of UKTI, said of the overall results: “True, the climate remains tough and the competition remains strong. We need to work even harder to stay a global destination of choice. We are committed to ensuring the UK remains the best place to start and grow your international business - both for foreign investors, and our home-grown businesses.”
 

UK still most popular investment destination in Europe

Another important annual survey, the Country Attractiveness Survey from professional services firm Ernst & Young, shows that the UK retained its position as the most attractive destination for inward investment in Europe in 2008. However, investment into Europe was flat, demonstrating the impact of the global recession on investment projects. According to E&Y’s seventh annual report, which surveyed 800 international executives, Europe secured 3,718 investment projects in 2008, six more than in 2007. Although the number of projects remained steady, the number of jobs created fell by 16 per cent to 148,333, accelerating a downward trend under way since 2004. “Five years of sustained inward investment growth in Europe came to an end in 2008,” said Marc Lhermitte, partner at Ernst & Young and author of the report. “But the true picture of how the global recession has hit inward investment has yet to emerge. Investment decisions for 2008 will have been made many months earlier, which explains why in 2008 Europe secured as many FDI projects as the year before. We expect 2009 to tell a very different story.”

The UK attracted 686 investment projects in 2008 - 4 per cent down on 2007 - which between them created 20,000 jobs. This was 16 per cent fewer than in 2007, but was still enough to rank the UK as the number one location in Europe for FDI job creation. The largest investor in the UK remained the US (263 projects), followed by India (49), France (46), Germany (42) and Japan (30). Indian investment surged ahead of that of traditional investors France and Germany for only the second time in the past 12 years. The leading recipients of FDI in Europe showed little change, despite the economic turmoil. After the UK, France, Germany and Spain, which have been leading destinations for FDI since 1997, completed the top four countries.

Some industries appear to be weathering the recession better than others. Across Europe, machinery and equipment saw a 19 per cent increase in FDI projects due to a surge of projects to supply wind turbines, solar components and fuel cells. Marc Lhermitte said: “One of the biggest winners has been the renewable industries due to new green market opportunities, with almost 6,000 new FDI jobs in 2008. Astute businesses will be positioning themselves to take market share and gain access this sector.” IT outsourcing, financial and business services continued to struggle, however, as did the automotive and electronics industries.

Most of Europe’s inward investment comes from European (mostly German, British and French) and US investors, who account for 51 per cent and 25 per cent of the total respectively, according to Ernst & Young. However, in 2008 the number of projects from China and India jumped from 118 to 182, a trend that has benefited the UK in particular. Generally, said E&Y, the uncertain climate has resulted in a temporary shift of mood amongst investors to more familiar markets and, for the immediate future, businesses see Europe as the safe option to make their investment.

London, which retained its position as the most attractive city for inward investment in Europe for the seventh year in a row, secured 262 projects in 2008. This was 14 per cent fewer than in 2007 but still well ahead of Paris, which claimed 222 projects, and Madrid in third place with 80. The executives surveyed for the report also named London as the city best placed to rebound from the economic slowdown. Twenty-eight per cent of them were attracted to London, compared with only 14 per cent voting for Paris. The UK capital continues to be an attractive city to work and live, concluded Ernst & Young, as well as offering excellent research and development facilities and access to the most up-to-date telecommunications network.

Within the UK, Scotland was the most popular destination for inward investment behind London and South East England for the third year running. It attracted 53 projects in 2008, compared with 64 for South East England. Scotland remained an attractive place for investment by manufacturers, with 29 inward investment projects in the manufacturing sector, compared with 14 in finance and business services and six in energy.

Glasgow remained one of the five most popular UK cities for inward investors, attracting nine projects to rank it third in the UK. Over the past three years Glasgow has attracted 46 investments in total, making it the second most popular city for inward investors after London. However, in 2008 the number of projects fell more sharply in Scotland than in other parts of the UK, as the recession took hold. “It is encouraging to see that Scotland is still able to attract projects across a wide range of industry sectors,” said Hywel Ball, managing partner for Ernst & Young in Scotland. “It is this diversity of industry groups, combined with the skills base of the Scottish labour market, that will hopefully help speed Scotland’s recovery from the current economic storm.”

Recognition for world-class status of UK cities
Two of the UK’s top cities are among the world’s most ‘liveable’, according to the Economist Intelligence Unit’s latest global liveability survey. The Liveability Ranking, part of the EUI’s Worldwide Cost of Living Survey, assesses living conditions in 140 cities on 30 factors across five broad categories: stability, healthcare, culture and environment, education and infrastructure. On these criteria, Manchester emerged as the 46th best place to live worldwide and London 51st.

Jon Copestake, editor of the EIU report, said: “London and Manchester both benefit from the attractions that a big city offers, but also suffer from the problems that can be faced such as crime, the threat of terrorist attacks and overloaded transport infrastructure.” Manchester scored highly on stability, health care, culture and environment, education and infrastructure. Colin Sinclair, boss of MIDAS, the city’s inward investment agency, said: “This confirms Manchester’s burgeoning status on the national and international stage.”

Vancouver in Canada remains top of the league table, while Zimbabwe’s capital Harare sits at the bottom. Vienna (Austria) is ranked second, followed by Melbourne (Australia) and Toronto (Canada). Canadian and Australian cities account for six of the top ten, with Vienna, Helsinki (Finland), Zurich and Geneva (both Switzerland) making up the most liveable destinations surveyed. However, in practical terms, says the report, there is little real difference between the top ten cities.

Cities that score best tend to be mid-sized, in developed countries with a low population density, benefiting from cultural or recreational availability but with lower crime levels or infrastructure problems that can be caused by large populations. With the exception of high scores in Australasia and some Asian centres, most of the better-scoring locations are based, unsurprisingly, in the more developed regions of Western Europe and North America.

Another survey of the world’s “alpha cities”, conducted by the Globalisation and World Cities (GaWC) Research Network, based at Loughborough University in the East Midlands, suggests that established giants London and New York are being joined by Hong Kong and that the three could one day form a triad of global cities that will dominate the globe. “London and New York define a duopoly that constitutes a case apart … Hong Kong is consistently number three (not Tokyo) and is definitely gaining in importance and approaching the super alpha-plus level,” said the report. Another key finding of the 2008 report was the rapid rise of other western Pacific Rim cities such as Sydney, Shanghai and Beijing.

The GaWC research classifies the world’s leading cities using a list of key providers in four main fields - banking, advertising, accountancy and legal services - and measures the connectivity between cities. According to its criteria, the US had six alpha-status world cities in 2000 (when the survey was first published) but now has just two - New York and Chicago, which is hanging on as an alpha-minus city.

There is a clear trend of the rise of cities from emerging markets between 2004 and 2008, with Seoul, Moscow, Mumbai, Buenos Aires and Kuala Lumpur joining Sao Paolo to constitute the majority of plain alpha cities in 2008. Their rise has largely been at the expense of leading western European cities: Amsterdam, Frankfurt and Zurich have moved down to alpha-minus level, although Milan, Madrid and Brussels have consolidated their alpha-level status. A number of cities have retained their status throughout the period surveyed: Paris and Singapore stay alpha-plus, Toronto remains alpha, while Mexico City, Taipei, Jakarta, Stockholm, Bangkok and Dublin have consistently been alpha-minus cities.

Meanwhile, Bradford in West Yorkshire has beaten off global competition to be named the world’s first “City of Film” by Unesco, the United Nations Educational, Scientific and Cultural Organisation. The title was awarded to Bradford after the city demonstrated its history and potential as a filming location, its contribution to the film industry and its celebration of film. Bradford is home to the UK’s National Media Museum and hosts an international film festival each year. It is hoped that the City of Film status will build its local and international profile as a film destination, and boost its economy by encouraging visitors and film-makers to visit the city. Bradford-born screenwriter Simon Beaufoy - who recently won the best adapted screenplay Oscar for smash hit movie Slumdog Millionaire - said that the title was “superb news” for Bradford and a “testimony to the city’s dedication to the film and media industry”.

Signs that recession ‘may be over’ as indicators show upturn
The UK economy grew by 0.2 per cent in April and by 0.1 per cent in May, after contracting by 0.5 per cent in March, signalling the first growth in industrial output in more than a year. The National Institute for Economic and Social Research (NIESR), a respected research group, said the figures indicated that the recession had passed its trough in March and was now returning to growth. Martin Weale, NIESR director, said that the recession had ended “as far as I can tell”, adding: “There has been much less downward momentum than we expected.” According to the NIESR, UK economic output fell by 5 per cent from the beginning of the recession in May 2008 to March 2009. This was a worse contraction than in the recession of the early 1990s, but not as bad as the one in the early 1980s.

Manufacturing production rose also rose, by 0.4 per cent through March and April, indicating that the sector might be stabilising, after a 14 per cent decline over the past year. The purchasing managers’ index for manufacturers rose to 45.37 from 43.07 in April, its highest level in a year (numbers below 50 indicate that companies are reporting a decline in business activity). The manufacturing PMI has now been rising for the past three months after a record low in February, signalling that the pace of the recession is easing. “UK manufacturing looks like it may be close to turning the corner,” said Roy Ayliffe, director at Cips, the purchasing and supply management body. This optimism echoed a recent report from EEF, the engineers’ organisation, which said that motor vehicle manufacturers were expecting a rise in production over the next three months.

The services sector, which makes up 75 per cent of the UK economy, also returned to modest growth in May, showing the first signs of expansion since April 2008. The CIPS.Markit Purchasing Managers’ Index (PMI) showed its largest ever monthly jump, rising from 48.7 to 51.7, a sixth consecutive monthly rise (a reading above 50 indicates positive growth). Markit Economics, which conducted the poll, said that the figures suggested that national output in the second quarter of 2008 would show a smaller than expected fall. Markit also reported that the All-Sector PMI, which includes services, manufacturing and construction, had risen above the critical reading of 50 in May. This suggested that the UK would be one of the first economies in Europe to see a return to growth, it concluded.

Manufacturers have been helped by a weaker pound, which has boosted competitiveness. However, the fall in sterling has led to more expensive imports, which has pushed up inflation. Consumer price inflation (CPI) declined in May to its lowest level since the beginning of 2008, but was still higher than most economists expected. It fell from 2.3 per cent in April to 2.2 per cent in May, compared with economists’ predictions of a drop to 2 per cent. The retail price index fell by 1.1 per cent in May compared with a year earlier, according to the ONS. This was the second consecutive monthly fall, although it was slightly less than the 1.2 per cent decline seen in April. The CPI has now fallen for three months in a row and is well below its peak of 5.2 per cent, reached last September due to soaring oil prices. It is now at its lowest level since January 2008; however, the Bank of England’s long-term forecast is for it to fall below its 2 per cent target for an extended period of time.

Despite the good news, some analysts have urged caution on whether the improved figures constitute positive signs of recovery for the UK economy. Industrial production is still 12.3 per cent lower than in April 2008 and both consumer and business spending remain weak. However, others believe that the manufacturing and industrial production figures bode well for an economic recovery and could presage a rapid return to growth in GDP.

New ‘super-department’ to champion business and skills
As part of Prime Minister Gordon Brown’s June reshuffle of his Government, a new Department for Business, Innovation and Skills (BIS) has been created by merging the former Department of Business, Enterprise and Regulatory Reform (BERR) and the Department of Innovation, Universities and Skills (DIUS). The new ‘super-department’, headed by Lord Mandelson, Secretary of State for Business, Innovation and Skills, will be responsible for building Britain’s capabilities to compete in the global economy. John Denham, formerly Secretary of State at DIUS, has moved departments to become Communities Secretary.

According to ministers, BIS “combines BERR’s strengths in shaping the enterprise environment, analysing the strengths and needs of the various parts of British industry, [and] building strategies for industrial strength and expertise in better regulation with DIUS’s expertise in maintaining world-class universities, expanding access to higher education, investing in the UK’s science base and shaping skills policy and innovation through bodies such as the Technology Strategy Board”.

Among specific aims, the new department will design tailored policies for key sectors of the UK economy; assess changing skills needs, especially the intermediate and high skills vital in a global economy, and design training policies to meet them; and continue to invest in the UK’s science base and develop strategies for commercialisation. In addition, it will encourage innovation; deliver on the Government’s objectives to expand the number of apprenticeships; encourage a sound regulatory environment that fosters enterprise and skills; collaborate with the Regional Development Agencies (RDAs) in building economic growth in the English regions; and continue to work to expand UK exports and encourage inward investment.

In relation to universities and skills, the department’s role will include “maintaining world-class universities, expanding access to higher education, investing in the UK’s science base and shaping skills policy and innovation”. The Government statement continued: “It also puts the UK’s further education system and universities closer to the heart of government thinking about building now for the upturn.”

Diana Warwick, head of the higher education body Universities UK, said: “We are looking forward to an early meeting with Lord Mandelson. We want to work with him to continue the momentum in developing a higher education system that will equip people with the knowledge and skills to compete in a global economy and enhance Britain's existing world-class research base."

An “aggressive” push into derivatives is likely to start on a pan-European basis, including equity derivatives, with a possible “strategic alliance” with TMX, the Canadian exchange, in energy derivatives. That could be expanded to the LSE’s existing relationship with Oslo Bors. Mr Rolet also said that the “fruits of the Borsa Italiana” acquisition had not yet been “fully harvested”, allowing scope for expansion of derivatives beyond Italy into other European markets. He warned that any restructuring of the exchange industry “will have to involve London if it is to be truly global”. Looking ahead to the coming months, he declared, “There is everything to play for.”

China Construction Bank (CCB), the second largest bank in the world by market capitalisation, has opened a new subsidiary in London. Headquartered in Beijing, CCB is ranked 23rd in Forbes Global 2000. It operates in three business segments – corporate banking, personal banking and financial market businesses – and in recent years has benefited from China’s strong economic momentum. Over the past 20 years CCB has built up a global network with branches across mainland China, Hong Kong, Asia, Europe and Africa, though China Construction Bank (London) Limited (CCBL) is its first wholly-owned subsidiary outside Asia. Its operations will include corporate banking, merchant banking and global market activities. Minister for Trade and Investment, Lord Davies of Abersoch, said: “The UK’s strong relationship with China will be a driving force behind future growth and prosperity in both our countries. The decision by CCB to base its core operation in London is an excellent sign for the future.”

Think London, the UK capital’s official inward investment agency, has extended its ‘Touchdown London’ service, which offers free office space to encourage overseas investors to set up business in the city. The move will increase the office space available by 350 per cent, allowing up to 40 new businesses to benefit. Offered in association with serviced office provider Avanta, phase two of the scheme will add a third centre in the City of London to existing offices in Hanover Square and Hammersmith. Michael Charlton, Chief Executive of Think London, said: “We have been greatly encouraged by the number of enquiries we received from international businesses looking to take us up on the offer of free office space. To cope with demand, we are delighted to be able to provide more desks and another central London location, adequately responding to the needs of businesses in this current climate.” The agency has received a significant increase in enquiries from international businesses following the launch of Touchdown London in March.

Jun Jeong, branch manager for M3 Mobile, a mobile marketing solutions company from Korea, said: “London’s easy access to European markets ensures we are close to all our European clients. Think London also introduced us to the benefits of its Touchdown London service and we recently took up space in the West London office. Touchdown London has definitely put M3 Mobile a step ahead.” At the same time the Mayor of London, Boris Johnson, endorsed the signing of a Memorandum of Understanding between Think London and KOTRA (the Korea Trade-Investment Promotion Agency) to jointly promote London’s capital markets and specifically listings on AIM, its secondary stocks board.

Digital Britain strategy promises high-speed broadband for all
The Government has unveiled its Digital Britain white paper, which sets out its strategy for providing the whole of the UK with high-speed digital broadband. Culture Secretary Ben Bradshaw, launching the paper, reiterated the Government’s promise to deliver 2 megabit-per-second broadband to the whole of the UK by 2012. This will in part be delivered using wireless networks after the release of high-quality spectrum, he said. The most controversial aspect of the paper, drawn up by Lord Carter, was a proposed $9.90 annual levy on every copper-wire landline in the UK to help fund the creation of next-generation broadband networks. “The economics of building what are essentially new networks mean that, left to the market, true superfast broadband will only reach two-thirds of homes and businesses over the next decade,” said Mr Bradshaw.

To help fund universal broadband, the government will also make available around $330 million from funds left over from the imminent switchover to digital television. The analogue radio signal will be switched off in 2015, sooner than previously expected, and will be replaced with digital audio broadcasting (DAB) as the primary platform. The government has also promised a further $495 million for a “home access scheme” to help low-income families to buy a PC and get a broadband connection. It has appointed Martha Lane Fox, the entrepreneur behind lastminute.com, as its new “digital inclusion champion”, while Tim Berners-Lee, the founder of the worldwide web, will lead a panel advising on the use of personal data.

In advance of the white paper, BT, Britain’s leading telecoms provider, has given subscribers a broadband boost, more than doubling headline speeds for its 4.8 million residential and business customers. Over 60,000 consumers can already access the faster speeds through a BT trial, and the upgrade to ADSL 2+ technology will be available to other homes this summer. BT Retail broadband customers already enjoy speeds of up to 8Mb/s. The plans will see consumers and businesses in enabled areas receive faster speeds of up to 20Mb/s as part of their broadband service, at no extra cost. In addition, BT is to provide customers with a free device, the BT Broadband Accelerator, which will eliminate electrical interference from telephone extension wiring and improve broadband speeds and reliability up to the 2Mb/s threshold.

In a separate move, BT Retail is to begin trials of super-fast fibre-based broadband up to 40Mb/s in two areas over the summer - Whitchurch in South Wales and Muswell Hill in north London. It is already delivering speeds of up to 100Mb/s to customers in the Ebbsfleet Valley in Kent, using fibre-to-the-premise (FTTP) technology.

Broadband is now seen as ‘essential’ utility, researchers say
Government-funded research shows that UK consumers now believe that broadband is becoming an essential utility, on a par with electricity or water. The Communications Consumer Panel questioned 16 focus groups and a conducted a face-to-face survey with 2,000 people across the country. Seventy-three per cent of those questioned described a high-speed connection as important, and said that people without broadband would be at a disadvantage, missing out on services such as shopping, banking and public services. The chair of the panel, Anna Bradley, said: “The key message is that people think broadband is at a tipping point. … It is being compared by consumers to gas and electricity - things which they think we all ought to have access to, almost as a right.”

The report showed that people value broadband for accessing information and for communicating, but a growing proportion are now using it for entertainment services, such as streaming TV content. The Consumer Panel, which advises Ofcom, said its research showed that there was strong public support for universal broadband, which would need to be at a speed that allowed everyone to participate fully in society. “It’s the services that matter to consumers. The government and companies need to tell us what it is going to allow us to do, not what speed it is at,” said Ms Bradley.

Those questioned had mixed views on whether the Government should subsidise broadband. Some felt that most people could now afford a connection, even if it meant doing without something else, but others felt that the Government should help those on low incomes to get online. However, there was broad support for Government help for people in so-called “not-spots”, where access to broadband is difficult or impossible.

The message that broadband is now an essential part of people’s lives - especially in London - is reinforced by Matt Brittin, UK managing director for search engine giant Google, who wrote in an article, shortly after the city hosted the company’s annual Zeitgeist conference: “Changes in both consumer and business behaviour mean London can now lay claim to be the e-commerce capital of the world.” Mr Brittin cited research by BT that found that nearly 60 per cent of Londoners considering economising during their recession would hang on to their broadband connection, no matter what. “Internet access is now seen as a necessity,” he said.

He added: “The capital’s internet-based businesses are bucking the recession, while the web operations of more traditional businesses are defying the downturn elsewhere in their operations. The web clearly has profound implications for the capital’s economy. London has always had an amazing ability to re-invent itself economically, especially in hard times. Now its dynamism, its outward-looking consumers and businesses and concentration of knowledge mean that even as parts of the financial industry suffer, e-commerce is growing.”

According to Brittin, London’s embrace of the internet is showing the way out of recession - for a number of reasons. He explained: “First, broadband use has exploded - almost three-quarters of Londoners are now online. Not only that but, according to the New York Times, London has an advantage over most cities because of the low costs and fast internet connection speeds on offer because of competition. Another advantage for London is that it harbours arguably the leading media and advertising agencies in the world, mastering the art of advertising on the web. A fifth of all advertising money is now spent on the internet, which offers a cost-effective way to reach new customers based anywhere in the world.”

Pointing to the rapid growth of online retailing, he continued: “London is now the world leader in internet commerce. As the recession continues, the capital’s businesses can grow by embracing the fantastic infrastructure already in place. But they can now take this to the next level, by using the potential of the web as a place to meet customers around the world. The internet makes this recession a real opportunity for London to reinvent itself economically. There is surely no city more equal to that task.”


UCL leads move towards free online access to research
University College London is set to become the first elite university in Europe to make all of its research available online for free, in a model it hopes will spread across the academic world. UCL’s move to “open access” for all research, subject to copyright law, could boost opportunities for intellectual breakthroughs if taken up by other universities, thus increasing economic growth.

A small number of other British universities, including Cardiff, are planning similar moves to UCL’s, partly to boost their competitiveness by raising the profile of their research. Janet Peters, head librarian at Cardiff, said: “We can have a shop window on the worldwide stage for the research that’s being done here.” Oxford University - in common with many other institutions - offers its academics the opportunity to publish their research for free online, through “opt-in open access”. Globally, the most famous institution to move towards open access is Harvard, some of whose faculties have voted in favour of it.

A US company that provides software to help predict consumer behaviour has set up offices in Bracknell, Berkshire in South East England, in a bid to boost sales of its software across Europe and Asia. Terra Technology allows consumer goods companies to forecast demand and plan inventories by analysing data throughout the supply chain. The company chose the UK because it has many retailers using point-of-sale (POS) data, a key input in its Multi-Enterprise Demand Sensing software. In addition, said Terra, Bracknell provides easy access to London, as well as the rest of Europe, and offers a high-quality workforce. The firm, whose customers include Campbell Soup, Procter & Gamble, Unilever and Ventura Foods, claims that its technology can improve customer service, reduce inventory, decrease unplanned changeovers and reduce costs by creating more accurate forecasts and inventory targets.

InVision Software Ltd, a subsidiary of German firm InVision Software AG, is to expand its Londonderry R&D centre in Northern Ireland. The company has committed to creating 30 high-quality software development, customer support and documentation jobs by 2012. Economic development agency Invest Northern Ireland has offered $414,000 of support towards the project. InVision is an international provider of enterprise-wide workforce management software solutions designed to optimise the deployment of staff, thus reducing costs and enhancing productivity and satisfaction. Stephen Williams, operations director at lnVision Software Ltd, said: “Since the founding of our R&D centre in Derry in 2001, we have created more than 40 jobs in the region, and in the long run we are planning to bring total employment to 60 by 2012. The strong performance of this centre combined with a sound skills base and Invest Northern Ireland support makes it an appropriate location for InVision’s R&D capability.”

A Republic of Ireland software company, Dublin-based Softedge Systems, is also to establish itself in Northern Ireland. The company plans to create a centre of excellence in Newry, County Down, as part of a $1.2 million investment that will create 15 new ICT positions. Invest NI will support the project with funding worth $231,000. Softedge is the first European-certified Microsoft Venture Partner, and it will use Microsoft technology to develop state-of-the-art software products. This is the latest in a series of cross-border investments, with Eircom and another Dublin-based telecoms company having expanded operations in Belfast recently.

Vikas Sahni, CEO of Softedge Systems (NI) Ltd, said: “The centre of excellence in Northern Ireland is an integral part of the company’s overall growth plans. The availability of a talented workforce and the valuable support of Invest NI were major factors in the decision to invest here. By recruiting a mix of experienced and graduate software specialists and further developing their skills, we are putting in place a blend of talent that will underpin our capability in both service delivery and research well into the future. The Newry centre is focusing initially on developing software solutions using Microsoft’s innovative Silverlight technology. More and more organisations are incorporating the system into their websites and we believe the Newry centre will strongly position us to take advantage of this demand.”

Trident Space & Defense, based in California, has opened an office in Hampshire, South East England to manage its extensive European operations. The firm has provided parts and engineering solutions for aerospace, military and industrial markets worldwide for over 33 years; the new centre in Fareham will enable it to provide programme management, engineering and customer support specifically for its European customers. Trident, formerly TRW Components International Inc, hopes that this new base will enable it to increase its ability to source European manufactured components as well as providing customers with a direct supply of US products. Trident, which was acquired by Admiralty Partners in March 2007, is made up of three operating units: EEE Space Electronic Components, which supplies electronic components and design support; Advanced Products, which manufactures multi-chip modules; and Ground Systems, which specialises in launch support and tracking systems.

In the automotive sector, Malaysian firm Weststar has withdrawn from its planned deal to acquire LDV vans, forcing the firm to apply for administration. In May Weststar agreed a deal to buy the van-maker, based in Birmingham, West Midlands, while the Government pledged an $8.25 million four-week loan. Business Minister Ian Pearson said that the Government was disappointed that the deal had fallen through. LDV commented: “The directors of LDV Group have been forced to reapply for administration to protect the assets of the business. This is due to the fact that essential funds required to maintain the business and workforce as a going concern are not being made available.” LDV employs 850 workers and is also a major customer for many suppliers, as well as employing 1,200 people in dealerships.

There was better news from Rolls-Royce Motor Cars, which has created 150 new manufacturing jobs at its factory in Goodwood, West Sussex in South East England. Rolls-Royce is expanding as more workers are needed to produce its latest model, the Ghost. “This is good news for the British car industry at a time when it is struggling … Britain has an exceptional talent for automotive production,” said Rolls-Royce chief Tom Purves.

Picture copyright BMW AG

Rolls-Royce, a subsidiary of BMW, had to lay off 40 temporary workers and close its factory for a short time earlier this year, but the new recruitment drive will boost its manufacturing workforce by 50 per cent to about 450 workers over the next few months. By the end of the year around 900 people will work for Rolls-Royce, almost doubling of its overall workforce in two years. Many of the new recruits will work on a new assembly line built for production of the Ghost, while others will be employed in the wood and leather areas of the factory, or in the paint shop. Production of the Ghost will begin during the autumn and the car will go on sale early in 2010.

Back in the West Midlands, a planning application has been submitted by RDA Advantage West Midlands and global property group Goodman to develop the former Jaguar site at Browns Lane in Coventry. The application is for a mixed-use development on the 30-hectare site, with a focus on manufacturing to attract new companies to the area and create employment opportunities, alongside new housing and public spaces. The outline planning application incorporates 882,000 sq ft of space for industrial and distribution uses and 75,300 sq ft of high-quality office space, supporting a long-term strategy for regeneration of Coventry and the surrounding area.

New research initiatives for life sciences networks
The leaders of biotechnology network organisations in Cambridge, Oxford and London are seeking to formalise an arrangement whereby the three clusters work together on biotech science and business projects. The new ‘super-cluster’, which will be rolled out in September, is being named ‘The Golden Triangle’. “This is the densest region in Europe for therapeutics, medtech, diagnostic and healthcare R&D companies,” said Harriet Fear, CEO of ERBI, the Cambridge network. “It is also home to many of the world’s leading companies and provides access to a skilled labour force, centres of clinical and academic excellence and an infrastructure supporting one of the most productive and innovative regions of Europe.”

London is particularly strong in clinical research and access to funding sources, Cambridge boasts strength in discovering therapeutic antibodies and moving them through clinical trials, drug re-profiling and developing novel technology platforms, while Oxford has a strong R&D base across a range of diseases, including cancer, central nervous system (CNS) disorders and inflammation.

In a separate development a US life sciences company, Michigan-based Accuri Cytometers, has opened a new European operations centre in St Ives, Cambridgeshire, Eastern England. This is the first project outside the US for the company, which specialises in cutting-edge life sciences instrumentation. Its new European subsidiary will start with a team of 10 before increasing staff levels if the venture goes according to plan. Robert Penney, Accuri’s managing director, explained that the company chose the region because of its biotechnology cluster, which is one of the largest in the world. Its close proximity to Stansted Airport is also a benefit, linking the company to its European clients.

A new national centre to analyse plant, animal and microbial genomes has opened at the Norwich Research Park in Eastern England. The Genome Analysis Centre (TGAC) will provide genome sequencing to underpin advances to improve food security, protect UK agriculture from exotic animal diseases and exploit weaknesses in microbes to develop new ways of killing superbugs. It will also be a centre of excellence in bioinformatics to ensure that the data generated by its genome analysis, and that of other facilities, can be effectively collected and analysed.

TGAC will be a Biotechnology and Biological Sciences Research Council (BBSRC) national centre, in collaboration with local partners. BBSRC will provide the majority of the $22.3 million investment required for the Centre and will underwrite its running costs for a number of years. A central part of TGAC’s operations will be to develop the economic potential of genomic knowledge and technology. Led by a new business development director, it will work to exploit relevant commercial opportunities.

Scotland’s reputation as a world leader in life sciences is to be boosted by a partnership between researchers and academics. Supported by $24.8 million of Scottish Government funding, the three-year Scottish Academic Health Sciences Collaboration (SAHSC) will generate 250 jobs across a range of disciplines. It will also create a world-leading platform for attracting research funds, promoting change in the National Health Service (NHS) and driving economic development through high-value jobs and intellectual property. It will have a focus on imaging, pharmacy, radiology and tissue banks, combining the talents of health boards and medical schools in Aberdeen, Dundee, Edinburgh and Glasgow. Scottish Health Secretary Nicola Sturgeon said: “This opens up further opportunities for us to turn cutting-edge research into real health benefits. The funding will secure an outstanding research resource across Scotland. This ensures that the SAHSC is founded on a clinical research platform that is second to none.”


Regional news
The University of Oxford in South East of England has been named the UK’s best higher education institute for the eighth year running by British newspaper The Times in its annual Good University Guide, after scoring full marks for student facilities, degree classifications and staffing levels. The Times classification of the UK’s universities ranks institutions according to criteria including student satisfaction, staff-to-student ratio, entry requirements, graduate prospects and spending on services. Dr John Hood, Vice-Chancellor of the University, said: “This is the third university guide this year to put Oxford at the head of their overall league table and the eighth year Oxford has held number one position in the Good University Guide.” In 2008 Oxford received more than 13,000 applications for undergraduate places, an increase of 61 per cent from 1998.

Dage Precision Industries, a US-owned bond-testing and X-ray technology company, has announced plans to move its UK group headquarters to a larger facility in Aylesbury, South East England. The company, which was acquired in 2006 by leading adhesive manufacturer Nordson Corporation, headquartered in Ohio, will occupy a new facility twice the size of its old base. Its 200-strong UK workforce will relocate to the new site, which measures more than 36,000 sq ft, enabling it to develop and coordinate business with its global offices and clients in China, Japan, Singapore, Germany and the US. The facility will include a large production area, including a cleanroom which will be used for the assembly and testing of ultra-high-bandwidth bond-tester transducers. “We are now in a unique position to expand our range of products and services within the electronics and related industries,” said Steve Kew, CEO of Dage.

Azure Venture, an investment vehicle backed by the Chilean royal family, has bought shares worth $20.6 million in Allergy Therapeutics, a pharmaceutical company based in South East England. The UK company, which is headquartered in Worthing, West Sussex and which specialises in innovative treatments for allergy-related diseases, had launched a financing initiative intended to raise up to $36.3 million. Ignace Goethals, its chairman, described the Chilean investment as a “significant development”, and added: “After a period of substantial investment in product development and manufacturing, this transaction will enable us to invest in European sales and marketing in order to accelerate growth.”

Two other overseas companies have secured office space in Sussex as they establish a presence in the UK. Norwegian-based virtual training firm It’s Learning and Dubai-headquartered shipping firm Polarcus have both signed tenancy agreements at a facility in Gatwick, the site of the UK’s second busiest airport.

Lucite International, a global plastics giant based in Southampton on the south coast, is to be taken over by Mitsubishi Rayon of Japan for $1.8 billion. The deal went ahead after the Chinese government dropped concerns about its impact on the company’s operations there. The textile corporation, Japan’s biggest manufacturer of acrylic, said that it would seek to expand Lucite’s operations in the next three years. The acquisition will make Mitsubishi Rayon the largest producer of MNA monomer in the UK, as well as in the US, Europe and East Asia. Lucite is a global leader in the production of methacrylates and currently holds more than a quarter of the world market share. Last year it was listed as the UK’s 51st largest private company in research by Oxford-based firm Fast Track and the Sunday Times.

Ambios Technology, Inc., a supplier of surface metrology instruments for industrial and academic researchers headquartered in Santa Cruz, California, has opened a sales and support office in Cambridge, Eastern England. The move will provide added assistance to the company’s distributors and customers in Europe, giving it a direct presence in Europe. Founded in 1996, Ambios manufactures high-resolution stylus-type profilometers, non-contact optical interferometers and Atomic Force Microscope/Scanning Probe Microscope (AFM/SPM) products. Last August it was ranked by Inc. Magazine as one of the 5,000 fastest-growing private companies in the US.

Global chemical company MacDermid has chosen Birmingham in the West Midlands as the site for a new $24.8 million R&D laboratory. The US-owned company, which makes chemicals for the electrical, printing and other industries, has been based on the edge of the city’s Eastside area for over a century. The new lab will be on a site in Small Heath, which was secured with the help of Locate in Birmingham, the city council’s inward investment agency. The MacDermid unit is targeting companies in four key sectors: life sciences, professional and financial services, public sector relocation and transport technologies. The company’s UK boss, Lance Phasey, said: “We are committed to Birmingham as our base for UK operations; it has a great deal to offer an established business like ours.”

Spanish-owned translation specialist OH2 International has opened its first UK office, and its first office outside Spain, at Keele University Science and Business Park in North Staffordshire, in the West Midlands. The company specialises in translating and producing international marketing material for businesses from all major industrial sectors, in over 20 different languages, and has offices in Madrid and Barcelona. Its new UK arm is aiming to create 10 new jobs by early 2012 and to recruit a possible further 50 expert collaborators. OH2 International’s owner, British expatriate John Bendel, was attracted by the Bridge to Growth scheme, a one-stop advice package offered by RDA Advantage West Midlands (AWM). He said: “The support I have received from AWM has proved invaluable … I was keen to come to the West Midlands as it is renowned for being an industrially rich region - ideal for us as these clients make up a large proportion of our target market.” OH2 International is the second company to set up shop at Keele Science Park through the Bridge to Growth scheme, after Scandinavian-owned marketing company Write-It moved there in November 2008.

The Ansty Park research and development site in Coventry, West Midlands expects to receive a boost from improvements to Junction 2 of the M6 motorway and the A46 highway. The $16.5 million highways infrastructure work will have a positive impact beyond Ansty Park, supporting economic development in and around Coventry and across the region, according to Steve Holland, head of asset management at Advantage West Midlands. He said: “Ansty Park has already acted as a prosperity and jobs dynamo for Coventry and the region, securing Ericsson as an anchor tenant, which will generate 850 R&D jobs. This is the first time we have worked in such close alignment with the Highways Agency and we hope to adopt this approach for future projects in the West Midlands.”

A $7.4 million initiative is under way to create an incubator for new business opportunities in the process industries sector in the Tees Valley in North East England. The Process Industries New Business Opportunity Hub at Wilton, managed by the Centre for Process Innovation (CPI), aims to assist 150 small companies with growth plans, attract 50 new businesses to the region, create 90 new jobs and safeguard 75 others. With 108,000 sq ft of modular units, office space and laboratory areas equipped with leading-edge testing facilities, it will enable small and medium-sized firms (SMEs) to develop embryonic commercial ideas. It will also provide process industry market sector experts to assist local businesses with market analysis, entrepreneurial skills and access to finance. The hub will draw from a variety of sources for new business opportunities, including existing companies in the region, local universities and the CPI’s advanced processing, low carbon energy and functional materials platforms.

Electrical engineering company Enersol, based in the Republic of Ireland, is to build a new international base at Capenhurst near Chester in North West England, with support from the Northwest Regional Development Agency (NWDA). It is thought that the move could create up to 30 skilled jobs; the company has said it is particularly interested in employing trained engineers who have lost their jobs due to the recession. Enersol develops products designed to reduce energy consumption and to encourage a reduction in the use of unsustainable materials. Among other things, it produces fuel and lubrication additives for the rail and automotive sectors.

A new research centre for radiation science and decommissioning is planned for the Westlakes Science and Technology Park in Cumbria, North West England. The Dalton Cumbria facility will employ two professors and 30 graduates to provide continuous research into the region’s nuclear energy sector. It will be financed by the Nuclear Decommissioning Authority (NDA) and the Dalton Institute of the University of Manchester. Also in West Cumbria, a $9.9 million nuclear recycling plant, the first of its kind in the UK, has officially opened its doors. Studsvik UK’s Metal Recycling Facility (MRF) at Lillyhall Industrial Estate, near Workington, holds the first new nuclear site licence to be granted in more than 20 years. The Swedish-owned facility is charged with the task of decontaminating scrap metal from the nuclear industry, as sites are decommissioned under the control of the NDA. It has already created more than 30 jobs and this number is expected to increase now the site is officially open. Work at the facility will begin in July, after the Nuclear Installation Inspectorate (NII) gives final consent for the receipt of contaminated metals onto the site. Typically, around two or three containers of scrap material will be transported to and from the site each week.

US-based Dow Chemicals, the world’s largest chemicals company, has acquired materials specialists Rohm and Haas. The takeover has created a leading speciality chemicals and advanced materials company, combining the two organisations’ best-in-class technologies, broad geographic reach and strong industry channels. Rohm & Haas has a base at Grangemouth in central Scotland, and the merger means that the three largest chemical companies in the world now have a base in Scotland, with Dow joining major players BASF and Ineos. Grangemouth is synonymous with petrochemicals, being home to the 500-acre Ineos-owned oil refinery and the reception facility for the Forties pipeline. The Scottish chemicals sector accounts for 15 per cent of the UK chemicals industry, generating some $15.4 billion of revenue and employing 70,000 people, directly and indirectly. The strength of the industry is backed up by a strong R&D focus; 12 universities and six colleges in Scotland have teaching excellence in chemistry and engineering.

A specialist paper plant at Chirnside in Scotland, owned by Finnish company Ahlstrom, is now producing over 10 per cent of the world’s teabags, thanks to a new $38 million production line, the first in the world to produce teabags that are completely biodegradable. The investment has created 30 extra jobs and has safeguarded the future of the existing 180-strong workforce. The new line uses corn starch to produce a lightweight, low-denier polymer material, which has been developed in response to global demand for sustainable products. The plant was officially opened in early June by Scotland’s First Minister, Alex Salmond. As well as teabags, Ahlstrom manufacture fabrics for a variety of single-use medical applications, including facemasks, drapes, gowns and sterilisation wraps, and engine filtration products for the transport industry.

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