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Connectivity is key to improving productivity

Posted on November 30th, 2017

Getting the best out Britain cover
Businesses and regional bodies in the East Midlands say improved connectivity will drive productivity growth across much of the UK and help close to the gap between the best and worst performing regions, according to a new study published by HS2 Ltd today.

Drawing on evidence from over 100 employers, local authorities and universities, HS2: Getting the best out of Britain highlights the regional strengths of highly skilled manufacturing clusters, universities and research centres and cutting edge technology entrepreneurs, but warns that more needs to be done to draw them together and realise their full potential in the modern economy.

David Higgins, Chairman of HS2 Ltd said: “This report is the evidence that HS2 will boost productivity in the North and Midlands. This is a once-in-a-generation opportunity to join up and amplify the many centres of excellence around the country, as we prepare to exit the European Union.

“By improving the connectivity between our major population centres, HS2 will give businesses access to the skills, labour and services they need to change the economic geography of the country.”

The report shows that world-leading skills and research in the Midlands and the North can match that of London and the South East. Cities and regions in the Midlands and North account for 32% of the UK’s research staff working in universities with high quality research, compared to 35% in London and the South East, and high quality universities produce thousands of graduates every year.

The report, launched at an event at the Nottingham Contemporary this afternoon, shows that by joining up the major conurbations around the country HS2 will enable a greater pooling of people and capital around the regions of the UK.

This connectivity will enable businesses in the East Midlands to gain better access to new markets, investments, and become more globally attractive.

The Chamber was at the launch event, which featured Secretary of State for Transport the Rt Hon Chris Grayling, Chair of HS2 Ltd Sir David Higgins and Chairman of the Midlands Engine Sir John Peace.

Scott Knowles, the Chamber's Chief Executive, said: “HS2 will open up whole new areas and opportunities for growth, improving productivity through easier and greater collaboration with partners to the North and West of us than we have today.

"Independent research has shown that HS2 Phase 2 will create about 74,000 jobs during and post-construction and be worth about £4bn GVA to the East Midlands and South Yorkshire within ten years of services starting.

“With a station hub planned for Toton, between Nottingham and Derby, service stops at Chesterfield and Sheffield and a maintenance depot at Staveley, the opportunities presented by HS2 for this region, through the changing faces of competition, are enormous and we should be looking now at how best to capitalise on them and how to encourage businesses of all sizes to be part of it.”

Stephen Barker, Chief Executive at Creative Quarter Nottingham said: “HS2 is about much more than connections to London. Journey times from East Midlands Hub at Toton are incredible - 26 minutes to Sheffield, 27 to Leeds, 35 to York, 20 to Birmingham. That creates a single economy. I can live in one city, work in another. I can easily service clients and recruit staff across a wide geography. It can only boost productivity and create jobs - whatever sector you’re in, not least in the creative industries.”

East Midlands productivity is at 87% of national average and there is an aim to raise it to the national average by 2030. The report highlights a number of factors which contribute to this, including the smaller scale of urban areas making it difficult for city regions in the Midlands to secure the same degree of scale and success as their counterparts in the South East.

In addition, the Midlands needs to address skills shortages - in the city regions of the Midlands, less of the working age population have degree level qualifications (between 30% and 33% in 2015) compared to the national average (37%).

By offering HS2 faster, more frequent and more reliable travel between cities, HS2 will increase the number of skilled workers that businesses based in the East Midlands can access – both directly on HS2 services and through the releasing of capacity on the existing rail network for local commuter services.

It will also offer businesses the opportunity to relocate or expand their operations in the East Midlands and realise significant cost savings while retaining easy access to opportunities in the capital.

Mr Grayling said: “This study clearly shows transport investment is crucial to a strong and resilient economy. That's why we are investing in all forms of transport, including the biggest rail modernisation programme for over a century, to improve services for passengers – providing faster and better trains with more seats.

“As Britain's new railway, HS2 will deliver vital links between some of our country’s biggest cities, driving economic growth and productivity and helping to deliver the Government’s Industrial Strategy.

"By bringing our major cities, regions and communities closer together we are encouraging business and innovation and building a Britain that is fit for the future with a stronger economy and fairer society."

Sir John said: “The Midlands economy is built on a strong advanced manufacturing base and is enhanced by a wide range of sectoral strengths, universities and research centres.

"Midlands Connect and Midlands Engine are seizing on the once-in-a-generation opportunity HS2 brings to drive growth for the region, through improved connectivity within the region as well as beyond. We will create a thriving environment for businesses to flourish and HS2 is critical for us to do that.

"HS2 is arguably the greatest business opportunity to hit the Midlands in decades, benefiting both the East and West Midlands. And collectively we need to be HS2-ready.”

The Midlands also has a strong science and research base, including 20 universities, three of which have been ranked in the top 150 in the world – Warwick, Birmingham, and Nottingham. The Midlands aerospace cluster is centred around Rolls-Royce, one of the world's leading producers of aircraft engines, in Derby, with suppliers of aircraft control systems in Birmingham, Wolverhampton and Coventry.

HS2 will connect these clusters in the East and West Midlands to other aerospace clusters in Lancashire, Cheshire and Edinburgh.

Nottingham is designated as one of the UK’s six Science Cities and HS2 will help the city to maximise its research and science base.

It will also help Leicester to grow its developing digital tech sector.

Mike Carr, Pro Vice-Chancellor Employer and Economic Engagement at Nottingham Trent University said: “Improving connectivity will bring huge benefits to us as a university. Firstly, the connectivity of a city is a key consideration for students contemplating studying with us and also for graduates and others thinking of applying for jobs with us and in the wider conurbation.

"We are also already working with other local universities to capitalise on opportunities that will emerge from HS2 and the planned station hub at Toton.”

HS2 will serve around 30m people and directly serve 25 stations, joining up the dots between where we are now and where we could get to as a country - a combination of more capacity and better connectivity will improve accessibility, and, therefore, productivity in the Midlands and the North – at the same time as easing the pressure on London.