West Midlands Futures Green Paper

In the West Midlands, our vision is that economic growth will be created by more productive businesses, unleashed by human-centred innovation, activated by its diverse and growing population, and rooted in thriving places at the heart of the national economy.

Different elements of the vision will be considered in more detail in the following sections of the Green Paper.

In technical terms, economic growth is often measured by the productivity of work—that is, getting the most economic value from the time spent working on it. This is vital for our region. Currently, West Midlands businesses are less productive than their comparators in other city-regions. According to the latest data available, the average gross value added (GVA) per hour worked in the WMCA area was £34.50 compared with £36.60 in Greater Manchester and the UK average of £39.50. While these may seem like small differences, if our regional productivity was on a par with the national average, our regional economy would be £12 billion bigger than it is.

But while productivity growth is our main focus, it isn’t our only concern. The West Midlands faces a greater deprivation and poverty challenge than other regions; we cannot ignore a large share of our residents and allow economic growth to pass them by. This would only increase regional inequality and store up the costs of it for society and public services. Our growth plans must then realise the human potential of the greatest number of our residents.

We have got to increase the numbers of people in well-paid, good-quality jobs and this means tackling our high levels of unemployment and economic inactivity. And we have got to ensure that the jobs people take are productive and well paid so that we see improvements in living standards and healthier lives across all parts of the region.

In 2019, the WMCA adopted a definition of ‘inclusive growth’ which we believe should remain at the centre of our West Midlands Growth Plan. It says that we should work for:

A more deliberate and socially purposeful model of economic growth - measured not only by how fast or aggressive it is; but also, by how well it is created and shared across the whole population and place, and by the social and environmental outcomes it realises for our people.

The challenges and trade-offs concerning how we unleash more inclusive growth are very real. Should we invest more in entry-level or higher-level skills? Should we concentrate on building social housing or regenerate the urban centres of our towns and cities? Should we spread our business support funding across all businesses, those in our high-growth industries or specific firms with potential to increase their own productivity? Should we invest most in metro lines or 15-minute neighbourhoods? These are complex questions but they are not necessarily binary choices or zero-sum games. Our Growth Plan must negotiate these issues with care and consideration and our responses and decisions must be transparent and authentic.

What would success look like for the West Midlands if we were to achieve our vision of inclusive economic growth?

• The West Midlands would have higher gross disposable household income (GDHI), indicating that we are seeing living standards rise for the largest number of our residents.
• Our productivity (gross value added per hour) would be higher.
• More residents would be in well-paid, good quality jobs.
• Our economic strategy would support the region’s transition towards net zero, with lower greenhouse gas emissions over time.

Questions

2) How does the WMCA’s vision for inclusive economic growth compare with our everyday experience and will it inspire change?