Northwest regional overview THE BIOMEDICAL SECTOR: ENTERPRISE COUNT REGIONAL AND SUB REGIONAL OVERVIEW In Summer 2007, the NWDA Research Team undertook a project to get more accurate data on the region’s sectors. Using four digit SIC codes, 17 sectors that make up the whole economy where defined, plus two additional cross-cutting industries. Data was sourced from the Office for National Statistics Inter Departmental Business Register, to show the number of enterprises, employees and business turnover for each sector. Data for the biomedical sector is, however, incomplete as certain data were not disclosed by enterprises, consequently the report is less detailed than for most sectors.
NATIONAL CONTEXT Relative to the region’s working age population 1 , the Northwest ‘hits above its weight’ in respect of the number of employees and business turnover associated with the biomedical sector but below it for the number of enterprises. In overall terms, the region contains:
13.3% of England’s working age population. 11.6% of England’s enterprises associated with the sector (compared to 11.8% of other 2 enterprises). 18.0% of England’s employees in the sector (11.4% of other employees). 18.0% of England’s business turnover for the sector (8.6% of other business turnover).
REGIONAL DIMENSION The biomedical sector in the Northwest is comprised of 430 enterprises, employs 22,780 people and has an annual turnover of £6.1billion. Enterprise size - against this backdrop small enterprises, in the region, employing less than 10 people, play an important role as they:
Represent 73.3% of the sector’s enterprises (87.4% of other enterprises). Provide 5.0% of the sector’s jobs (16.8% of other jobs in the region). Deliver 5.0% of the sector’s business turnover (19.4% of other business turnover).
Change over time – within the Northwest, between 1998 and 2006, it can be seen that the: Number of enterprises in the sector has fallen by -3.4% (other enterprises = -7.9%). Number of employees in the sector has risen by +87.0% (other employees = +1.7%). Value of business turnover in the sector has risen by +41.5%. (corrected to a 1998 base to account for inflation). Sectoral comparisons – compared to the NWDA’s other eighteen enterprise areas: 1 2
One of the region’s other 18 enterprise areas contain fewer enterprises. Two of the enterprise areas provide fewer jobs. Five of the enterprise areas generate a lower business turnover.
The working age population has been agreed with the Office of National Statistics, see glossary for details. For definition of ‘other’ enterprises, employees and business turnover, refer to the glossary.
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Northwest regional overview: The biomedical sector DATA NOTES AND GLOSSARY Data/terminology
Source/comments
Other enterprises, employees and business turnover
The term 'other' in relation to the number of enterprises, employees and levels of business turnover refers to the data for all enterprise areas within the region apart from those within the business & professional sector and those in the specific sector which the chapter/paper that is the focus of the paper being read. Consequently, for example ‘other’ for the creative and digital sector is different to the ‘other’ in the food and drink sector report. This affects all of the tables, graphs and commentary in the report.
Data contained in main report:
Office for National Statistics (Inter-Departmental Business Register) is crown copyright material and has been reproduced with the permission of the controller of HMSO.
IDBR
The data analysis has been prepared by Knight, Kavanagh and Page for the Northwest Regional Development Agency.
Enterprise and local unit level data
N.B.: The number of enterprises, employees and turnover are based on extracts from the IDBR at enterprise (business) level. Enterprise information can place data at Head Office level and result in ‘higher/lower’ numbers than might otherwise be expected. This is not, however, consistent across all areas (see also notes on turnover). The alternative is a ‘local unit’ count which reflects the number of enterprises and employees in relation to their actual place of work. See http://www.statistics.gov.uk/idbr/idbr.asp
Standard Industrial Classifications
Sectors have been defined on the basis of 4-digit SIC codes; details can be obtained from the NWDA research team upon request. Because some 4-digit codes span more than one sector, the definitions are only approximate and the data may omit some activity within the sector and include some activity outside of it.
Turnover
At its simplest this refers to the monies going through a company’s accounts. Although turnover has been used as part of the assessment, caution should be exercised in the use of the data. In addition to the company headquarters issue (referred to above) not all companies disclose data on turnover. Turnover data is not a surrogate for profit information. One of the most obvious examples being professional football clubs, many of which have high levels of turnover but few convert this to operational profit. Although turnover data for 2006 is provided at 2006 prices; time series data has been modified to remove the effects of inflation. Consequently all growth or decline reflects real change since 1998.
Working age population
The working age population, for the purposes of this exercise, has been agreed with the Office of National Statistics as males aged 16-64 years and females aged 16-59 years and is shown as a proportion of England’s population aged 16-59/64 years.
Regional Economic Strategy (RES)
The RES is regarded as the blueprint for the region’s economic development. It is the foundation for everything that the NWDA does. The current RES was launched in March 2006 and sets out a clear vision for the region’s economy and identifies specific priority actions to meet the economic challenges and opportunities of the next ten years and to close the economic gap with the rest of England. In the geography adopted for the RES, Halton is incorporated into the Merseyside area.
Nomenclature des Unités Territoriales Statistiques (NUTS)
Nomenclature of territorial units for statistics and statistical regions - for the classification of economic activities in the European Community, these regions were established by Eurostat more than 25 years ago. In the geography used for NUTS data (including GVA), Halton is included in Cheshire.
NOTE: At the time of writing this paper, GVA data was only readily available for NUTS areas and even then had gaps in its coverage due to SIC coding issues. This factor combined with the incompatible geographies used in the NUTS and RES data led to the decision that sectoral and industry GVA figures will be produced as supplementary information for RES based geographies in 2008.
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Northwest regional overview: The biomedical sector KEY STATISTICS Other enterprise areas
Biomedical sector
All sectors
REGIONAL PERSPECTIVE National share (proportion of England’s enterprises in the Northwest) Enterprises
11.6%
11.8%
11.5%
Employees
18.0%
11.4%
11.1%
Turnover
18.0%
8.6%
6.5%
Small enterprises (those employing less than 10 people as a proportion of the sector’s enterprises in the region) Enterprises
73.3%
87.4%
88.2%
Employees
5.0%
16.8%
17.6%
Turnover
5.0%
19.4%
19.6%
Change over time (at a regional level - between 1998 and 2006) Enterprises
-3.4%
-7.9%
-0.7%
Employees
87.0%
1.7%
6.3%
Turnover
41.5%
-
-6.7%
SUB-REGIONAL PERFORMANCE IN ABSOLUTE TERMS Enterprises More than two fifths (43.0%) of the region’s enterprises, within the sector, are located in Greater Manchester; compared to 35.0% of other enterprises.
Northwest: Percentage of enterprises by sub-region (2006)
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50.0% 43.0%
40.0% Percentage
Relative to other enterprises a slightly higher than average share of the region’s enterprises, from the sector, are located in Cheshire (17.4%) and Greater Merseyside (17.4%).
60.0%
Other enterprise areas
35.0%
30.0% Biomedical
23.5%
20.0%
18.6%
17.4% 15.3%
17.4% 15.2%
11.0%
10.0% 3.5%
0.0% Cheshire
Cumbria
Greater Manchester
Lancashire
Greater Merseyside
Source: IDBR ONS
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Northwest regional overview: The biomedical sector ENTERPRISE SIZE Number of enterprises 73.3% of enterprises within the sector employ fewer than ten people and 3.5% employ 250 or more. In comparison, 87.4% of other enterprises employ fewer than ten people; 0.5% employ 250 or more.
Employee numbers The scale of employment within the sector has not been fully disclosed, however, 5.0% of its employees work in small enterprises. For other enterprise areas 16.8% of people work for small enterprises.
Business turnover The scale of turnover within the sector has not been fully disclosed, however, 5.0% of is generated in small enterprises. For other enterprise areas 19.4% of turnover is generated in small enterprises.
0-9
Enterprises
Employees
Business turnover
Number of companies, employees and turnover by company size Northwest region (2006)
Biomedical 5.0%
Other enterprise areas
95.0%
19.4%
80.6%
Biomedical 5.0%
Other enterprise areas
Over 10
95.0%
16.8%
83.2%
Biomedical
73.3%
Other enterprise areas
26.7%
87.4%
0%
10%
20%
30%
40%
12.6%
50%
60%
70%
80%
90%
100%
Source: IDBR ONS
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Northwest regional overview: The biomedical sector PERFORMANCE RELATIVE TO POPULATION OF WORKING AGE The following charts and data illustrate an alternative perspective to that shown above. For example, they highlight the fact that although Greater Manchester is undoubtedly the driving force of the region, it does not always make the most significant contribution. The key question, at regional and sub-regional level, being ‘does the area hit above or below its weight relative to the size of its working age population?’ Population The first diagram highlights the regional and sub-regional population of working age and provides a context for the charts that follow. For example, the Northwest is home to 13.3% of England’s population aged 16-59/64 years and 5.1% are resident in Greater Manchester.
Regional share of working age population (2006)
Lancashire 2.8%
Greater Merseyside 2.9% Rest of England 86.7%
Greater Manchester 5.1%
Cumbria 0.9%
Regional perspective The Northwest contains:
North West 13.3%
Cheshire (including Warrington) 1.7%
Biomedical sector - Regional share Number of enterprises (2006)
11.6% of England’s enterprises within the sector and 11.8% of other enterprises. 18.0% of England’s employees in the sector and 11.4% of other employees. 18.0% of England’s turnover for the sector and 8.6% of turnover for other enterprise areas.
In short, for enterprises within the sector, the region ‘hits above its weight’ in terms of the number of employees and business turnover, but below it in terms of the number of enterprises.
Lancashire 2.2%
Rest of England 88.4%
North West 11.6%
Greater Merseyside 2.0% Greater Manchester 5.0%
Cumbria 0.4%
Cheshire (including Warrington) 2.0%
Source: IDBR ONS
Other enterprise areas - Regional share Number of enterprises (2006)
Lancashire 2.8%
Rest of England 88.2%
However, for other enterprise areas the region ‘hits below its weight’ in terms of the number of enterprises, employees and considerably below it in respect of business turnover.*
North West 11.8%
Greater Merseyside 1.8%
Greater Manchester 4.1%
Cumbria 1.3%
Cheshire (including Warrington) 1.8%
Source: IDBR ONS
* See data notes on turnover
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Northwest regional overview: The biomedical sector Sub-regional perspective The following table provides a sub-regional summary of the data in a number of different ways for the number of enterprises in the sector:
Firstly, it provides a national percentage share of working age population; this is then used as a base index rate of 100. Secondly, it provides percentage rates for the sector and relative index scores. Thirdly, it provides comparator figures for other enterprise areas.
For example, 1.7% of England’s working age population is resident in Cheshire. Consequently, for the sector to pull its weight Cheshire would have 1.7% of enterprises. In reality, 2.0% of the sector’s enterprises are based in Cheshire, this represents an index score of 117.7 ([2.0/1.7] x 100). A score above 100 indicates that the sub-region performs better than one would expect, whilst a score under 100 indicates a performance below its weight. Cheshire (including Warrington) is home to: 1.7% of England’s working age population (100.0). 2.0% of enterprises in the sector nationally (117.7) and 1.8% of other enterprises (105.9). Cumbria is home to: 0.9% of England’s working age population (100.0). 0.4% of enterprises in the sector nationally (44.4) and 1.3% of other enterprises (144.4). Greater Manchester is home to: 5.1% of England’s working age population (100.0). 5.0% of enterprises in the sector nationally (98.0) and 4.1% of other enterprises (80.4). Lancashire (including Blackburn with Darwen and Blackpool) is home to: 2.8% of England’s working age population (100.0). 2.2% of enterprises in the sector nationally (78.6) and 2.8% of other enterprises (100.0). Greater Merseyside (including Halton) is home to: 2.9% of England’s working age population (100.0). 2.0% of enterprises in the sector nationally (69.0) and 1.8% of other enterprises (62.1).
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Northwest regional overview: The biomedical sector PEFORMANCE AT LOCAL AUTHORITY LEVEL Number of enterprises In the region as a whole, the areas which have highest number of enterprises within the sector include Bolton, Macclesfield, Manchester, Stockport and Trafford. These areas have between 21 and 30 enterprises in them. In the majority of cases the larger numbers of enterprises can be linked with highly dense areas of population. This is the case for Bolton, Manchester, Stockport and Trafford, all of which have populations of between 4,200 and 10,600 people per square mile.
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Northwest regional overview: The biomedical sector CHANGE OVER TIME - 1998-2006 At national and regional levels the performance of this sector, between 1998 and 2006, is almost always above the equivalent average figure for other enterprise areas, for turnover in England and the Northwest and for the number of employees in the Northwest. Furthermore, comparative data for the sector, in the Northwest, is almost always above the national equivalent for measures of percentage change for employees and turnover (see table below). Percentage change 1998-2006 Biomedical sector
Other enterprise areas
England
-3.0%
-6.4%
Northwest
-3.4%
-7.9%
-4.2%
+7.3%
+87.0%
+1.7%
England
+16.7%
-
Northwest
+41.5%
-
At a regional level the data for enterprises within the sector between 1998 and 2006, indicates that the: Number of enterprises has fallen by 3.4%. Number of employees has risen by 87.0%. Value of business turnover has risen by 41.5%.
Enterprises
Employees England Northwest Turnover
Percentage change (1998-2006) Number of enterprises
Other enterprise areas Biomedical
30.0%
20.0% 15.4%
Percentage
10.0%
0.0%
0.0%
-10.0%
-3.0% England -6.4%
-3.4% Northwest -7.9%
Cheshire -7.1%
-4.4% Cumbria
Greater Manchester -9.2% -5.1%
Lancashire
Greater Merseyside
-5.5% -5.9% -11.5% -11.8%
-20.0%
-30.0% Source: IDBR ONS
1. Turnover data has been adjusted to a 1998 base to remove the effects of inflation. 2. The economy as a whole experienced growth between 1998 and 2006. This, however, reflects a mix of growth and decline in different sectors; as one of the areas of growth was the business and professional sector and its removal from the overall dataset creates an artificial picture of slight decline. Consequently time series data for other sectors has been excluded from the analysis as its inclusion would be misleading.
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Northwest regional overview: The biomedical sector Change at a sub-regional level The following graphs show area performance over time whilst also enabling areas of differing size to be compared directly. This is achieved by assigning the relevant area base at 1998 as an index of 100. The data appears to reinforce the principle that successful areas will continue to grow whilst less successful ones are in danger of further decline; this may be either absolute or relative (the national base referred to is England). Number of enterprises (indexed scores - 1998 base = 100) Biomedical sector
Average for other enterprise areas
The national figure for the number of enterprises in the sector indicates a decrease to 97 by 2006.
The comparator average rate for other enterprise areas in 2006 is 94.
The Northwest index for 2006 is 97.
The Northwest index for 2006 is 92.
The greatest increase for the sector is in Cheshire with a 2006 index of 115.
The smallest decrease at sub regional level is a score of 96 for Cumbria.
The greatest decline (relative or absolute) at sub regional level for the sector is a score of 88 for Greater Merseyside.
The greatest decline (relative or absolute) at sub regional level for other enterprise areas is a score of 88 for Greater Merseyside.
Change in the number of enterprises 1998-2006 Other enterprise areas
Change in the number of enterprises 1998-2006 Biomedical sector 130
130
120
120
110
110
100
100
England
Index rate
Index rate
Northwest
90
Cheshire (including Warrington) Cumbria
90
80
80
Greater Manchester
70
70
Lancashire
60
60
50
50 1998
2000
2002
2004
2006
Greater Merseyside
1998
2000
2002
2004
2006
Source: IDBR ONS
Source: IDBR ONS
Number of employees (indexed scores - 1998 base = 100) Biomedical sector
AVERAGE for other enterprise areas
The national figure for the number of employees in the sector shows a decrease to 96 by 2006.
The national index for the number of employees in other enterprise areas in 2006 is 107.
The Northwest index for 2006 is 187.
The Northwest index for 2006 is 102.
Business turnover (indexed scores - 1998 base = 100) Biomedical sector The national figure for business turnover in the sector indicates an increase to 117 by 2006. The Northwest index for 2006 is 141.
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