It is a fact that the world's successful economies do not lean on one single superpowered capital, but a network of strong, well-connected regions. As the UK prepares for Brexit, having strength in our regions is more important than ever. Our economy cannot prop itself up on an overcrowded, overpriced capital. Building strongholds in regions to attract international and national businesses are a must, and with its position at the heart of the UK, the Midlands will be crucial to economic success.
At Midlands Connect - the transport delivery arm of Midlands Engine - we've been campaigning for strategic investment in the Midlands transport network to fuel the UK's strength and prosperity. The region already generates £240 billion a year towards the economy and is home to more than 11.5million people with major global businesses choosing the Midlands as their home; for example HSBC's announcement that it will be moving its retail headquarters to Birmingham, shows the case is growing for improved transport links to, from and through the region.
However, if we are to attract more international businesses to the Midlands, then we cannot just stand by and wait for something to happen. It is not a matter of relying on singular companies to pull us in the right direction. We need to implement a unified strategy to unlock the potential of the Midlands.
Our own research of businesses - large, medium and small - shows the important role effective transport networks play on their overall success. Around 30% of businesses select their location on the basis of accessibility to the road and rail network, but 60% of them reported that conditions on major road networks cause them problems. Added to this, with a third of British heavy road freight going through the region, transport is critical to the growth of the economy.
Since the launch of Midlands Connect in October last year we have been working closely with Highways England, HS2 and Network Rail to identify schemes that can unlock economic growth and network capacity. For example, creating a Midlands Motorways Hub to tackle the congested road network in the Midlands, or a similar Rail Hub to create the capacity for 10 extra carriages on tracks for commuters, will make a huge difference. We calculate that such investment has the potential to create 300,000 new jobs, increase productivity by £1.1bn and save businesses £0.5bn per annum in agglomeration costs.
We've already started planning and earlier this year demonstrated the practical benefits in our Picking up the Pace report, which received support from Chris Grayling, Secretary of State for Transport. It shows that by tackling major bottlenecks on the UK's road and rail networks, and investing now to ensure the Midlands is HS2-ready, the region can help deliver economic growth to the UK and prosper in an increasingly competitive global market place.
Since then, the Government has announced Midlands Connect will receive a further £12million to work on the implementation of our transport strategy after it is published in March 2017. Chris Grayling has set a deadline of 2018 for all rail companies to have smart payment systems in place, following one of our recommendations for making transport to get people and products to places faster.
However, work needs to continue. As one of the key regions in the UK, we need to make sure that our funding doesn't stop at research and ambitious plans. We need to use this money to show the Government that investing in the regions is in the best interests of the economy. We need significant funding for road, rail and air to propel the Midlands and the UK into one of the most prosperous economies in the world.
With Brexit on the horizon, if the UK is to continue to attract the biggest, best and brightest businesses it cannot just concentrate on one area of its land. The economy needs Britain to be thinking of how it connects people, places, manufacturers and markets both domestically and internationally. For this to be achieved the Midlands must be recognised as a crucial cog in the plan for the UK to grow and establish itself as one of the world's most successful economies. Through the work of the Midlands Engine and Midlands Connect, we are gaining powerful support in Westminster and beyond. So, watch this space as the Midlands story continues to gather pace.