Viewpoint

Rail Cluster – theory and practice

Michael Hird, Director at Hird Rail Development brings us up to date on the South Yorkshire rail cluster

In recent weeks colleagues from across the rail sector in South Yorkshire have been meeting on a regular basis to discuss the region’s ‘rail cluster’. Many of us thought we were going to business development events, Chamber of Commerce meetings, Rail Industry Association get togethers etc. Even more so after two years of lockdowns, we were simply getting to reconnect with old friends, colleagues and explore new opportunities with clients and our supply chain. In fact, or so I am told, we have been taking the South Yorkshire rail cluster to a new level of maturity!

With support from Business Doncaster’s rail lead Andrew Webb and Dan Fell and the team at the Doncaster Chamber of Commerce, along with other chambers across South Yorkshire, we have been working in a more collaborative fashion for many years. I have had the opportunity to discuss the cluster ideas with Professor Paul Hammond from University of West of England, Bristol and a Director with Steer. We set out the challenges for the sector as I saw them locally and compared these against the academic theory and practices of a cluster.

Industry clusters are spatial concentrations of related industries. Clusters consist of companies, suppliers and service providers, as well as government agencies and other institutions that provide education, information, research and technical support to a regional economy. According to my Professor friend, ‘Clusters are a network of economic relationships that create a competitive advantage for the related firms in a particular region. This advantage then becomes an enticement for similar industries and suppliers to those industries to develop or relocate to a region.’

A cluster-based approach starts with regional stakeholders pursuing initiatives to address challenges and make the industries and assets that are already present in the region better. These can include overall business environment conditions, common to all sectors, but in rail particularly our ageing, and male dominated, workforce means we are facing future skills constraints. Access to finance, government rules and regulations and uncertainty post-Covid were already on my list of challenges. Add to these the issues caused by huge increases in our cost base and uncertainty in the market around global and national decision-making and the basis of a cluster is already in play – it helps to talk to customers, staff and the supply chain. It also helps that we cover all aspects of the railway – rail operations, power supply and distribution, traction, rolling stock and advanced manufacturing and Infrastructure. Central to the clusterbased approach is that, in response, we support each other, we learn from each other, we challenge each other.

In South Yorkshire that is what we have been doing for many years – spurred on by great relationships with our UK and global clients including Network Rail. As we move into a new age with the establishment of Great British Railways in a rail sector that is focussed on its customers, safety, decarbonisation and delivering value in passenger and freight this will only increase in importance.

Our cluster-based strategy has not been easy or quick to implement, but we are now beyond the development stage and piecemeal approaches. We are doing good business and generating jobs. Two examples standout in this regard.

Firstly, as Professor Hammond says, a successful cluster welcomes Foreign Direct Investment as competition and an opportunity to learn and trade. Facilitated by the local authority and Doncaster Chamber of Commerce, and with support from the Department for International Trade (DIT), we have sent delegations to InnoTrans Berlin. The latter point is important – the DIT recognised that we had something special and that we are already ‘clustering.’

Secondly, the labour market has begun to change, and we are seeing a light at the end of the tunnel regarding the skills crisis that the sector has been aware of for many years. Future rail careers are being shaped at Doncaster’s award-winning University Technical College (UTC) and at the National College for Advanced Transport and Infrastructure (NCATI), which specialises in skills for rolling stock, track systems and power. Sheffield Hallam University (SHU) is steeped in rail and offers, inter alia, a degree apprenticeship in railway engineering. South Yorkshire is soon to have an Institute of Technology (IoT), making a substantial contribution to the region’s productivity and ability to attract and retain higherlevel technical skilled roles in the region. These skills then form a virtuous circle and support the development of wider industry skills hubs. There is the Clean Power and the Energy Institute at the University of Sheffield, and the UK Rail Research and Innovation Network (UKRRIN) is of international significance, we are testing steel for our future railway at the Advanced Manufacturing Park (AMP) in Rotherham and we host UKRRIN’s Digital Hub at Unipart Rail in Doncaster.

The development of a future rail workforce is gaining momentum locally and many of the 200+ firms in the regional rail cluster are active with these educational bodies as Board members, advisors, and Governors. By offering these links and work experience we are a cluster in practice, not theory. Challenges remain however, and in a recent visit to meet students from the UTC we heard from one individual about the likely need to leave South Yorkshire to get a well-paid job. He could get the education locally but couldn’t see the opportunities in our cluster.

More work to do.