News

 

November 2000

UK remains top EU inward investment destination

The UK has again topped the European league for inward investment flow, according to the United Nations Conference on Trade and Development (UNCTAD). In its World Investment Report 2000, the UN agency calculated that the UK received more than $82 billion in inward investment during 1999, second only in the world to the US, which notched up a massive $275.3 billion. The next largest recipient of FDI in the EU was Sweden, with $60 billion. The UK’s foreign direct investment stock rose a record $84 million in the second quarter of 2000, at the end of June standing at $386 billion, almost a third higher than the previous year. The figures suggest that the UK’s decision to remain outside the first wave of European monetary union has done little to diminish its attractiveness to foreign firms.

The UK also recorded the largest outflows of FDI of any country in the world in 1999, according to UNCTAD, with investments of nearly $200 billion overseas. The US, by comparison, made overseas investments of $151 billion. Overall, said UNCTAD, mergers and acquisitions remain the driving force behind FDI throughout the developed world, with unprecedented numbers of firms being traded in a global marketplace. The agency estimated that global investment flows were set to top $1,000 billion in 2000, compared with $865 billion in 1999.

 

London stays ahead in the internet game

London has been voted the internet capital of Europe - for the eleventh year running. In its annual European Cities Monitor survey, international property consultant Healey & Baker quizzed senior business people from 500 European companies about their favourite business locations, their investment plans and their perceptions of 30 European cities. When it came to internet-related business and services, London came out top on 39 per cent, well ahead of any other city - Frankfurt, for example, was second with 7 per cent and Paris third with 5 per cent. In addition, 39 per cent of respondents thought the internet would be the factor that would have the greatest impact on business over the next ten years.

London also came first in seven of 12 key criteria for determining where companies locate: easy access to markets, availability of qualified staff, external transport links, quality of telecommunications, availability of office space and the range of languages spoken. In addition, the city maintained its position as the perceived future financial capital of Europe.

The survey comes at a time when 27 per cent of UK businesses are already trading online (according to a report from the Department of Trade and Industry), putting the country on a par with the US and Canada and ahead of European competitors such as Germany and Sweden. Altogether 81 per cent of UK businesses are now online, compared with 83 per cent in the US and 80 per cent in Germany, while 90 per cent of UK office workers work for companies that have access to the internet. Some 1.7 million small and medium enterprises (SMEs) are online, an increase of 1.1 million from last year and well ahead of government targets.

Minister for e-commerce and small business Patricia Hewitt, who has pledged to keep the UK a leading e-business player, has welcomed telecoms deregulation agreed by the European Union. The EU’s Telecoms Council reached agreement in early October on unbundling the local loop, a move that will give competing firms access to telecoms infrastructure, thus increasing choice for customers. The process is already well advanced in the UK, where a legal framework was established in August and incumbent operator BT has received orders from 28 operators wishing to locate their equipment in BT exchanges.

 

Telecoms boom continues

Meanwhile the telecoms revolution rolls on. Cable and Wireless, for example, the UK-based telecoms operator, is planning to shift all its voice traffic to a new multi-million dollar network based on internet technology within the next three years. In the most ambitious example of its kind to date, C&W is to switch to Voice over Internet Protocol (VoIP) technology, which will provide customers with integrated voice, data, video and graphics services via internet transmission channels, and at a lower cost than traditional telecoms networks. The move is a key part of a $1.4 billion project that will see Canadian telecoms manufacturer Nortel Networks implement and operate the new network throughout Europe and North America.

Firms in the communications sector also continue to establish new bases in Britain, especially firms from the US. Broadcom, based in Irvine, California, for example, has acquired Element 14 of Cambridge, Eastern England for around $600 million. Broadcom is a leading provider of integrated silicon solutions for broadband digital transmission of voice, video and data while Element 14, which has 68 staff, specialises in the design and production of low-power, high-performance chips for digital subscriber line (DSL) applications.

Another US company, ShareMax, a leading internet provider of strategic sourcing platforms for procurement professionals, has established its European headquarters in the UK, with offices in London and Manchester. San Diego-based Ensemble Communications, which manufactures point-to-multipoint wireless systems, has opened a London office to service the European market, as has another Californian company, Loudcloud, which specialises in internet infrastructure services. Epicentric of San Francisco, which develops next-generation e-commerce portal networks, has opened an office at Slough in South East England, while application service provider ShipLogix, of Hudson, Ohio, has established itself at nearby Maidenhead. Also new to the Thames Valley is Kickfire of San Jose, California, a provider of web-based software to Fortune 1000 marketing departments, which has opened a European sales headquarters at Reading.

Wysdom of Boston, a provider of wireless internet applications and infrastructure, has opened a European hosting facility at a site near London. Excelenergy Corporation of Lexington, Massachusetts, a provider of e-infrastructure technology to the global energy markets, has opened an office in Bristol, South West England. E-business services company Bidcom, based in San Francisco, has set up a European operation at Rugby in the West Midlands, which will create up to 125 jobs over the next three years. Baltimore-based RBuzz, a media manager provider to the digital advertising industry, has established its European headquarters in London, while Infonetics of San Jose, California, a leader in networking and telecoms market research, has set up a second European office in London, its first being in Newbury, South East England.

BroadcastEUROPE.com, a division of BroadcastAMERICA.com of Portland, Maine, is to set up a European base in Glasgow, Scotland, creating 50 jobs over the next three years. The company is the world’s largest radio and television internet broadcaster, and the new base will form the hub of a Europe-wide network of radio and TV stations. New York-based TMP Worldwide Inc has opened a European sales office in Glasgow for its Monster.com internet recruitment portal. The move will create 180 jobs over the next three years. Edify, a wholly owned subsidiary of Atlanta-based S1 Corporation, which specialises in internet-based solutions for financial organisations, is to set up an international technology development centre in Edinburgh, also in Scotland. The centre will create 20 jobs for software engineers and other staff.

 

Enterprise hubs to boost hi-tech start-ups

The South East England Development Agency (SEEDA) has launched five ‘enterprise hubs’ in the first phase of a programme to create a network of business clusters across the South East. The hubs - in Southampton, the Isle of Wight, Brighton and Hove, North Oxfordshire and Newbury - will form business networks providing flexible workspace for new companies and will have strong links to universities. With investment of $12.6 million over five years, the hubs will provide up to 250,000 sq ft of new workspace, doubling the amount already under development in the region. SEEDA’s goal eventually is to create 30 hubs with 1 million sq ft of space for small and growing businesses, which will assist up to 600 start-ups each year.

With a strong focus on innovation and technology transfer, the initiative will provide the physical infrastructure for business incubation and clustering. As well as links with local partners, each hub will have its own director, or ‘business champion’, and support staff. Entrepreneurs will have access to academic expertise, business advice and public and private-sector sources of finance. Each hub will have its own focus, linked to local strengths. The Isle of Wight hub, for instance, will concentrate on composites manufacturing, while the one in North Oxfordshire will be linked to the Materials Research Centre at Oxford University and will specialise in nanotechnology, motorsport and media. Others will focus on electronics, advanced engineering and new media and creative industries.

At the other end of the country, Glasgow in Scotland is planning to turn a 550,000 sq ft brownfield site in the city centre into the UK’s first inner-city science park. The project, jointly sponsored by the city council, development agency Scottish Enterprise and local universities and one of the most ambitious ever seen in Scotland, promises to create an $84 million science and technology quarter that will generate up to 3,000 jobs over the next five years. Dubbed CityScience, the site will house R&D and business facilities for a range of hi-tech industries already prospering in Glasgow, including software, opto-electronics, e-commerce and life sciences. Some 400,000 sq ft of the site, which is located opposite the buildings of Strathclyde University and a short walk from the city centre, will be devoted to R&D facilities. Plans for the remaining space include small business incubator units, housing, shops, a café, restaurants, a hotel and a gym.

Also aiming to capitalise on the UK’s hi-tech boom is incuVest LLC, a New York-based company that specialises in creating leading-edge technology companies. It has established a European base in London, where it will focus on building European technology-based businesses through what it calls ‘enterprise factories’, or networks of serial entrepreneurs who are able to identify groundbreaking technologies and commercialise them to create successful companies.

 

Virtual universities target online learning

Cambridge University has secured its first private-sector backing for a $118 million virtual link-up with Massachusetts Institute of Technology (MIT). British Telecommunications has pledged $3.5 million over five years to CMI - the Cambridge-MIT Institute - to create a ‘technology triangle’ involving the two universities and its own research and development centre at Adastral Park, near Ipswich in Eastern England. Cambridge needs to raise $22 million from the private sector before qualifying for government funding to cover the rest of the project, which is designed to boost enterprise in the computer and telecoms industries. MIT will help CMI with research and teaching to improve competitiveness in the UK, will introduce its business executive programmes and help develop spin-offs. CMI will also act as an entrepreneurial hub for British universities in general.

Meanwhile Oxford University has got together with Princeton, Stanford and Yale to form an elite virtual college that will provide internet courses for half a million alumni. The non-profit making University Alliance for Lifelong Learning will provide alumni (among them many of the world’s political and business leaders) with non-degree courses to widen their knowledge and obtain specialist updates. They will pay for access to research and teaching via live video links to lectures, interactive seminars and campus seminars.

The material will eventually be made more widely available as the universities explore the $50 billion worldwide ‘webucation’ market. Another initiative in this direction is a plan being developed by the Higher Education Funding Council For England for a British e-university, a global online college. The council’s business model for the project shows that start-up costs would be in the region of $560 million but that the institution could show an operating profit within three years of launch. It will receive an initial $20 million in government funding under the 2001-02 comprehensive spending review, and the first courses could be on offer for the 2001-02 academic year.

 

Car giants reaffirm long-term plans

BMW plans to invest nearly $1 billion in the UK over the next three years, according to Norbert Reithofer, the German company’s head of manufacturing. Speaking at the Birmingham International Motor Show in October, he said that $322 million would be spent on the company’s plant at Oxford, South East England to prepare for production of the new Mini model, while $560 million would be spent on its Hams Hall engine plant in the Midlands and around $70 million on a new Rolls Royce factory at Goodwood in South East England. He also raised the possibility of the Oxford plant producing BMW-badged vehicles to ease capacity bottlenecks at other BMW plants around the world, should the need arise. In the meantime, up to 700 workers from the new Mini assembly line, a third of the workforce, will be transferred temporarily to plants in Germany and the US for retraining.

The announcements underline BMW’s commitment to the UK despite the recent disposal of its loss-making Rover subsidiary, although the company remains in talks about the possible disposal of its engine and gearbox plant at Longbridge, near Birmingham in the West Midlands, and its pressing plant at Swindon, South East England. Similarly, Ford of the US has committed to spend $500 million on a new diesel engine plant at its Dagenham car plant in Essex, Eastern England. The hi-tech ‘clean room’ facility will be completed by 2002 and by 2004 will produce 900,000 diesel engines a year compared with current capacity of 650,000. The facility, one of the most advanced of its kind, will create around 750 jobs, softening the blow of the redundancies expected when Ford ceases car production at the Dagenham plant. Even when car production stops, however, the vast complex will still employ 5,000 people.

 

Port traffic grows as transport funding gets green light

The UK is to receive about $39 million this year from the European Union to develop schemes and studies for Trans-European Network (TEN) routes, special transport corridors that link the UK with mainland Europe along existing designated links. The bulk of the funds will go towards two rail projects, the Channel Tunnel Rail Link and the West Coast Main Line. Other schemes to benefit will include technical studies for an upgrade of the TEN route between Larne and Newry in Northern Ireland and a project to improve ground transport to Manchester Airport.

The government has also approved funding and construction arrangements for the Birmingham Northern Relief Road and work will begin later this year as planned. The road, 20 years in the planning, will be the UK’s first privately operated toll motorway. Its dual three-lane carriageways will run for 27 miles north of Birmingham, in the West Midlands, and will form part of a designated TEN route.

Container and roll-on/roll-off traffic at UK ports rose by 4 per cent in 1999, according to a report from the Department of the Environment, Transport and the Regions, Maritime Statistics 1999. The number of roads goods vehicles and containers handled by UK ports was 0.4 million higher than in 1998, at 10.2 million. The weight of goods carried reached 136.8 million tonnes, 4 per cent higher than in 1998 and 60 per cent up on ten years ago.

The leading port was London with 52.2 Mt, followed by Grimsby & Immingham (49.8 Mt), Tees & Hartlepool (49.3 Mt), Forth (45.4 Mt) and Sullom Voe (37.7 Mt). The biggest container port was Felixstowe, which handled 1.8 million containers (up 7 per cent) while Dover, the leading ro-ro port, recorded a 10 per cent increase in units to 1.7 million, almost all road goods vehicles.

Meanwhile, Continental Airlines has announced it is to commence the first transatlantic service from Stansted Airport, in the East of England, from May 2, 2001. The new service is expected to be popular with the many hi-tech companies clustered in the area, particularly around Cambridge. Altogether, some 400 business facilities in the East of England are owned by US or Canadian companies.

 

Yorkshire plays to its strengths

Development agency Yorkshire Forward is pioneering the use of ‘green’ technology to help restore disused coalfields in the northern English region. Bio-remediation work recently started on the site of the former Wharncliffe Colliery near Barnsley, one of 22 derelict sites owned by the agency, and it is keen to extend the new techniques to other former colliery sites in the region. The traditional method of reclaiming coalfield sites involves excavating soil and removing it to landfill sites. However, this does not solve the problem of contamination in the soil - it simply moves it elsewhere. The new technique involves treating the soil so that the contaminants within it are bio-degraded, meaning that the existing soil can then be used to landscape the site, reducing the environmental impact.

Eight hectares of land at the Wharncliffe site will be developed for industrial use, providing 300,000 sq ft of floorspace and creating up to 300 jobs. The remaining hectare of land will be used to create a wetland area, which, it is hoped, will encourage wildlife and introduce new plants into the area. The total area of land earmarked for reclamation in the Yorkshire coalfields exceeds 1,200 hectares.

Another colliery - Dinnington Colliery at Rotherham - is being reclaimed using more traditional methods. The 85 hectare site will provide 32 hectares of land for industrial, business and mixed use, while the remainder will become urban green space. A former RAF base at Finningley could be developed into a commercial airport if plans are approved. Yorkshire Forward has given the scheme its backing on condition the developer involved makes a series of environmental improvements.

Yorkshire Forward meanwhile is selling the attractions of the region with a $450,000 marketing campaign under the slogan ‘Alive with Opportunity!’. The campaign aims to build on the region’s traditional strengths while also highlighting some of its more recent achievements - such as the facts that it is home to two of the UK’s fasting growing public e-commerce businesses and that one third of the UK’s internet traffic passes through it. Find out more at www.yorkshire- forward.com

 

Future takes shape with prestigious new developments

ExCeL, London’s new exhibition complex at Royal Victoria Dock in east London, will open for business on 20 November, when it hosts Automotex, a trade-only automotive technology and motorsport engineering exhibition. From 2002 it will also host World Travel Market, the travel industry’s most prestigious show, which is currently held at Earl’s Court in west London and attracts around 52,000 visitors annually. The $35 million ExCeL complex covers 273,000 sq ft and is larger than the Millennium Dome in nearby Greenwich. When complete, it will have 26 food and drink outlets, seven hotels with 1,500 rooms, 500 apartments and serviced apartments and a nightclub.

Another major Docklands development is set to take shape at Marsh Wall after developer Capital & Provident received approval from Tower Hamlets council for its 2 million sq ft World Trade Centre. The scheme, adjacent to South Quay light railway station, will be built in two phases. Also at South Quay, developer Ballymore has been given the go-ahead for a 713,000 sq ft office, leisure and retail development. It will seek a prelet for the Arrowhead Quay scheme, with initial rents quoted at $46 per sq ft.

Outside London, MWB BusinessExchange has launched the largest serviced office to date in Leeds, Yorkshire, at 1 Whitehall. The 32,600 sq ft site provides 308 workstations in 86 office suites. In Bristol, South West England, a $1 million extension to the Easton Business Centre has provided new facilities for up to 19 small businesses. And business park developer Arlington Securities has launched on online extranet service for its 16 business parks around the country. ArlingtonOnline will give occupiers a number of value-added e-commerce services, such as online purchasing of goods, and will also provide services such as tenant-to-tenant communications.

 

Inventiveness is patently growing

Applications to the United Kingdom Patent Office for patents rose by 6 per cent to more than 30,000 during 1999, according to the government agency’s annual report. Applications for trademarks rose by 11 per cent to more than 84,000. Thirteen per cent more trademarks and designs were registered during 1999, with 57,537 national and international trademarks and 9,655 designs being recorded.

Telecommunications was the sector in which the most patents were granted, with 865, but machine elements (633), civil engineering (462) and electric circuitry (429) were also extremely busy. The most inventive area for trademarks was the science sector, with 5,175 applications published, followed by miscellaneous services with 4,138 and paper and stationery with 3,708. A total of 3,176 applications were published in the education, entertainment, sporting and cultural sectors.

The largest number of filings for designs was in recording, communications and information retrieval equipment, with 887. The biggest percentage increase was for games, toys and sports goods, where applications rose 12 per cent to 759. Other popular areas for design applications included packaging, containers and furnishing.

 

Around the regions

• Hunter Marine Corporation, a Florida-based boat-builder, is setting up a European manufacturing base at Portland, Dorset, South West England. It will recruit 50 staff in its first year, rising to 300 within five to ten years, and will begin producing mid-range sailing cruisers by early 2001.
• Shimizu Industry group of Japan has acquired a plastic injection moulding plant owned by TP Consumables in Telford in the West Midlands. The new company will be known as TP Mouldings and will retain the existing 50-strong workforce.
• Also in Telford, Phoenix Contact, a German-based manufacturer of industrial connector systems and interface products, is to set up a second UK office employing six people. The company already has a UK base at Wokingham, South East England. The new office will support clients in the Midlands and will act as a training depot for the 40 or so independent distributors that sell its products.
• Last month’s news gave the address of the Telford Development Agency’s redesigned website as www.telford.co.uk - this should have read www.telford.uk.com
• Mobile phone giant Orange, owned by France Telecom, is to open a new call centre in North Tyneside in North East England. The centre will be fully operational by August 2001 and will employ 1,500 people in addition to the 5,500 already employed by Orange at four call centres in the area.
• Huntsman, of Salt Lake City, Utah, is to invest $70 million in a new titanium dioxide factory near Hartlepool, North East England. Huntsman is the world’s largest private chemical company and the new plant will help it strengthen its position as an international leader in titanium dioxide pigments.
• International consumables company Kimberly-Clark is to locate its new European Service Centre in Brighton and Hove on the South Coast. The development, which will create 300 jobs, will support the company’s sales operations in 14 European countries. Its product portfolio includes well-known brands such as Huggies, Kleenex and Andrex.
• TRB, a subsidiary of Japan-based Tokai Rika, has invested $8.6 million in an automotive components factory in Denbighshire, North Wales, where it will manufacture control assemblies for car steering columns and cluster switch modules for windows and heating systems. Also in North Wales, General Domestic Appliances (GDA), jointly owned by Marconi of the UK and General Electric of the US, is to invest $38 million in a new plant that will manufacture Hotpoint washing machines. The plant, at Bodelwyddan, will secure 1,000 manufacturing jobs in the area.
• AVX Corporation, based in South Carolina, is to spend approximately $76 million over the next three years in expanding its plant at Coleraine in Northern Ireland. The expansion at the plant, which produces passive components for a wide range of electronic devices, will create 125 new jobs.
• Agilent Technologies, based in Palo Alto, California, is to build a $20 million fibre-optic R&D facility at its Ipswich Components Operation in Eastern England. The expansion, due for completion in December 2001, will create 500 jobs, mostly in engineering and research.
• Bio-agronomics manufacturer Becker Underwood of Ames, Iowa has acquired MicroBio Group of Whittlesford, Cambridge, Eastern England for an undisclosed sum. MicroBio’s products are based on natural micro-organisms that can be used to help maximise yields and protect plants from pests and disease.
• Dutch pharmaceutical company Organon has invested $13 million in an extension to its research facility at Newhouse, Lanarkshire in Scotland, creating 110 new jobs. The company develops drugs to treat depression and schizophrenia.
• Sony of Japan is planning to redevelop its facilities at Basingstoke, South East England to house an additional 300 people. The $14 million redevelopment will include more than 60,000 sq ft of office space that will accommodate a number of Sony businesses, together with laboratories, computer rooms and leisure facilities for staff that may include a gym, café and shops.
• Swedish communications supplier Ericsson is to establish an investor relations (IR) office in London, its third after offices in Stockholm and New York.
• New York-based engineering consultancy firm Weidlinger Associates Inc has set up a European office in Dunfermline, Scotland, where it plans to recruit 20 skilled engineers over the next five years.
• VPK Packaging Group of Belgium has acquired Rigid Group of Selby, Yorkshire in Northern England for around $12 million. The Rigid Group, which employs 350 people, manufactures corrugated board packaging and waste-based paper products.
• CSE Group of Singapore, an IT and consultancy services provider, has acquired IT specialist Servelec Group of Sheffield, Northern England. Servelec provides applications for use in the oil and gas, water and utilities, food and beverages, steel, healthcare and pharmaceutical industries.
• The Welsh Development Agency (WDA) has launched a new website that aims to foster links between business and higher education institutions in Wales. Know-How Wales (at www.knowhowwales.com) will focus on knowledge and technology transfer and will give each educational establishment its own page to highlight expertise and resources that can be exploited by business.
• Two UK development agencies, the Northwest Development Agency (NWDA) and the North West Regional Assembly (NWRA), have jointly set up an office in Brussels, Belgium. The new office will help raise the profile of the North West of England in Europe and work to make the most of European funding initiatives.
• In the West Midlands meanwhile, development agency Advantage West Midlands has contributed $440,000 to help train workers and develop skills in the glass industry, under a programme set up by the Glass National Training Organisation.
• The government is to contribute $2.1 million to help the textile and clothing industry increase its competitiveness. The money will support a new Textile and Clothing Industry Forum, a government/industry partnership that will help forge supply chain relationships between designers, manufacturers and retailers.

To find out about business exhibitions and events happening around the United Kingdom click on the Events button.