by John Forkin.

DO you believe in numbers? Last week’s official figures suggesting a 0.2% drop in gross domestic product, following the previous quarter’s drop of 0.3%, heralded the dreaded double-dip recession. The actual definition of a recession is brutally simple, two consecutive quarters showing gross domestic product in decline – and two consecutive quarter reductions we now have.

Yet, the announcement was met with muted mumbles in the market which expressed concern over the accuracy of the numbers because so many other indicators seem to point away from a dip. And, as we know, the markets dislike surprises unless they come packaged up as a bonus.

Apparently, the UK is unique in that our Office of National Statistics issues gross domestic product figures only 25 days after the quarter end when only 42% of the numbers are available.

Would you issue your company management accounts on the back of only 42% of the information? Thought not. I didn’t know this but the remaining 58% of the calculation is based on our old friend, the computer model.

Yes, the same computer models that predict barbecue summers, arctic winters and the fact that Barcelona were going to win this year’s Champions League. In the forecasting business, what we do in the UK is called a flash estimate. This might be why other countries don’t bother doing it.

My question though is more fundamental. I can’t get my head around the fact all of the millions of economic activities, all the buys and sells that go on every day, when all added together come in at 0.2 above or below the same activity compared with the previous period.
Surely the differentials should be greater? Disturbed by these thoughts I carried out my own flash scientific exercise.

I looked at my weekly shopping bills for the past quarter to see if I was managing to achieve this remarkable balance in spend. How would all of my banana, yoghurt and nacho purchases balance out in a 13-week period? Was I in growth or recession?

The result was a disaster – my weekly differential ranged wildly from week to week with no underpinning logic, short of being overly influenced by clever marketing tricks involving a few juicy three-for-two offers and 50% wine reductions. If the weekly tolerance in the Forkin household differs by as much as 100% how does the whole UK economy manage to come in at less than 1%, whether plus or minus?

Another figure much-loved by economists is the balance of payments.

Each country produces its annual balance of payment figures, that is the difference between imports and exports. The economic Holy Grail is to have a positive balance of payment figure, a surplus that shows you are exporting more than you are importing.

Our friends at the IMF decided to add all the countries’ reported figures together and came out with some surprising results. According to the IMF, in 2010, planet earth as a whole exported $331billion more than it imported.

We have no idea to what other part of the universe these exports went but, according to the numbers, go they did. Even better, by 2014 the surplus will be $700 billion. Politicians, the media, the market, business people all talk about confidence being the critical factor in getting us out of the current economic mess. Confidence isn’t a number but an intangible emotion influenced by the statistics seemingly produced in rather a haphazard way.

Maybe the Office of National Statistics could bring their expertise to my shopping. At least we’ve got those extra-terrestrial exports to fall back on.

Published in Business Weekly, Derby Telegraph on Wednesday 2nd May

by Russell Rigby, Director at Rigby & Co. – Commercial Property Consultant.

AS the commercial property market continues to recover, an unlikely area of the city is about to assume the mantle of the “next big thing”. It doesn’t have an obviously identifiable name; rather it is the eastern side of the city centre, running from the inner ring road and Westfield towards the rail station.

A number of short and long-term regeneration projects are converging to radically transform a part of the city, which in recent years has seen little investment and has created few headlines. However, without yet having laid a single brick, both Compendium’s Castleward Urban Village scheme and Derby Hospital Trust’s Nightingale Quarter schemes have already generated substantial interest.

Compendium believes its plan to transform the Castleward estate is challenging but eminently deliverable.

The Nightingale Quarter, the site that was once home to the Derbyshire Royal Infirmary, will move into its next stage of development in the next month or so, once a few planning issues have been resolved. Both schemes are being talked about in national property circles and both have the potential to create sustainable new locations for both businesses and residents.

Over the past few years, Derby station, which provides the eastern side of the city centre with a transport hub, has seen significant and much-needed investment. The station is now something to be proud of and not ashamed about, which was the case prior to the investment. Buildings in the east-of-city-centre zone previously thought to be either redundant or failing are now being talked about in a far more positive light.

Just last week it was announced that St Andrew’s House in London Road is to form the first phase of a new Free School for this side of Derby, thus regenerating a failed 1960s Government building that had been empty or underused for some time.

Next to St Andrew’s House is Midland House, whose new owners are skilfully repositioning the identity of the building and improving its quality in order to offer the market high-quality corporate offices on very sensible rental terms. A planning application is also being prepared which will lead to redevelopment to the rear of the former Nightingale House on London Road.

Again, its new owner, First Urban Properties, is investing considerably in both the building and the site to take advantage of the shifting level of confidence in the area. Rigby & Co. is currently advising the owners of Midland House, Nightingale House and Derby Hospitals NHS Foundation Trust.

Published in Business Weekly, Derby Telegraph on Wednesday 18th April 2012.

by John Forkin.

The future of the great British High Street is threatened by climate change.

Not the environmental global warming-driven type but the threat of a structural attrition rooted in a retail recession, changing customer expectations and the internet. Many of the vacant shops, now a feature of every town and city, will possibly never be filled as they were before. Reports addressing this crisis are being launched on a regular basis.

Last week, property consultancy BNP Parisbas Real Estate produced a national retail risk index that illustrated the extent of the divide between the south east and the rest of the country. Disturbingly, both Derby and Nottingham were put in the highest risk category.

The Local Data Company, which tracks retail vacancies, has launched a town tool kit full of ideas on how to help tackle the decline. The Prime Minister asked TV’s self-styled queen of shops, Mary Portas, to take a look and her recent report included recommendations ranging from creating special town teams to establishing a national markets day.

The past few weeks have seen the collapse of more big-name retailers such as Game and Peacocks. So, what can be done to rethink the future of the high street – or should anything be done? It’s my belief that the high street is an essential part of the urban experience.

All cities grew from their historic core and today the city centre gives character and identity to a place. When we travel to another city, whether it’s York or Rome, we automatically gravitate to its main centre and seek to experience what is special about that place.

There will be international brands we expect everywhere but also the shops and cafes unique to that area – customers want both. The four quarters in Derby’s city centre all reflect different periods of growth.

The soon-to-be-revitalised Riverside is the reason why a settlement was first established, having been a crossing point in the river.

The Cathedral Quarter is the historic core that grew with Derby as a market town, St Peter’s reflects the post-war high street boom and Westfield is a 21st-century response to retail globalisation.

So, what of the future?

The recession will one day end but we will never go back to 2005. The internet will continue to grow and customers will become even more fussy when choosing where and how to spend their leisure time. And that’s the key for me, recognition that a visit to a town or city centre is now a primarily a leisure activity.

It’s a matter of choice, not convenience. We want centres to be easily accessible, attractive, clean, safe and vibrant. We desire an ambience that mixes shopping with eating, relaxing, resting and culture. We want the whole experience to be interesting.

Most of all, we want shops to be open when we need them to be open. That is the most singular failure of the high street today is that most stores open as you arrive at work and close as you leave. It is as if they have designed their opening hours to exclude any potential customers who are employed.

Mary Portas has fallen into the trap of thinking a solution lies in more planning, regulation and marketing. Well Mary, here is a 29th recommendation. Maybe shops should open when customers are able to shop?

Published in Business Weekly, Derby Telegraph on Wednesday 4th April 2012.

Photos of Derby by Tristan Poyser

by John Forkin

As we enter the fifth year of economic turmoil, it is only beginning to dawn how fundamental the challenge is following the crash. Capitalism itself is being questioned as a viable economic system and not only in the camps around St Paul’s.

This was best illustrated by a series recently explored in the Financial Times. Even its title, Crisis in Capitalism, would have been unthinkable a few short years ago when, as communism collapsed, Francis Fukuyama declared the “end of history”.

I’ve always been wary of the “two legs good, four legs bad” approach and feel a false dichtomy – a wedge even – has been created between the public and private sectors. Recent comments to Marketing Derby’s Bondholders by the Lord Mayor of Derby’s twin city Osnabruck, Herr Boris Pistorius, countered that well. Here was a leader with strategic and tactical insight, able to communicate eloquently in another language, better still, able to make jokes that won him the hearts of a tough local business audience.

He stressed the need to take a more rounded approach. In his view, Germany’s relationship with Greece had to be more naunced than “we worked hard for our money and you haven’t”. Osnabruck’s moniker as a “city of peace” had to mean more than the fact  a treaty was signed there over 300 years ago; it had to be lived out in a tolerant city today through its visitor experience. Unsurprisingly, Pistorious if a fan of what he called PPP, public-private partnership, and I agree.

The withdrawal of Fred Goodwin’s knighthood was nothing more than a media sideshow. His nickname, Fred the Shred, said it all – an ineffective Businessman who should never have been rewarded, nor, I suspect, should many other hundreds of business people and career civil servants who haven’t been identified…just yet.

There can be no catastrophic mismanagement and incompetence lay at the heart of the crash, both in private and public sectors. Both banks and states failed in their core tasks and the consequences are going to be with us long after the last Greek riot has calmed down. Now, surely is the time to get a bit more sophisitaced and step above yah-boo, 24/7 media-fed, politics where shouting overrules listening and thinking. Put simply, the state needs business and business needs the state.

The trick is not to identify the right balance between the two but to recognise their interdependance in a relationship based on a dynamic tension around the creation and distribution of wealth. We have some fantastic examples of this in Derby. Rolls-Royce has announced £1 billion profits – a fantasic achievement – yet if the state had not saved the company in 1971, it would not exist today and Derby would be a very different city.

Bombardier is another global behemoth, and yet if it wasn’t for the action of the wider community and, yes, eventual climbdown by the state, it would be leaving the city already. I believe Derby is more comfortable with the concept of PPP than most places.

Government’s role is to provide a framework to encourage business growth but also regulate. In 2007 we saw the consequence of state inaction just as in 1989 we saw it with too much state control.

We must focus more on attention and support for the business entrepreneur. By this, I primarily mean the individuals who risk it all to create and grow enterprises. I have a thousand  times more respect for an internet start-up in a bedroom than for a Fred Goodwin. Here are the real wealth creators.

In Derby, we are blessed with entrepreneur-led businesses as any walk around Pride Park, the RTC, Friar Gate Studios, Vernon Gate and all the other city’s main business quarters show. Derby is a city where business thrives and this is attractive.

It’s no accident that the 800 jobs being brought into the city by HEROtsc, or the first speculative city centre office development being constructed in 20 years, are the result of intensive PPP.

Published in Agenda Magazine, Wednesday 14th March 2012.

THIS week over 20,000 professionals from the world’s property and investment community will gather in Cannes for the annual MIPIM event.

Over the years, some people have assigned MIPIM a reputation as merely a jolly on the Riviera – all sunshine, yachts and parties – usually those who have either never been or who, when they did go, treated it as a holiday.

During the boom, it did get out of control in terms of size but the financial crash means that today it is a much leaner, more business-like affair.

MIPIM stands for Marché International des Professionnels d’Immobilier – the international market for property professionals.

It is a mad mix of exhibitions, conferences, events and one-to-one meetings.

MIPIM is to property what Davos is to finance, the nexus of global real estate activity crushed into a few days. Cities, regions – even countries – showcase their investment opportunities and deals are discussed over canapés.

In the midst of this maelstrom will be Derby, once again represented by a very strong public-private delegation, headed by the leader and chief executive of Derby City Council and local business leaders.

Today there will be a Derby City Embassy event at which we will press the message that our city offers great investment opportunities.

Tonight we host a dinner designed to attract occupiers into new office schemes and tomorrow we meet a group of private investors away from the Cannes hothouse.

This year will be our fifth visit, so why do we keep going back? There are three reasons. The first is simple: to boost the city’s profile.

Derby is not on the typical investor’s shortlist of locations so we have to elbow our way in to grab their attention. MIPIM gives cities like Derby a platform – an opportunity to stand shoulder to shoulder with the Milans and Manchesters of the world. We don’t have the resources those cities have but we do have the guile and gumption to get noticed and, believe me, we do.

The second reason to go to Cannes is to bolster our credibility. If you want to attract £2 billion of investment to help create 10,000 jobs for local people then you really need to be where the investors are.

This week they are in Cannes – with the property media and all our competitors. The senior level of Derby’s delegation is vital and the quality time we offer on a one-to-one basis with city leaders is appreciated.

The third reason to go is as a learning experience.

All our competitors are represented, as are many other cities. Over two days there is a fantastic opportunity to suss them out, hear their pitches and see their plans. We are in competition for every pound of investment and MIPIM provides a valuable insight into other approaches.

The proof of the pudding is always in the eating and if you are looking for a tangible outcome from previous excursions, pop down to Friar Gate over the next few months and see the first city-centre office complex in 20 years rise out of the ground.

Lowbridge, the developer behind Friar Gate Square, came across Derby in Cannes and, over the past four years, its confidence that Derby was the right place to invest was built up in conversations at MIPIM.

Published in Business Weekly, Derby Telegraph Wednesday 7th March 2012.

THERE has been much brouhaha about the proposed location of the Government’s new Green Investment Bank.

This financial institution is being established to accelerate investment in the green economy and it is expected to invest £3 billion in such schemes over the next three years. Some might say that the creation of another new bank can hardly be the priority in the current climate of bail-outs and bonuses.

However, the Green Investment Bank does seem to be an innovative and genuine attempt by the Government to fund much-needed growth in projects that benefit sustainability. Initial priority sectors will be energy and waste. It is hoped that this will give the UK a critical advantage internationally in this growing economic sector.

The number of jobs actually located within the Green Investment Bank itself is relatively small. There are likely to be between 50 and 70 employed by the bank but the profile attached to it has meant an unholy scramble in the competition to find it a home. The competition was launched last month by the Department for Business Innovation and Skills.

No fewer than 32 areas have thrown their hats into the ring ranging from the big cities such as London, Leeds and Edinburgh to smaller communities like Durham, Torbay and Bicester.

You would expect Derby to have submitted a bid and, of course, we have done so. Marketing Derby has co- ordinated a skilled team of public, private and non-governmental organisations, all backed by the city’s three MPs.

Our pitch is simple: we are a central, compact, professional business city with innovation in our DNA.

We believe that Derby offers the Government a choice that is both pragmatic (easy access to the Green Investment Bank’s potential staff and business customers) and symbolic (we are not a traditional financial centre or even one of the usual suspects for government locations).

So, what are our chances? I think they are pretty good. Let me explain why. First consider the Government’s stated intent to rebalance the economy. This means it is not likely to be looking to put any more public sector employment into areas already over dependent on the taxpayer for jobs. In my view, based on a quick glance at the list of 32 areas bidding, I would say this must rule out about 20 of them, all of whom have a significant national and regional civil servant and quango presence in the past.

Access to a sufficiently large professional talent pool has been identified as the key criteria for the Green Investment Bank. Again, this must rule out areas that are geographically isolated or with too small a travel-to-work area. By my book this rules out a further ten bidders. Which leaves two: Derby (of course you will not be surprised) plus one other (I’ll leave you to hazard a guess).

By my maths, this takes our odds up from 3% to 50% which feels so much better. With 2.1 million people living within our travel to work area, most major cities within 90 minutes, 50,000 new graduates within an hour plus a saving to the taxpayer of some £19 million if Derby is chosen, I’d like to think our case will be well received.

Published in Business Weekly, Derby Telegraph, Wendesday 8th February 2012.

by John Forkin.

Inward investment is a sometimes tough and always unpredictable game.

Hundreds if not thousands of variables will have been considered by the time final sign-off is given to invest in any particular location. These range from fundamentals, such as why even look for a new location, to site, staff and access issues.

The truth is that every decision is underpinned by a variety of rational and emotional aspects, whether one is talking about the creation of five or 500 jobs. The competition between cities is fierce and winning is not a science.

For an inward investment agency such as Marketing Derby, the worst times are the moments (sometimes weeks, more often months) awaiting the investor’s final decision.

By this point there is no more pitching to be done. As the famous poster says, you’ve just got to keep calm and carry on.

That’s why the decision by HEROtsc to open its new Sky contact centre creating 700 new jobs in Derby was such welcome news, coming just in time for Christmas.

In my final article last year, I talked about how, following a tough 2011, good news had finally started to arrive on the jobs front for Derby.

I mentioned Rolls-Royce and Toyota, both of whom had announced a significant growth in employment but only dared hint at the HEROtsc investment which I knew was waiting in the wings. Once the deal was agreed, HEROtsc didn’t hang around.

The announcement on a Thursday was followed by a recruitment fair on the Saturday and by the Tuesday, jobs had been offered.

Since then, Bombardier has been awarded the much-needed £188 million Southern Trains contract so 2012 has started on a good note too.

It’s self-evident that Derby needs new employment. Its economic strategy is to create 5,700 net new jobs over the next 5 years. There are only three ways to do this – new businesses starting, existing employers growing and inward investment.

It’s important to see more new business starts as Derby has lagged behind competitor cities on start-up rates. But in the short term, this will only contribute a small amount to the jobs target. Indigenous growth is always going to be a bigger contributor. This is a business city and some of its firms are the world’s best and these are in growth.

Prospects among the thousands of other companies based in the city will very much depend on the health of the UK and eurozone economies, where 2012 promises to be another flat year.

Finally, there is the contribution of inward investment. Last year, we worked on investments leading to 1,160 new jobs in Derby.

A big chunk is HEROtsc but companies such as Young Ideas in retail, Ask in leisure, plus Gardner and Tracsis in technology show that Derby is becoming more attractive.

Their reasons for choosing Derby all differ though in each case, location, workforce and effective local partnerships were all crucial.

Derby, therefore, has a strong story to tell.

Our economic heritage is second to none, as is our contribution in terms of gross domestic product. What is different now is Derby’s clear vision. The £2 billion transformation of the past few years is starting to get noticed, especially by outsiders.

Published in Derby Telegraph – Wednesday 10th January 2012

by John Forkin.

Today the Government launches its much anticipated plan for growth.The challenge is formidable though the dilemma simple enough.

Can government interventions (or even non-interventions) create employment in a flat economy, especially when so many of our trading partners are also suffering?

Jobs cannot just be created out of thin air and, even if government can provide the right conditions for growth, do we want our jam today or tomorrow? There is no doubt that massive infrastructure investment does produce jobs but only slowly. The real benefit will not be felt for some time. Time that we don’t seem to have.

On the other hand, short-term fixes might bring a rapid rise in employment but would these roles be sustainable or just a flash in the pan?

It’s sometimes difficult to remember how much the world has changed over the past three years.

Not so long ago, debate raged in these columns as to whether or not the UK was about to slide into recession.

Don’t mention the “R” word and it won’t happen. It seems that over 50 consecutive quarters of economic growth had numbed us from thoughts of failure.

Earlier this month, we held our annual Derby City Embassy in London with more than 100 city ambassadors and investors present to hear Derby’s business case.

Thinking about the growth review took me back to our equivalent Embassy held in 2008 on the 34th floor of the Citi Tower in Canary Wharf. The feeling was still confident, bullish even.

That evening, Citibank announced it had bought another bank (the massive Wachovia Bank in the US) making it the largest bank in the world.

Its New York-influenced strapline “the Citi never sleeps” had never felt more appropriate. What’s more, Egg was thriving and Citi were looking at putting even more roles into Derby. Then the world changed. By the end of the week the Wachovia deal was off and within a week Lehman Brothers collapsed.

Three years later, Citi had sold its interest in Egg too.

As the recession approached, debate focused on its potential economic shape, illustrated by using letters from the alphabet. Remember the choice? A V-shape meant a quick fall followed by a rapid rise. A W-shape meant a double dip and a U-shape a longer period in the flat before the return of growth.

So far it has turned out be an elongated U-shape, three years and counting but could still yet become a W. So, is it all doom and gloom or is there any room for optimism here in Derby? The city is certainly not immune but is proving resilient than some others.

Remember, there has been more development in central Derby over the past four years than in the past 40.

Derby’s export-facing economy is finding work across the world, especially in regions with robust growth.

At the embassy we heard from Derby’s largest employer, Rolls-Royce. It now has a record order book of some £60 billion and, at this month’s Dubai Air Show, the company won £680 million worth of contracts. During 2011, Rolls-Royce has recruited and relocated a very significant number of staff into Derby. These are much-needed, highly qualified and well-paid jobs.

We also heard that Derby City Council is about to invest £230 million in capital projects across the city. This starts the next wave of investment and, with private sector investment to follow, will keep the momentum going.

The £40 million that Derby has been awarded from the Regional Growth Fund will give us some headroom in taking employment creation schemes forward over the next three years.

A mix of quick wins and longer term infrastructure.

One thing the Government can be sure of is that its investment in Derby is safe and we will exceed its targets as we did with City Challenge on Pride Park.

The £40 million is very welcome but if Bombardier wins its E-Voyager and Southern contracts and we manage to reel in a replacement for Egg then it could be a happier Christmas for Derby than might have seemed possible even a few weeks ago.

Published in Derby Telegraph on Wednesday 30th November 2011

Marketing Derby released the Investment Prospectus Brochure at the Derby Embassy in London last night. The brochure, with the intention of creating inward investment opportunities, was given to all 120 attendees at the Embassy.

To view and download the Investment Prospectus, Click Here>