Changing policies for the automotive industry in an 'old' industrial region: an open innovation model for the UK West Midlands?

Abstract

The manufacture of automobiles and components in the UK West Midlands reached its peak during the two decades after the Second World War. In the following four decades, despite the overall growth in world sales, there has been a steady decline both in the numbers of vehicles produced and overall employment as local industry found itself unable to cope with overseas competition brought about by the opening of world trade through GATT and then, latterly, by the UK's membership of the European Single Market. Over this same period a succession of both national and regional policy measures have been spectacularly unsuccessful. Initiatives such as the government supported merger of independent producers to form of the British Motor Corporation in the 1950s, the use of the planning laws to encourage green field development away from the region in the 1960s, the nationalisation of the (then) British Leyland in the 1970s, the support for FDI by Japanese manufacturers in the 1980s and the Rover-centric Accelerate project in the 1990s have all tended to mirror and/or exacerbate the problems of short-termism and poor practice. Since early 2000, regional policy has been under the stewardship of the local Regional Development Agency, Advantage West Midlands. Rather than simply seeking to preserve existing policy, the RDA has latterly adopted new policies to support niche manufacturing and high value engineering and to align the regional knowledge base with the search for sustainable solutions to environmental and congestion issues. The new strategy moves away from traditional support measures based on the needs of big companies or 'champions' and instead adopts a devolved approach centred on a mix of small and large businesses and high level research, and -arguably -towards an 'open innovation' approach. In this article we examine these new policy measures and their potential to create a new innovative and competitive environment in the region.

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