Local Sourcing by Multinational Enterprise Plants: Evidence from the UK Regions and the Implications for Policy

Abstract

New empirical evidence on local sourcing by multinational enterprise plants in two UK regions (Yorkshire and The Humber and Northern Ireland) is presented and compared with evidence from other UK regions. The proportion of material inputs sourced locally is generally quite low in both regions and is broadly in line with that observed elsewhere. The scope for increasing the level of local sourcing through policy intervention is then examined and the suitability of various policy models for the UK regions is considered. A number of obstacles to greater local sourcing are identified including the sourcing strategies employed by multinationals and problems of availability, capacity, and competitiveness in local supply bases. The scope for policy intervention, it is argued, is quite limited but supplier-development policies designed to tackle issues of supplier capacity and competitiveness have greater potential than simple ‘brokering’ services.