new businesses across lancashire’s local authority districts · 2019-09-16 · •jp74...

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New businesses across Lancashire’s Local Authority Districts

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Business Births as a % of Stock

DRAFT: Lancashire Local Industrial Strategy: Evidence Base August 201941

Source: Business Demography, ONS 2011 for 5 years

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5%

10%

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5 Year Business Survival Rate

England Average

• On the whole, Lancashire’s Local Authority Districts underperform in terms of business births and 5-year survival rates when compared to the England average.

• However, the picture of business births and business survival varies significantly between Lancashire’s local authority districts.

• In terms of new businesses as a proportion of the total business stock, Blackburn with Darwen and Burnley outperform the England average.

• In terms of 5-year business survival, Ribble Valley and Pendle outperform the England average.

England Average

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Business size


Proportion of businesses by employment size band

• Lancashire has a small proportion of micro-businesses when compared to any other assessed spatial level. These are often the source of fast growth – therefore Lancashire may be missing out on potential high-growth businesses

88.1%

88.7%

89.2%

89.6%

9.9%

9.3%

8.9%

8.5%

1.7%

1.6%

1.6%

1.5%

0.3%

0.4%

0.4%

0.4%

82% 84% 86% 88% 90% 92% 94% 96% 98% 100%

Lancashire

North West

England MinusLondon

England

0-9 10-49 50-249 250+

Source: UK Business Counts, NOMIS 2017

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Key sectors

• Lancashire’s GVA-driving sectors are

broadly inline with North West

averages.

• The county draws a large proportion

of its GVA (60%) from its three

largest sectors: Manufacturing;

Distribution, transport,

accommodation and food; & Public

administration; education; health.

• Lancashire also draws a relatively low

proportion of its GVA from Business

service activities.

• Thus, the economy has a specialism

in manufacturing, a relatively high

concentration of public sector

activity, a low concentration of high-

value added service activities.

• Although, in line with What Works

Centre guidance, local partners note

that industrial structure is not

something that may be easily

influenced through local intervention.

DRAFT: Lancashire Local Industrial Strategy: Evidence Base

Share of GVA By Sector

August 201943

Source: ONS Regional Accounts, 2015

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29%

35%

23%

24%

14%

19%

28%

16%

31%

12%

14%

15%

18%

21%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Blackburn with…

Blackpool

Burnley

Chorley

Fylde

Hyndburn

Lancaster

Pendle

Preston

Ribble Valley

Rossendale

South Ribble

West Lancashire

Wrye

Agriculture, forestry and fishing Production other than manufacturing

Manufacturing Construction

Distribution; transport; accommodation and food Information and communication

Financial and insurance activities Real estate activities

Business service activities Public administration; education; health

Other services and household activities

Variation in sectoral mix between Local Authority Districts in Lancashire

• Over 25% of GVA in Rossendale,

Ribble Valley, Pendle, Fylde

comes from the Manufacturing

sector – well above the county

average.

• In Lancaster, 12% of GVA comes

from production other than

manufacturing – compared to a

county average of 3%.

• South Ribble has a particularly

large construction sector – 20%

of GVA compared to a county

average of 7%.

• Wyre, Ribble Valley, Pendle and

Hyndburn have small business

services sectors – less than 5% of

GVA compared to a county

average of 8%.

• In Preston and Blackpool over

30% of GVA comes from Public

administration, education and

health sector activities –

compared to a county average of

22%.

• Thus, local economic priorities

are likely to vary between

districts.

DRAFT: Lancashire Local Industrial Strategy: Evidence Base

Share of GVA By Sector

August 201944

Source: ONS Regional Accounts, 2015

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GVA per hour worked


Nominal (smoothed) GVA (B) per hour worked indices, 2004 - 2017

Source: ONS Regional and Sub-regional Productivity, 2019

70.0

75.0

80.0

85.0

90.0

95.0

100.0

105.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Lancashire Blackburn with Darwen BlackpoolLancaster and Wyre Mid Lancashire East LancashireChorley and West Lancashire North West England

• All the local authority districts in Lancashire have been on an upward trajectory in terms of GVA per hour worked since 2014.

• The largest changes in GVA per hour worked over the period 2004-2017 occurred in Lancaster and Wyre, which fell from close to the England average in 2004 to just above that of the North West in 2017, and Mid-Lancashire which climbed from below the Lancashire average in 2004 to the national average in 2017.

• But there is significant variation between local authority districts in GVA per hour worked – posing a particular challenge for inclusive growth.

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Priority Sectors identified in the Strategic Economic Plan

DRAFT: Lancashire Local Industrial Strategy: Evidence BaseAugust 2019 46

ADVANCED MANUFACTURING

CONSTRUCTION CREATIVE AND DIGITAL ENERGY AND ENVIRONMENTAL

FINANCIAL AND PROFESSIONAL

SERVICES

HEALTH & SOCIAL CARE

VISITOR ECONOMY

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Advanced Manufacturing

Employment in key manufacturing sectors

Aerospace 12,900

Automotive 4,100

Food & Drink 13,500

Textiles 3,700

Chemicals 4,300

The premises offer for Advanced Manufacturing

The Enterprise Zones at Samlesburyand Warton offer space for 6,000

highly skilled jobs

The skills challenge for Advanced Manufacturing

Nearly 22,00 workers will need to be replaced by 2022

Key businesses

BAE Systems

BCW Engineering

Burton’s Foods

Evans Vanodine International

Fox’s Biscuits

Graham & Brown

Hotter Shoes

Leyland Trucks

Panaz

Pepsi

Rolls Royce

TRW Automotive

Victrex


Source: Lancashire LEP Sector Skills Baseline Study, 2015

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Lancashire’s aerospace supply chain

August 2019 DRAFT: Lancashire Local Industrial Strategy: Evidence Base 48

Lancashire is the biggest aerospace employer in the UK with 17,00 directly employed in the sector, and tens of thousands employed in high skilled jobs throughout its supply chain.

There are around 30 Lancashire-based aerospace firms, which have a combined turnover of £5billion, these include BAE, Rolls-Royce, Kaman, Safran, Magellan, Weston, Velocity and Assystem.

Approximately 500 firms in Lancashire directly supply the county’s aerospace sector, many in specialist manufacturing including engine sub-system assembly, precision components and advanced surface treatments.

Lancashire is the only place in the UK with the skills, resources and capacity for the manufacturing and servicing of a complete aircrafts for its entire life-cycle.

The county has world-class aerospace businesses, assets and infrastructure dedicated to R&D, manufacturing and servicing, including the Samlesbury Enterprise Zone with its aerospace hub and BAE’s UK manufacturing base which includes aerospace training facility.

Lancashire has had substantial private sector investment in aerospace (including from Rolls-Royce and BAE Systems), and the LEP has previously secured Growth Deal public funding to support aerospace activities.

The North West Aerospace Alliance forecasts increasing demand for new larger civil craft over the next two decades, as well as 12,500 civil aircraft awaiting manufacture with the potential for growing demand for the region’s innovation and production capabilities.

Source: NWAA, Lancashire: Number One For Aerospace Jobs, 2017

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Construction

• c.36,000 workers in construction in Lancashire

• 584 construction business in Lancashire

• Key construction businesses:

• BAAS Construction

• Balfour Beatty

• Barnfield Construction

• Conlon Construction

• Eric Wright Group

• FWP Group

• Laing O’Rourke

• Marcus Worthington Group

• Story Homes

• Wade Group

DRAFT: Lancashire Local Industrial Strategy: Evidence Base August 2019 49

Source: Lancashire LEP and National Careers Service, Sector Focus, and CITB, Construction in the Lancashire LEP Area, 2016

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Creative & Digital

4,500 Creative & Digital businesses 36,000 workers

Key businesses:

• Bespoke Internet

• Door4

• EKM

• Fat Media

• Graham & Brown

• JP74

• Motionlab

• NuBlue

• Panaz

• SMD Textiles

• Tetrad



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Energy and Environmental

5,200 business 40,000 workers Key businessesEDF Energy

Farmgen

Peel Energy

Recycling Lives

Remsol

Westinghouse

Trelleborg Offshore

United Utilities

Vattenfall

Vital Energi

Wind Power



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Financial and Professional Services

5,200 business 40,000 workers Key businessesBegbies Traynor

Chesnara PLC

Chorley Building Society

Danbro

Farleys Solicitors

Forbes Solicitors

Key Retirement Solutions

KPMG

Marsden Building Society

Moore and Smalley

Napthens Solicitors

National Savings and Investments

PM+M

RSM

Taylor Patterson



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Health and social care

3,500 businesses

98,000 workers – largest

employment sector

Concentrations of jobs in:

Preston

Blackburn with Darwen

Blackpool

Key employer:

NHS

Private sector: Bupa

Anchor

Barchester

Multiple smaller businesses



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Visitor Economy

3,800 businesses 50,000 workers Key employers:Best Western

Blackpool Pleasure

Beach

Blackpool Winter

Gardens

Holiday Inn

Martin Mere

Merlin Entertainments

Northcote

Pure Leisure Group

Preston Guild Hall

Seafood Pub Company

The Sandcastle

Travelodge



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Exports in goods and services

• Publicly available data on exports at the local authority level are limited. Experimental data on service exports show Lancashire performs strongly on

service exports as a proportion of its GVA, out-performing the North West and performing close to the England average.

• Mid Lancashire (Fylde, Preston, Ribble Valley and South Ribble) exports the most goods (in value) to both EU and non-EU countries, East Lancashire

(Burnley, Hyndburn, Pendle and Rossendale) exports the second-most.

• Chorley and West Lancashire, Blackburn with Darwen, Lancaster and Wyre and Blackpool export more goods to the EU than non-EU countries, in

Chorley and West Lancashire, Blackburn with Darwen and Blackpool this disparity is large with EU goods exports contributing double as much in value

than those in non-EU countries. Mid and East Lancashire’s goods exports to non-EU countries contribute much higher value than their EU exports,

however.


14%

11%10%

15%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Lancashire North West England MinusLondon

England

Service Exports as a Proportion of GVA

Source: The Pink Book International Trade in Services ONS 2016 & Regional GVA by Local Authority, ONS 2016

947 777 307 304 282

51

1,512

1,033

165 151 246

25

-

500

1,000

1,500

2,000

2,500

3,000

MidLancashire

EastLancashire

Chorley andWest

Lancashire

Blackburnwith

Darwen

Lancasterand Wyre

Blackpool

Statistical Value of Non-EU Exports (£ million)

Statistical Value of EU Exports (£ million)

Source: HMRC Regional Trade in Goods Statistics, 2017

Regional Trade in Goods Statistics disaggregated by smaller geographical areas

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Exports and foreign investment

• The North West’s Foreign Direct Investment

projects constitute 6% of the UK’s total, Yorkshire

and the Humber’s FDI projects also constitute 6%.

The West Midlands’ (7%), South East’s (10%) and

London’s (39%) constitute higher percentages of

the UK’s total FDI projects than the North West

region’s, the North East’s (3%), East Midlands’

(3%) and South West’s (4%) FDI projects,

constitute lower percentages.

• Publicly available data on foreign ownership at

local authority level is limited, regional data show

the North West has the fourth largest number of

foreign-owned businesses, after London, the

South East and the West Midlands.

• Foreign ownership may be advantageous to an

economy, as foreign-owned businesses tend to

export more than domestic firms and can tap in to

wider supply and innovation networks – however,

in the current policy environment with uncertainty

regarding international trade and investment

arrangements, stakeholders have expressed a

need to identify and mitigate risks associated with

key investment decisions being taken overseas.


390

1,625

1,175

1,240

1,775

2,135

8,405

4,630

1,175

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

North East

North West

Yorks & Humber

East Midlands

West Midlands

East

London

South East

South West

Number of foreign-owned businesses by Region

Source: VAT and/or PAYE based Enterprises by Country of Ultimate Foreign Ownership ONS, 2010

North West, 142

Regional Breakdown of all UK’s Foreign Direct Investment Projects

Multiple UK sites

North East

North West

Yorkshire and The Humber

East Midlands

West Midlands

East of England

London

South East

South West

Scotland

Wales

Northern IrelandSource: DIT Inward Investment Results, 2018-19

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Introduction

Outline of this section

• This section reviews the innovation landscape in

Lancashire. It provides an overview of:

• Research, Development, Demonstrator and

Innovation Assets including Higher Education

Institutions;

• Patent activity by sector;

• University research performance;

• University Commercialisation, Spin-offs, Knowledge

Transfer Partnerships and Graduate Start-ups; and

• Regional-level data on innovation active businesses

and R&D spending by business and universities.

• It draws on national datasets, plus the:

• Lancashire Innovation Plan, 2018;

• North West Coastal Arc Partnership for Clean and

Sustainable Growth Science and Innovation Audit,

2018 – a partnership led by Lancaster University,

involving Merseyside, Cheshire, Staffordshire and

North Wales;

• Innovation North Progressing Innovation in the

Northern Powerhouse, NP11 and Innovate UK, 2018;

and

• ESRC-funded Lancashire Innovation Ecosystem

Project – ongoing.


Key messages

• Lancashire is home to leading global businesses at the cutting edge of advances in

Advanced Manufacturing, which are supported by a cluster of high-tech SMEs that

are amongst the most productive in the country.

• Lancashire’s manufacturing base is led by aerospace, automotive, and energy

sectors, with additional strengths in digital, healthcare and agri-food and agri-tech

sectors.

• There are excellent examples of innovation in Lancashire’s business base, including

BAE Systems in the aerospace sectors and AMS Neve in digital/sound engineering.

• Lancashire is developing its innovation links with neighbouring cities, including but

not limited to Manchester, Liverpool and Sheffield. An example of collaboration

with Sheffield partners is the Advanced Manufacturing Research Centre North

West.

• Lancashire’s HEIs have research strengths in Allied Health Professions, Chemistry,

Computer Science, Earth Systems and Environmental Sciences, General

Engineering, Mathematical Sciences and Physics.

• IPO data show strong intellectual property advances in areas such as Civil

Engineering, Mechanical Elements, Medical and Computer Technology, and

Thermal Processes.

• Lancashire’s strengths in industries at the forefront of Industry 4.0 and its

participation in the Made Smarter Pilot in the North West mean that it is well-

placed to capitalise on productivity improvements associated with increased

automation and the adoption of new technology.

• Lancashire has an unusual mix of sectors and supply chains with (as yet untapped)

potential to combine capabilities which may open up new competitive

opportunities.

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Innovation assets

• Four universities operate in Lancashire – the table below shows their positions in different Higher Education Insitution ranking schemes.

• The Lancashire Innovation Plan identifies: 54 innovation assets that support and enable innovation, which cover 16 sectors, including:

• Advanced Manufacturing (15 assets);

• Digital (6 assets);

• Energy (5 assets);

• Aerospace (5 assets); and

• Health (5 assets).

• There is a concentration of innovation assets along the West to East corridor (M55-M6-M65).

• There is also a substantial concentration of assets around the Lancaster University and UCLAN Campuses.

• Digital assets in Lancashire appear to be broadly distributed, with no apparent signs yet of effective clustering.


Times UK Ranking Times World Ranking

QS World Ranking REF Power Ranking FTE Students Intl Students

Lancaster University 6 =150 =135 25 11,637 38%

University of Central Lancashire

93 601-800 801-1000 74 16,500 18%

Edgehill University 61 - - 96 - -

Cumbria University 125 - - 142 - -

Higher Education Institutions

Source: The Times/The Sunday Times: Good University Guide 2018, Times Higher Education World University Rankings 2018, QS World University Rankings 2018, REF 2014 Power Rankings

Lancashire’s Innovation Assets

Source: Lancashire Innovation Plan, 2018

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Patent applications

• Firms and research institutions based in Lancashire are actively developing patents across a broad range of sectors.

• Relative to other LEP areas, Lancashire has particular prominence in patents for:

• Thermal Processes & Apparatus;

• Mechanical Elements; and

• Civil Engineering.

• With further strengths in Digital and Healthcare.

• It should be noted that these data capture ‘local’ patenting, which does not include patents from major multi-national corporations (MNCs) with registered HQs outside Lancashire, so these data are likely to understate the level of activity in Lancashire.

• Data on innovation active businesses are only available at regional level – the North West is only marginally behind the UK average.


Source: IPO, 2017

52%

53%

51%

52%

53%

54%

North West UK

Innovation active businesses

Patent applications by sector, 2005 to 2017

Source: Innovation Active Enterprises, UK Innovation Survey 2015 (survey period 2012-2014)

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R&D Spend


Source: ONS Country and regional breakdown of expenditure, 2017 and ONS Population Estimates 2019

R&D Expenditure per person by Business and Higher Education

£91

£95

£106

£71

£71

£133

£225

£129

£76

£120

£145

£300

£172

£319

£421

£758

£317

£535

£297

£386

£0 £100 £200 £300 £400 £500 £600 £700 £800

North East

North West

Yorkshire and the Humber

East Midlands

West Midlands

East of England

London

South East

South West

England

Business R&D Spend per head Higher Education R&D Spend per head

Gross R&D Expenditure by Business and Higher Education

£240

£691

£579

£341

£416

£819

£1,982

£1,174

£424

£384

£2,174

£938

£1,521

£2,467

£4,677

£2,796

£4,860£1,652

£0 £1,000 £2,000 £3,000 £4,000 £5,000

North East

North West

Yorkshire and the Humber

East Midlands

West Midlands

East of England

London

South East

South West

Business R&D Spend (£ million) Higher Education R&D Spend (£ million)

• Data on R&D expenditure is available at regional level for university and business investment – this provides an indication of the levels of investment in R&D in Lancashire.

• It shows:

• HE R&D investment per head is £95 – 80% of the England average; and

• Business R&D investment per head is £300 – around 80% of the England average.

• Data on investment in R&D by government and charities is not available at the level of the NW due to issues of confidentiality.

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Innovation Projects


Projects funded by Innovate UK in Lancashire LEP between 2004-2019,

sum of grants offered (£000s) by sector

Projects funded by Innovate UK in Lancashire LEP between 2004-2019,

sum of grants offered (£000s) by enterprise type

Source: Innovate UK and UK Research and Innovation, 2019

8.4

3207

3756

4341

4647

10693

17502

0 5000 10000 15000 20000

Strategy

Ageing Society, Health & Nutrition

AI & Data Economy

Clean Growth & Infrastructure

Global

Open & Commercialisation

Manufacturing, Materials & Mobility

252

6368

9132

10009

0 2000 4000 6000 8000 10000 12000

Public Sector Organisation

Large

Academic

Micro, Small and Medium

• An area’s ability to innovate effectively plays a crucial role in economic growth and competitiveness. Lancashire’s universities spark innovation, but what about firms across the LEP? The Enterprise Research Centre measured firm’s performance across 10 benchmarks of ability innovate.

• Innovation projects in Lancashire between 2004-2009 constitute 12.7% of the total grants awarded across the North West region.

0

10

20

30

40

50Business Practices

Work Organisation

Marketing

R&D

Design

Co-operation

Product/Service Innov.

Radical Innov

Innov. Sales

Process innov

HighestLowestLancashire

• Lancashire LEP performs better than the average of all LEPs in England on 6 of the 10 benchmarks; Business Practices, Marketing, R&D, Design, Radical Innovation and Process Innovation.

• Lancashire LEP however scores lower than average across the other 4 benchmarks; Work Organisation, Co-operation, Product/Service Innovation and Innovation Sales.

Source: ERC Innovation Benchmarks, 2019

Innovation metrics, Lancashire LEP 2014-16

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University research performance


Highest % of research (overall) rated 4* or above by subject & by university

University SubjectAverage of 4* Research

Lancaster Theology & Religious Studies 42%

Lancaster Business & Management Studies 41%

Lancaster English Language & Literature 40%

Lancaster Mathematical Sciences 40%

Lancaster Allied Health Professions, Dentistry, Nursing & Pharmacy 39%

Lancaster Sociology 39%

Lancaster Computer Science & Informatics 36%

Lancaster Earth Systems & Environmental Sciences 32%

Lancaster Art & Design: History, Practice & Theory 31%

Lancaster History 30%

Lancaster Psychology, Psychiatry & Neuroscience 29%

Lancaster Law 28%

Lancaster Education 25%

Lancaster Physics 24%

Lancaster Chemistry 20%

UCLANCommunication, Cultural & Media Studies, Library & Information Management 20%

UCLAN Modern Languages & Linguistics 20%

Lancaster General Engineering 17%

Edge Hill Psychology, Psychiatry & Neuroscience 15%

Cumbria Sport & Exercise Sciences, Leisure & Tourism 14%

Edge Hill Sport & Exercise Sciences, Leisure & Tourism 13%

UCLAN Psychology, Psychiatry & Neuroscience 13%

Source: REF, 2014

• As noted above, four universities operate in Lancashire:

• Lancaster;

• UCLAN;

• Edge Hill; and

• Cumbria.

• The Research Excellence Framework (2014) shows Lancashire’s HEIs have significant research strengths.

• The high-rated subjects of relevance to the Industrial Strategy are:

• Business & Management Studies;

• Mathematical Sciences;

• Allied Health Professions, Dentistry, Nursing & Pharmacy;

• Computer Science & Informatics;

• Earth Systems and Environmental Sciences;

• Psychology, Psychiatry & Neuroscience;

• Physics;

• Chemistry; and

• General Engineering.

• The next slide illustrates the universities’ performance relative to the UK average.

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Research performance


Lancaster University

% of research (overall) rated 4* or above by subject

Edgehill University

University of Central Lancashire (UCLAN)

University of Cumbria

Source: REF, 2014

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Universities and Intellectual Property


Source: Lancashire Innovation Plan, 2018

27 29

47

94

0

20

40

60

80

100

The University of CentralLancashire

The University of Lancaster

Number of disclosures Cumulative patent portfolio

Source: HESA, 2017/18

Patent portfolio and number of disclosures by university

1

2

3 3

1

4

7

3

0

2

4

6

8

2014/15 2015/16 2016/17 2017/18

The University of Central Lancashire The University of Lancaster

Source: HESA, 2014/15-2017/18

Granted number of patents by year• Two of Lancashire’s universities, Lancaster and UCLAN,

actively generate new IP.• In 2017/18, UCLAN had 27 disclosures, i.e. research that may

be commercially relevant and require a patent, and Lancaster identified 29.

• The generation of findings which may be patentable and then achieves a patent can take time and is ‘lumpy’ making year-on-year comparisons tricky. The range of patents granted each year for Lancaster is in the range of 1-7 and for UCLAN 1-3.

• Between the two universities there are 141 active patents in their portfolios.

• In terms of driving GVA and growth, the key challenge for the universities is commercialisation of their research – the next slide provides a breakdown of the data on this.

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Commercialising Research


£229,000

£105,000

£35,000£107,000

£7,000£5,000

£0

£100,000

£200,000

£300,000

2014/15 2015/16 2016/17

Lancaster University UCLAN Cumbria

Intellectual property income (including patents, copyright, design,

registration and trade marks) by university

Source: HESA, 2014/15-2016/17

2

7

4

0

2

4

6

8

The University of CentralLancashire

The University of Lancaster

Spin-offs with some HEP ownershipFormal spin-offs, not HEP owned

Spinoff activity


• University research is translated into commercial activity through spin-off companies or licensing.

• Data for 2017/18 show two active spin-offs for UCLAN and 11 active spinoffs for Lancaster – seven of which have at least some ownership with the university.

• To provide a comparison in terms of scale of activity, data for the University of Manchester show 14 active spinouts with university ownership and 12 with no university ownership, and data for the University of Liverpool show 12 active spinouts with some university ownership and 2 without.

• The above chart shows income from licensing for Lancaster, UCLAN and Cumbria universities.

• It shows significant variation from year to year – and income of a relatively modest scale.

• To provide a comparison in terms of scale, data for the University of Manchester show £1.65m in 2014/15, £3.6m 2015/16, £1.27m 2016/17 and data for the University of Liverpool show £361,000 in 2014/15, £524,000 in 2015/16 and £683,000 2016/17.

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Supporting Business


Graduate start-ups


972

55 76

625

40 150

100200300400500600700800900

1000

The University ofCentral Lancashire

The University ofLancaster

University ofCumbria

Number of active firms

Number still active which have survived at least 3 years

Knowledge Transfer Partnerships

Current KTPS Total completed KTPs

Edge Hill University 1 4

Lancaster University 7 43

University of Central Lancashire 2 48

University of Cumbria 0 15

Source: Knowledge Transfer Partnerships Database , InnovateUK (Accessed 05/19)

Graduate entrepreneurship

• Universities in Lancashire have a good track record in graduate entrepreneurship – UCLAN has one of the best records in the country in terms of graduate start-ups.

• Graduate start-ups include all new businesses started by recent graduates (within two years of graduation) regardless of where any IP resides, but only where there has been formal business/enterprise support from the HE provider

KTPs

• Universities support the adoption and the spread of innovation via Knowledge Transfer Partnerships.

• Lancashire has a strong KTP network – with 10 active KTPs and a track record of successful delivery

People

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Introduction

Outline of this section

• This section covers the size, occupational mix,

qualifications and skills of Lancashire’s current

workforce and projected future requirements.

• It draws on national datasets to look in turn

at:

• Employment rates;

• Employment by sector;

• Employment by Occupation;

• Current skill shortages;

• Potential sector and occupational

changes to 2028;

• Projected changes in demand for

workers at different levels of skill;

• Educational outcomes;

• Subject choices of students in Further

and Higher Education, as an indication of

future talent flow; and

• Current health as a potential cause of

relatively low productivity.


Key messages

• Lancashire’s employment rate is relatively good compared to regional and national

averages. There are, however, significant variations in the employment rates achieved in

different districts. Thus, there is untapped employment potential in the county.

• The employment rate appears to be more volatile than regional and national rates,

indicating a need to build resilience in local economies and the workforce.

• Lancashire has a greater proportion of lower level occupations and fewer high-level

occupations than the England.

• The largest sectors by employment are Wholesale & Retail Trade, Human Health & Social

Work, Manufacturing, Education, and Accommodation & Food.

• Currently there are skills shortages in Skilled Trades, and Administrative and Clerical Staff.

• There are projected reductions in demand for Process, Plant and Machinery Operatives

and Administrative and Secretarial Support and projected increases in Directors,

Managers and Senior Officials; Professional occupations; Associate Professional and

Technical occupations; and Caring, Leisure and Other Services occupations.

• The challenge for the local economy in terms of those currently in work will be to reskill

those who need to move sectors and upskill those who need to attain new roles in their

current sector – particularly in relation to digital skills.

• The education system locally performs well in aggregate but this overall picture masks

significant variation at the local level.

• STEM subjects are relatively popular with students going on to study at university, but

there is a risk of a mismatch between the educational choices of students and the needs

of the economy in the future.

• More than half of Lancashire’s Districts suffer above average sickness absence rates,

which reduces worker productivity – health interventions as part of workforce

development will help drive up productivity in some of the areas with relatively low

worker productivity.

|

Population


• Blackburn with Darwen, Blackpool, Lancaster and Preston have the largest populations of Lancashire’s local authority districts, Ribble Valley and Rossendale have the smallest populations.

• Blackburn with Darwen has the largest proportion of 0-15 year olds in Lancashire (23.3%), Fylde has the smallest (15.7%). Preston has the largest proportion of working age population (65.4%), while Wyre has the smallest (57%). Wyre has the largest proportion of those aged 65 years or more (27.2%), Blackburn with Darwen has the smallest (14.3%).

• To a large extent Lancashire’s age-makeup reflects the UK’s, but with slightly lower proportions of 20-34 year olds, and slightly higher proportions of people over 50.

23.3%18.4%

20.7%18.4%

15.7%20.7%

16.8%21.1%

20.0%

17.2%19.6%

18.3%17.1%

15.8%

62.4%

61.2%

60.8%

62.1%

57.4%

61.0%

63.3%

60.5%

65.4%

59.5%

62.2%

60.8%

61.2%

57.0%

14.3%

20.4%

18.4%

19.5%

26.9%

18.2%%

19.9%

18.5%

14.7%

23.3%

18.2%

20.9%21.7%

27.2%

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Aged 0 to 15 Aged 16 to 64 Aged 65+

Lancashire’s local authority districts by population size and age groups, 2017

Source: ONS Annual Population Survey, 2017

18.9%

19.0%

18.9%

61.4%

62.5%

62.9%

19.8%

18.4%

18.2%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

Lancashire

North West

UnitedKingdom

Aged 0 to 15 Aged 16 to 64 Aged 65+

Age groups, 2017


|

Demography


0.5%

0.2%

0.8%

1.2%

1.1%

15.0%

3.1%

1.7%

2.8%

2.4%

15.1%

4.4%

3.6%

2.8%

2.5%

0.8%

0.6%

1.8%

3.4%

3.0%

2.0%

1.6%

2.2%

3.6%

3.3%

0% 5% 10% 15% 20%

Blackburn with Darwen

Lancashire

North West

England

UK

Other ethnic group Black or Black British Pakistani/Bangladeshi

Indian Mixed ethnic group

Source: ONS Annual Population Survey, 2018-2019

Minority ethnic percentage of the total population aged 16 and over

• Lancashire has a smaller proportion Black and/or Black British population and higher Pakistani and/or Bangladeshi and Indian populations than the UK as a whole, as a proportion of the total population aged 16 and over.

• The published data on ethnic minority populations in Lancashire by local authority district is incomplete.

• However, data show that Blackburn with Darwen has a significantly different profile from Lancashire overall.

• The North West region and the UK as a whole have similar proportions of men and women. Lancashire has a very slightly lower proportion of men and slightly higher proportion of women.

Lancashire North WestUnited

Kingdom

Male49.44% 49.34% 49.34%

Female50.56% 50.66% 50.66%


|

Population Projections


Projected change in population between 2016 and 2036, thousands

Source: GMFM 2018

400

600

800

1000

1200

1400

1600

2014 2015 2016 2017 2018 2019 2020 2021 2022 2027 2032 2037

Total population Working age population: 16-64

Population: 15-74

Projected change in population In Lancashire LEP between 2014 and 2037

• Over the next two decades Lancashire’s population is likely to change.

• Following the trend of the UK’s ageing population, there is a projected increase of 102,481 in population over the age of 65 in Lancashire.

• The working age population is projected to decrease by a similar amount, 97,459, increasing Lancashire’s dependency ratio in turn.

• In contrast to the North West as whole, Lancashire’s total population is projected to decrease, by 14,867.

• Total migration is also forecasted to lessen slightly, both in Lancashire and across the North West region.

Source: GMFM 2018

-14.87-19.89 -97.46

102.48-5.75

181.95

-10.74

-288.62

481.31

-34.47

-400

-300

-200

-100

0

100

200

300

400

500

600

Total populationPopulation aged0-15

Population aged16-64

Population aged65+

Total migration(annual

average)

Lancashire LEP North West

|

Employment Rate

Variations in the employment rate by local authority

• The employment rate varies between Lancashire’s Local

Authority Districts with a number falling below (and a few

significantly below) the UK average, namely: Blackburn

with Darwen, Blackpool, Fylde, Pendle and West

Lancashire.

• A number of areas also outperform the UK in terms of the

employment rate, most significantly Chorley and South

Ribble (both areas have employment rates above 80%).

Variations in the employment rate over time

• The employment rate has fluctuated across time, with

much of this variation accounted for by national economic

trends. However, Lancashire’s employment rate appears

to be more volatile than North West and England trends.

• Following the 2008 recession, Lancashire initially

recovered faster than national and regional averages. This

was followed by a more severe second decline in 2013-14.

However, Lancashire again recovered quickly with

employment growth rates outpacing national and regional

averages. More recent data show a tailing off of this

growth.

• This pattern of volatility implies a need to build economic

resilience.


% in employment aged 16-64 over time

67.3%

71.0%67.1%

86.9%77.3%79.3%

71.1%69.1%

75.9%74.9%75.0%82.7%

69.3%

79.4%

0%10%20%30%40%50%60%70%80%90%

100%

Local Authorities United Kingdon (75.2%)

% in employment aged 16-64, 2018/19

Source: Annual Population Survey, 2019


64%

68%

72%

76%

80%

Lancashire North West United Kingdom

|

Employment by sector


Source: BRES, 2016

Sector % total jobs

Wholesale & Retail Trade 16%

Human Health & Social Work

16%

Manufacturing 13%

Education 9%

Accommodation & food 8%

• Lancashire’s sectoral breakdown is distinct from the North West and England for the scale of ‘human health and social work activities’ and, more significantly, manufacturing.

• Lancashire also has a relatively low proportion of employment in the ‘financial and insurance activities’ and ‘information and communication’ sectors.

• The county’s largest sectors by employment are detailed in the table below.

|

Occupational breakdown


• An economy’s occupational mix helps to determine the overall worker productivity and earnings.

• Compared to the UK, Lancashire has a larger proportion of employment in lower skilled occupations and a smaller proportion of employment in higher skilled occupations.

• This mix needs to shift if Lancashire’s economy is to increase productivity and earnings.

9.5%

18.4%

13.6%

10.8%

10.7%

9.2%

7.0%

9.1%

10.8%

20.9%

14.7%

10.2%

9.1%

7.4%

6.3%

10.3%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Managers, directors and senior officials

Professional occupations

Associate prof & tech occupations

Skilled trades occupations

Caring, leisure and other serviceoccupations

Sales and customer service occupations

Process, plant and machine operatives

Elementary occupations

UK Lancashire

Employment by occupation, 2019


|

Skills shortages

Employers reporting skills shortage vacancies by Occupation


Source: UKCES, 2015

• In terms of the current level of supply and demand for skills, Lancashire suffers fewer shortages in elementary staff, associate professionals, and manager when compared to the North West and England.

• On the other hand, Lancashire has greater levels of skills shortages in Machine operatives, sales and customer services staff and skilled trades occupations than the North West or England.

• This pattern – which is mirrored by data on hard-to-fill vacancies – indicates that the majority of current skills shortages in Lancashire are in mid-level skills.

• However, this pattern may change as technological drivers produce changes in sectoral and occupational structures.

|

Employment change by sector and occupation 2018-2028


• Between 2018-2028 Lancashire is projected to experience similar changes in sectoral employment to the UK.

• Key anticipated employment growth sectors in Lancashire are:

• Construction;

• Professional, scientific and technical;

• Administration and support;

• Health and social work; and

• Arts, entertainment and recreation.

• Sectors projected to shrink in terms of employment include:

• Agriculture;

• Mining and quarrying;

• Manufacturing;

• Energy;

• Water and waste; and

• Public administration and defence.

• These sectoral shifts are projected to link to changes in Lancashire’s occupational mix, with falls in demand for Process, plant and machine operatives (linked to a projected decline in manufacturing employment associated with digitisation and automation), and a decline in demand for Administrative and secretarial occupations (linked to digitisation and automation).

Occupation change 2018-28

Sector change 2018-2028

Source: Oxford Economics analysis for the Lancashire Labour Market Intelligence Toolkit, 2018

|

Skill levels – present supply and future demandExisting qualification Levels


Projected employment change by skill level 2018-2028

• Lancashire currently has a lower proportion of residents with NVQ Level 4+ qualifications than the North West and UK and a higher proportion of those with Level 3.

• Projections of demand for qualifications to 2028 show increased demand for NVQ Level 3 and 4+ with declines in demand for Levels 1 and 2, and a significant fall in demand for those with no qualifications – Lancashire is projected to experience a larger decline in the demand for those with no qualifications than the UK overall.

• Thus, there is a challenge for the local economy to upskill its existing workforce and to ensure that the next generation of workers has the qualifications necessary for the skill-hungry economy of the future.

Source: Oxford Economics analysis for the Lancashire Labour Market Intelligence Toolkit, 2018

10% 10% 9%

9% 8% 9%

13% 13% 14%

16% 16% 15%

19% 18% 16%

32% 35% 37%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Lancashire North West UK

No quals Other NVQ 1 NVQ 2 NVQ 3 NVQ 4+

4%5%

-5% -4%

16%

-7%

6%8%

-3% -2%

18%

-5%-10%

-5%

0%

5%

10%

15%

20%

NVQ 4+ NVQ 3 NVQ 2 NVQ 1 Other No quals

Lancashire UK

|

Educational attainment

• Schools, colleges and universities in Lancashire drive the

future talent pipeline.

• The picture of current educational performance across

Lancashire varies depending on the metrics used.

• Looking at the proportion of residents attaining Level 3

qualifications by age 19, Lancashire outperforms the

North West and England.

• Looking at the proportion of Key Stage 2 pupils reaching

expected their expected level in reading, writing and

mathematics the Lancashire average is on a par with that

of England.

• However, there is significant variation in Key Stage 2

attainment at the local authority level with some local

authorities (i.e. Blackpool, Burnley, Hyndburn and Pendle)

significantly underperforming by this metric.

• The Lancaster average of key stage two attainment is

weighted upwards by the strong performance of some of

its other local authorities.


Source: Department for Education, 2016

59%

57%

56%

57%

54%55%55%56%56%57%57%58%58%59%59%60%

Lancashire North West England MinusLondon

England

% of attainment of Level 3 by age 19

51%48%

45%

59%58%

48%50%

46%

57%

64%

57% 57%59%

56%

40%

45%

50%

55%

60%

65%

Local authorities Lancashire England

54%53%

Source: Department for Education, 2016

% of pupils at KS2 reaching expected level in reading, writing and maths

|

School leavers destinations

• In Lancashire, a higher proportion of

students go into higher education than in

the North West or England as a whole –

however, there is significant variation

between Local Authority Districts.

• A smaller percentage of Lancashire’s

students move into Further Education than

in the North West and England. While the

percentage of students moving into

apprenticeships matches the regional

average and is marginally higher than that

of England.

• Further Education provision in Lancashire, is

mainly rated Outstanding or Good. But

there is room for improvement.

Stakeholder consultations indicated

concern that current funding levels to FE

colleges were inadequate to meet expected

needs.

• The relative fit of the future talent flow

with the local economy’s needs depends on

the subject choices of students – the next

two slides summarise subject choices in

Further Education and Higher Education.


Source: DfE, 2017

Ofsted Rating Number of FEI

Outstanding 17

Good 18

Requires Improvement 7

Inadequate 1

No data available 38

Source: DfE, Find and compare schools in England, March 2019

Ofsted Ratings for Schools/Colleges (16-18 years)

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