Improving place-based economic and social outcomes through engaged research

Impact Areas: Inclusive regional economic development policy; local industry competitiveness and resilience; workplace productivity and skills; R&D commercialisation and business innovation.
Institution: City-Region Economic Development Institute (City-REDI) and West Midlands Regional Economic Development Institute (WMREDI), Birmingham Business School, University of Birmingham.
Leading Academics: Simon Collinson, Anne Green, Bec Riley, Fumi Kitagawa, Donald Houston, Darja Reutsche.

Background

City-REDI was established with University of Birmingham funding in 2015 and has since won awards from the ESRC, EPSRC, AHRC, Innovate UK, Facebook, the EU and a range of other funders. In 2019 it was awarded significant RED Funding from Research England (UKRI) to establish the West Midlands Regional Economic Development Institute (WMREDI). It hosts an interdisciplinary team of over 30 researchers and data and policy analysts.

Research

Through engaged, user-led research we are developing a better understanding of city-regions to help policymakers and business groups cope with the challenges of inclusive and sustainable economic growth. We work with Chambers of Commerce, Combined Authorities, City Councils and Local Authorities at the regional level and the CBI, DSIT, DHLUC, Treasury and other government departments nationally, to tailor policy interventions, investments and business support programmes for local economies and communities.

The research has a mixed-methods approach including quantitative (datasets, input-output, econometric and CGE analyses) and qualitative case study analyses on specific regions, industries, firms and workers. Data analysis, modelling and impact evaluation expertise, and a concern for the spatial impacts of different interventions are central to our approach.

Universities and firms: driving local innovation systems

Productive and innovative firms are at the heart of a growing economy, and the UK continues to face challenges sustaining sufficient numbers of competitive firms in some regions. Part of our work examines how local combinations of infrastructure, skills (supply-demand gaps), businesses and policymakers drive or constrain regional development and how interventions can improve this mix.

Working with government partners including DSIT and UKRI, we are analysing the role of universities as a source of skills and new technologies, R&D and knowledge to drive local clusters in emerging industries, for example in healthcare and renewable energy technologies. Government investments into innovation accelerators, catapults and special investment zones, to help leverage university-based R&D to trigger place-based growth, requires a robust understanding of the wider conditions for economic development in each region. This is one of the many contributions City-REDI is making to solve real-world challenges.

Impact

Of the two REF2021 Impact Case Studies submitted by City-REDI, the first focused on a programme of work to analyse the regional and national responses to the dual shocks of Brexit and Covid-19 and economic resilience in the UK. A ‘Weekly Economic Impact Monitor’ provided evidence on a broad range of regional effects of Covid-19: health, labour, industry and regional economic performance measures to track the changing impacts and future scenarios to enable stakeholders to understand the combined local effects of both Brexit and Covid-19. An interdisciplinary approach, taking into account cross-border global value chains, regional multiplier effects and firm-employment-household interdependencies, produced more accurate projections of the impacts at local levels.

A particular set of insights resulted from the application of the WMREDI input-output economic model of the West Midlands region alongside survey and secondary data. This showed how increased insolvencies amongst some smaller firms which employ lower-skilled workers translates into increased unemployment in lower-income communities. Early interventions, to prevent certain firms collapsing in the face of economic shocks are shown to reduce the overall costs of economic shocks. These include both short-term costs of unemployment and welfare benefits and long-term costs of economic inactivity and ill-health. The Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Job Retention Scheme (CJRS, or 'furlough') are examples of UK government interventions during the Covid-19 pandemic. City-REDI analysis showed the additional impacts of Brexit and Covid on the West Midlands region, alongside a more precise understanding of the firms and communities that would be most affected.

As a direct consequence of this work, the West Midlands region was awarded approximately 50% additional funding from Central Government compared to a straightforward per-capita basis (a £66m allocation from the national £900m Getting Building Fund in July 2020). Andy Street, the Mayor of the West Midlands Combined Authority (WMCA) said, “the work of City-REDI was pivotal in putting together the list of asks for Government support that formed our ‘Recharged the West Midlands’ document”. The region’s enhanced share of this fund was calculated on the basis of the additional risk of shocks to our regional economy and higher levels of risks to firms, jobs and communities. The Head of Economy and Local Industrial Strategy at the WMCA confirmed: “This is a result of the robust, evidence-based case which the WMCA put forward, with City-REDI analysis at its heart.”

Comparative analysis of the West Midlands against other UK and international regions, on the challenges of balancing productivity improvements, net zero targets and reduce levels of deprivation and inequality in city-regions, has contributed to the national ‘levelling up’ policy agenda. Collaboration and co-production with partners who are responsible for designing and delivering interventions to promote ‘good growth’ at the regional and national levels, is key to what we do.

Professor Simon Collinson is the Founding Director of City-REDI and WMREDI. He was Dean of Birmingham Business School (2012-2016) and Chair of the Chartered ABS (2015-2018).