Due to kick-off in November, the Qatar World Cup has restarted discussions about the potential of major sporting events to transform local communities and economies. Recognised as one of the most successful Commonwealth Games ever, Birmingham 2022 strengthened the West Midlands’ status as a world-class investment destination. So what kind of legacy will it leave for the region and what further steps are needed to make the most of the opportunity?
With more than 1.5 million tickets sold and Birmingham’s hotels at upwards of 85% occupancy, the buzz in the West Midlands was impossible to ignore during the Commonwealth Games. After the challenges of the past two years, people across the globe tuned in to soak up the excitement of the competition and visited in person to immerse themselves in the region’s diverse cultures and communities.
However, as well as changing the world’s perceptions of the region as a tourist destination, the Games emphasised its exceptional business credentials. At the same time as sporting stars competed at our venues, UK House – an eight-day programme of trade and investment talks – showcased our sector strengths to key markets such as Africa, Australia, Canada, India, Malaysia and Singapore. Jointly delivered by the West Midlands Growth Company and the Department for International Trade, this unique business event was attended by an impressive 1,541 people from all corners of the globe. Around 300 speakers shared their expert insights, from government ministers to international business leaders and former Commonwealth Games champions.
The recent announcement of a £60m boost from the UK government to enhance the Birmingham 2022 legacy is fantastic news for the future of our region. As well as driving inward investment, the fund will help to increase access to sport and culture and boost the West Midlands’ reputation as a world-class host for major events.
The importance of FDI to the Commonwealth Games legacy
However, in order to make the most of the funding available and optimise the economic impact of Birmingham 2022, it is vital that the region secures a greater portion of the UK’s foreign direct investment (FDI). This can play a major role in transforming local economies by contributing to a more competitive business environment, boosting talent agglomeration and supporting international trade integration.
In our region, 5,571 new jobs were created from 143 FDI projects in 2021/22. This represents just 9% of the UK’s total FDI projects. For example, professional services company Accenture recently announced a new Midlands hub as part of its regional expansion, while Indian business service provider Firstsource announced the creation of 200 jobs at its Birmingham headquarters.
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A wave of Commonwealth-sourced investment projects is also evidence that the Business and Tourism Programme (BATP) is already achieving results. The BATP is the first programme of its kind, designed to boost the economic impact of the Commonwealth Games in the years ahead. The programme is demonstrating how our investment ambitions can be surpassed with the right level of capacity, capability and government collaboration that builds on our existing institutional knowledge.
To date, BATP activity has led to an 80% increase in inward investment projects landed in the West Midlands, as well as more than doubling the number of jobs created by inward investment. For inward investment projects landed, we have already achieved double the target for 2022–23 and nearly half of the 2027 end-of-programme target. What is more, for jobs created by inward investment, we have already achieved nearly double the 2027 target. Nevertheless, to really unlock the transformative potential of the event for our economy, we need to secure a greater slice of the UK’s FDI.
In the two decades to 2016, numbers of London-focused FDI projects increased threefold, while the numbers of regional FDI projects in the UK fell by 15%. Addressing this problem and levelling the FDI playing field will be key to maximising the economic impact of Birmingham 2022. As recommended by 2021’s ‘Onward Report – Levelling Up Inward Investment’, it will also be important to transition to a more devolved investment model that considers opportunities alongside regional needs.
Another vital element of our legacy strategy will be assessing how to drive further value from our existing facilities, such as the shiny new Sandwell Aquatics Centre and revamped Alexander Stadium in Perry Barr, while drawing on our experience to bid for other major international events. Further success in this area will strengthen our reputation as an outstanding international events destination, while bringing more jobs, decision-making and investment to the region.
In order to successfully compete for investment internationally and respond to the global headwinds we are facing, we must subsidise the next iteration of the BATP. At the West Midlands Growth Company, our ambitions are to introduce a post-BATP internationalisation campaign, which mirrors the national-regional model demonstrated by the first iteration. Our international ambitions are exemplified by our planned trade mission to India in November, which is designed to strengthen trade ties between our region and India.
While the sporting spectacle may have come to an end, the economic opportunity that Birmingham 2022 represents is still very real. By realising the West Midlands’ strengths as a unique investment destination and taking action to level out the FDI playing field, the Commonwealth Games can prove transformational for our region and the wider UK.
Neil Rami is the chief executive of the West Midlands Growth Company.