Advantage West Midlands has unveiled a further £56 million investment over the next three years to continue to develop a network of “business clusters” which help grow regional industries to exploit markets and create jobs.

The major announcement was made yesterday at the regional development agency’s Cluster Conference 2008 where 120 delegates were told how businesses have prospered from working on cluster programmes for benefits ranging from technology transfer and skills development to product innovation and overseas trade.

AWM’s newly launched cluster programme for 2008-11, presented to a public and private sector gathering at the conference at Scarman House at University of Warwick, fits neatly within the West Midlands Economic Strategy (WMES), launched last December, which highlights the challenge of “developing markets and sectors with the most wealth and employment potential.”

Business clusters considered as priorities for the West Midlands, based on their strength and their potential to create lasting wealth and employment, are in: aerospace, automotive, building technologies, business and professional services, environmental technologies, food and drink, interiors and lifestyle, Information Communication Technology (ICT), manufacturing, medical technologies, rail, screen image and sound and tourism and leisure.

The West Midlands thriving aerospace industry, working together with the Midlands Aerospace Alliance, is often highlighted as a good example of how businesses can exploit opportunities to generate jobs and prosper by clustering together. Where businesses cross-cluster, there is often innovation, competitiveness, sustainable economic growth and employment beyond a level that could be achieved by individual organisations.

Over the next three years the clusters will focus more on specific markets and on growing and maintaining a share in markets where the region can generate significant wealth over the long term.

Mick Laverty, Chief Executive of AWM, commented: “The objective of clusters is to grow regional industries to exploit attractive markets where the region has existing or potential strengths. Clusters encourage businesses to work together to achieve this.

“Achievements have been numerous, and across a broad spectrum. They include an impressive regional order book for innovative wind turbine generators, a new serious games institute, demonstrators for assistive living housing, a regional lead role on the national low carbon vehicle platform, SMEs working on public buildings to develop products to reduce climate change, marketing consortia in furnishing and interiors, and a new advanced materials company already fulfilling commercial orders.

“This has created a set of networks on which clustering can build, whether links between businesses, relationships with university departments, or network organisations playing a catalytic role within their sectors.

“At any one time around 3,000 businesses have been actively collaborating in these initiatives. The cluster opportunity groups (COGs) alone have some 150 participating businesses, which have overseen the development of the new cluster plans for 2008-11.”

COGs will now take on the role of influencing public skills initiatives and business support services, and bring together businesses and the public sector in special “market focus groups” to pursue opportunities which can have a regional impact beyond any one cluster.

Initial market focus groups will develop cross-cluster opportunities in “homes for health” (assistive living), low emissions vehicles and low carbon housing.

Achievements by clusters that show how they are maximising potential to create lasting wealth and employment – as well as some of their future targets - include:

• Aerospace: The Midlands Aerospace Alliance (MAA) provides networking, marketing and strategic activities for 250 members across the Midlands, while the New Short Range (NSR) replacement aircraft for the current Boeing 737 and Airbus A320 aircraft will be the most significant new aircraft programme for many decades;

• Automotive: The Premium Automotive Research and Development (PARD) programme – based at the University of Warwick – has applied world class technology into the premium car industry and its supply chain, while new investments will focus on technology development, including low emission vehicles  and companies accessing overseas markets;

• Building technologies: The West Midlands Centre for Constructing Excellence (WMCCE) has helped 600 businesses collaborate on productivity improvements – which will be used in the fight to reduce CO2 emissions from the built environment and adapt buildings to climate change;

• Business and professional services (BPS): Birmingham Professional DiverCity has won awards for assisting around 400 BPS firms recruit more ethically and ethnically. A target market will be developing the cluster to cater for the increase in professional services;

• Environmental technologies: The Birmingham-based WindSupply project links businesses to the fast growing wind energy marketplace, and the new cluster plan will encourage new businesses connected to renewable energy production and waste management ;

• Food and drink: The West Midlands Food Partnership ensures food and drink businesses get support. Future developments will centre on low carbon food and healthier options as priority markets;

• ICT: IT Futures has assisted more than 100 businesses to adopt e-business, generating £5.4m extra sales and 573 jobs. Future areas of interest include helping businesses tap into emerging markets in fields such as data security and tracking devices;

• Interiors and lifestyles: The cluster has worked with more than 200 companies across the region’s consumer goods sectors in furniture, ceramics, glass, jewellery, fashion, and leather goods. Market areas offering growth opportunities include high design interiors and design-led lifestyle products.