0. Introduction & Regional Context
1. The aim of this study is to identify how the West Midlands Regional Planning Guidance (RPG) can support the development of clusters of economic activity in each of the RES’s "high growth, high value" economic sectors. These sectors are tourism and leisure, food and drink, medical technologies, creative industries and engineering design.
2. There appears to be no firm regional consensus on a list of sectors to be the focus of region-wide business support. Three recent regional strategy documents – with admittedly slightly different agendas – identify different target sectors with only partial overlaps (see Table A). As will be shown below clusters can benefit from a clear programme of public support, and RPG can contribute to this as an overarching strategic document.
3. The planning process alone cannot develop a cluster. RPG should only set out to support a particular sector if there is a clear consensus to support it and if non-planning policies are also being geared to this end. The RPG process will have to decide whether a definitive list of sectors and related activities should be defined by RPG to be the focus of special "cluster" policies. If this is not possible it may be more appropriate to define only non-sector specific planning policies that can support the development of clusters (as set out in section 2).

0. Clusters & RPG
1. Clusters are characterised by networks of strongly interdependent firms. Their attractiveness to economic development is based on the fact that clustered firms have been found to more innovative, exhibit stronger growth trends and more resilient to economic downturns than non-clustered firms. They can thus form the basis of regional prosperity.
2. To date Regional Planning Guidance has contained very little mention of clusters and the policies designed to support them. Clusters themselves are not a new phenomenon, and have existed in many industries for a considerable length of time (e.g. the ceramics industry in Stoke-on-Trent). Recent research (DETR, 2000) indicates that while the planning system to date may not have hindered the development of clusters, nether has it proactively facilitated them. Much more can be done therefore to ensure that that the planning system is responsive to the land use and infrastructure implications of clusters.
3. RPG is regarded as the most appropriate level for the planning of clusters. As most clusters cover more than one local authority area, it is only through RPG that the interplay between housing, transport and cluster-based activities can be fully exploited. The draft version of PPG 11 makes a specific requirement for RPGs to consider cluster development.
4. Any public support for clusters is plagued by the fact that clusters are highly individual entities. Studies on existing clusters highlight the range of different factors that have brought them about and maintain them - and indeed the variety different forms they take. Consequently no single model of cluster development and support can be formulated, and by extension neither can a single response from the planning system. The formal recognition of clusters is a relatively recent phenomenon so adding to these problems is the fact there is – to date - comparatively little evidence on how RPG can effectively support clusters.
5. The paper undertakes an analysis of locational factors which have been found to underpin cluster and seeks to identify the planning instruments that can influence these. On the basis of this, the following policy issues and choices are presented to allow RPG to develop a clusters policy:
1. RPG should identify the region’s development corridors, along with the industries that would most benefit both from locating there.
2. RPG (& Local Development Plans) should develop a list of sectors and assign them to areas of the region as a basis for cluster policies.
3. Areas of development need with a large number of available sites and few apparent cluster opportunities should be identified along with the flag-ship facilities (R&D establishment, large inward investor) and infrastructure requirements needed to begin to develop local clusters.
4. RPG should promote competition between sectors in support of innovation by allowing similar industries to establish themselves in proximity to each other.
5. RPG should contain a list of the region’s research establishment (i.e. universities with significant research activity and businesses with major R&D facilities) and assign a cluster strategy to each one. This should identify the principal linkages with the local economy and sites and premises where joint ventures with the private sector can be launched.
6. The analysis also identifies the following policy recommendations and choices that would be taken forward by the wider planning process:
1. A "Proximity Criteria" should be added all planning applications with a commercial focus. Companies should demonstrate how local companies would benefit from it locating at the site and the added benefit to the company from locating at the site as oppose to any other. Activities that support business (including R&D facilities, training and support institutions) can also receive favourable consideration from the planning system by providing similar proximity evidence.
2. When determining proximity criteria, provision may have to be made for a sector "champion" – for an institution or company which can only demonstrate benefits to future companies that could follow on after it
3. Prime sites where there may be competing planning applications should be released on the basis of such proximity criteria.
4. Overwhelming proximity evidence may also be a reason for releasing sites with development control (such as green belt) and change other planning restrictions.
5. Cluster policies should not be allowed to promote development that may destroy the qualities that make an area suitable to locate in, in terms of quality of life. Clusters can be more appropriately used to allocate scarce land resources.
6. Each RPG sub-region or each development plan area should further identify what particular industries and related cluster activities particularly favour the area and how these are to be supported. The support strategy should also contain an identification of each cluster’s land use and site requirements and a commitment to maintain a certain level of sites and premises "readily available" for each cluster.
7. For all sites which are readily available and being actively marketed as a business location, local authorities should conduct an analysis – a "Cluster Planning Appraisal" - to identify which industries could ideally locate at the site. The proposed activity should help to establish or reinforce local economic clusters, delivering the maximum benefit from the site to the local businesses and benefiting most from the strategic location – thus supporting quality jobs and innovation. Such an appraisal could be limited to larger sites of regional/ national or international significance and market.
8. A review of local housing and transport provision should be conducted when allocating sites and areas to a particular cluster.

3.1 Leisure and Tourism

1. The region needs to plan for large entertainment centres collecting several leisure facilities – these should be built around existing urban cores and existing facilities.
2. Smaller leisure facilities (gyms, hotels and restraints) should also be promoted along side other facilities such as business parks and retail centres.
3. The region needs to develop leisure facilities with a national or international reach that complement existing provision – these should be subject to favourable planning policies.
4. The region should favourably consider development that are needs to further support the development the business tourism
5. Existing facilities in rural areas should be converted to offer increased bedspace provision inc. quality, characterful caravan sites, self catering cottages and high quality conversion farmhouse accommodation.
6. Leisure facilities that can help tackle social exclusion should be preserved and maintained

3.2. Food and Drink

1. Food processing and facilities preparing ready made meals should be favourably considered in planning decisions and be encouraged to areas of development need.
2. Small scale processing should be facilitated in rural areas when raw materials are predominantly local. Favorable planning policies in terms of use of buildings should be considered.
3. Ethnic cuisine should be encouraged building on the regions diverse cultural based – predominantly in urban areas.

3.3 Medical Technologies

1. Preference should be given to medical technology companies on sites straddling the A38 corridor.
2. The planning system should actively support the location of a large medical equipment manufacturer in the region, and also a large private R&D facility – preferably close to existing and earmarked sites for medical technologies.
3. Planning applications related to telemedicine should be favourably considered.

3. Creative Industries
1. Areas close to the region’s urban cores should be earmarked as suitable locations for creative industries. Urban improvements may be necessary to make sites suitable and improve the urban environment, establishing locally-based image for the area and making some parts suitable for night-time economy
2. In rural areas there may be potential to develop co-ordinated programmes which build on an area’s local image, use abandoned or underused buildings and develop cultural industries which build on the areas local strengths.
3. Within all these areas sites need to be developed with the particular office needs of creative industries in mind (flexible terms and size, IT infrastructure, provision for craft based activity etc).
4. There should be further encouragement of computer games design in the Leamington/ Warwick area, as well as around any other geographical concentration of creative industries which may emerge.
4. Engineering Design
1. Within the Region’s manufacturing areas specialised engineering design companies which can demonstrate benefits along the lines of proximity criteria should be given prime sites with good regional access.
2. Engineering Design companies may have particular requirements in terms of good quality office space with good IT infrastructure which may need to be provided close to otherwise manufacturing areas.
3. Special focus should be made to attract companies into the Walsall/ Wolverhampton area to support the incipient cluster that may be emerging. Similar priority should be given at the heart of other manufacturing areas (Stoke-on-Trent, Coventry?)
4. It may be appropriate to allocate an area of the region as the focus for motor-sport design companies and give these activities priority access to premium sites.

The study will review the spatial implications of the Regional Economic Strategy’s (RES) commitment to support clusters of new economic activity in the West Midlands. It will help to contribute to the proposed strong relationship that should exist between the RES and West Midland’s Regional Planning Guidance (RPG). At this stage it aims to provide a series of strategic choices policy choices to be resolved by the RPG process.

Section one establishes the regional context and highlights areas where the RES does not concur with other regional strategy documents in identifying priority sectors for the region. Generic non-sector cluster planning policies may thus be necessary for RPG. Section two discusses the concept of clusters, identifies the sort of planning policies that can facilitate their development, without reference to specific sectors. Section three reviews the RES’s five "high growth, high value" sectors, attempting to identify trends in the region’s presence in these sectors and possible appropriate planning responses.

As the RES notes the region’s economy is currently concentrated in sectors whose growth prospects – certainly in employment terms – are relatively poor. Currently, a 10,000 per annum rate of job losses in the region's manufacturing sector is forecast. Whilst retaining and enhancing activity in the region’s core economic sectors, the objective of a number of regional strategy documents (Working to Win, Objective 2 Single Programming Document, Rover Task Force Report as well as the RES) is to shift the economy towards sectors which present the best growth prospects.

In addition to the support of innovation and the uptake of ICT (Information and Communications Technology) in all sectors and containing the decline of the region’s significant existing "legacy sectors", the RES identifies five "high growth, high value" economic sectors to act as the focus of support. These sectors are engineering design, food and drink, medical technology, creative industries and tourism and leisure.

These sectors have been chosen because they have a capacity to generate external income for the region and have higher levels of value added capable of addressing the region’s shortfalls in GDP (Gross Domestic Product) per capita in the longer term. All have a presence in the region but are under-represented. These sectors will probably be the focus of considerable support as part of the RES and associated programmes (e.g. the Objective 2 SPD). The RES calls for the creation of Business Growth Task Groups led by AWM (Advantage West Midlands) for each sector. Amongst other support activities the Task Groups will encourage the development of cluster activity.

Subsequent research has identified other areas of potential growth within the regional economy. A summary of these is provided in Table A.

The Rover Task Force report identified the following sectors where significant short term employment growth is forecast:

• Electronics (2.8% pa)
• Professional services (e.g. legal/accounting) etc (2.9% pa)
• Computing services (3.8% pa)
• Other specialised business services (2.4%).

High growth potential sectors:

• Creative industries – currently employs c.50,000 (2.4% of total employment) – this is a must have relatively easy to grow sector, likely to be centered on the conurbation core centre;
• ICT – currently employs 13,000 (although Marconi’s recent expansion announcement will boost this) (0.7% of total employment);
• Medical technology – currently employs 2,000 (0.1% of total employment) – this is also a must have and relatively easy to grow sector, which is increasingly closely integrated with creative industries.

Moderate growth potential:

• Aerospace – region offers the skills but looking at the wider sector dynamics, quotas agreements with our European partners are resulting in relocation of share of UK sector – therefore probably little scope for expansion;
• Call Centres – although currently generally low skilled, part time jobs, some call centres will move towards internet based/ e-commerce based higher skilled jobs – sector to watch;
• Consumer electronics – very competitive, tends to be branch plant and at risk;
• Electronics – very competitive, tends to be branch plant and at risk;
• Food and drink – but most of activity is not high skilled; and
• Pharmaceuticals – most scope from relocation resulting from the continuing global process of acquisition and merger.

Moreover the Rover Task Force suggests that the following geographical areas provide a mixture of opportunity and need, linking the areas that might suffer most from the decline in manufacturing – in particular automotive manufacture - in the region with those areas that can pick up the opportunities from the above sectors. Extending this line of reasoning these areas may provide a focal point for cluster-based activity. These three areas are:

• A corridor running broadly along the route of the A38 from central Birmingham, past Longbridge, into north Worcestershire;
• A corridor from the north Black Country to Telford; and
• Coventry and its environs.

Clusters are characterised by networks of strongly interdependent firms. Their attractiveness to economic development is based on the fact that clustered firms have been found to more innovative, exhibit stronger growth trends and more resilient to economic downturns than non-clustered firms. They can thus form the basis of regional prosperity.

To date Regional Planning Guidance has contained very little mention of clusters and the policies designed to support them. Clusters themselves are not a new phenomenon, and have existed in many industries for a considerable length of time (e.g. the ceramics industry in Stoke-on-Trent). Recent research (DETR, 2000) indicates that while the planning system to date may not have hindered the development of clusters, nether has it proactively facilitated them. Much more can be done therefore to ensure that that the planning system is responsive to the land use and infrastructure implications of clusters.

RPG is regarded as the most appropriate level for the planning of clusters. As most clusters cover more than one local authority area, it is only through RPG that the interplay between housing, transport and cluster-based activities can be fully exploited. As the draft version of PPG 11 outlines, RPG should:

• "Identify the regional or sub-regional priority areas for economic development and regeneration. This will include where appropriate, making provision for the location, expansion and promotion of clusters or networks of knowledge driven industries, linking business to the science and research base, so that they can more readily compete in world markets;

• Ensure that regionally or sub-regionally, significant housing, transport and other infrastructure proposals support the above priorities and, where necessary, provide advice on phasing and programming; and

• Advise on general locations and criteria for strategic site selection, so that sufficient sites are made available to meet business needs while ensuring that major "greenfield" sites are not released unnecessarily as part of a process of competition between nearby authorities."

Any public support for clusters is plagued by the fact that clusters are highly individual entities. Studies on existing clusters highlight the range of different factors that have brought them about and maintain them - and indeed the variety different forms they take. Consequently no single model of cluster development and support can be formulated, and by extension neither can a single response from the planning system. The formal recognition of clusters is a relatively recent phenomenon so adding to these problems is the fact there is – to date - comparatively little evidence on how RPG can effectively support clusters.

At the most general level, public support for cluster growth should build on local and regional strengths and remove identified barriers to development. A review of the factors that have been found to underpin the development of clusters (DETR, 2000) can be used to highlight some of the planning policies that might support their development:

Encouraging the effective operation of networks of companies is an important element in cluster development. The planning system can assist the development of effective networks by supporting the strategic development of sites that are geographically proximate and well connected by the region’s transport system. For different sectors or activities the level of required proximity will vary from adjacent sites, to development "corridors", or contiguous areas covering one or more local authority boundaries. In some sectors and activities the whole region may indeed be a potential cluster area. These attempts to attain geographic proximity should cross-reference with business support initiatives aiming to support networking and clustering amongst companies.

Proximity may also support certain instances of healthy competition – as well as elements of co-operation. By putting pressure on companies to improve their products and innovate, these can reinforce the success of a cluster. Proximity can help create a spirit of "better thy neighbour", with peer pressure, pride, and a desire to look good amongst executives leading to higher quality, efficiency and innovation. The planning system may thus want to support proximity of companies when no instances of co-operation are apparent to stimulate competition in the cluster.

The importance of this factor is highly dependent upon the nature of the industries that comprise the cluster. Some mostly low value added cluster activity may depend less on research facilities (such as call centres and perhaps food and drink). Other industries with more cutting edge technologies may be more dependent. R&D facilities can take the form of public facilities (including universities) or private facilities belonging to major companies. In either case if relevant R&D facilities wish to locate, relocate or expand - and a proven need for proximity in the cluster can be demonstrated – sympathetic planning policies should be applied. This may take the form of exception to "restraint" policies in certain areas or allowing access to premium locations that have been already been earmarked for development. It may also take the form of actually seeking a suitable site within a given area and proactively facilitating its move onto the property market. The question of exactly how a need for proximity can be demonstrated remains a challenge on which guidance may be appropriate.

An alternative approach may be to encourage the location of such an R&D facility in areas with development need, hoping that subsequent industries would wish to locate there. Such an approach may run against the principle that clusters cannot be created, but merely facilitated when building on local strengths. There is evidence nonetheless that this approach works at the margins and when it does not over stretch the need for location decisions to be based on a solid commercial rationale.

Planning policies can play a strong role in maintaining the image of an area. This can be achieved in a number of ways. A ‘herd instinct’ is detectable in business location decisions where perceptions become at least as important as commercial factors. The encouragement of a sector "champion" into the area can thus add greatly to its image and reputation of being at the "cutting-edge" of a particular technology or industry. In this case sympathetic planning policies as described above should be applied. Again a challenge remains on how this can be objectively assessed and the extent to which such facilities can be encouraged into areas of development need. Such an initiative should cross-reference and reinforce regional marketing and promotional activities.

A more important way in which planning can add to the image and reputation of an area is by maintaining the quality of the local environment as an attractive place to work. This factor is especially important in some of the high-technology knowledge based industries where quality of life decisions are important in attracting key personnel. Striking the balance between facilitating the expansion of successful industries without destroying the features which made such a location attractive in the first place presents a major challenge for planning policy.

Good transport linkages both attract companies to a particular location, but also embed them within a regional economy, as the cluster matures and linkages between companies strengthen. Transport linkages are required at all levels, but access to major international and national facilities such as an airport or fast rail connections are more scarce and thus more prized, and are often sought by the high technology companies which clusters policies often support.

At a regional level application of the "corridor" principle in transport development may be appropriate, linking target areas and sites with good connections into regional transport networks. Good regional transport networks also help the clusters tap into a wide labour market, and also the movement of key personnel into regional and international networks.

The availability of land and premises is critical to the development of a cluster. The interaction between the property market and the planning system is crucial to maintaining an adequate supply of premises suited to the needs of cluster-related companies, and is probably the most important influence the planning system can have on cluster development.

Each cluster will have very specific requirements for land and premises. In addition to the requirements for a good geographic location - as influenced by the some of the other locations factors in this section - the actual site will need to have the appropriate characteristics in terms of size and infrastructure. This can only be determined by a bottom-up analysis of the sector or industry in question. Some industries will require large consolidated office locations or industrial units, others smaller business units suitable for SMEs. Lease terms may also relevant as small companies may need flexible terms which allows them to expand according to need. A continuous monitoring of the property market would be appropriate to see where extra provision is required, coupled with a dialogue with industry to identify its need. This can be followed up with appropriate site development and planning policies.

A cluster planning policy may also have to be selective in terms of deciding on competing uses for prized development sites. Sites could be earmarked with a particular cluster in mind. Planning applications may have to demonstrate to what extent the proposed activity fits into, or helps to establish, a particular cluster on the basis of established guidelines. Planning policy may also have to pro-actively look for a suitable site if a prized component of a cluster wishes to locate in a given area.

A critical element in the development of many clusters has been a supportive public policy environment. Public support can take many forms, including a responsive and pro-active planning system, but also grants, public R&D expenditure, support for networking activities and the provision of infrastructure. These can be supported through the provision of a strategic framework provided by the RPG, and ensuring that it reflects regional policy priorities on which a wide consensus is based.

Different sectors respond differently to factors relating to market access and raw materials, so understanding the particular needs and market orientation of each specific cluster and its sub-elements is crucial if planners are to take these into consideration when designing appropriate supportive policies. At the broadest level, industries with bulky raw materials (such as food and drink) will wish to locate closer to their raw materials (in this example - mainly rural areas). Industries whose main input is human capital (such as the creative industries) will wish to locate close to urban centres. As for proximity to market there is a tendency that the lower down the supply chain a company is, the more important this factor becomes.

Except in the improvement of transport infrastructure, however, planners can do little to influence the way these factors pull industry to particular locations, although as mentioned an appreciation of these factors is important in designing appropriate policy responses.

The presence of support facilities drawn to the area by market opportunities offered by the cluster can support its further development. These can take the form of logistics companies and business services. Public support facilities can also play a role (such as business support or training facilities). There is thus an obvious case for sympathetic and pro-active planning policies, where a proven need for proximity can be demonstrated. This may take the form of exceptions to "restraint" policies in certain areas or allowing access to premium locations that have been already been earmarked for development, or pro-actively looking for and make suitable a site. Again, the question of exactly how a need for proximity can be demonstrated remains a challenge on which guidance may be appropriate.

The issue as to what extent such facilities can be encouraged into areas of need - using them to bring in related industries – also emerges. It may be relatively difficult to use support facilities in this way as they tend to follow and help reinforce existing clusters rather than help establish or extend new/ incipient clusters.

This is a crucial factor in the attractiveness of an area to a firm. It can take the form of both a need for a highly skilled or a low skilled workforce (e.g. food and drink and call centres both gravitate towards areas of low skills). Availability of a skilled workforce not only encourages firms to an area but labourforce turnover can constitute an important part of the transfer of ideas and techniques amongst clusters which strengthens the performance of cluster firms.

The place of skills and training issues in RPG is an open topic. The draft PPG 11 does state that "RPG should not set out non-land use policies in respect of the economy, for example in respect of skills training, but rather cross-reference to the relevant initiatives being taken or proposed by the RDAs or others". However new versions of PPG 11 may strengthen the place of skills and training.

Availability of labour can be influenced by the planning system through the impacts of decisions on housing development and transport infrastructure. Thus any policies to support clusters which may encourage immigration to the region or encourage people to live or work in a slightly different area of the region will have to be co-ordinated with planning policy in relation to housing and transport.

• RPG should promote competition between sectors in support of innovation by allowing similar industries to establish themselves in proximity to each other.

• A "Proximity Criteria" should be added to planning applications with a commercial focus. Companies should demonstrate how local companies would benefit from it locating at the site and the added benefit to the company from locating at the site as oppose to any other. Activities that support business (including R&D facilities, training and support institutions) can also receive favourable consideration from the planning system by providing similar proximity evidence.

• Overwhelming proximity evidence may also be a reason for releasing sites with development control (such as green belt) and change other planning restrictions.

• For all sites which are readily available and being actively marketed as a business location, local authorities should conduct an analysis – a "Cluster Planning Appraisal" - to identify which industries could ideally locate at the site. The proposed activity should help to establish or reinforce local economic clusters, delivering the maximum benefit from the site to the local businesses and benefiting most from the strategic location – thus supporting quality jobs and innovation. Such an appraisal could be limited to larger sites of regional/ national or international significance and market.

This sector covers hotels, restaurants, art facilities, amusement parks, libraries museums and sports arenas. In the West Midlands employment in hotel and catering was 161,240 in 1999. The Institute for Employment Research predicted this total to increase by 17.8% by 2010, with forecasts for value added expecting the sector to grow by 40%. In 1998 39,000 people were employed in SIC code 95 companies which include art facilities, amusement parks, libraries, museums and sports arenas. Growth predications are not available but anecdotal evidence suggests this sector has had little employment growth in recent years.

The region is the second largest generator of leisure day trips after London. In 1997 there were 12.23m trips to the West Midlands (an increase of 12.9% on 1993), 39.2m nights spent here (an increase of 23.7% on 1993) and a total spend of £1,271m (an increase of 12.9% on 1993). The most popular attractions in the region include Alton Towers, Drayton Manor Park, Warwick Caste, Stratford and a number of niche attractions building on the region’s industrial heritage (in Stoke-on-Trent, the Black Country and Cadbury World). The region’s central position greatly assists the market area of these sites – as well as any other attractions of national significance wishing to base here.

Birmingham – helped by its significant student population - is consolidating a significant night-time economy. This has been used to regenerate areas around the city’s urban core. The Region is well positioned in the business travel and associated conference market, although activity is mostly focused on Birmingham/ Solihull.

The sector is set to experience significant changes in the coming years. The sector has moved on from the provision of one-off facilities such as multiplex cinemas and ten-pin bowling alleys. The trend has been towards bringing together a number of leisure attractions on adjacent or single sites, sometimes under the banner of "family entertainment centres" - building in effect clusters of entertainment facilities. Such centres would seek at least initially green field locations. The sequential test introduced in the 1996 update of PPG6 also applies to major leisure and entertainment facilities. With work it has been shown that suitable sites can be encouraged into town centres (e.g. Five Ways). The challenge posed by city centre sites are a lack of a large enough footprint, land can be expensive and existing buildings may have to be demolished and design requirements may be more demanding. Nonetheless such clusters of entertainment facilities are appearing in brownfield locations in the region (e.g. Star City and Festival Park)

The notion of the free standing leisure park may be on the way out. Factory outlet centres have already blurred the divide between retail and leisure use, and mixed leisure and shopping malls will become more common. Likewise, modern business parks have spawned leisure components like hotels and restaurants. There is thus large potential for mixed use facilities, with leisure facilities proximate to retail centres. The Birmingham Mailbox conversion is an important pilot in this respect.

A continuing thrust of the region’s tourism strategies has been the importance of increasing overnight stays in the region by providing a critical mass of visitor attractions; increasing the likelihood that visitors stay in the region rather than use other areas as a base to visit the region. In support of this, new facilities of national appeal need to be developed to complete the tourism product of the region. Supportive and pro-active planning policies may be relevant.

The 1999 "Business Tourism Leads the Way" Report notes that "The UK lacks much of the physical infrastructure needed to support regional, national and international exhibitions" and argues that UK market share will continue to decline unless there are substantial investment in facilities and infrastructure. Birmingham has a special place in the business tourism market and the report implies that more facilities and improvements to current facilities are needed. There is also increasing competition within the UK with the development of the Docklands Arena.

The report also highlights the shortage of hotel bedspaces and the need to improve

transport facilities by road, rail and air.

The Heart of England Tourism Strategy (1998-2003) argues that potential may lie in the following areas of niche accommodation.

• Quality, characterful caravan sites
• Self-catering cottages and high quality conversions
• Farmhouse accommodation well marketed.

All have these have potential to diversify the rural economy and could be assisted by sympathetic planning policies.

Leisure and social exclusion

Local leisure and sports facilities can also play a role in tackling issues such as social exclusion, health and quality of life. The thinking is behind the launch of "sports action zones" aimed at opening up schools and other facilities to local communities in areas of economic and social deprivation. This principle is also championed as part of the Government’s cross cutting neighbourhood renewal. Many such recreational facilities are falling into disrepair. There is thus a need for the planning system to support the maintenance and improvement of recreational assets under pressure from commercial and residential development.

The food and drink sector is a relatively underdeveloped sector in the West Midlands region - although it does employ 38,970 people (1999). The sector has experienced little employment growth in recent years. The total number employed in the sector is virtually the same as in 1993 and employment forecasts to 2010 expect a 15.2% decline in the sector – nonetheless industry value added will grow by 10.3% over this period.

The regional strengths for food manufacturing in the West Midlands region currently lie in low value-added areas of food markets. Mass and specialist producers in meat, vegetables, milk, cheese and yoghurt benefit from proximity to good quality farming country much of which is located in the west (Shropshire) and in the south (Herefordshire & Worcestershire) – although food production can be found in all the region’s counties.

The region currently lacks a comparative advantage in higher value-added areas of food production such as food processing and ready made meals. The region is nonetheless home to several large food companies e.g. Cadbury Schwepps, HP Sauce and Mueller Dairies. Overall the majority of companies in this sector are SMEs (77 per cent of companies have less than 250 employees). Nonetheless if the region is to develop a larger, more profitable food industry in the future more food processing facilities need to be developed.

The region’s central position and access to the national motorway network means that the region could have a comparative advantage in developing both food and drink activities and their associated distribution facilities. Indeed, the East Midlands has had some success in diversifying its manufacturing base towards this area.

Ready-made meals are presently a major growth area – the market for them has grown by 70 per cent over the last five years. This reflects various demographic trends such as an increase in people living alone and dual-working households seeking more convenient meal options for their families. Ready-made sandwiches is another major growth market. Several major manufacturers such as The Sandwich Factory and Buckingham Foods are already based in the region.

A great deal of food processing could be clustered around farms, and there may be potential to assist the development and diversification of rural areas by permitting the development of facilities. However a major problem remains in how the planning system can differentiate between food and drink processing and other manufacturing activity which would be unacceptable to allow into many rural areas.

The region could also try and attract more footloose food manufacturing investments by marketing itself, through its central position, and relatively good transport facilities and large local population, as a growth node for food production and distribution. Suitable sites would be close to the region’s transport network. The skills requirements for such activity would be relatively low.

Ethnic cuisine is one niche area in which the West Midlands region could potentially develop a strong competitive advantage. The large ethnic minority population in areas of the West Midlands conurbation has – for example - established a thriving balti restaurant industry. These activities could be used as the basis of diversification into ready made meals prepared for the major supermarket chains. Building on the region’s ethnic diversity other cuisines could be developed. Appropriate responses from the planning system in urban areas may be appropriate to facilitate this.

According to the Annual Employment Survey, some 2,052 people were employed in the medical technology sector in the West Midlands – although this is likely to understate the size of the sector due to the fact that many general engineering and manufacturing companies may develop medical products. This represents only 5.6% of the UK’s employment in the sector. Employment in the industry is on the increase within the West Midlands whilst on the decline in Great Britain as a whole. Between 1995 and1997 employment in the industry increased by almost 20% in the West Midlands whilst declining by 10% in Great Britain. In general the sector is very export orientated.

The number of firms engaged in the industry also increased in the West Midlands, from 159 in 1995 to 196 in 1997. While the West Midlands has a relatively vibrant SME component, overall the sector is under represented in the region due to the absence of large companies. In Yorkshire and Humberside, Wales and the South West - for example - around 50% of the medical technologies workers in the industry are employed by large firms. By contrast, the West Midlands contains no large firms engaged in the manufacture of medical equipment. In fact, over 75% of the firms in the industry are ‘micro’ firms, employing between 0-9 people.

At a national scale employment in the industry is concentrated in the East and South East. Links may exist between the location of firms in these regions and the existence there of scientific research establishments – especially those engaged in process technology and biotechnology research. The existence of a healthy and expanding SME sector in the West Midlands might prove attractive to large firms in search of supply chains or wishing to contract out some of their own in-house activities.

The industry is experiencing sustained growth of around 5% per annum – reflecting an ageing population and increased medical expenditure. There are opportunities to form synergies with other sectors in the region such as precision engineering. Many of the regions medical technology products – such as opthalmic blades, wound care producers, ostomy care products, wheelchairs, and other mobility aids – build on the region’s strength in manufacturing.

There is currently an untapped wealth of expertise in the region’s universities, research institutions and hospitals. The medical technology sector is currently spread throughout the region and lacks critical mass in any one location. Also there appears to be little evidence of interaction between different bodies in areas such as research and development. The concept of a corridor along the A38 could be provide the focus for a cluster.

As discussed above the region lacks the presence of larger medical technology companies and also private sector research establishments. These could substantially reinforce a Medical Technology cluster. A priority may thus be the attraction of a large medical technology company to the region as well as the attraction of major research establishments. These could be given priority in terms of sites.

In an attempt to support the industry an initiative called MEDILINK has been established, and there are plans to create a medical technology cluster at a Medi-Park between the Queen Elizabeth Hospital and the University of Birmingham Medical School. The size of available land is limited and there are already tentative plans for a series of other medical parks within the region.

A new area of medical technologies is telemedicine – defined as the delivery of healthcare services using information and communication technologies. The region has currently no presence in this activity which is concentrated along the M4 corridor. The growth of this sub-sector is still in its early stages and there may be some potential in developing this activity in the region

• The planning system should actively support the location of a large medical equipment manufacturer in the region, and also a large private R&D facility – preferably close to existing and earmarked sites for medical technologies.

The Creative Industries Taskforce (1998) define Creative Industries as "those activities which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property". Key sectors are defined as "advertising, architecture, the art and antiques market, crafts, design, designer fashion, film, interactive leisure software, music, the performing arts, publishing, software and television and radio. "

Using this DCMS (Department of Culture Media and Sports) definition of creative industries, research has found that only 2.4% of employment in the West Midlands in 1997 was in the creative sector- as compared to nearly 12% in London (1990). Other research by KPMG (1998) put creative industries employment at 4.5% in the region, but sill below the national figure. The Creative industries cover numerous sub-sectors, which in the West Midlands showing a variety of different trends:

• Despite the recent success of the ‘British’ film industry, employment in the West Midlands film industry declined by 38% between 1993 and 1997.

• Employment in publishing in the West Midlands increased by 46% between 1993 and 1997. This was driven by growth in markets for magazines and books. Markets for newspapers declined due to competition from other media.

• Employment in computer games, software and electronic publishing in the West Midlands increased by 70% between 1993 and 1997. A cluster of such activity exists in the Warwick/ Leamington area.

• Employment in radio and TV in the West Midlands remained stable between 1993 and 1997 despite changes in the industry (satellite, digital) which saw large employment increases elsewhere.

• Employment in architectural and related engineering activities has also been found to be declining. Employment in designer fashion in the West Midlands rose by 39% between 1993 and 1997.

• A significant cluster of craft-based activity exists in jewellery making in the Hockley area of Birmingham – the Jewellery Quarter. The industrial structure of the creative industries in the West Midlands is characterised by a high number of small or sole proprietor organisations.

Planning policies can play a large role in developing and supporting the development of cultural industries. Planning polices can promote areas through the construction and reinforcement of a local ‘image’ which make an area attractive to particular creative industries. Such images have to build on local strengths and activities. Such initiatives have had notable success in some urban areas. Through this successful clustering projects act as flagships of urban renewal, the symbols of a cultural renaissance of a particular area bringing ‘life’ (jobs, new technologies, new ideas) back into often blighted inner cities.

Locations close to the region’s urban cores could be made suitable for such a focus. A range of planning and non-planning policies are needed to help to deliver such an initiative. Any site developments should preserve and improve an area’s physical heritage. Such areas, on the whole, need pro-active policies to improve the urban environment and remove unwanted activities. Old disused buildings may need public intervention to bring them back into use. Creative industries benefit from small units which have the necessary infrastructure for their activities – especially in terms of IT and craft based activities. As with any small business (and start-ups) they need flexible terms and conditions in relation to renting, allowing them to relocate and expand as their business requires. Cultural businesses benefit from the development of networks and from physical and virtual clustering. Complementary local policies and structures, such as relaxed alcohol licensing laws and the promotion of night-time economy, can also be important. More formal networking activities should also focus in areas designated.

In rural areas the scale of such initiatives are obviously much reduced; nonetheless, there may be potential to develop co-ordinated programmes which build on an areas local image, use abandoned or underused buildings and develop cultural industries which build on the areas local strengths. In all areas of the region, there is potential to develop creative industries-type activity building on aspects of its economic and industrial heritage (there is an overlap in this area with creative industries and engineering design). Local specialisms from carpet manufacture to ceramics and jewellery making can be the basis of craft activity.

From the above outline it appears that the region has particular strengths in publishing, computer games and designer fashion. As mentioned computer games manufacturing appears to be clustering around the Leamington/ Warwick area. It is unclear as yet if any geographic clustering is occurring in any other sector

The engineering design sector is an integral part of the region’s industry even though it often does not receive sufficient recognition for the role which it plays. Broadly speaking, engineering design is based around small batch precision engineering activities in products requiring a high design content and/or significant customisation.

There are comparatively large number of specialist engineering design companies in the Region. The Region has nine of the fifty-one members of the Federation of Engineering Design Companies – which is a reasonably comprehensive measure of those firms whose primary role is engineering design. The West Midland’s total is higher than any other region with the exception of the North-West. The majority of these firms are clustered in the Wolverhampton and Walsall areas and are relatively small in size. Only one company employs more than 150 workers and the rest all have fewer than 100 workers and comparatively low turnover rates. Their location, and the range of services which they provide, indicate that they are heavily involved in the area’s mechanical engineering and metalworking industries.

Nonetheless, much of the region’s employment in engineering design can be found in large firms in sectors such as electrical and mechanical engineering, and the automotive sector (as well as to some extent the aerospace and telecommunications sectors) which have in-house engineering design facilities. As employment data cannot distinguish between activities within companies, precise employment levels are difficult to determine.

It can be reasonably expected that the design component of manufactured products will continue to increase with ever more demanding specifications and performance requirements and as product life cycles continue to shorten. Engineering design also allows manufacturers to move into high-value added products, allowing them to counter competition for lower cost producers abroad who may have lower capacity for higher value added services. The promotion and expansion of this sector offers potential to modernise the region’s manufacturing base.

Promotion of research and development within manufacturing companies is the key to the further promotion of engineering design. Academic institutions in the West Midlands have a considerable body of scientific expertise which is currently not being used to anywhere near its full potential in the engineering design sector. An increased academic involvement in the sector would be beneficial for both parties and is essential given the rapid rate of technological progress.

The constantly changing nature of the product development process means that many aspects engineering design could be out-sourced – creating strong supplier linkages between firms. The onus of the design function is also moving down the supply chain to lower tier suppliers. The region can thus attract new companies - whether start-ups, relocating companies or inward investors - in engineering design. As they would provide a service for many companies, strategic sites with good communications and access to the region’s manufacturing base could be used to attract these companies. Sites in and around Walsall and Wolverhampton may be suitable for this purpose.

The growth of motor-sport companies in the region will increase the need for engineering design. For this sector the focus of added value is moved further away from the raw material and the manufacture of the product towards its design and customisation.

• Within the Region’s manufacturing areas specialised engineering design companies which can demonstrate benefits along the lines of proximity criteria should be given prime sites with good regional access.