US Recession Sparks Overseas Courtship
Monday, June 9th
Northern England defies Bubble Trouble, Redefines “Going Global”
Whether the US is in an official recession is debatable. Some analysts expect a protracted period of economic slowdown that would drag down the global economy. US companies may be forced to maintain a precarious balance of growth and preservation, all while the world markets fight for survival. The assumption is; if America sneezes, the whole world catches a cold.
However, the global economy is forging forward in spite of turmoil. In 2006, 104 countries grew at more than 5%, and most of them continued this pace in 2007. The US’ chokehold on the world’s progression is loosening. Moreover, world financial capitals such as London, are vying for supremacy complemented by new players on the world stage, such as Manchester. We now stumble upon an odd place in economic history where the juxtaposition of the current US economy, global boom and burgeoning enterprise regions force US businesses to implement new strategies to compete, grow and sustain amid turbulent times--all while adapting to a increasingly financially independent global machine. The model of relying on a single market to drive revenue and growth is stale.
Northern England
Northern England, one of the UK’s largest enterprise clusters and second home to some of the world’s top companies including Mellon/The Bank of New York, GE, Proctor and Gamble, and MBNA/Bank of America, has experienced unprecedented growth and has been instrumental in rewriting the definition of growth and global for US companies. As a vibrant, dynamic, and innovative region situated right in the center of the UK, US companies have reaped the golden benefits of global growth and stability including:
- Creation of 15,000 jobs, projection of 100,00 jobs over next 5 years
- 700 North American company investments, many of whom are Fortune 500
- Manchester is UK’s second major financial center which is seeing a surge in growth from companies leaving high-cost locations such as London.
- Leading sectors including life sciences, energy, digital technology, and business/professional services
Expansion and/or relocation of operations to North Englandare lured by the lucrative European market, availability of tax subsidies to businesses investing abroad, and overall positive growth. It is a far cry from the outsourcing phenomenon that saw companies shifting operations overseas to cut costs.
Mellon/Bank of New York
Not every US institution has been adversely effected by the credit crisis. America’s oldest bank, Mellon/Bank of New York, is currently poised for aggressive global economic growth using Manchester as a platform. Managing more than US$1.1 trillion on behalf of UK investors, the Bank leverages its central UK location to manage 1,500 UK pension funds. The Bank opened its doors in 2005 with 120 people. It now employs more than 850 people. By the end of 2009, it expects to have created another 200 jobs.
Additionally, Bank of New York Mellon's asset servicing arm has been given top ranking in seven categories in Global Investor magazine's annual Global Custody Survey. The Bank was ranked as the best global custodian in the world, ahead of rivals Citi, Northern Trust and RBC Dexia.
“Manchester is one of our biggest locations in Europe, and Europe the fastest growing area of our business,” states Bob Kelley, Chief Executive Officer of Bank of New York, “The office here has seen amazing growth….Manchester is going to be a lot bigger for us still."
Outlook
While there are varying opinions concerning the outlook of the US market, the impact on US businesses is clear: companies must change or die. Rather confident about the US economy and its part on the global markets, Sir Howard Bernstein, Chief Executive of Manchester City Council predicts, “Improved liquidity will help restore confidence and increase the percentage of companies looking to compete globally by establishing a real presence in European market.” Adds Colin Sinclair, Chief Executive of MIDAS, “The US economy will most likely normalize after a period of 18 months or so, however we will see that during this time, North American companies will race to diversify their operations and investments. The Northern England region proves to be a viable option for US companies seeking to adapt to the changing global economic climate.”
About North England Inward Investment Agency
The North England Inward Investment Agency is a British Government-funded consultancy and UK-based inward investment agency whose role is to advise and assist North American companies considering UK/European expansion. Our services are free and confidential and include the provision of information on a wide range of important issues such as: market feasibility studies, business plan support, site selection, potential procurement of financial assistance/public grants, taxation issues, work-force training and recruitment, supply chain opportunities, skills availability, labor costs and regulations, market data, links and collaborations with Universities, introductions to key professional services and regulation advice. For more information, please visit www.northengland.com.
About MIDAS
MIDAS is Manchester’s inward investment agency whose strategic aim is to assist national and international companies that wish to relocate to – or expand within – the Manchester City Region. Working in partnership with the ten local authorities and the Northwest Regional Development Agency, MIDAS provides services such as relocation support, assistance in finding property solutions and advice on recruitment and training. The Manchester City Region is now home to over 2,000 foreign owned companies including Adidas, AIG, Bank of New York and Google. To learn more about MIDAS, please visit www.investinmanchester.com.
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