Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Foreign companies exaggerated job targets

23.11.2004


BIG foreign companies that established UK business plants over a 14-year period exaggerated their job creation claims, a new study suggests.



Companies deliberately overstated job claims to attract business support and advice, conclude researchers from the University of Newcastle Upon Tyne Business School. The team say ambitious job creation targets can be advantageous to inward investment agencies, like regional development agencies (RDAs), and warn that such claims should be treated with “a high degree of scepticism”.

The study, published in the Oxford Bulletin of Economics and Statistics, reveals that many firms which invested in new plants in North East England – a UK boom area for foreign inward investment in the 1980s and 1990s – fell short of their job creation targets. It also reports that firms that received help for their business plants from the main investment agency at the time, Invest UK, were less likely to achieve their employment goals.


However, further research is needed to show whether a similar situation has perpetuated into the present day. This is the first detailed study of this kind of data, as the job claims of the inward investors and agencies are rarely tested, say the research team.

Newcastle University researcher, Dr Colin Wren, said: “Rather than some other explanation it seems the number of jobs may have been deliberately over-estimated. Although we only looked at the North East we suspect the findings apply to other regions and countries which benefited from inward investment, such as North West England, Wales and Scotland.

Co-researcher, Dr Jonathan Jones, said the findings implied a misallocation of public resources, adding: “Larger job scales imply better treatment from inward investment agencies, in terms of help with land, premises and other forms of assistance. “Economic development agencies benefit from claims about the number of jobs provided, especially in larger ‘flagship’ projects, which may not only bring them prestige, but potentially better grant-in-aid funding.”

The study analysed statistics relating to 265 new foreign-owned plants, which undertook 416 projects in North East England from 1985 until 1998. These mostly originated in Western Europe, the Far East and North America.

Overall, the researchers found the new plants promised a total of 48,825 jobs but total employment within the plants stood at 34,164 in 1999, a shortfall of over one-third at 15,000 jobs. Over 9,000 jobs promised were in the 50 plants that closed before 1998. Looking more closely, the team discovered that while smaller plants achieved their employment targets, the larger plants fell someway short, suggesting either the job target was not met or that jobs were lost by the end of the analysis period.

To elaborate, a large plant promising 250 jobs had only between half and three-quarters of these in place in 1999, while a plant promising 1,000 jobs had around half these jobs in place by that time.

Plants that received special financial assistance were more likely to achieve their employment targets but those involved with Invest UK were less likely to reach them. For example, on average, a plant promising around 50 jobs had more than this number in place if it received financial assistance but statistics showed it was be likely to achieve two-thirds of this target if involved with Invest UK.

Dr Colin Wren | alfa
Further information:
http://www.ncl.ac.uk

More articles from Studies and Analyses:

nachricht Multi-year study finds 'hotspots' of ammonia over world's major agricultural areas
17.03.2017 | University of Maryland

nachricht Diabetes Drug May Improve Bone Fat-induced Defects of Fracture Healing
17.03.2017 | Deutsches Institut für Ernährungsforschung Potsdam-Rehbrücke

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Giant Magnetic Fields in the Universe

Astronomers from Bonn and Tautenburg in Thuringia (Germany) used the 100-m radio telescope at Effelsberg to observe several galaxy clusters. At the edges of these large accumulations of dark matter, stellar systems (galaxies), hot gas, and charged particles, they found magnetic fields that are exceptionally ordered over distances of many million light years. This makes them the most extended magnetic fields in the universe known so far.

The results will be published on March 22 in the journal „Astronomy & Astrophysics“.

Galaxy clusters are the largest gravitationally bound structures in the universe. With a typical extent of about 10 million light years, i.e. 100 times the...

Im Focus: Tracing down linear ubiquitination

Researchers at the Goethe University Frankfurt, together with partners from the University of Tübingen in Germany and Queen Mary University as well as Francis Crick Institute from London (UK) have developed a novel technology to decipher the secret ubiquitin code.

Ubiquitin is a small protein that can be linked to other cellular proteins, thereby controlling and modulating their functions. The attachment occurs in many...

Im Focus: Perovskite edges can be tuned for optoelectronic performance

Layered 2D material improves efficiency for solar cells and LEDs

In the eternal search for next generation high-efficiency solar cells and LEDs, scientists at Los Alamos National Laboratory and their partners are creating...

Im Focus: Polymer-coated silicon nanosheets as alternative to graphene: A perfect team for nanoelectronics

Silicon nanosheets are thin, two-dimensional layers with exceptional optoelectronic properties very similar to those of graphene. Albeit, the nanosheets are less stable. Now researchers at the Technical University of Munich (TUM) have, for the first time ever, produced a composite material combining silicon nanosheets and a polymer that is both UV-resistant and easy to process. This brings the scientists a significant step closer to industrial applications like flexible displays and photosensors.

Silicon nanosheets are thin, two-dimensional layers with exceptional optoelectronic properties very similar to those of graphene. Albeit, the nanosheets are...

Im Focus: Researchers Imitate Molecular Crowding in Cells

Enzymes behave differently in a test tube compared with the molecular scrum of a living cell. Chemists from the University of Basel have now been able to simulate these confined natural conditions in artificial vesicles for the first time. As reported in the academic journal Small, the results are offering better insight into the development of nanoreactors and artificial organelles.

Enzymes behave differently in a test tube compared with the molecular scrum of a living cell. Chemists from the University of Basel have now been able to...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

International Land Use Symposium ILUS 2017: Call for Abstracts and Registration open

20.03.2017 | Event News

CONNECT 2017: International congress on connective tissue

14.03.2017 | Event News

ICTM Conference: Turbine Construction between Big Data and Additive Manufacturing

07.03.2017 | Event News

 
Latest News

Argon is not the 'dope' for metallic hydrogen

24.03.2017 | Materials Sciences

Astronomers find unexpected, dust-obscured star formation in distant galaxy

24.03.2017 | Physics and Astronomy

Gravitational wave kicks monster black hole out of galactic core

24.03.2017 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>