The outlook for 2021
Forecasting the future is difficult, particularly given the uncertain economic landscape caused by Brexit and the pandemic. But it is not all doom and gloom from the Midlands’ perspective, as innovative businesses will still have opportunities for growth, even in traditional sectors. We recently provided growth capital to Vivarail, which specialises in developing a range of hybrid, electric, and battery solutions for rail carriages and systems, via the Midlands Engine Investment Fund (MEIF). With some neighbouring regions lacking an MEIF equivalent, the Midlands has a real advantage in the race to attract businesses. Nissan, for instance, partnered with Coventry-based manufacturer Dynamo to develop electric taxis. Generally speaking, the Midlands can look forward to exciting activity in 2021.
The Midlands region still retaining its appeal to Investors
The Midlands offers businesses convenient connectivity to the capital without them having to pay a premium for London office space. Renting flexible workspace in Birmingham, for example, costs an average of £245 per desk per month, considerably lower than London’s £523. Meanwhile, HS2 is among Europe’s biggest infrastructure projects, and will help bring in even more businesses which have been priced out of London.
Another draw for investors is the depth of the Midlands’ talent pool. With the region’s 20+ universities producing a combined 100,000 graduates per year, and with 30% of its population below the age of 25, the Midlands boasts an embarrassment of riches when it comes to the type of talent which businesses want to invest in. Moreover, this young population makes the Midlands especially receptive to new ideas, including the UK’s 5G rollout. Birmingham currently edges London with 11.2% 5G coverage, while the West Midlands’ 7.3% coverage is almost treble that of Greater Manchester. Metrics such as these matter to modern businesses, and we can expect to see investment follow growth companies into the region.
Sector resilience in 2020
Tech-enabled businesses have obviously taken great strides forward during the pandemic, with Covid-19 accelerating the longer-term trend of digitalisation. Many of these businesses have benefitted because they already operated online pre-pandemic, which made the transition to working from home much smoother. In contrast, sectors such as hospitality have faced particular hardship.
However, firms’ fortunes have not been determined solely by sector. Many companies in more traditional arenas, which needed to adapt dramatically to survive 2020, have done so successfully. We have seen producers of cleaning products, for example, pivot to providing PPE, attracting substantial order volumes and creating new opportunities for growth.
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