How can the Midlands turn away from traditional manufacturing and develop business in the new economies? Insider gathered a group of experts - held fittingly enough in a new innovation centre on the site of the former MG Rover plant - to answer questions from an audience of business leaders.
Are we open for business? Are systems in the Midlands fast and agile enough to promote business?
Anthony Glossop No, we aren't. We have a problem and the property industry is suffering from a planning system that is moribund. Businesses now have to wait to move into new premises. The building we're in today was six years in the realising. We need to get our act together.
Tim Hazell Certainly, there is room for improvement, but there has also been improvement in the provision of venture capital with four or five funds now looking to help young businesses. Finding the right property is a bugbear, though. After a company has outgrown its incubator premises there is a real worry about where it goes next.
Dr Pam Waddell Universities are now becoming more open to working with businesses, but I think we have a societal problem where everything has to be tied down before anyone takes any great leaps forward.
Mike Wilkes Mercia and Catapult have been extremely helpful in providing funds to small businesses, but there aren't enough people willing to invest in new businesses and the ones that are aren't accessible enough. It's more difficult to source £31m of funding than it is to source £3100m.
Jack Glonek Are we better off than we were five years ago? I think the answer to that is yes, but we in the UK do seem to be averse to risk. I think we're in a better position than much of Europe, but not as good as the US. As far as I'm concerned we've seen huge changes in the public sector - maybe not in planning, that needs more change, I agree. But we're better off than we were five years ago and certainly a lot better off than we were 20 years ago.
What should be the role of the public sector in all of this?
Glonek In influencing policy we've been a force in central and regional government. We want to be seen to be proactive and that's why, for example, when property is vacant for a length of time we'll look at moving people in, but not charge them the full commercial rate. This is just one way we're looking to help businesses.
Waddell The public sector has a role to play in funding by cushioning the risk. Also, I think that people underestimate the buying power of the public sector, and I think this can stimulate innovation.
Glossop At times we all let property at less than its market value. I agree with Pam and Jack, but the problem comes when the public sector thinks it can do it all on its own. It can't.
Hazell The problems we've had public sector funding is that schemes come and go. One moment a funding scheme will be wildly successful, then two years down the line it's disappeared. The Technology Transfer Fund has ended, for example. The public sector only does what it has to do, which I suppose is correct.
Waddell People in the public sector who provide funding are subject to the will of funding cycles, I believe. We don't change our minds, but governments change and funding can come and go with that change. It's something we're acutely aware of.
Wilkes The problem with public sector funding or grants isn't that it isn't available, it's that it's not money. There isn't enough money in one grant to be able to seriously grow a business. We tend to use it for research and development projects. We recently wanted to move into the French market, but we were told by the French authorities that if we wanted to sell to the French then we had to have an office in the country and be registered there. Let me tell you all that there are fantastic benefits to moving into France. We have 7,000 sq ft of office space in a suburb of Paris and we only pay 200 euros a month. In fact it cost us more to go through a launch at the British embassy than to pay from the premises. That's how much Invest France wants businesses to succeed over there. That's a huge contrast to what happens in the UK.
John de Kanter, In Staffs
Does the panel have any views on whether businesses in the new economies need bespoke facilities in terms of sites and premises? If the answer is yes, will the private sector alone be able to provide such facilities?
Wilkes Both the public and the private sector have a role to play. We needed the ability to grow and moving into this building was a no-brainer for us. I suppose we're very fortunate, because I'm guessing this building will fill up very rapidly. I think what the public sector needs to do is concentrate on finding the right properties for start-up companies so that they don't have to be tied into long-term leases. I know a lot of entrepreneurs baulk at the idea, but maybe the public sector should look at subsidising and supporting start-ups when it comes to finding premises.
Glossop We can be as bespoke as the occupier wants. We'll normally only start making money on a building when it's 80 per cent full, but the land was held down by Advantage West Midlands (AWM) and we bought it off them on the basis of what it was going to be used for.
Glonek It's tricky. We want to get involved, but often the private sector says "that's our game'. But we do need to intervene and look for gaps and be creative. We're not competing because it's not about competition.
Hazell I think it's interesting that around 90 per cent of our investment's addresses are on specialist business parks. More facilities are required, clearly. Moving out of incubator units can be a culture shock for some businesses. It can be a big step, so I think help is needed.
Glossop The model that we have here is not subsidised at all. But AWM was very willing to support us because of the land use.
Wilkes The more high-tech businesses we have, the more we need the public sector. Look at the redevelopment of the Pebble Mill site - the private sector couldn't do that alone. As Pam said, the public sector can be very useful in cushioning the risk.
Max Ward, Hing and Jones
I would welcome the panel's comments on how they see the region responding with one voice to the requirements of fledgling businesses and inward investors, rather than with the proliferation of various agencies as at present.
Glossop I don't think it's ever going to be perfect, but I think the service is much better than it was five years ago.
Glonek I worry about the term "masterplan'. To me it smacks of Big Brother. But I like the mess we have at the moment - I think it's a good thing. The UK is built on an uncoordinated approach. There are a lot of things going on and we know it could be better. But I think many people do have a different role to play and they can all help in different ways, but we need to get away from a masterplan.
Alan Griffith, Cyril Sweett
With the move away from manufacturing, to more hi-tech industries, including science parks, is the infrastructure in place to support the new industries and ensure they flourish, rather than decline in future years due to developments not being part of a larger masterplan?
Wilkes Science parks can do different things. As centres of innovation they're perfect for those companies who want to grow. But often companies will need modular buildings. There are a lot of firms that don't want a manufacturing plant, but don't want an office either, and they can find this a problem.
Waddell I think we need something between a masterplan and chaos. The A38 Technology corridor is a good model to follow. Then we have Aston Science Park, Malvern Science Park and the rest competing. I think the different agencies have to look at developing skills in these areas.
Stephen Brown, Pinsent Mason
Does the panel believe that the government's proposed changes to the capital gains tax rules will have a significant impact on the willingness of entrepreneurs to invest in new businesses?
Wilkes Yes. It'll have a particular effect on older entrepreneurs who are looking at divesting themselves of their businesses, but for most people looking to start a business I don't think it enters their mind. I think it was fundamentally wrong to push this measure through in one hike, but then it's just another embarrassment for the bunch of idiots who are running the country.
Hazell Simplification is good, but this is not good. But I don't come across entrepreneurs who worry about it too much. But this will affect people like business angels and I think the incentive to be entrepreneurial has been taken away. I can't particularly see how the new measures will last.
Charles Cattaneo, Grant Thornton
What does the panel think has been wrong with the initiatives that have been undertaken by the various agencies to date and what do they think has worked?
Glonek What's worked is where we've seen a gap in the market, set up our own venture capital fund and invested in a company. We've then sold our stake further down the line and made a handy profit. Some of you may have heard about our success with Maverick TV. What's not worked is where the public sector thinks it can go alone and change things for social and economic reasons.
Glossop In the 1980s there was a grant called Citygrant, which enabled a company to go to the land authority and get a decision really quickly. What didn't work was when that was abandoned.
Waddell What I'm most pleased about is universities starting to work with businesses more. What I'm less happy about it the property gap between incubator units and larger premises.
Hazell The tax credit system for research and development has been good. What's been bad has been the move away from the small firms guarantee scheme.