Innovacion

Innovacion to examine supply chain finance issues for automotive sector for SMMT

Following on from our initial Gearing Up Report, Innovacion and The Smith Institiute have been commissioned to complete a detailed investigation of finance issues affecting the automotive supply chain for the Society of Motor Manufacturers and Traders (SMMT).  Reporting by May 2012 the study will investigate: how well the current supply chain finance products fit with the needs of the vehicle manufacturers (VMs) Tier One suppliers and other suppliers; are there particular issues for firms looing to finance tooling costs; and are other financial products needed in addition to recent Government initiatives and the current product offers from the bank and non-bank sector. 

Business Growth Fund offers opportunities to grow automotive supply chain

Increased availability and access to finance will boost investment across the UK’s automotive supply chain, helping it to remain competitive – these were the findings presented by leading industry figures at a Business Growth Fund seminar, hosted yesterday by the SMMT.

Outlining the challenges facing the supply chain and finance sectors, leading industry figures, including Andrew Rumfitt, Director, Innovacion, Stephen Pegge, SME Markets Director, Lloyds TSB and Mark Byrant, Director of the recently launched Business Growth Fund, presented an overview of the UK’s financial landscape and the opportunities for growth through improved financial availability for UK businesses.

Copies of the presentations available here

Fast Forward for the British Library

Innovacion recently prepared the British Library’s application to the Intellectual Property Office (IPO) Fast Forward programme for funds to support the initial development of six Business & IP Centres in Birmingham, Leeds, Liverpool, Manchester, Newcastle and Sheffield. The project will develop a Blueprint and operational guidelines for the national roll-out of a branded network of Business & IP Centres to Birmingham, Leeds, Liverpool, Manchester, Newcastle and Sheffield.  The project will unlock the potential of the Patlib network, increase the knowledge exchange between business and universities and develop shared services to achieve economies of scale.  

Andy Rumfitt's Gearing Up Report launched by SMMT

Our report, published today by the SMMT, has highlighted the need to get capital into the UK’s automotive supply chain to stimulate growth and take advantage of the opportunities created by recent OEM investment announcements. It also explores the mismatch between the banking sector’s current approach and the lending needs of suppliers.

Focusing on the relationship between financial institutions and the domestic automotive supply sector, the report looks for solutions to the lack of consistency and strategic vision in lending today. The study identifies how a more effective working relationship could help to rebuild and rebalance the economy if the industry and finance providers had a better understanding of the workings of both sectors and work together to address the type of finance offered to businesses.

“Improving access to finance and credit has the potential to stimulate growth in UK automotive’s small and medium-sized companies, enabling them to develop facilities, tooling and machinery to take advantage of broader automotive growth,” said Paul Everitt, SMMT Chief Executive. “The UK is recognised globally for its strength in automotive engineering and innovation and we believe that by achieving competitive funding for UK businesses, the UK can take a larger share of the components market.”

The UK has seen a wealth of positive investment announcements throughout 2011 with international companies committing millions of pounds to the country, introducing new models, building new facilities and employing more people. These announcements have included commitments to source more components locally, capitalising on lower transportation costs and high quality output of domestic suppliers.

Despite this wave of positivity, there is still expansion potential in the UK. Earlier this year, the Automotive Council reported that the UK has the capability to supply 80% of the country’s component types, but the Smith Institute found that just 36% of an annual £7.4bn automotive component spend was purchased in the UK.

The potential for the sector is clear, but many suppliers report that financial institutions were wary of the automotive industry despite the UK manufacturing sector performing strongly, exports achieving record levels and recent investment announcements demonstrating the long-term plans to base operations in the country.

The Smith Institute Report was launched at an event attended by the banking and automotive sectors and government representatives.

Download Gearing Up Report Launch Version 081211

£36 million for Emirates Air Line: A Taste of the Future of Funding?

In the past when there was money you could have a single objective project funded from a single source. In our new world major projects will look and feel more like the London Cable Car now known as the Emirates Air Line following the airline's £36 million sponsorship of the scheme over 10 years. In an area of London bedevilled by limited and ageing river crossing options the Cable Car, which will move from the design board to ‘all aboard’ in about 2 years, will offer a new way for tourists, event goers and commuters to cross the Thames. As well as adding an important landmark it will go some way to further knit together the emerging range of economic assets and attractions in the Royal Docks and on the Greenwich Peninsula into a vibrant cluster of activity for visitors and residents alike. As well as sponsorship, funding is also planned to be secured from an application for a European Regional Development Fund (ERDF) grant, additional sponsor agreements, retail space rental and fare revenue. While this blending of funding for multi-objective projects works well for major landmark projects in London the question is how viable this approach is for less glossy but equally important projects elsewhere.

Innovacion produced the ERDF application for TfL and we're keeping our fingers crossed for a successful outcome by Spring 2012.

 

Expanding the automotive supply chain in the UK

As a Research Fellow for the Smith Institute, Andy Rumfitt is conducting an initial inquiry for the Society of Motor Manufacturers and Traders into the financial challenges and opportunities for expanding the UK based automotive supply chain, a market valued at £7.4 billion per annum. As well as reviewing a wide range of existing literature, detailed face to face interviews were completed with industry bodies, automotive suppliers, banks and financial institutions and public agencies. The study will be published in October 2011.

Innovacion produce Regional Growth Fund Bid for British Library

Innovacion have been retained to help the British Library to develop a Regional Growth Fund Round Two bid. The project proposes a national roll out of the British Library's successful Business and Intellectual Property (IP) Centres to Birmingham, Leeds, Liverpool, Manchester, Newcastle and Sheffield. The project aims to support the objectives of the Regional Growth Fund by increasing the levels of private sector enterprise and supporting entrepreneurial dynamism in major English city regions. Previously, Innovacion assisted the British Library with early pilot development work for the proposed North East Business and IP Centre.

Innovacion unlocks £1.2 million ERDF for British Library

The British Library's bid for £1.2 million of European Regional Development Funding (ERDF) has been successful and received the green light to start contract negotiations with the London Development Agency. Innovacion provided the British Library with ERDF bid management and application support services.

The British Library’s Business & IP Centre’s ‘Innovating for Growth’ project will provide high quality business and intellectual property (IP) advice and support services to help ambitious SMEs to innovate, to grow and to create new knowledge economy jobs in London. Services will be provided by the British Library’s expert staff and carefully selected delivery partners in the nationally renowned Business & IP Centre.

The British Library's bid was one of only seven ERDF projects that were selected from applications to ERDF Round 3 and Round 4.  Less than one in four bids for ERDF were successful.  The LDA's European Programmes Management Unit (EPMU) received a total of 30 applications for £30 million ERDF.

Regeneration effects of upgrading the Woolwich Ferry

Innovacion are helping Transport for London to develop the best approach to assess the regeneration effects of a range of options to upgrade the Woolwich Ferry. The Woolwich Ferry carries around one million vehicles and over two million passengers a year.

Innovacion advise on a business & IP centre for the north east

Innovacion have been appointed to develop the case and proposed approach for the development of a Business & IP Centre in the north east building on the successful British Library centre in London. Working with Newcastle City Library, Northumbria University and NESTA, Innovacion are reviewing regional demand, identifying the core offer and proposing an initial model to BIS.

National Infrastructure Plan - Beware the strings with private investment.

While the £200 billion outlined in the  National Infrastructure Plan sounds a lot some estimates suggest that the UK needs £300-£400 billion of investment in road, rail and air infrastructure alone over the next 20 years to meet demand and existing power generating capacity is expected to fall by one third in the next decade. And the numbers in the NIP are summing public and private investment. While private investment will have to avoid the dangers of TfL's PPP for the underground it is also likely to come with specific characteristics such as increased tolling of any new roads, tunnels and bridges if we want them. Nothing is free.

 

The Regional Growth Fund - Regional, sure, but Strategic?

The Local Growth White Paper which includes  the Regional Growth Fund (RGF) suggests that the coalition is very much committed to regional rebalancing. The RGF will be deployed along with Tax Incremental Finance (TIF), more local controlled business rates, as yet undefined Growth Hubs and new Technology and Innovation Centres which are to be set up by an expanded Technology Strategy Board. However the first Round of the RGF (£325 million of £1.4 billion) feels like it is being done very much on the hoof (it only has a full application stage) and the workshops in London come almost after the 21 Jan 2011 deadline. Though anyone in London will do well to secure these funds and even the weight of a potential London-wide Local Enterprise Partnership (LEP) may not help much. However the RGF suggests there is a clear desire to stimulate the private sector in areas of high public sector employment dependency and this extends to aspirations for high levels of cash support from the private sector and social enterprise in bids to the RGF (60% is suggested as being achieved in Wales). The assessment criteria are drawn from the Treasury's Green Book on value for money so the first round bids will have to be at a well developed stage and have this detailed financial information easily available. The fund seems to be flexible and include capital and revenue elements but bids from the public sector alone are not permitted. However a number of questions emerge:

• Will this approach actually bring forward the right and the right scale of projects rather than the projects that can meet the RGF criteria? Theoretically middle ranking (and urban?) areas in the regions where there is more private funding available may actually do better if this is a key metric. It may also favour those areas with well established public-private partnerships.
• It is not obvious how a sub-£1 million social enterprise project can genuinely be compared with all the other areas expected to be funded from the RGF including housing and infrastructure? And £325 million may not go very far if there are chunky capital projects.
• Projects with less evidence of tangible financial benefits may suffer from this approach (e.g. social inclusion, sustainability)?
• Is any existing strategy being used to co-ordinate these "competitively assessed" projects?

And the RGF is not to be confused with the Business Growth Fund.  In parallel the £1.5 billion Business Growth Fund (relatively small considering the Goldman Sachs bonus pot is £8.3 billion this year!) that has been pulled together by the six largest banks is providing equity finance (£2m-£10m) to firms with turnovers of £10m-£100m though a programme of free mentoring from former bank employees is being offered.

Innovacion review Extra Care Housing demand in North Yorkshire

Innovacion and Atkins have been commissioned to review the forecasts and assumptions used for a housing need analysis for extra care housing provision across North Yorkshire and its seven Local Authorities. The study is the first stage in the development of an Outline Business Case (OBC) by North Yorkshire County Council to consider the merits of developing further schemes in addition to the existing 12 ECH schemes that have been successfully developed since 2003.  

Innovacion develop ERDF bid for Business and IP Centre at British Library

Innovacion have been appointed to develop a multi-million pound ERDF funding bid for the highly successful Business and Intellectual Property Centre (BIPC) at the British Library. Since 2006 the BIPC has supported 150,000 innovators, small firm owners and entrepreneurs with business formation and every step of the innovation cycle. The BIPC handles 2,300 business and IP inquiries a month and runs many partner workshops, open evenings and business clinics. The ask an expert service allows aspiring entrepreneurs to get advice from seasoned entrepreneurs, ex-Dragons and an in-house inventor. In 2008 the BIPC was identified as best practice in The Richard Report on Small Business and Government to the (then) Shadow Cabinet.

Innovacion look at funding sources for Croydon Council

Innovacion have been appointed to review traditional and non-traditional external sources for a range of projects in the areas of transport, economic development and sustainability for Croydon Council.