Birmingham - Developing our Design ID
"Just think what we might have achieved if we'd put just a fraction of the £850bn required to bail out the banks into manufacturing?" asks Mike Whitby. The Conservative Councillor and Leader of Birmingham City Council, the largest local authority in Europe, is in discussion with both Charles Morgan and myself at the Morgan factory in Malvern.
The idea is unthinkable. Yet this is the official cost of the bank bailout, revealed by the National Audit Office last year. But then Mike Whitby is a Conservative politician who thinks the unthinkable. Or perhaps you'd call it thinking out of the box.
Even now, after 7 years as Leader of Birmingham City Council he shows no signs of complacency. His vision is clear: for Birmingham to be a leading 'supercity'. His focus is firmly on quality of life with economic growth driven by high-end manufacturing. Yes, that's right, manufacturing.
Mike listens with enthusiasm as Charles Morgan recounts their extraordinary story spanning over 100 years. "The three-wheeler was the start-up of the business when launched by my grandfather, 'HFS' Morgan. It still holds many speed records. In 1935 Morgan produced its first 4-wheeler and the Four Four remains a classic to this day providing people with a sports car for £26,000 that does 50 miles to the gallon."
The new three-wheeler is the personification of Morgan's brand values and already the business has taken 450 orders from all over the world. "We're incredibly proud of being the largest car maker still in British hands," says Charles."We turn over £40m, producing around 1000 cars a year and exporting 70% of these."
Manufacturing is a passion for Mike, as Chairman and Managing Director of Smethwick-based Skeldings, the engineering business he's owned for over 20 years.
He's genuinely delighted by the turnaround taking place in the region's best-known luxury brand-led businesses, including JLR, which has just posted record profits of over £1bn.
Mike refers to their Operations Director, Alan Volkaerts, appointed to the newly formed Greater Birmingham and Solihull Local Enterprise Partnership (LEP) and naturally then to Andy Street, MD of John Lewis Partnership, who's become LEP Chairman and whose business is due to open a new flagship store at the re-developed New Street Station.
"It's taken over three years of intense negotiation to bring this major achievement about," says Mike, "and it's tremendous that they'll be opening their largest store outside London there - 250,000 square feet - forming the centrepiece of this landmark transport hub."
"The LEP is critical to our on-going development as the influence of Birmingham on the rest of the region is like a river delta on its alluvial flood plain," says Mike. "It's about using this influence to promote us to investors and talent - here and abroad. Promoting us, not only as 'open for business', but a city with 'a passion for making things'."
Charles asks if he's considered using the 'Made in Birmingham' mark again. "What is particularly striking about Birmingham, when compared with many other European cities," says Charles, "is that things are made right in the heart of the city, not only in outlying areas - for example in the jewellery quarter or in our countless engineering businesses. Innovation and design go to the roots of our identity as a City"
Mike speaks about the revival taking place at MG, owned by SAIC Motor Corp, China's largest domestic automotive producer. He's been a frequent visitor to China and Hong Kong since 2004, developing links with this and other valuable export markets and trading partners, with a visit to Shanghai planned in a few weeks time.
JLR and Morgan, together with SAIC, are targeting elements of the buoyant emerging BRIC markets (Brazil, Russia, India and China) currently demonstrating a huge appetite for luxury brands.
"JLR has realised that in trying to service demand in these new markets the traditional lowest cost-based international procurement model is out of date," says Mike. "By strengthening their local supply chains they can build in efficiencies in terms of green miles, distance travelled to assembly and rapid response rates needed to meet unexpected sales surges.
"The question for the region is whether we have enough equity and the leverage to finance this supply chain expansion. For this reason," he says, "it was so important to have the new national equity investment fund, the Business Growth Fund chaired by Sir Nigel Rudd, headquartered in Birmingham."
"For us at Morgan," adds Charles, "as a productive business with a strong heritage, innovation and design remain integral to our brand. At the moment we're being funded by the Technology Strategy Board to develop lightweight applications for the composite, magalloy, and we've also been developing a fuel cell electric car - quite an ambition for us as a small company in automotive terms.
"Our new models, such as the AeroMax, generating £9m in sales and £2m in profits, have succeeded in combining good design with innovative manufacturing techniques. This includes super-forming aluminium, based on a technology transfer from Alcan, to produce 'big curves'. Adhesive bonding has doubled stiffness in the structural integrity of the chassis, with bonded bodywork coming to us from our Birmingham supplier, Radshape.
"More generally, in spite of Britain producing some of the best designers in the world we still seem to have a challenge in defining our British identity. With British designers such as Tom Dixon and Jonathan Ive, Ian Callum, Design Director at Jaguar, his colleague, Julian Thomson, formerly of Lotus, heading up the Jaguar Design Studio, Gerry McGovern at Land Rover and Marek Reichman at Aston Martin, we have a wealth of internationally respected talent, much of it located here in the West Midlands."
Both men recognise the importance of design and just what it can achieve in terms of driving sales and adding serious value. "Why is the 1963 Ferrari 250 GTO worth £20m?" asks Charles. "It's got to do with people associating it with the romance and culture of this period, also symbolised by the E-Type Jag. These products have so much enduring appeal - full of charm, character, sophistication and status."
Both men query why so many great British brands are no longer British-run. Perhaps it takes an outsider's eyes to recognise value in what we take for granted or to prompt the next big leap of faith. Alberto Alessi, for example, works with over 90 designers from all over the world.
Charles notes that Church's, Tod's and Brooks England, are all run by Italians, who're very consciously using the heritage associated with the brands to generate value, with Mike commenting on the Burberry revival under the American, Angela Ahrendts as a great achievement.
Professor Roberto Verganti of Politechnico di Milano, spoke about the need to move outside the accepted thinking and perspectives. "The danger for strong brands is that they become conservative making too many incremental changes rather than working to create their future."
"As the birthplace of the industrial revolution," says Councillor Whitby, "we changed the quality of life for people around the world. The creation of luxury, specialist, high-end lifestyle products says something exciting about Birmingham, our character, culture and values. But we need to keep innovating and challenging ourselves.
"I'm focussing on moving Birmingham up the Mercer Quality of Living Index where we're currently ranked 55th, occupying the second position for any English City in comparison to London, ranked 39th. I'm targeting moving us into the top 20 Cities. To achieve this we need to transform ourselves economically and environmentally by becoming a 'smart' city. We'll need to deliver on our CO2 emissions targets where we're looking for 60% reductions by 2026, and to deliver strong economic growth."
The Big City Plan is the driver, targeting the redevelopment of 2,000 acres of City centre land to dramatically improve the look and feel of Birmingham as part of our long range planning.
"Key to this," says Mike, "will be improving our physical environment to attract people and improve the city's image through well designed buildings, streets and spaces. We need to offer attractive homes, schools, public transport, health and social facilities. All this is challenging given the likely 10% population uplift.
"The most 'liveable cities' are desirable places. People want to live there; they attract highly qualified people and hence investment. They promote social inclusion."
This design challenge places the user - business and the public - at its heart.
"I'm focussing on key developments in the city around quality of life - the £600m re-development of New Street Station and the £188m being invested in our new Library as a cultural resource and the largest to be built in Europe, together with green spaces and even new forests planned for the city centre and outlying areas."
He regrets that so many of our traditional brands have been lost to the region, suggesting these really need to be captured in digital records before this social and intellectual capital disappears forever.
However, Mike adds that with so many great brands still being produced here - Jaguar, Land Rover, MG, Morgan, AGA, Rangemaster, Triumph motorcycles, Emma Bridgewater - there's a real need to communicate these achievements more effectively as saying something really distinctive about our 'can-do' character.
"Broader design thinking could play an important role in how we develop more inclusive business models and provide assistance to business start-ups and entrepreneurship," adds Mike. "I am keen to encourage local supply chains in farming with smaller farmers having the opportunity to sell their produce into more local markets," he says with emphasis.
"How can we inspire and give hope to the many small businesses with 97% of VAT registered businesses employing 20 or under? If we're going to rebalance the economy we need to look at health & safety and other compliance costs, where possible reducing national insurance costs.
"Social capital is very important. I want more people living here to be motivated to give something back. We need a greater sense of philanthropy, or 'verbindung' as the Germans call it. I'm a fan of business models favouring wider ownership amongst employees and I am worried about the widening gap between high and low earners."
So after 7 years as the City's Leader how does the scorecard look?
There have been certainly some impressive achievements. But, set against the demanding national and international backdrop, it's clear that if ever there was a time for vision, leadership and yes, thinking out of the box, it's now.
Beverley Nielsen is Director Employer Engagement at Birmingham City University.