September 2009

NEWS

Government pledges support for advanced manufacturing sector
The Government has unveiled a significant new package of measures to help UK companies in the advanced manufacturing sector take advantage of opportunities provided by emerging technologies. Business Secretary Lord Mandelson has announced investment totalling $242.5 million as part of the Government’s targeted strategies for key sectors and markets, with the aim of expanding access to information, encouraging take-up of new technologies and addressing specific challenges faced by the aerospace sector.

‘Advanced manufacturing’ describes businesses which use a high level of design or scientific skills to produce technologically complex products and processes. Because of the specialised requirements involved, these are usually goods and associated services of high value. The new investment – in plastic electronics, the nuclear supply chain, aerospace and silicon design – is an important part of the Government’s New Industry New Jobs strategy for the UK’s economic future.

The Government will provide a further $72 million from the low-carbon element of the Strategic Investment Fund to support research and technology critical to the development of low-carbon aircraft engine technology; this project will also be led by Rolls-Royce. At least $64 million will be invested in the SAMULET Research and Technology programme, a collaborative aerospace project focusing on productivity and environmental improvements. Of this, $45.6 million will come from the Technology Strategy Board (TSB) and $18.4 million from the Engineering and Physical Sciences Research Council, while further support is under discussion with regional bodies.

Other elements of the Advanced Manufacturing package include a further investment of $8 million by the TSB in collaborative R&D projects as part of its High Value Manufacturing competition, in addition to $38.4 million invested earlier this year; a $6.4 million expansion of the Manufacturing Advisory Service to help a wider range of businesses; and investment of $800,000 to support the development of a Centre of Excellence for Silicon Design in South West England.

Many of these initiatives will be supported by investments by England’s Regional Development Agencies (RDAs). Speaking on behalf of the RDAs, Richard Ellis, chair of the East of England Development Agency (EEDA), said: “This new support will provide a further stimulus for the growth and emergence of a new manufacturing economic base. Advanced manufacturing, along with sectors such as low-carbon manufacturing, digital communications and aerospace, has the potential to drive UK Plc out of the downturn and towards a new, sustainable period of economic invention, prosperity and wealth.”

The A350 XWB is a family of three large civil aircraft ranging in capacity from 270-350 passengers. The project is being supported by four partner nations: the UK, France, Germany and Spain. Through increased use of advanced composite materials in the construction of the wing and other parts of the aircraft, the A350 XWB will be lighter than its predecessors, delivering significant environmental benefits, including a reduction of around 15 per cent in CO2 emissions. The funding will create or secure more than 1,200 jobs within Airbus at its sites in Filton in Bristol, South West England and Broughton in Flintshire, North Wales, as well as over 5,000 jobs within the supply chain. In all, Airbus employs 10,500 people in the UK.

The UK’s aerospace industry is the second largest in the world behind the US and accounts for more than 13 per cent of total turnover in the world aerospace market. The industry employs more than 100,000 people and has a turnover of more than $32 billion annually. As well as wings, the UK has recognised strengths in the assembly of combat aircraft and military helicopters, smart munitions, avionics and sensor systems, landing gears, wheels and brakes, and electrical and fuel system design.

Support for the Airbus A350 is crucial to the industry’s future, according to insiders. Ian Godden, CEO of the Society of British Aerospace Companies, said: “The significant technological advances of the composite materials being used mean that the importance in developing the skills and technology for the future sustainability of the UK aerospace industry cannot be exaggerated.” Welsh Assembly Members also welcomed the deal, which will help to secure the future of the Broughton plant. Alyn and Deeside AM Carl Sargeant said it gave people “hope and confidence in the future”, while Wrexham AM Lesley Griffiths said that local firms relied on Airbus for orders.

Pioneering aerospace initiatives push the boundaries
Elsewhere in the aerospace sector, Wales is poised to lead the world in unmanned aerial vehicle (UAV) technology, according to a NASA expert. Former shuttle pilot Scott ‘Doc’ Horowitz was speaking at the prestigious UV Europe 2009 conference at the Parc Aberporth aerospace centre in Newport. He said: “This is one of the very few environments, if not the only one, that’s going to be able to do some of the testing that people are going to need to do in the future. It has tremendous potential, and if everything works out, Wales will have a world-class capability that I don’t think exists anywhere else across the globe.” Wales was chosen over Paris and London to stage the conference because it continues to lead the way in the European aerospace sector, according to Horowitz. The 180 companies in the sector now based in Wales include the British Airways Rhoose base in the Vale of Glamorgan, which is the world’s only licensed dual-bay facility able to maintain and overhaul Boeing 747s, 767s and 777s.

The European Space Agency has opened a new UK research centre at the Harwell Science Park in Oxfordshire, South East England. The $2 million centre, a former computing lab, will focus on climate change science, robotics and the use of radioactive materials as power sources, and it is hoped it will encourage more British scientists and engineers to become involved with the UK’s space programme. It may also lead to a rethink on whether Britain should have – and can afford – its own space agency with the power to initiate its own missions. Science Minister Lord Drayson hailed the centre as part of the UK’s “space renaissance”, following the recent selection of Major Tim Peake as the country’s first official astronaut. Climate scientists are due to arrive at the centre in September, and will refine computer models of the impact of climate change with the help of data from environment-monitoring satellites.

Also in Oxfordshire, pioneering aerospace company Orbital Optics has been acquired by MDA of Canada for $5.6 million. The multinational robotic systems specialist has purchased the high-resolution camera developer in order to obtain a presence in European markets. Orbital Optics was formed in 2006 as a spin-out of the globally recognised Rutherford Appleton Laboratory, and was previously funded by the Rainbow Seed Fund and the Science and Technology Facilities Council. It creates a variety of high-performance cameras used by space agencies around the world.

BAE Systems is to invest $1.6 million in energy efficiency research projects with the University of Central Lancashire (UCLan) in North West England. The money will be used for R&D projects designed to reduce costs and carbon emissions in the defence sector, which will focus initially on the development of intelligent energy management systems for use at BAE Systems sites across the UK. There is also potential for the systems to be rolled out for wider use in the defence industry and on military bases. The partnership will see UCLan establish a Centre for Energy and Power Management within its Centre for Sustainable Development in Preston. Nigel Whitehead, group managing director of programmes and support at BAE Systems, said: “Working with UCLan is an opportunity for us to demonstrate our support for research activity in the North West, where we employ around 15,000 people.”

On the south coast, the University of Portsmouth has opened a new cosmology facility that it hopes will make it a world-leading research institution. The new $14.4 million Dennis Sciama building will house the Institute of Cosmology and Gravitation (ICG), which will host internationally-renowned scientists. The new facility will investigate the early universe and the formation of galaxies and dark matter. The University of Portsmouth is active in knowledge transfer across a range of industries, including the biomedical and biomolecular sciences.


Car manufacturers look to the future
In the automotive sector, Nissan’s Sunderland plant in Sunderland, North East England has won a contract to assemble a new petrol engine from next year, securing future engine production on Wearside. Assembly of the 2.0 litre engine, codenamed ‘MR’, will immediately safeguard up to 130 jobs, with the expectation that an additional 200 posts will be created by 2013, depending on the market. The contract was secured with the help of a $3.1 million grant from RDA One North East, supporting a $20.7 million investment by Nissan over the next four years to upgrade and install new facilities. This will allow around 65,000 engines to be produced annually from May 2010.

The new engine will be used in several models including Nissan’s award-winning Qashqai and Qashqai +2, which are also produced in Sunderland. The news follows an announcement that the Nissan European Mother Site for battery production will also be based at Sunderland. Trevor Mann, Nissan Senior Vice President for Manufacturing in Europe, commented: “Employees have worked incredibly hard to improve the overall competitiveness of this part of the production process in terms of both quality and cost, and today’s news is just reward for their efforts.”

New engines for the Nissan Qashqai are to be assembled in Sunderland, North East England

Elsewhere, private sector funding has secured the future of Jaguar Land Rover (JLR) production in the UK, after the company’s Indian owner Tata secured investment worth $280 million from banks and commercial capital markets. It also obtained guarantees that will give it access to a $544 million European Investment Bank loan, if required. JLR has been negotiating for Government assistance under the $2.2 billion automotive assistance scheme since September last year. The additional funding will allow it to invest in future models and to launch the new XJ saloon on schedule, along with updated Land Rover models later this year. Tata purchased JLR from Ford last year and the company employs nearly 15,000 people across the UK.

The deal with Navistar will create a joint venture that will produce and sell electric Class 2c–3 commercial vehicles in North, Central and South America. The zero-emission, all-electric delivery vehicles will be used primarily for pick-up and deliveries in urban and suburban areas. The US Department of Energy grant to Navistar was announced by President Barack Obama during a visit to the company’s plant in Elkhart County, Indiana, which expects to be producing several thousand vehicles annually within two years. Modec’s chief executive Bill Gillespie said: “The positive impact of this partnership on the electric vehicle world will be significant, and this is a true sign of evolution in the automotive industry.”


Awards schemes offer incentives for knowledge transfer
The long-running Government-funded Knowledge Transfer Partnerships (KTPs) scheme, which encourages collaboration between industry and academia, has undergone a revamp with the introduction of a more flexible funding system. The programme part-funds graduates to work with businesses on projects key to their future development. Usually, graduates and academic institutions collaborate with businesses for between one and three years on long-term strategic development projects. Now short-term KTPs are being introduced that last between 10 and 40 weeks. These are aimed particularly at businesses that have more short-term business problems to tackle, and will also act as a stepping stone for companies with limited experience of collaborating with academia. Iain Gray, chief executive of the Technology Strategy Board, said: “The launch of shorter KTPs is an exciting new initiative, which will help more businesses to find innovative solutions through collaborative working.”

Manufacturing clusters in the UK regions will now be able to seek an internationally recognised award, in a new government-sponsored competition. The Cluster Mark competition aims to recognise where companies, specialist suppliers, service providers and educational institutions are working together to develop competitive advantage in a global economy. The competition was launched by Rosie Winterton, Minister for Regional Economic Development, on a visit to Hethel Engineering Centre in Norwich, Eastern England. Ms Winterton said: “When I hear people say the UK doesn’t make stuff anymore, they forget that we’re the sixth largest manufacturer in the world. Manufacturing … adds over [$240] billion to the economy, and accounts for around half of UK exports and 75 per cent of business R&D.”

Another competition, this time with private sector support, aims to reward businesses for innovative ideas to tackle climate change. The Shell Springboard Awards 2009-10 offer cash prizes of between $32,000 and $64,000 for UK-based companies to come up with commercially viable products, services or ideas that will lead to a reduction in greenhouse gases. The contest is open to businesses that operate in the UK and employ fewer than 250 people. Entries will be grouped into three regions: Scotland, Northern Ireland and Northern England; Central England and Wales; and Southern England. There will be a maximum of six winners from each area, while two finalists from each region will go on to a national judging round, where one will be named overall champion for 2009-10. Previous winning ideas include a lightweight plastic used in car manufacturing, an ultra-efficient heating pump and an air turbine suitable for use in low-head hydropower sites. For more information, see: www.shellspringboard.org/home.

Fresh expansion and innovation in renewable industries

In the renewable energy sector, the Advanced Composites Centre for Innovation and Science (ACCIS) at Bristol University in South West England is pioneering the manufacture of lightweight composite materials for use in 100ft wind turbine blades for Danish company Vestas Technology. The project, which is being undertaken with the help of a $14.3 million RDA grant, also has applications for the aerospace industry. The South West has recently been designated by the Government as a ‘low-carbon economic zone’. Vestas claims a 20 per cent share of the wind turbine market and, with 38,000 turbines installed, is the world’s leading supplier of wind-power solutions. The company has also recently won a $9.6 million grant from the Department for Energy and Climate Change’s Environmental Transformation Fund (ETF) and the South East England Development Agency (SEEDA) for expansion on the Isle of Wight, where it will build a new research and development facility. The grant is the first to be awarded to a company under the ETF scheme. Energy giant E.ON is planning further investment in Cumbria, North West England, which could see the number of wind turbines in the region increase to 500. The German-owned company is reportedly looking to build 100 more turbines off the West Cumbria coast, which would generate enough energy to supply almost 200,000 homes. This is in addition to the 60 wind turbines it is currently erecting at the $520 million Robin Rigg wind farm in the Solway Firth, one of the UK’s largest renewable schemes. When complete, the Robin Rigg facility will generate enough energy to power around 120,000 homes, and will save around 235,000 tonnes of carbon dioxide emissions each year.

E.on’s Robin Rigg offshore wind farm, shot from the coast  line in Cumbria. Credit: Newscast/Ally Carmichael.

Millennium Inorganic Chemicals, located on the south bank of the Humber estuary in northern England, has become the first UK company to take a direct electricity feed created by tidal power. An innovative shallow-water tidal device known as PS100 is currently harvesting power for the company, demonstrating that predictable energy levels can be produced close to shore. This greatly reduces the investment needed to install, connect and maintain devices in more remote locations. The fully submerged 100 kW system also reduces environmental impact. The pilot turbine’s creator, Sheffield-based Pulse Tidal, believes that shallow-water tidal turbines will surpass wind turbines as the most economic source of offshore power, and is now engineering a much larger device, capable of powering 1,000 homes.

MGT Power, which already has Government approval for a biomass plant at Teesport in North East England, has announced plans for a second major facility in the region. The first plant will be fuelled by 2.4 million tonnes of clean wood chip fuel per year and will provide up to 295MW of clean energy. The second facility, the 295MW Tyne Renewable Energy Plant (Tyne REP), will be built on industrial land owned by the Port of Tyne in North Shields. Tyne REP represents an investment of over $640 million and forms part of the North Bank of the Tyne regeneration area, which covers 600 hectares from the Walker Riverside Industrial Park in Newcastle to North Shields.

Life sciences sector attracts international investors
University of Oxford spin-out company BioAnaLab, based in South East England, has been purchased by the Massachusetts-based Millipore Corporation, for an undisclosed sum, as the US life sciences corporation seeks to expand its presence in Europe. Millipore specialises in the provision of technologies and tools to the global life sciences industry, while BioAnaLab supplies businesses with a range of services aimed at assisting the evaluation of drugs and vaccines. BioAnaLab was created in 2002 by academics at the University of Oxford’s Therapeutic Antibody Centre to provide an outsourcing solution to the biopharmaceutical industry. Geoff Hale, the company’s chief executive, said: “Through Millipore’s global market presence, we will add new capabilities and increase our capacity to serve our customers across the world.”

CN Innovations Holdings of Hong Kong is backing another Oxford University spin-out business, Zyoxel, with $1.6 million in funding. Zyoxel has perfected a technique to substantially cut drug development costs by testing them on laboratory-grown human tissue. Besides reducing the need for animal testing, this will help to minimise the incidence of drugs initially tested on animals but proving toxic for humans. The technique involves microbioreactors that speed up drug discovery and stem cell culture, and was developed by Professor Zhanfeng Cui and colleagues at Oxford’s Institute of Biomedical Engineering. Zyoxel hopes to link up with major pharmaceutical companies to sell its first product within a year.

Also in Oxfordshire, a new $3.2 million, five-year project has been set up to analyse the human body’s ‘transporter’ proteins. The project, led by Professor So Iwata, will be based at the Medical Research Council’s Diamond Light Source laboratory on the Harwell Science and Innovation Campus. Its findings could be exploited commercially by drug developers in the form of new medicines targeting individual proteins, potentially reducing side-effects in patients. Prof. Iwata, a life scientist at Imperial College London, said: “These transporter proteins are the gateway to our cells, so they’re massively important. Our aim is to solve the structure of some of these proteins in order to improve our basic understanding.” The Harwell Science and Innovation Campus has an international reputation for scientific excellence and is currently the focus of more than $800 million of investment.

British company GW Pharmaceuticals has received multimillion-dollar backing from US investor Great Point Partners for its cannabis-based medicines. GW, based in Salisbury, South West England, grows cannabis plants in secret locations in the English countryside to produce its Sativex treatment for multiple sclerosis. The treatment is currently used to reduce spasticity in MS patients who do not respond adequately to existing therapies, and is also being developed to treat cancer pain. Sativex will be marketed in the UK by Germany’s Bayer AG and in the rest of Europe by Laboratorios Almirall SA of Spain. Shares in GW rose sharply after the announcement was made, and analysts expect that other institutional investors will follow Great Point’s lead. David Kroin of Great Point said: “[We have] been following GW for some time and [have] identified it as a compelling investment opportunity, particularly following the recent strong clinical data on Sativex.”

Dundee University in Scotland is to lead a European Union-funded project aimed at developing new methods of delivering cancer treatments. As part of the $2.7 million scheme, the university will collaborate with international companies InSightec and CapsuTech on the Nanoporation project. The project will identify ways of using MRI-guided Focused Ultrasound (MRgFUS) and drug nano-capsules for more efficient methods of delivering chemotherapy. By integrating MRI (magnetic resonance imaging), focused ultrasound and potentially photonics, scientists hope to use nano-capsules to carry anti-cancer drugs to target tumours. The work has been funded for the next four years through the European Union’s Framework 7 programme and will create two new post-doctoral research positions and two new PhD positions at the university’s Institute for Medical Science and Technology (IMSaT).

US science equipment company Essen Instruments is to establish its European Discovery Services operation and a linked business site at the BioPark in Welwyn Garden City, Hertfordshire in Eastern England. The BioPark, which lies 30 minutes from central London by train, offers specialist facilities and support to bioscience and health technology businesses. Essen provides instruments and services for life science research and works to develop new technology in the field. Recently, it has expanded to offer contract services and its team of senior scientists have managed drug research for pharmaceutical companies. Its new facility will provide contract and collaborative services for drug researchers, initially based around ion channels and Essen’s platform technologies. The company’s president and CEO, Kirk Schroeder, said: “Extending our successful US Discovery Services operation into Europe is an exciting and natural extension of our business model.”

The Institute for Animal Health at Pirbright in Surrey, South East England is to be redeveloped with new investment from the Department for Business, Innovation and Skills (BIS). The $160 million redevelopment will be partially funded from the Large Facilities Capital Fund. According to the Government, the improvements will modernise the working environment at the facility; enhance Pirbright’s ability to attract and retain the best researchers; improve its ability to deal effectively with animal disease outbreaks; and provide the most up-to-date methods of bio-security. Science and Innovation Minister Lord Drayson said: “Pirbright leads the world in studying animal health and welfare, making a major contribution to our understanding of animal diseases and helping to maintain food security. This redevelopment will ensure that Pirbright has the facilities it needs to keep the best scientists and continue to be at the forefront of this vital research.”


RDAs report another successful year of business support
The Government has published its annual performance reports for each of England’s Regional Development Agencies (RDAs). The reports showed that all of the RDAs are meeting the objectives and targets set out in their corporate plans. This follows an independent study earlier in the year which showed that, overall, every Ł1 invested by RDAs generates at least Ł4.50 for their regional economies. Speaking on behalf of the RDAs, Richard Ellis, chair of the East of England Development Agency (EEDA), said: “RDAs have continued to invest to create the right environment for the growth of future and emerging economic sectors, such as low-carbon technologies, high-tech manufacturing and digital communications. To support tomorrow’s innovative businesses we are investing [$1.6] billion between now and 2011.”

Among key achievements this year, the RDA-funded BusinessLink service has refocused its offering to meet the immediate needs of businesses to survive the recession. Over the past year it has supported 942,166 businesses nationally, the majority of them SMEs. Businesses can now access a large range of advice and support through the single BusinessLink portal. RDAs have brought forward up to $160 million as part of the Government’s Fiscal Stimulus package, targeted at projects that will create a short-term boost to the economy by ensuring that critical projects continue as normal. They have also worked with a range of partners to respond to companies in difficulty through their Area Action Teams. In addition, Transition Loan Funds (TLFs), introduced since last November, have proved very successful, with over 280 loans totalling more than $44.8 million approved to date, safeguarding over 9,000 jobs.

The Northwest Regional Development Agency (NWDA) meanwhile has completed a fundamental review of its strategic regional sites, identifying a total of 35, in order to give a clear sense of strategic priorities and direction to public and private sector partners. The new list includes 20 sites retained from the previous list and 15 new sites, while five sites have been removed. The new sites are Central Chester and Central Warrington in Cheshire; Carlisle City Centre and Lillyhall Business Park, near Workington, both in Cumbria; Central Bolton and Manchester Piccadilly Basin/Oxford Road Area in Greater Manchester; Freckleton Street Area, Blackburn and Salmesbury in Lancashire; and Birkenhead Docks (Wirral), Dunningsbridge (Sefton), Liverpool North Docks and Liverpool Pall Mall/Liverpool City Centre, all on Merseyside. Those deleted from the list are Chester Business Park in Cheshire; Carrington and Davenport Green, both in Trafford, Greater Manchester; and Kings Business Park, Knowsley and Twelve Quays, Birkenhead on Merseyside.

 

Signs of recovery in the City as Bank boosts money supply

The Bank of England surprised observers in early August by voting to pump an extra $84 billion of ‘quantitative easing’ into the economy. The bank’s Monetary Policy Committee decided to extend its programme of buying government and corporate bonds from $200 billion to $280 billion, while holding interest rates at 0.5 per cent. The decision came despite more positive economic data, with several surveys suggesting that the UK economy might be emerging from recession. The Bank, however, said that the “recession appears to have been deeper than previously thought”; although it noted that the pace of contraction had slowed.

Mervyn King, the Bank’s governor, said: “Though there are signs that credit conditions may have started to ease, lending to business has fallen and spreads on bank loans remain elevated.” One analyst, Roger Bootle, economic advisor to professional services group Deloitte, described the move as “another step in the right direction”, and added that there was a good chance the Bank would need to extend the programme still further.

The number of new financial companies applying for UK regulatory authorisation rose by 10 per cent in the second quarter of 2009, the first increase since early 2008. The single largest group among the 282 new companies registering with the Financial Services Authority (FSA) consisted of independent financial advisers selling life assurance and other retail products. However, the other big group was financial advisory services, including fund managers, private equity shops and corporate finance boutiques. Some of these businesses have been created by financiers who have left mainstream banks in the past two years as a result of the banking crisis.

On the wholesale side, many of the new registrants were also seeking to take advantage of new pools of capital hoping to profit from the downturn, according to IMAS Corporate Advisors, which conducted the survey. The data are likely to boost hopes that parts of London’s financial community are recovering after the financial crisis. The number of companies cancelling their authorisation with the FSA also slowed, by 18 per cent in the three months to June.

In another tentative sign of recovery, the recruitment freeze in the City of London is beginning to thaw as companies cautiously begin to hire again. Momentum seen in the employment market in June was maintained through July, according to specialist recruitment company Morgan McKinley. New job vacancies in the financial services sector increased by 20 per cent in June from May’s levels. The number fell by 7 per cent from June to July, but remained the second highest this year. The catalysts for the recovery are said to be improved investor confidence and financial markets. Banks that have survived the financial crisis relatively unscathed are strengthening their workforces with proven performers in project management, regulatory compliance, risk auditing and financial controls.

Meanwhile, UK blue-chip companies will no longer have to advertise their most senior vacancies in local JobCentres in order to comply with immigration rules, after the Home Office backed down on the issue. After lobbying by lawyers and businesses, immigration minister Phil Woolas agreed that companies would no longer have to display posts with a salary above $208,000 in JobCentres before they can go to an overseas worker. However, they will still have to advertise in other UK media, such as specialist recruitment websites. One unexpected result of the UK’s points-based immigration system has been an apparent sharp rise in the number of high-flyers attracted by jobs in the country. Tier One of the Home Office regime is restricted to “highly skilled” entrepreneurs and to investors. According to the migration advisory committee, 55,000 people in this category are expected to come to the UK this year, almost double the 28,000 who arrived in 2007.


Companies warned of changes to EU VAT rules
Changes to the European Union system of Value Added Tax (VAT) due to come into force on 1 January 2010 will have major implications for EU businesses, warns accountancy firm Blick Rothenberg. The main changes include switching the place of supply rules for many services, from the country where the supplier belongs to the country where the recipient (customer) belongs; extending the scope of the ‘Reverse Charge’ for services supplied to and received from outside the UK; the introduction of quarterly EC Sales Lists for services subject to the ‘Reverse Charge’; monthly, rather than quarterly filing of EC Sales Lists for goods and halving the time allowed for their submissions; and the introduction of an electronic VAT refund scheme replacing the current EU 8th Directive procedure.

The changes will affect businesses that trade internationally and in particular where services are supplied to or received from other EU countries. For some businesses it will mean significant extra administration and may even require updating accounting and IT systems to enable compliance with the new rules. The 2010 changes mark the start of a five-year rolling programme of EU VAT simplifications. Further changes to the place of supply of services related to live events and long-term hire of transport will come into effect in 2011 and 2013 respectively. 2015 will see the introduction of the one-stop-shop for business to consumer (B2C) sales of telecoms, broadcasting and electronically supplied services.

The UK Government has given the go-ahead for a scheme that will see businesses paying tax on staff parking spaces. The Workplace Parking Levy (WPL) was approved by Transport Minister Sadiq Khan, with Nottingham City Council in the East Midlands the first local authority likely to introduce it. Under the scheme, businesses with 11 or more parking spaces reserved for staff will be charged $296 a year for each space. This could rise to $560 by 2014. Employers will be able to pass the costs of the levy on to their employees.

Nottingham City Council estimates that the levy will raise some $18 million a year, but does not plan to implement it until 2012, to help businesses cope with the recession. However, a number of other councils in England are believed to be considering the WPL, a prospect that predictably has not gone down well with business and motoring organisations. The Automobile Association (AA), for example, has described the levy as “a tax on jobs”. However, the Department for Transport said that it was up to local authorities to decide what measures were appropriate for improving transport and tackling congestion in their areas. “WPL schemes may only be introduced if they will contribute to the achievement of local transport policies, and all revenues must be reinvested in local transport,” said a DfT spokesman.


Report envisions knowledge-based economy of the future
Business and enterprise in the United Kingdom is headed for the biggest change since the industrial revolution, according to a new survey, the HSBC Future of Business Report. The report predicts that five new “super cities” – Brighton, Leeds, Liverpool, London and Newcastle – will evolve over the next 20 years as the UK economy undergoes massive change. It says that scientific innovation will drive the growth of these cities, which will derive their status and wealth from “new economy” income streams such as biotechnology, stem-cell research, gaming, cybernetics, nanotechnology and even alternative work practices and business models.

The report, based on input from 18 industry experts and data from 500 entrepreneurs and company directors in 17 UK cities, maps out a UK in which factories, power stations and livestock are supplanted by centres for gaming, wind farms and robotics as the economic landscape is redrawn around knowledge and next-generation industries. Its authors state: “The super cities promise to change the traditional national and regional power bases in the UK because of their proximity to the one thing that does not depend on natural resources – knowledge. But this is knowledge in the 21st century – a notion driven by science, technology, culture, creativity, behavioural economics and, more importantly, an open-source approach to innovation.”

The report explains that changes being driven by the recession will push new ways of working, increased international business and entrepreneurship. Newcastle will become a science city, Leeds is predicted to establish itself as a financial hub second only to London, and Liverpool is expected to build on its recent European Capital of Culture status to become a global brand. The research also predicts that the North/South divide will shift as London’s economic output wanes. Competition and high living costs in the south are encouraging entrepreneurs to move north.

“Regionally,” says the report, “we will be looking at a map of the UK that is radically different to that once familiar to today’s schoolchildren, where the landscape is plotted by pictograms of factories, power stations, coal mines, and sheep and cattle to indicate agricultural land. Tomorrow’s maps will contain symbols for wind farms, robotics, nanotech, biotech and gaming software parks, as broadband connectivity, regional diversification and a growing emphasis on the bio and tech sciences rewrite our notion of region-specific industries.”
 

Bob Wagener, vice president for sales and marketing at Roomlinx, said: “We are absolutely delighted to win the International Technium Challenge for 2009. Although our Roomlinx Interactive TV product has received a great response, we are still a relatively small company facing the standard challenges of introducing a new product. The combination of Technium guidance and free office space for a year will make our introduction into the UK market that much easier.”

Welsh Assembly Government Deputy First Minister Ieuan Wyn Jones commented: “Technium is an idea that was born in Wales but is now recognised across the world as a model for incubating companies, which is something to be very proud of. Bringing together like-minded talents from similar markets under one roof is reaping rewards and is proving to be a true catalyst for progress and prosperity.”

Another company investing in Wales is the French-owned Sword Group, which is to open a second office to support increased staffing levels at its new Technology Centre in Cwmbran. Sword’s world-class information Technology Centre opened in January 2008 with just two employees but by January 2009 had already grown to 67 employees. By mid-August employee levels had increased again to 88 and by the end of the year are expected to rise again to over 100. The centre’s main focus has been on research, development and operational support for Sword’s software portfolio. Project expansion is already under way, with plans to involve more global software development and to introduce emerging technologies.

Meanwhile the Welsh Assembly Government and British Gas have announced that the UK’s first dedicated Green Skills Training Centre will open in Tredegar in the South Wales Valleys later this year. The centre is expected to train over 1,300 people each year, and will include specialist provision to help enable local people who are long-term unemployed to find work in emerging green industries. British Gas will also use it to train new staff and to improve the skills of its existing workforce in renewable technologies.

The Green Skills Centre will play a key part in driving regeneration, aiding sustainability and reducing fuel poverty in a region that suffers from higher than average levels of social deprivation. In particular, it will help the Welsh Assembly Government to deliver energy efficiency measures to 40,000 homes, including the installation of large volumes of microgeneration and renewable technologies, as part of its Heads of the Valleys Low Carbon programme. Achieving this goal would create the largest Low Carbon Zone of its kind in Europe. Phil Bentley, managing director of British Gas, said: “British Gas employs over 1,500 people in South East Wales and our investment here today is a clear indication that we are committed to supporting the communities that we work and operate in.”


Ryanair switches northern operations to Leeds Bradford
Hundreds of new jobs are to be created in Yorkshire and Humber as Irish low-cost airline Ryanair sets up a new operations base at Leeds Bradford International Airport. The base, Ryanair’s 34th, will open at the airport in March 2010, with two aircraft and 14 new routes, 17 in total, being launched. The airport has recently been given the go-ahead for a $44.8 million development, including a terminal upgrade and a new two-storey airside departure lounge, which will see it double in size. John Parkin, chief executive at Leeds Bradford, said: “This is a great vote of confidence in the potential of both the airport and our region from Europe’s largest airline.” The investment is said to be worth $134.4 million and promises to draw one million Ryanair passengers to the airport each year, creating up to 1,000 jobs.

At the same time, Ryanair has dropped nine of its 10 destinations from Manchester, North West England, following a long-running campaign to reduce charges there. The airline said the move would cost 600 jobs at Manchester, which is the largest UK airport outside London. Instead, as well as at Leeds Bradford, Ryanair will increase the size of its operations at Liverpool and East Midlands airports. The airline, which recently scaled down its winter programme from Stansted, typically reduces its activity during the winter months. Bosses at Manchester airport hit back, saying that the loss of Ryanair’s business would not have as big an impact as the carrier claimed. Manchester Airport has suffered in the recession but its range of business and long-haul flights have protected it to some extent. Passenger numbers are down 6 per cent year-on-year, compared with 12 per cent for all airports, and it still hosts 65 airlines serving 200 destinations.

Elsewhere in Manchester, council planning officials have given the go-ahead for a $640 million port in Salford. The port will create up to 3,000 jobs and will boost the local economy by up to $133 million a year, according to the Peel Group, which will develop the facility. It will also take up to 21 million kilometres of lorry journeys a year off roads in the North West by increasing traffic on the Manchester Ship Canal. Peel property director Mike Butterworth said: “Port Salford will bring together rail, road and short-sea shipping together in a unique development alongside Manchester Ship Canal.”

UK takes leading role on sporting and cultural stages
England has been chosen to host the 2015 Rugby World Cup, beating rival bids from South Africa and Italy. This will be the second time that the country has hosted the competition, the previous time being in 1991 (Wales has also played host, in 1999). The International Rugby Board (IRB) also announced that Japan will host the event in 2019. Rugby Football Union (RFU) chairman Martyn Thomas called the decision “a relief, and also great joy for England”. He added: “We have been trusted with making a great competition and providing a great spectacle, and delivering what the IRB needs in terms of host revenue. … We have got some very iconic stadia and it will be tremendous for world rugby and immense for participation in England.”

According to the RFU, England will stage the biggest World Cup ever, and will generate a surplus at least $96 million larger than that promised by the other bids. As well as bringing an estimated $3.4 billion in economic benefits to the British economy, the tournament is projected to generate $480 million for the IRB. It will run from 4 September to 17 October 2015, and it is expected that three million people will watch the games live at stadia across the country. The venues selected are Twickenham, Wembley and the Emirates Stadium in London, Old Trafford in Manchester, St James’s Park in Newcastle, Anfield in Liverpool, Elland Road in Leeds, the Ricoh Arena in Coventry, Welford Road in Leicester, Kingsholm in Gloucester and St Mary’s Stadium in Southampton. Cardiff’s Millennium Stadium in Wales will stage two quarter-finals and some pool matches.

Prime Minister Gordon Brown said that winning the bid was a “fantastic achievement”. The event will form part of what he has labelled a “golden decade” of sport in the UK, which includes golf’s Ryder Cup at the Celtic Manor resort in Newport, Wales in 2010, the Champions League final at Wembley in 2011, the Olympic Games in London in 2012, the Rugby League World Cup in 2013 and the Commonwealth Games in Glasgow and Ryder Cup in Gleneagles in 2014. Ex-England rugby captain Lawrence Dallaglio, part of the side that won the tournament in 2003, said: “The world’s best players will now have a chance to play in some of the world’s best stadia and supporters can look forward to a feast of rugby.”

The UK is also benefiting from international exposure provided by the film industry. A total of $856 million was spent on film production in the UK during the first half of 2009, and council film officers have reported an increase in enquiries from production companies looking to take advantage of UK locations. According to the Local Government Association (LGA), the amount spent on film production to June 2009 was 47 per cent higher than in the same six-month period in 2008, and the highest since 2004. As well as blockbusters such as Harry Potter and the Deathly Hallows, smaller productions are also contributing to inward investment. For example, Kent County Council in South East England has supplied $120,000 of funding for The Calling, starring Brenda Blethyn and Susannah York, while working to secure match funding.

Around 10 per cent of visits to the UK are thought to be linked to the impact of British films, and are worth around $2.9 billion a year. Chris White, Chair of the Culture, Tourism and Sport Board at the LGA, said: “Film and television makers are valuable customers which councils are helping bring into local areas. The business of making a movie benefits the hospitality industry and local caterers, and can turn a location into a major tourist draw for years to come.”


Regional news
China Merchants Bank (CMB), the sixth largest bank in China, has set up a representative office in London to drive its European expansion strategy. The move, secured with the help of inward investment agency Think London, promises to further enhance London’s status as a strategic location for financial services companies from Asia. Weihua Ma, president of CMB, said: “We are pleased that London will be the headquarters for our European operations. We researched alternative locations, such as Frankfurt, where the European Central Bank is based, but London has an incomparable advantage over other locations as it is a global financial hub, with unrivalled access to the European market.”

A new five-storey innovation centre offering 42,000 sq ft of lettable laboratory space, plus an auditorium and a café, has opened in east central London. Part of the University of London, the Queen Mary Bioenterprises (QMB) Innovation Centre, located on Mile End Road E1, will offer laboratories designed according to tenants’ needs, allowing them to specify the internal division of their premises and the ratio of wet lab to write-up space. The Innovation Centre is located next door to a modern medical school, St Bartholomews Hospital (Barts), the London School of Medicine and Dentistry and a large prestigious public hospital, the Royal London. It will target start-ups and more mature companies in the biosciences, environmental, nanotech and clean-tech sectors.

The University of Southampton in Hampshire, South East England, has invested $4.8 million in IBM’s iDataPlex server, one of the world’s most powerful supercomputers, giving researchers in the region access to next-generation computing facilities. IBM’s system has the processing power of 4,000 standard office computers and is expected to advance the university’s commercial and academic projects. Professor Philip Nelson, Deputy Vice-Chancellor, said that the technology was essential for the future development of the university, which has a strong entrepreneurial culture. “The University of Southampton is one of the UK’s leading research universities. To ensure that we remain at the cutting-edge … we must invest in the best facilities for our research staff,” he remarked.

Laboratory services provider Veeda Laboratories, a subsidiary of Veeda Clinical Research based in Hampshire, South East England, has been acquired by clinical research company ICON plc of Dublin. Veeda will be integrated into ICON’s Development Solutions arm, where it will provide specialist pharmaceutical techniques and lab safety services. Veeda Laboratories is a provider of biomarker services, which can be used to measure the process of a disease or the effects of a treatment. Thomas Frey, President of ICON Development Solutions, said that the new company would play a vital role in its future operations. He commented, “We have acquired a company that has a very strong reputation for biomarker development and has well-established relationships with top-tier pharmaceutical and biotechnology companies.”

Spanish lighting company KSR Lighting has relocated to a base in Portsmouth, Hampshire. The Marbella-based company, which provides domestic and commercial lighting solutions, chose the site for its first presence in the UK as it seeks to expand its business away from its core central European and Asian markets. It has taken the last 8,155 sq ft of space available in the Nelson Centre in the city’s docklands area, which is home to a number of global defence and shipping companies.

Folkestone in Kent, South East England, is attracting international and domestic businesses from the creative industries, according to local regeneration organisation the Creative Foundation. The foundation has supported the $80 million redevelopment of Tontine Street and Old High Street, which has brought the town a new lease of commercial life. Last year it hosted the Folkestone Triennial, which displayed work by some of the world’s leading contemporary artists. Peter Bettley, spokesman for the Creative Foundation, suggested that the area has become attractive to the literary, performance and artistic industries. A high-speed rail link connecting Folkestone with London St Pancras in less than an hour will begin services on 9 December, offering another incentive for businesses looking to relocate to the region.

Global swimwear brand Speedo is reinforcing its long-term commitment to the East Midlands by moving its international headquarters to new premises at the Ng2 business park in the centre of Nottingham. The company has signed a 17-year lease for a new high-tech office facility to house its 170-strong workforce, currently based elsewhere in the city. Construction is due to start later this year, subject to final planning approval, and the building will be completed by the end of 2010, providing 43,000 sq ft of space over three floors. The Speedo brand recently celebrated its 80th anniversary, and the new site will provide improved facilities for product development at its global Aqualab Research and Development Centre. It will also act as the brand’s international base. Founded in 1928 in Australia, Speedo has had a presence in Nottingham since 1959 and the city has been the brand’s international HQ since 1991. Its latest products include the Fastskin LZR Racer, a technologically advanced swimsuit in which a number of world records have already been broken. To date, 400,000 sq ft of the Ng2 site has been developed, providing a mix of retail and office space. Other tenants include Experian, Coutts Bank, Bank of England, HBOS and Mercedes-Benz.

Alcatel-Lucent has purchased technology company Velocix, based in Cambridge, Eastern England, in a deal worth between $19 million and $24 million. Velocix is a content delivery network solutions and services provider to the media, entertainment, software and telecoms industries. It provides an internet ‘fast lane’ for digital assets, enabling high-quality, uninterrupted streamed video plays and superfast file downloads. The company was the first to market a turnkey solution – Velocix Metro – that allows broadband service providers to deploy their own advanced delivery capabilities for bandwidth-hungry multimedia content. The company was spun out from internet consulting business Saviso in 2002 and was formerly known as CacheLogic. John Lee, CEO at Velocix, said: “We are very excited at becoming part of Alcatel-Lucent and the opportunities this will give Velocix and its customers. The acquisition is a great fit for both businesses.”

Spanish lift manufacturer Orona is to locate its UK headquarters at Sheffield Business Park in South Yorkshire. Orona (UK) will occupy one floor of a 6,650 sq ft unit let to its subsidiary Independent Lifts at the park’s Europa Green complex, from where it will oversee the operations of 400 staff across the country. Independent Lifts was previously based at Holmewood in Chesterfield, but moved to Sheffield because of the city’s strategic location on the UK’s motorway network. Orona is the leading lift manufacturer in Spain, which is the world’s second-largest market for lifts. It is the latest of a number of international companies, among them Fujitsu Siemens, to have established their UK headquarters at Sheffield Business Park. The park has detailed planning permission for 600,000 sq ft of offices, plus outline consent for a further 900,000 sq ft.

Huddersfield in Yorkshire and Humber is to host a high-tech textile testing facility designed to help detect counterfeit goods. The town’s Textile Centre of Excellence has won a three-year contract for the SigNature DNA Anti-Counterfeiting programme, developed by US-based Applied DNA Sciences Inc to prevent counterfeiters copying high-quality goods across Europe. The centre will also be able to test the authenticity of banknotes, passports and even wines. The technology can create and convert hologram trademarks, invisible inks and unique threads into a DNA mark on fabrics and threads. RDA Yorkshire Forward and the European Union have provided initial funding for the programme, which is also expected to receive major backing from the private sector.

PZ Cussons, a cosmetics and toiletries manufacturer based in Stockport, North West England, is expanding its presence in the region by investing in a new $41.6 million research facility in Salford. The innovation centre will employ more than 150 workers, two-thirds of whom will be involved in manufacturing roles. The company, which produces brands such as Imperial Leather, Morning Fresh and Carex, currently employs over 400 people in the North West. This year it is celebrating its 125th anniversary. The new facility will function as a global centre of excellence for PZ Cussons, which chose to build on the site of a former coal mine in preference to a number of overseas locations. In June 2008, the company chose Manchester Business Park as the location for its new 40,000 sq ft headquarters, and expects to complete its relocation there in early 2010.

Murata Manufacturing, one of Japan’s leading electronics companies, is to collaborate with the University of Manchester in North West England in the field of nanotechnology. The company will work with Professor Paul O’Brien at the institution’s School of Chemistry on new technologies that could change the future of manufacturing. Nanotechnology has the potential to create new applications in medicine, electronics and energy production, and the university has had a nano-workshop since 2003. Mark Hughes of the Northwest Regional Development Agency (NWDA) said: “This research collaboration is great news for the University of Manchester and testimony to the strength of the region’s reputation for research and development.”

Data centre operator Internet Villages International (IVI) has secured almost $1 billion in financing to build a 3 million sq ft ‘data centre village’ in Annandale in South West Scotland. The company will partner with power and cooling solutions provider APC by Schneider “to deliver ecologically designed, modular, scalable data centres for sustainable operation”. APC by Schneider will provide the technology and infrastructure for multiple data centres on an initial 125-acre phase of the development. The $1.6 billion data centre campus, ALBA1, will eventually include more than 3 million sq ft of data centre space – making it, according to IVI, “the largest energy-efficient and sustainable data farm”. The data centre will be built near renewable energy sources, and IVI has signed a deal with Atlantic Resources to share energy generated by a tidal power project in the Pentland Firth. The initiative could potentially turn Scotland into a hub for sustainable data centres, said the company.

US technology giant Tyco International has invested a further $11.2 million in Northern Ireland to create a centre of excellence that will focus on increasing the competitiveness of design and product engineering functions at its Electronic Security Products (ESP) business. The centre was built in conjunction with development agency Invest Northern Ireland, and is already helping to achieve development goals at the company’s access control and video systems operations. ESP boss Mark VanDover said: “Invest NI support has been instrumental in growing our presence in Northern Ireland and we now have almost 200 employees based here. We remain impressed with the wealth of engineering talent that exists locally. This new centre has brought together core parts of the electronic security business in a modern, purpose-built property, which includes a specially designed R&D and product engineering facility.”

Invest Northern Ireland, with the help of the European Union, is also helping tyre manufacturer Michelin to increase the skills levels of its employees at its Ballymena base and improve profitability, through a $2.7 million training programme. Michelin manufactures heavy bus and truck tyres at the site, primarily for export to North America and Europe. The staff training and development project aims to help the company enhance performance in a number of business areas, including production and administration, so that it can be more competitive in the global market. Invest NI has provided over $976,000 towards the total investment cost, which includes part funding from the European Regional Development Fund (ERDF).

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