Baseline Perception Study

How London Manufacturers and the Organisations Supporting Them are Perceived

Conducted on Behalf of

CommunicateResearch Ltd

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©CommunicateResearch Ltd 2004.

Contents

     Page                        

Objectives of the study                                                                             3

Summary of findings                                                                        4

Detailed qualitative results                                                              5

Detailed quantitative research – Business

Section 1 – Methodology & sample profile                                     8

Section 2 – London as a place to do business                                10

Section 3 – Manufacturing in London                                              13

Section 4 – Seeking advice                                                             17

Section 5 – Developing your manufacturing business          22

Detailed quantitative research – Londoners                                   25

Appendix – List of organisations interviewed for qualitative

Objectives of the study

This study is conducted to support the Made in London Awareness and Advocacy Project.  In addition to providing an up-to-date assessment of attitudes towards manufacturing in the capital, it establishes a baseline against which the success of the wider project can be measured.

The study covers three key audiences:

• Opinion formers

• Businesses – both manufacturers and service companies

• and Londoners themselves.

The main areas covered by the study include:

• Perceptions of London as a business location

• Perceptions of manufacturing as a business sector

• Views about what the future holds for manufacturing in London and whether special efforts ought to be made to promote manufacturing

• Awareness of business support organisations and awareness among manufacturers of those specialising in support for the sector

• The types of support that manufacturers would find valuable in helping their businesses develop.

The study was carried out using three methods – qualitative in-depth interviewing of opinion formers, an online survey of businesses and quantitative telephone interviews among Londoners.

Summary of Findings

1. London is widely viewed as an immensely attractive place to do business, especially in respect of its transport system, proximity to customers, employment pool and status as a world-class city.

2. Manufacturing attracts a great deal of general support and favourable perception, but there is also much pessimism about its potential as a driver of future economic growth.

3. There is widespread, but not uniform, acknowledgement that the capital’s manufacturing base is predominantly high-tech and high value-added.

4. While the general public commonly regard London’s manufacturing as high-tech, it is also often regarded as a noisy, dirty sector.

5. Londoners are generally quite well aware of the range of products manufactured in the capital, although they are less aware of some products such as chemicals and car assembly.

6. The future of manufacturing is not thought to be positive, a view shared by the manufacturers themselves.  Yet many of the opinion formers interviewed said they believed ‘steps should be taken to prevent manufacturing from disappearing’, the sector being regarded as ‘vital for a balanced economy’.  The one group that is least positive about the need to promote manufacturing is actually the service sector.

7. 100% of manufacturers surveyed said they felt the service sector didn’t always recognise the value of manufacturing to the economy.

8. The CBI and chambers of commerce featured prominently among opinion formers as supporters of manufacturers.  However, while many qualitative respondents claimed to have heard of Made in London, few felt they knew anything about it.

9. Government efforts to support business met with a very mixed response, many believing these efforts to be less effective than those of the private sector.

10. Following on from this, half of manufacturers described government efforts to support business as ‘incompetent’.

Detailed Qualitative Results

Methodology

In-depth telephone interviews were conducted among 28 key opinion formers, including representatives of organisations ranging from the London Development Agency and Greater London Authority, through to members of Parliament.

Interviews were conducted throughout July and up to 9 August 2004.  A list of organisations that took part is contained in the Appendix.

1.  Firstly, what are your overall impressions of London as a place to do business?

Extremely positive - 75% of qualitative respondents said they thought London was a good place to do business.

2.  And when you think about London’s strengths and weaknesses as a business location to what extent does manufacturing feature in your mind?

Manufacturing does not feature strongly in the majority of cases. Although certain areas like food and clothing were singled out as doing well, less than 25% said that the sector featured highly in their mind.

3.  Do you have a view about London’s strengths and weaknesses as a business location?  And as a centre for manufacturing?

A wide range of responses. Perceived problems included high cost of living and transport issues, particularly the tube. However, there was a strong feeling that the tube is talked down by Londoners when it is actually viewed very positively outside of the UK. London is seen by some as being ‘in contraction’ although respondents tended to think that positive aspects such as access to markets, a skilled workforce and high quality of life outweighed the problems. There remain significant difficulties for the low waged and low skilled. Reference was also made to the difficulties low-tech manufacturing companies face when competing outside the UK.

4.  What sort of images spring to mind about London’s manufacturing base?  Do you see it as low-tech, mass production for instance?

Most respondents believed that London manufacturing was predominately high tech and design driven. However, there was clear acknowledgement that pockets of lower tech manufacturing still exist.

5.  If you were to imagine a spectrum of opinion about manufacturing in London, ranging from one end where the sector is regarded as part of the capital’s history and should be allowed to decline without intervention, through to the other end where it’s highly valued and actively promoted as being vital to the health of London’s economy, where would you put yourself?

Manufacturing is seen as very important to London’s economic balance. Reference was frequently made to the supporting role that the manufacturing industry provides to other sectors. Although there was no overall consensus on the need, desirability or effectiveness of Government intervention, the majority of respondents placed themselves in the middle to highly-valued end of the scale on this measure.

6.  What sort of future do you think manufacturing in London has over the next decade or so, especially in comparison with other sectors such as finance or the creative industries?

Few respondents saw a dynamic future for more traditional low-tech manufacturing, although there was a strong feeling that the decline in these areas is actually levelling out. Only one respondent drew attention to the potential of brown field site development for larger manufacturers. The future for design-driven, high tech goods was considered to be much brighter. One respondent commented that manufacturing might continue to decline in terms of employment but was unlikely to in terms of value.

7.  Can you think of any organisations with a remit to promote or support business in general?  And what about any that specifically support manufacturers in London?

The CBI and chambers of commerce (British and London) were the most often cited.  Just under half of all qualitative respondents mentioned Made in London with respect to manufacturing support.

8.  What’s your overall impression of government efforts to support business? I.e. effective/not, efficient use of resources/not, etc….

An even split of opinion with the sample broadly split between those saying ‘good’, ‘could do better’ and a similar number saying disappointing. There was a feeling that Government had not yet developed a clear strategy to deal with the divisions within the sector itself.

9.  Have you heard about Made in London?  Do you know what it is/what it’s for/what its objectives are?

Approximately 50% of those questioned said they were very familiar with MiL; however the majority of respondents work closely with the business community.  The remaining respondents were vaguely familiar or even completely unfamiliar with the organisation and its aims and objectives.

10.  Is there anything else you’d like to add about your perceptions of manufacturing in London, or about London as a manufacturing centre, which we’ve not covered already?

There were few additional points although some respondents were keen to re-iterate the importance of manufacturing as crucial to a balanced economy.

Detailed Quantitative Research – Business

Section 1 – Methodology & sample profile

423 London businesses participated in an online survey, between 7 July and 1 August 2004.

Number of employees in the London businesses participating in the online survey

Main business activity of London businesses participating in the online survey

Section 2 – London as a place to do business

1.  In terms of what London is like GENERALLY as a place to do business do you tend to think of it as better about the same or worse than other cities in the UK?

As a place to do business, service companies have a slightly more positive view of London than manufacturers.  Among the latter there is a balance of +30% who say it is probably or definitely better than other cities compared to +34% of service companies.

2.  What would you say are the BEST things about doing business in London?

Other factors cited fell into three principal categories – quality of human capital, contacts/networking, and the size of the business community.  Several manufacturers cited the importance of a cluster of related firms.

For manufacturers London’s employment market is clearly the most important location factor, whereas for service companies customer proximity is the most important factor. It is a helpful reminder too of the importance of good transport links to the manufacturing sector.

3.  And what would you say are the WORST things about doing business in London?

The other main factors cited were crime and lack of alternatives to travelling by road (service companies only).

In view of the importance of London’s employment market it is significant that manufacturers complain particularly about the level of skills.  In view of the publicity given to the capital’s transport problems it is perhaps not altogether surprising that transport difficulties come top among both groups; however, from the TfL interview conducted as part of this study’s qualitative research, we would expect the capital’s transport authority to be especially dismayed at this finding.

Section 3 – Manufacturing in London

4.  We would like to ask you a few questions about the scale & importance of manufacturing in London. Firstly, what proportion of London’s output would you estimate is attributable to manufacturing?

It is interesting to note that service sector companies generally regard manufacturing as a smaller sector than manufacturers do – but not by much.  The median answer is 6-10% for both groups.