Clusters blog: Looking back on a month of diving into some of the biggest growth opportunities in the Midlands

Date posted: February 4, 2025
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Clusters in the Midlands

Since December last year and throughout January, the Midlands Engine has brought together a series of roundtables to explore the investment potential of some of the biggest clusters in our region – from aerospace to cyber and defence, nuclear energy to space technologies.

At a rate of one a week, these ‘deep dives’ have featured keynotes from industry leaders, lively discussion and workshop exercises around each cluster’s business, talent, innovation and investment ecosystems to encourage greater collaboration and to identify how the cluster can best showcase its investment potential.

Here we look back on an eventful – and insightful – month that has seen Midlands Engine partners from government, academia and business leading the conversation around clusters and their role for the region’s economic growth.

Clusters can fuel economic growth – but are challenging to define

While much of the objective analysis was done in the 2023 project for 30 Midlands clusters, hearing from the people on the ground within each cluster shone a new light on many of the unique opportunities and challenges each industry faces.

The space cluster, for instance, is particularly challenging to define and there is lack of awareness about how the technologies can be applied on a broad scale to the rest of the economy.

Space technologies and applications apply to all of the Industrial Strategy’s key sectors and present a real opportunity to scale up manufacturing in the Midlands – perhaps drawing on established supply chain for adjacent sectors like automotive.

The Midlands’ aerospace cluster, meanwhile, has dominant companies such as Rolls-Royce. Yet, current data normally used to quantify the sector’s economic impact are a poor foundation for policy making, with smaller aerospace companies in the wider supply chain not benefiting from sufficient funding.

A recent project led by the Midlands Aerospace Alliance revealed that the sector’s size and contribution to the Midlands has been greatly underestimated.

In terms of energy, the Midlands is where nuclear power technology is developed, tested and made, and soon it will be generated here too.

The future for the nuclear sector in the Midlands is strong, with industry-leading projects in terms of manufacturing of Small Modular Reactors, submarine reactors and fusion, as well as significant investment opportunities through innovation hubs in Derby, Leicester and Birmingham  – with £2.3bn invested in nuclear R&D in the Midlands in 2019-20 alone.

To help unlock further investment for the cluster,  a comprehensive map of the Midlands’ civil nuclear capabilities is required to better guide investors, as well as a shift in public attitudes to this clean energy source needed for the UK’s energy security. Nuclear is the first roundtable to be published and the white paper is available here.

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Space Park Leicester hosted the Space cluster deep dive this January

In the cyber cluster, 44,000 jobs were created in the Midlands through domestic investment in 2017-22 alone. But Midlands-based software companies received just 1.32% of equity investment raised in the UK from 2017 to 2021, despite making up 10.2% of all high-growth software companies in the UK. This  demonstrates the disparity between investment in the region compared to that in London and the South East.

The complex, inter-twined clusters of cyber and defence was also made clear, which results in exceptional opportunity but also increased sensitivity and caution around external engagement and collaboration.

The Midlands Engine cluster roundtables and resulting white papers are also revealing common issues across these sectors.

Challenges include the need for general engineers and to raise the profile and accessibility of careers in nuclear, aerospace and defence for local people right here in the Midlands.

Opportunities include calls for new approaches to business rates on new factories which featured strongly in all discussions.

Midlands-wide focus and impact

The roundtables have taken us across the region. From Space Park Leicester to the University of Derby’s Enterprise Campus; and MIRA Tech Park to the University of Nottingham’s advanced manufacturing building.

They’ve been at the heart of the clusters themselves, bringing to life their ambition, drive and capability and ensuring that together, in collaboration, we can achieve even greater economic impact for our region.

What’s to come for Midlands clusters?

More clusters are planned in the spring on medtech and digital health, agri-food and the emerging hydrogen cluster in the region.

Each roundtable will be followed by a white paper articulating the cluster opportunities and barriers to growth, as discussed by partners taking part. The first in this series is now available on the Midlands Nuclear cluster.

The cluster white papers will be available to aid policy and investment decision making and will act as vital tools at major investment events, including Midlands Engine at UKREiiF 2025.

They will also form part of the ‘Invest in UK University R&D – Midlands campaign’, taking centre stage in showcasing the clusters to international audiences as investment-ready propositions.

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