Iain Cameron's Diary
"Click here to access the Fruitful Album" - Click here to visit Music for the Highveld Project

The Highveld Project

Get your own
 diary at DiaryLand.com! contact me older entries

2005-10-12 - 8:28 p.m.

I have been cluster-mapping - the activity that might help keep me solvent next year. I started with a global ranking of auto-firms by their RnD spend and tried to discover with respect to each how much and what kind of activity they undertook in the West Midlands. There were 50 firms in the ranking. Then I discovered a global ranking - by size - of the 25 largest first tier suppliers to the vehicle manufacturers - that added a few more firms. I estimate that just over half have some sort of presence in the WM. This afternoon I moved onto a listing of the 200 most important European suppliers - and this is throwing up some more elements of the global footprint in the region.

The background to this is the national target that the level of R&D in the UK should raise by around 30% by 2014 to 2.5% of GDP. For this to happen, a number of other things have to happen - foreign owned companies who donít do any R&D here at the moment have to be encouraged to do some, for example.

Various patterns are emerging - one is a logistics cluster, another is an automotive plastics cluster, maybe a seatings cluster - the two could be combined into an automotive interiors cluster, another might be an IT services cluster with an automotive focus - maybe a CAD cluster for example.

My thought is that its no good just listing all the firms in the sector in the region - we need to have a relevant way of grouping them - one which supports the directions that we want economic development to take.

I get the newsletter from the US Society of Autmotive Engineers and I noticed today that in the latest newsletter that they have developed a ne certificated course for Computer Aided Design - also a new self instruction package for understanding engineering drawings and in particular the way tolerances work. Mike has managed to sell one of my little forays for a four figure sum - I owe him a drink.

I am beginning to realise that I need to tighten up on the contractual side of the work I do - not my strongest suit at all. David phoned from Berlin on the way to Magdeburg - I explained that I had too much but that I would be going to his project meeting on Monday morning.

Phil from the DTI came over yesterday - he had given me a specific issue to think about - the ratio between the number of jobs in the vehicle manufacturing sector and the number of jobs in firms who sell into that sector. I explained a method to get a value - starting with the ratio between value added in those firms and the cost of bought in goods and services. The important thing is to net out imported parts. We came up with a figure of between 4 and 5 to 1 which is higher than some people think. The whole business of outsourcing has pushed the ratio up. We went out for a meal at the pub after - and we talked about his PRS - apparently it is a 22 fret model - shortscale.

We made a plan to go and see the statistician who produces the in-year productivity stats. There is a big time difference between the national productivity figures eg for the transport equipment manufacturing sector - auto, aero and marine etc - which have a measure for up to the first half of 2005. On the other hand the detailed regional figures for 2003 have only just come out at the next level down - the level where auto is distinguished from aero. I think that any kind of regional cut on the 2005 figures will add massive value and we need nag the Office of National Statistics into having a crack at this.

Phil showed me where he gets his automotive employment figures. The ONS website is pretty much of a maze and very hard to find ones way round. The next stop will be Andy at the Regional Observatory to see what we can do to get these figures broken down regionally.

There is a lot of angst around just now. The largest supplier to vehicle manufacturers globally has just gone bust - in the US this means going into Chapter 11 which is a very capitalist friendly way of trying to keep the business going by dumping on the creditors. The reason that the business went bust is the health and pension liabilities. One commentator said that this event is the first barrage in the new war between the young and old over how pension liabilities will be funded (or not).

One of the differences between this decade and the last is the diminished role of the stock-market. In the 1990s the stock-market would be used to raise capital for massive mergers - the way to react to globalisation was supposed to be to put organizations together to get global mass. This notion is discredited and indeed you might say the Chapter 11 episode is the death knell.

Nowadays the best firms see to be smaller and arenít quoted on the stock-market at all - rather they are held as private equity. One of the UK owned firms whose HQ is on the same business park as the firm I work for has just been sold into private equity by the family for the best part of a billion pounds. This is a UK family firm that over a period of years took a focused approach to globalisation and built up a network of well run closely related businesses.

previous - next