More and better jobs The North East Strategic Economic Plan - January 2017 - The LEP Network
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More and better jobs The North East Strategic Economic Plan January 2017
The Strategic
Economic Plan
for the North East
Contents
Section one
01 Introduction
05 Performance against SEP targets since 2014
07 Delivery of the SEP
08 The SEP refresh process
09 The North East:
A place to live, learn and do business
10 Areas of strength and programme delivery
Section two - Areas of opportunity
13 Tech North East
15 Making the North East’s Future
17 Health Quest North East
19 Energy North East
21 Enabling services
Financial, professional and business services;
Transport and logistics; Education.
23 A place that works
Section three - Six programmes of delivery
29 Innovation
31 Business growth and access to finance
33 Skills
35 Employability and inclusion
37 Economic assets and infrastructure
39 Transport and connectivity
Section four - Accountability
43 Accountability, roles and communications
Strong progress since 2014 effectively to government as these processes develop. In this refreshed SEP, we set out:
In this environment, there remains a strong commitment
We can report strong progress since 2014. Through the ••A group of priority themes that we will promote
amongst our business and policy communities to secure
hard work and commitment of our people, businesses within the UK’s emerging Industrial Strategy.
more influence over our future through devolution.
and economic partners, the North East has moved out These highlight opportunities for growth in order
of recession and economic growth has returned to The refresh of our Strategic Economic Plan to strengthen our contribution to the UK economy
The Strategic trend, delivering an average of 3% growth in Gross
Value Added (GVA) per annum. These factors have provided a powerful rationale for a
and the Northern Powerhouse
••Key interventions and investments across our six
Economic Plan In terms of our targets, progress since 2014 has
refresh of the SEP. We have established a reputation for
both creativity and effective delivery with key stakeholders
programmes that will strengthen our business
environment and help the region’s long term
for the North East exceeded our expectations. We can report: in government and we are keen to build on this.
economic growth and competitiveness. We will support
••Employment numbers reached record levels in 2016 We spent the summer and autumn of 2016 discussing and challenge our local and national partners to do
with data showing a significant uplift in overall job the SEP with partners across the region, testing more to deliver more and better jobs for our area and
Introduction numbers since 2014 - approximately 53,700 at our understanding of the North East’s current for the country.
September 2016. At over 50% of our overall target, economic position and working to update and
this is significant progress The progress we have made towards the targets
reframe our approach.
we set in 2014 has exceeded our expectations. With
••897,000 residents of the North East LEP area were a supportive business environment there is an
We know there is no silver bullet to deliver our
in employment in September 2016, and the area itself opportunity to deliver more.
ambitions, but this work set a clear direction for our
provides 865,100 jobs
future priorities and programmes:
As well as refreshing our delivery plan we have also Andrew Hodgson
••Job growth has been added at a rate of 6.6% over
••The need to continue to support business growth, revisited our key targets. Trends up to the summer
the last two years compared to 5.4% in England as a
foster innovation and drive productivity. Work to of 2016 suggest that there is potential headroom for
The North East is a fast growing economy offering whole. This represents a closing of the employment
date has helped to strengthen our economy and further employment growth in the North East economy.
a diverse and flexible location for business and an rate gap with national averages
create better jobs, but there is more to do to build Our aim will be to reach our 100,000 target early and
attractive place to live and learn.
••63% of employment growth has been in higher skilled on our strengths and opportunity areas, and support stretch that further.
It is home to almost two million people and its jobs. This is ahead of the target for the ten year period dynamism across our economy
of our plan However, given the need to address the productivity
economy generates over £37 billion each year, ••Our focus on skills is crucial, to meet current demand, challenge, it is particularly encouraging that the
contributing 2.6% of national output, and jobs ••The rate of change towards our target to close the future-proof changes to the labour market, support percentage of better jobs being driven to date has
for 865,000 people. gap with national performance in terms of business our residents to access opportunities and secure and reached 63%, already ahead of our original target.
density and economic activity in the labour force by retain higher skills in our economy
When we published the North East Strategic Economic
2024 is on track. If investment into the priorities within this plan is
Plan (SEP) in 2014 we set a direction for our economy ••The need to focus on our economic infrastructure.
forthcoming at an equivalent level to present, we believe
rooted in our determination to foster improved Key parts of the North East economy have done very Improved connectivity must strengthen productivity
we can sustain and increase this percentage as our
opportunities for our residents and businesses in a well. We have seen business and employment growth in through enhanced physical and online access to
economy changes and are therefore revising this target.
modern, diverse and entrepreneurial economy. our manufacturing sectors, UK-leading performance in markets, and support access to employment and
Our aim is that by 2024, 70% of all new jobs created in
employment in digital and technology businesses, and training for local people. Clear investment propositions
With support from our partners across the region, the North East LEP area will be ‘better’ jobs.
good performance in business services and education, are needed for key sites and housing. Our assets
we outlined a strong ambition – to deliver more and should be promoted as a test-bed for innovation and
as well as improvement in other sectors. Internationally, We will continue to forge strong partnership with our
better jobs for the North East. we must engage with international business to build
we continue to be a net exporting region, have growing partners in the region and with central government and
levels of inward investment and strong science and trade and strengthen flows of investment. its departments and agencies to deliver more and better
We established two key targets:
cultural links. ••There is more we can do as part of the global jobs for our area and the country. Councillor Paul Watson
••To support our economy to deliver a 100,000 growth community to secure economic advantage and improve
However it is early days in the 10 year delivery of the
in the number of jobs available in our area by 2024, our communities by leveraging our assets in key
SEP. A particular challenge relates to the delivery of
an uplift of 11% on 2014 challenge areas like inequality, health improvement and
higher regional productivity where there is a widening
carbon reduction.
••To ensure 60% of the new jobs delivered are ‘better’ gap with national performance.
Andrew Hodgson Chair, North East LEP
jobs – offering higher skilled, more productive and We welcome the Prime Minister’s commitment to a
Economic exclusion in some parts of the region remains
better quality opportunities to more people in the area. strengthened, place-based Industrial Strategy and to
persistent and some of the jobs being generated are low
continuing to work to diversify the economic structure
Underpinning these targets, we set out to ensure that paid and insecure.
of the UK by focusing on economic development
our economy is more competitive, resilient, and inclusive Looking beyond our targets, we aim to frame our outside the South East. The government will find
by adopting a further four targets that compare North approach in the context of economic change. strong and willing partners in the North East, through
East progress with national averages in key areas of the our partnership of business, education and local Cllr Paul Watson
economy. We aim to focus regional and national action Challenges in the national and international economic government, and in a North East community that has Vice Chair, North East LEP
on closing performance gaps, delivering positive change outlook, the decision to leave the European Union always been creative, resilient and forward looking. Chair,North East Combined Authority
and helping to rebalance the national economy. and a new government committed to a strengthened
Industrial Strategy all have an impact on our region. Strengthening our ambition
These ambitions continue to command support across Understanding the implications, managing risks and
the region. Success will deliver more opportunities for In this context we believe that now is the right time to be
seizing opportunities is crucial.
local people and businesses, and ensure that the North more ambitious for the North East.
East makes a growing contribution to improving the UK’s Our economy needs to continue to be future focused, Heidi Mottram Vice Chair, North East LEP
As government prepares its plans to leave the European
economic prospects. agile and open to national and international investment.
Union and develops the policies and investments which
The views of economic partners about the need to retain
It will improve our economic resilience at a time of will populate its Industrial Strategy, it is important that
access to key trade and investment markets, to skilled
uncertainty in national policy and the global economy. priorities for the North East economy are understood,
labour and to research networks need to be communicated Heidi Mottram
and the region’s potential is supported.
02
Section one
The North East
economy and the SEP
04
Performance against Strategic Economic Plan targets since 2014
In 2014 the SEP set out six targets which aimed
to measure progress towards the ambition for
The 2014 SEP described different
a more competitive economy, delivering more This measure compares the GVA potential targets. The target set
jobs and better opportunities for local people Target: Increase the number Close the gap in GVA per of the economy divided by the Close the gap in the out most clearly was that, by
and businesses. Target: 60% of all jobs created from number of full time equivalent jobs
of jobs in the North East economy
2014 will be will be better jobs full time equivalent employment rate* 2024, the North East LEP area
by 100,000 by 2024
Target: 50% reduction in gap by 2024
in the economy in the North East would close the employment rate
We also aimed to measure relative performance LEP area compared to the figures Target: 100% reduction in gap by 2024
Position at September 2016 Position at September 2016
Position at 2015: 9% increase Position at Sep 2016: 22% reduction against the 2014 UK rate (72.1%)
compared with the rest of the UK on key indicators for England, excluding London. by 100%.
selected to provide insight into the region’s performance
100,000
on productivity, employment levels, economic activity The source for this measure 76.0 However, discussion during the
70,000
and inclusion, and private sector employment growth. is the ‘GVA for LEPs, ONS, Feb refresh process has indicated that
by 2024
Two of these are absolute targets demonstrating 2016 50,000
16’ report which provides the
overall GVA performance with 72.0
this is not a particularly valuable
measure of performance and a
progress towards delivery of ‘more and better jobs’. the employment figures derived
North East LEP rolling measure comparing the gap
from the Business Register and
53,700
England trend line
These are: with the ongoing national position
30,000 Employment Survey (BRES). 68.0 would be most appropriate. At
1. To increase the number of jobs in the North East
economy by 100,000 by 2024
= more jobs created September 2016, the North East
10,000
had made good progress against
2. 60% of these additional jobs will be ‘better’ jobs. A 64.0 the target of a reduction in the
0
better job is defined as being a job in the top three 33,900 (63%) North East LEP
England Trend Line
gap of 22% compared with the
Standard Occupational Classification (SOC) categories, 2009 2011 2013 2015 employment rate for England,
which are: Managers and directors, senior officials, of these are better jobs excluding London. However,
professionals, and associate professional and
2014 2016 53,700 we note that achieving a 100%
Ap 9 - r 09
Ap 0 - r 10
811,600 865,300 new jobs
-S 6
Oc 5 - r 15
Ap 4 - r 14
Ap 3 - r 13
16
Ap 1 - r 11
Ap 2 - r 12
technical occupations. closure of the gap against the
5 r1
ep
r 1 Ma
r 1 Ma
r 0 Ma
r 1 Ma
r 1 Ma
r 1 Ma
t 1 Ma
r 1 Ma
jobs jobs rolling national measure is
Ap 8 -
r0
The four targets comparing the North East LEP area significantly more stretching
Ap
performance with English averages, excluding London are: than the 2016 target.
3. Improvement of productivity measured by the Gross
The source for this data is the APS.
Value Added (GVA) per full-time equivalent job
4. Improvement in the employment rate of local people
5. Improvement in the economic activity rate of local people This indicator compares the
ratio of private sector jobs to
6. Private sector employment density, reflecting the aim This figure is derived from the Annual The APS measure provides a breakdown of Close the gap in private public sector jobs filled by the
to rebalance the relative contribution of public and Population Survey (APS) which provides a employment by occupation, which allows us sector employment density population aged 16-64 in the
private sector employment. This indicator compares the
comprehensive measure of people in jobs in to identify jobs at different skill levels based Target: 50% reduction in gap by 2024 North East LEP area to the
Close the gap in economic levels of economic activity of
the North East LEP area and includes: on occupational groups and can enable us to Position at 2015: 16.2% reduction
figures for England, excluding
It should be noted that: activity for people aged 16-64 people living in the North East
••All those who had done at least one hour of estimate ‘better’ jobs from the same baseline. London. The sources are the
••While these targets were set out in 2014, the document to the figures for England,
work at a workplace within the North East 0.58 BRES public / private sector Target: 50% reduction in gap by 2024
excluding London.
was not specific about the indicators being adopted to It reports on the proportion of new Position at Sep 2016: 24% reduction
LEP area in the reference week covered by dataset and the ONS population
measure performance. Measures that aim to illustrate jobs created that are in the top three
the survey 0.54 estimates by single year of age. 79.0 The economic activity rate
progress since 2014 using as up to date and consistent occupational groups; Managers and senior
••Employees, the self-employed and unpaid measures the proportion of
data as possible have therefore been selected as part officials, professionals, and associate
workers in a family business who draw a 0.50 76.0 the working age population
of the refresh process professional and technical occupations.
form of payment such as a dividend, and (16-64) who are active or
••The baseline employment level of 890,000 stated in 0.46 potentially active members
participants in government-supported 73.0
the 2014 SEP which provided the basis for estimating of the labour market.
training schemes
that an 11% uplift was required to achieve 1 million 0.42 North East LEP
jobs, was reviewed by ONS as part of a wider national ••Those who had a job that they were North East LEP England excl. London The source for this data is the APS.
England excl. London 70.0
population review in October 2014, and discounted temporarily away from (for example, if 0.38
they were on holiday).
Ap 9 - r 09
to around 850,000. The 850,000 figure included
Ap 0 - r 10
-S 6
Oc 5 - r 15
Ap 4 - r 14
Ap 3 - r 13
16
Ap 1 - r 11
Ap 2 - r 12
5 r1
2009
ep
2010
2014
2015
2012
2011
2013
r 1 Ma
r 1 Ma
r 0 Ma
r 1 Ma
r 1 Ma
r 1 Ma
t 1 Ma
r 1 Ma
employment levels of people in the area - including
Ap 8 -
This data is considered by ONS to be the
r0
people living here but working out of the area - rather
Ap
most comprehensive data because it
than employment and jobs in the North East LEP area includes self employment, which other
economy alone. As such, the 811,600 indicator has measures discount.
been selected and baselined as it reflects the number
of jobs in our area’s economy.
These targets will be the subject of further review as
the evaluation project is finalised.
06
Delivery of the North East Strategic Economic Plan since 2014 SEP refresh
process 2016-17
In 2014 we established six programmes as the framework for action and investment to deliver the SEP,
providing support to a range of projects and partners working in the North East.
The headline progress made on each of these programmes by April 2016 is detailed below.
The refresh of the SEP was supported by an External
We published a full progress review in May 2016, which provides more detail and is available on our website. Advisory Group, and involved extensive consultation
through a range of workshops, partner led meetings
and on line and written submissions.
Finance and investment
A number of documents underpinned the process
including a progress review reporting on SEP delivery
European Structural between 2014-2016 and an updated economic
Enterprise Zone investment North East Investment Fund North East Growth Deal and Investment Funds analysis report. These documents and a report of the
consultation are available on the North East LEP website.
Infrastructure investment agreed £55m loans fully committed £329.9m secured for the region, €559.5m notional allocation for
to support development on of which £220m was allocated to the North East LEP area secured for
Enterprise Zone sites Supporting 21 projects the North East LEP for 2016 - 2021 2014 - 2020
Secured second Enterprise Zone - £4.5m allocated to extend the 48 capital projects funded At November 2016 three quarters of 2016
launch April 2017 Finance for Business Fund (JEREMIE) our ERDF allocation is committed - January - May
second highest rate in the country. • Formation of North East LEP/NECA task group
• Preparation of analysis and SEP refresh programme
Programme delivery
May - June
• Publication of economic analysis and SEP
progress update reports
Business growth and Employability Economic assets Transport and • Discussion with external advisory group
Innovation Skills
access to finance and inclusion and infrastructure digital connectivity and North East LEP/NECA sub-boards
to identify key engagement issues
• Discussion with LEP Board
••13 innovation projects ••Secured control of ••Led the development of ••Successful ••£44m of Local ••£57m investment June - July
leveraging over £100m £120m Finance for the Good Career Guidance development of Growth Fund is being secured for 23 • Publication of engagement paper and online survey
of external funding Business funding to Benchmarks national pilot £2m Mental Health invested across 11 transport projects
• Discussions with partners in hosted meetings
remain in the North scheme, launched into 16 Trailblazer, which major infrastructure and seminars
••First LEP in the UK to schools and colleges ••Highways England
East (successor to will support 1,500 capital projects worth • Consultative workshops – themed around
appoint an Innovation in the region collaboration
current JEREMIE fund) Employment and over £124m smart specialisation areas and place issues
Director underway to attract
•• Enterprise Adviser Support Allowance • Further discussion with external advisory group
••Development and ••Invest North East over £900m of
••A strengthened programme rolled out claimants
launch of the first fully England established, investment in the
ecosystem supporting to connect school pupils
digital growth hub in ••Generation North East with resource to strategic road network September
innovative businesses with the world of work
England; one single investing £4.5m to champion inward • Summary of findings and initial proposals
including Venturefest ••The Connection
point of access for ••Higher than national help 16-24 year olds investment at a regional • Discussion with advisory group, sub-boards
NE and the Innovation Voucher Scheme
business support average take-up of into employment; to level, working closely and LEP Board
SuperNetwork provided £1.9m of
and advice apprenticeships, with date 950 young people with local authorities • Identification of implications and priority actions
vouchers to over 1,700
••Facilitated Catapult the North East LEP have found work as a
••Local Growth Fund ••Inward investment has businesses to help
collaboration across leading the drive. result of the scheme.
investment of £6.2m led to the delivery of them get connected to October - December
four North East based ••A number of skills
for the Rural Growth 9,432 new jobs. Superfast Broadband. • Preparation of refreshed SEP
Catapults capital projects have
Network.
••Strong relationships been completed with
with national innovation the aim of providing
world-class technical 2017
agencies, including
facilities in educational
Innovate UK and the establishments March
Knowledge Transfer including further • Launch of refreshed SEP
Network. education colleges and
the development of
University Technical
Colleges (UTCs)
08
The North East:
A place to live, learn and do business
To Edinburgh, Glasgow, Aberdeen
Port of Berwick
Areas of strength and programme delivery
Berwick-upon-Tweed
Holy Island We are strategically located between Scotland and the wider northern
economy. The North East is well connected to the rest of the UK, Europe
A1
Farne
Islands
and the rest of the world by rail, sea, road and air.
Wooler We are justifiably proud of the North East’s industrial history, which helped shape the This SEP provides an industrial strategy for the North East to generate
global economy and continues to influence our future. Our capacity for invention and 100,000 more and better jobs by 2024. It sets out the interventions and
innovative delivery, from railways - to hydraulics - to stem cells, highlights our creative investments needed to do this.
spirit and pioneering culture.
At a time of national economic uncertainty as the UK begins the process of leaving the
Alnwick Today, with two million people and an economy generating £37 billion each year, our European Union, improving regional competitiveness, productivity performance, and
To Scotland A697
contribution to the national economy is driven by great businesses and skilled and employment levels are central to strengthening the UK economy and the Northern
Northumberland Coquet
resilient people. We look forward to 2018, when the Great Exhibition of the North, Powerhouse.
A68
National Park Rothbury A1
Island
recently awarded to Newcastle and Gateshead, will demonstrate our creativity and the
opportunities to invest and grow businesses here. The SEP sets out a blueprint for intervention and investment to ensure the North East
delivers more for the UK economy and for all who live, learn and do business here.
Our three great cities are globally recognised. Newcastle has vibrant science, education,
culture, digital and service sectors. Historic Durham has a leading university, science and The plan will:
Ashington
tourism sites. Sunderland is renowned for its manufacturing capability, being the home
Bellingham
Morpeth
of Nissan’s world-leading car manufacturing base and the focus of one the Europe’s ••Encourage a business environment that supports and promotes higher levels of
A68
A696
Port of Blyth
leading automotive clusters. investment, innovation and business growth
A189
Newcastle Cramlington
Airport Whitley Bay
Our cities are connected into a strong and diverse urban hinterland. Strategic digital and ••Drive areas of our economy where the North East has specialisms that can
North Shields
transport links, available land and labour supply provide a compelling combination to deliver more productive employment through innovation, skills and international
Port of Tyne
NEWCASTLE
UPON TYNE South Shields
attract investment. There are strong links to national and international markets through engagement
A69
key gateways for freight and passengers including mainline rail stations, five sea ports
A69
To Carlisle,
Manchester Haltwhistle Hexham
Blaydon •• Act to create economic opportunities for people and communities across our region.
A1
GATESHEAD
SUNDERLAND
Port of Sunderland
and Newcastle International Airport.
A692
A68
Washington
Consett A693 Global leaders in subsea advanced manufacturing and offshore energy sectors are
Chester-le-
complemented by the world-class offshore test facilities at Blyth. A diverse life science
Seaham Harbour
How will we do this?
A690
Street
A1 (M)
A691 economy combines leading research and a business base in medical and bio-technologies.
A19 Leading medicine manufacturers export 95% of their output across the world. There are four areas of specialism ••Financial, professional
DURHAM
that economic analysis and regional and business services
We have one of the fastest growing digital communities in the UK, hosting national brands,
A68
Spennymoor
Wingate
engagement have highlighted as
such as the headquarters of software leaders Sage. The community boasts strong capabilities We also look at how our physical
Bishop
Auckland Sedgefield areas of our economy which provide
To Hartlepool in smart data and cloud computing and is home to international brands in games development and cultural assets provide an
Newton and Middlesbrough distinctive growth opportunities.
Aycliffe and virtual reality, as well as new clusters working with satellite data, and cyber security. This infrastructure for growth.
These are:
is strengthened further through innovative collaborations to digitally transform public service
A688
delivery, particularly in the local transport system, NHS and local government. 1. Tech North East You can find out more information
Barnard To York,
Leeds,
Driving a digital surge about these areas in section two of
Castle
London, Four excellent universities – Durham, Newcastle, Northumbria and Sunderland play this document.
Midlands
a significant role in the North East’s economic development. They offer a breadth 2. Making the North East’s Future
of research and teaching capability with top 10 research rankings in a range of automotive and medicines There are six programmes
disciplines, educating over 82,000 students each year. Each has been the focus for the advanced manufacturing which provide actions to support
regeneration of key parts of the region. 3. Health Quest North East improvement of our regional
Innovation in health and economy. These programmes are:
17,000 financial and professional services companies call the North East home, including all
life sciences ••Innovation
Principal rail links of the ‘Big Four’ (Price Waterhouse Coopers, Ernst & Young, KPMG, Deloitte), Virgin Money
and banking innovator Atom Bank are also headquarted here. Many more are located in 4. Energy North East •• Business growth and access to finance
Tyne & Wear Metro Cobalt Business Park, the UK’s largest, in North Tyneside, and the Team Valley in Gateshead. Excellence in subsea, offshore
and energy technologies ••Skills
LEP boundary Thriving construction businesses, a growing transport and logistics sector and a ••Employability and inclusion
strong performing education sector are all enablers in our economy. We have identified three enabling
Motorway service sectors that support the ••Economic assets and infrastructure
Our towns, rural and coastal communities provide employment in a number of wider economy and offer opportunities ••Transport and digital connectivity
Key routes sectors. Across these territories, creative initiatives embedding new business growth for delivery of more and better jobs
are underway. For example incubators alongside rural tourism hubs like The Sill in in the North East. These are: You can find out more information
Enterprise Zones Northumberland, growth in iconic cultural locations like Beamish and Auckland Castle about these programmes in section
and initiatives to foster digital innovation in farming and water delivery, demonstrate ••Education
three of this document.
Ports opportunities to drive employment across every part of our economy. ••Logistics
Airports Underpinning investment and expansion is a strong sense of regional identity, a skilled
and committed workforce, a powerful and engaged business community, and public
bodies committed to development and regeneration.
10
Section two
Areas of opportunity
12
National Innovation Centre for Data,
The North East is pioneering work on smart Newcastle University
data across industry and public services
and has an asset base helping shape digital
delivery across the economy
Government’s 2016 decision to base the new
National Innovation Centre for Data (NICD) on
Newcastle Science Central, shows our capabilities,
with the opportunity to take a growing share of
this future market with an estimated value of £216
billion and 58,000 new jobs.
Tech North East
Driving a digital surge Our digital challenges and opportunities
A key challenge is to raise national and global
awareness of our niche strengths and potential
for growth, ensuring the North East builds its
reputation as a hotbed of digital activity.
There is also a priority to grow our skills base and
Our digital community is one of the most vibrant, Government service centres employ a significant number ••Performance Horizon Group, which provides products respond to the demand for new space and better
productive and rapidly developing in the UK. of people in digital and technical roles. Employers include and services in over 170 countries connectivity.
the Department for Work and Pensions, HMRC and NHS
A combination of start up, high growth and established •• SITS Group, cloud services provider to the Premier League The key initiatives that will help us do that are:
Prescriptions Pricing Authority.
businesses, innovation networks and incubators sit alongside ••Leighton Group, leading digital agency that operates ••Digital Alliance
North East universities with leading research capability and Digital specialisms include software development,
SalesCycle and WorkCast Digital Alliance brings together key networks,
nearly 50,000 STEM students across the region. cloud computing, shared services, systems design
national agencies, universities and public sector to
and communications, buildings information modelling, ••Scott Logic, UK-leading bespoke software
Headquarters of FTSE 100 listed software leader, Sage, support business and enterprise to grow the North
games design and delivery. development company
shared service centres for Hewlett Packard Enterprise, East’s software, digital and computing sector.
Accenture, BT and IBM and innovation centres for Ubisoft Emerging specialisms include data analytics, virtual ••Viewpoint, global leader in collaboration and Building
ENGIE and Red Hat are all located here. reality, smart data, and cybersecurity. Information Modelling compliance software Areas of focus include support for the digitisation
of key regional clusters including building
Both the Digital Catapult and Satellite Applications Leading innovators based in the North East include: ••Palringo, gaming community builders with 27 million information modelling, the automotive supply
Catapult have expert centres based in the region. users across 350,000 user groups. chain, gaming, tax/accounting and shared service
centres and championing collaboration between
research and business.
••Data for Growth
A SOFTWARE & TECHNOLOGY INDUSTRY Emerging specialisms include: GVA contribution is currently Data for Growth will be a multi-faceted
valued at double the national average. programme aiming to build on the North East’s
Data analytics
£2 billion Virtual reality The contribution of the North East
advantages in smart data delivery.
Smart data information and communications By encouraging collaboration between
part of a northern ICT economy worth
Cybersecurity sector grew by 14.9%. organisations working across North East
specialisms, and supporting challenge-based
£12 billion competitions and skills exchanges, Data
for Growth will drive innovation and digital
FASTEST GROWING transformation across the economy.
TECH ECONOMY IN THE UK ••Enhanced incubator network and
29,000 strengthened infrastructure
IT & DIGITAL Adding to the network of established incubators
EMPLOYEES at Campus North, Sunderland Software City, One
Trinity Green and the Evolve Centre, new incubators
Digital specialisms include: and investment in digital infrastructure will be
developed at locations across the North East.
SOFTWARE DEVELOPMENT
CLOUD COMPUTING • SHARED SERVICES Example locations will include Science Central,
15,250 SYSTEMS DESIGN & COMMUNICATIONS Newcastle’s East Pilgrim Street, Cobalt in North
CREATIVE Tyneside, Holborn in South Tyneside, Gateshead Quays
INDUSTRIES BUILDING INFORMATION MODELLING
EMPLOYEES GAMES DESIGN AND DELIVERY and Aykley Heads in Durham, as well as university
developments including the Future Engineering
and Technology Hub at Northumbria University.
14
Our manufacturing challenges and opportunities
Medicines manufacturing The proximity of supply chains and innovation in
both products and manufacturing processes offers
The North East boasts over 5,600 employees
major opportunities for the region.
working in 145 companies in the medicines
manufacturing industry. Including the supply For the North East automotive industry, relationships
chain, there are around 7,750 employees in with key manufacturers and sector networks offer
200 companies. opportunities for supply chain investment.
95% of North East pharmaceutical production is The science base and existing innovation capability in low
Making the exported. In 2014, £1.3billion was exported, with
record numbers to the European Union.
carbon vehicles, fuels and energy, technologies and design,
create opportunities in the automotive and vehicle industry
North East’s future Medicines manufacturing in the region has built a
to develop smart and more sustainable manufacturing
processes, addressing cost and carbon challenges.
strong reputation for regulatory expertise, high
Automotive and medicines quality and a safe manufacturing record. Medicines manufacturing innovation and nationally
advanced manufacturing Supply chain linkages and ownership are
leading research in health technologies, coupled with
process innovation using sensor technology and
highly internationalised and a number of our
emerging electronics, strengthen the opportunities for
pharmaceutical sites are world leading in quality
the North East to respond to healthcare challenges
and unit cost of production.
such as medicines for our ageing population. These
Major players located here include Glaxo SmithKline, assets include national centres in emerging electronics
Merck Sharp & Dohme Limited, Aesica, Sterling and and formulation hosted by the Centre for Process
Across the North East, advanced manufacturing and engineering is globally focused Piramal Pharma. Innovation based at NETPark in Sedgefield.
with strong clusters in automotive and medicines manufacturing.
There is a successful SME base working closely Projects crucial to growing advanced manufacturing include:
Significant growth potential lies in international investment and local supply chains and
the availability of high level engineering and capability from design to manufacturing.
62,500 Key strengths: with these industrial partners and an increasingly
strong group of innovation assets in or close to the ••Automotive and Vehicles North East Enterprise Zone:
region in areas including formulation and biologics. Across the North East, the Enterprise Zone offers
We have development sites available and strong transport and logistics assets.
ADVANCED There are strong links to emerging assets through
a range of sites for investment into advanced
manufacturing. The Low Carbon Vehicle Corridor
MANUFACTURING the Medicines Manufacturing Industry Partnership. sites are arranged close to Nissan and offer good
Automotive manufacturing
EMPLOYEES connectivity to key transport routes
In the second half of 2015, Nissan, Hitachi and Reece Group announced (UK top five) Automotive ••International Advanced Manufacturing Park (IAMP):
IAMP has been designated by the Secretary of State as
cumulative investment of over £200m in the North East and advanced a ‘Nationally Significant Infrastructure Project’ (NSIP)
manufacturing exports have doubled since 2000 from £8.84 billion to and is part of the North East Enterprise Zone. The
120,000
£16.73 billion. project will generate around 10,000 new jobs
Nissan’s October 2016 decision to build the Qashqai and the X-Trail in
Sunderland cemented its position as a major employer in the region ••Advanced Manufacture Science Park (AMSP):
and will significantly boost the supply chain, despite uncertainties EMPLOYEES Sponsored by the North East Automotive Alliance,
IN WIDER Nissan, local authorities and education bodies, the
following Brexit.
The automotive cluster now employs over 30,000 people, higher than any
MANUFACTURING Medicines Science Park will underpin the innovation and skills
base providing a platform for testing and development
other UK region. The North East cluster impacts on a further 141,000 jobs of new technologies and delivery of training and
across the UK. education at all levels
The North East Automotive Alliance brings together world renowned
companies that include Nissan, Komatsu, Caterpillar and Cummins, and ••Centre for Sustainable Advanced Manufacturing:
supply chain companies including Calsonic Kansei, Gestamp-Tallent, Located on the AMSP, this will be a centre of excellence
Unipres, Vantec Europe, ZF-TRW, R-Tek and Sevcon.
Among the 510,000 vehicles and 325,000 engines produced in 2015,
50,000 STEM STUDENTS in advanced manufacturing sustainability and will
incentivise companies to integrate developments in
science, technology and management techniques into
the North East accounted for 26% of all electric vehicle production coming through our universities every year manufacturing practice
across Europe.
There is growing investment into research and development and new and ••Centre for Smart Packaging and Delivery of Medicines.
emerging technologies such as advanced propulsion and connected and Through partnership working with North East
autonomous vehicles. based pharmaceutical manufacturers, Medicines
Manufacturing Industry Partnership (MMIP) and the
The labour market has potential for an additional 10,000 jobs during the wider sector, this will focus on smart and intelligent
period of this plan, building on its manufacturing base and strengthening packaging, sensing and drug delivery.
research and innovation capability. Hitachi’s investment into rail offers
potential to broaden vehicle manufacturing in the region.
16National centres The International
Highest ranked
of excellence: Centre for Life
NHS TRUST
Health Quest
North East
Innovation in health
and life sciences
Ageing and age related diseases
The health innovation agenda is influenced by trends in government through its investment into the new Crucial initiatives include: in clinical
Personalised medicine 600 from35
global markets towards more personalised medicines National Innovation Centre on Ageing, providing the Formulation employees countries
and treatments, and the need to respond to the health basis for the development of an industrial cluster ••North East life sciences networking:
research studies
opportunities and challenges of an ageing population.
This network platform will strengthen North East in UK Emerging national centres in World leader in
••Through strengthened co-ordination, the North East
Innovation has the potential to improve treatment has the capability to develop a leading translation co-ordination and communication and focus on healthcare photonics and dementia stem cell technology
quality, promote cost effectiveness, and create new environment from drug discovery to drug delivery interventions to enhance the business and innovation
markets in global health care delivery. environment
••Our strong life sciences research can be a focus for
In addition to the advanced manufacturing cluster, our thriving the future with the potential to accelerate application ••Health Quest North East:
life science community includes capability across the drug of leading knowledge themes including diagnostics,
delivery supply chain, world leading health research, excellent genomics, photonics and social innovation. This challenge based project led by the ASHN and North
NHS healthcare and a vibrant SME base in medical devices, East LEP is focused on accelerating innovation delivery,
We have highly respected pharmacy schools at solving long standing North East health challenges and
medical technologies and testing and clinical trials.
Sunderland and Durham Universities (the Durham school developing new approaches, products and
We have centres of excellence in stem cell technology, will transfer to Newcastle in 2017). technologies specialisms
ageing and age-related diseases, personalised medicine, Newcastle, Sunderland and Durham universities
digital healthcare and biopharma manufacturing. have considerable research strengths in continuous ••National Dementia Institute:
pharmaceutical manufacturing. This will build on Newcastle University’s status
The North East is part of the Connected Health Cities
network, through the Academic Health Science Network as a European centre of excellence in dementia and
Opportunities lie with the Medicines Manufacturing
(AHSN). This seeks to integrate data across primary, healthy ageing.
Industry Partnership (MMIP), which could potentially
secondary, and social care, and to develop new ways benefit from the region’s science and national
to use this integrated data to strengthen healthcare translation facilities.
delivery to benefit patients and create new opportunities
for wealth creating applications. Recent investments through the Local Growth Fund and
other sources include:
The AHSN North East and Cumbria has pioneered the
Innovation Pathway to support the development and ••National Formulation Centre: Located at NETPark
commercialisation of innovative ideas, providing a unique in Sedgefield, the Centre for Process Innovation’s
opportunity for SMEs to access and benefit from the (CPI) £28m centre will provide facilities and expertise
healthcare system. to help companies to develop, prove, prototype and
scale up the next generation of formulated products
The recent North East Combined Authority report and processes
‘Health and wealth: closing the gap in the North East’
highlighted the importance of innovation across our ••National Centre for Health Care Photonics: Also to
health and social care system. be based at NETPark, this will open in 2017 and
support technologies which use light to diagnose
Our assets and opportunities
and treat medical conditions and illnesses
Partners are developing a strategic approach to growth,
built on three propositions: ••Newcastle Life Science Incubator: Based at
Science Central this will accommodate new growth
••Knowledge and research capabilities in ageing and businesses linked to science strengths, delivering
health. The North East was recently recognised by over 250 new jobs.
18Research and development in energy technologies
The UK faces challenges from high levels of energy use in business to ageing
and inefficient housing and levels of fuel poverty.
North East bodies have pioneered integrated district heating systems and
there is a developing national profile in emerging heat technology, drawing
from distinctive natural assets including deep geothermal energy, minewater
heat, biomass and Hydrogen.
Energy North East Network capacity in power supply is a significant challenge hampering new
business growth in many parts of the region, but the development of smart
grid technology is emerging as a particular opportunity.
Excellence in subsea, offshore Newcastle and Durham universities are both leading significant research and
and energy technologies industry facing activities including through the Institute for Sustainability and
the Durham Energy Institute respectively. Working with other partners, plans
to create a North East Energy Alliance will be brought forward.
The development of secure and sustainable supplies of with good transport links to regional and national markets. of more hazardous environments, for asset extension
energy is one of the most pressing challenges facing the and recycling and for new business opportunities in Important initiatives include:
UK. The Northern Powerhouse Independent Economic Firms, including GE Oil and Gas and Technip Umbilical decommissioning.
Review has identified a distinctive role for the North of Systems, have established dedicated innovation/ ••North East Enterprise Zone
England in the UK’s energy future. research and development centres locally. There is For offshore wind, there are specific areas of the Offering a range of sites for investment into advanced manufacturing,
a strong research and innovation focus among firms supply chain where we have strong assets including around the Blyth Estuary, sites build on the presence of the Offshore
Our region is home to a critical mass of successful, world- including Soil Machine Dynamics (SMD), Bel Valves, fabrication, process and product development including Renewable Energy Catapult with a focus on supporting businesses linked to
leading firms in subsea, offshore and energy technologies IHC Engineering Business and Subsea Innovation. The bigger turbines and floating wind/platforms and in offshore energy and marine engineering.
and a range of research and science strengths in Durham, Offshore Renewable Energy Catapult test centre at Blyth the operations and maintenance through vessels,
Newcastle and Northumbria Universities. provides the most comprehensive open-access research sensors and digital applications. Given pressures for Along the north bank of the Tyne three sites support the region’s wider
and test facilities globally for offshore renewable energy cost reduction in the offshore industry, our strengths in CORE (Centre for Offshore Wind and Renewable Engineering) status as a
One of six nationally designated Centres for Offshore and marine industries. smart data and satellite applications provide particular focus for business growth.
Renewable Engineering, our area has a range of access to opportunities for innovation.
UK continental shelf oil, gas and offshore wind areas and NOF Energy and Subsea UK, based in the region, provide ••Tyne Offshore Centre
proximity to the largest development zone, Dogger Bank. networking opportunities. Subsea North East was As the North of England strengthens its focus on energy The Tyne Offshore Centre, a collaboration between Newcastle University
created in 2006 as a leading cluster organisation. generation and energy systems, businesses operating in and British Engines, is a major research and hyperbaric testing facility
Our infrastructure includes excellent facilities at three offshore engineering will have opportunities to diversify located on the north bank of the Tyne sitting in close proximity to
deep water ports; Port of Blyth, Port of Tyne and Port of With challenging economic conditions for oil and gas into wider energy activities, for example in the nuclear offshore manufacturing and production businesses located on Tyneside.
Sunderland and a number of Enterprise Zone sites, each businesses, there are opportunities for development supply chain.
The building will enable the testing of offshore components to understand
their operational capacity under high pressures. It includes a major
investment into a 4.5 metre long, 2.5 metre diameter hyperbaric chamber
simulating the pressure of 4,500m of water – the largest commercially
available chamber of its kind in the world.
OVER 50 COMPANIES ••Business support
The oil and gas sector is fluctuating as a result of changes in oil price, but
with a combined our businesses have significant opportunities for diversification, in particular
into other energy sectors. New manufacturing support services will help
turnover of £1.5bn diversification and growth.
employ more than ••National Centre for Energy Systems Integration
The creation of the £20m National Centre for Energy Systems Integration
15,000 people (CESI) at Newcastle Science Central will bring together energy expertise
from across the world to work collaboratively on future networks for the
World leading in supply and demand for energy.
Led by Newcastle University and including experts from Durham,
OFFSHORE AND Heriot-Watt, Edinburgh and Sussex universities, the centre will be a
SUBSEA TECHNOLOGY national demonstrator project funded by the Engineering and Physical
Sciences Research Council (EPSRC) and Siemens with additional resources
from industry and academic partners.
20Education
Based on its share of employment, the education
sector is estimated to account for nearly 7% of total
North East LEP GVA and has seen growth over the last
10 years of around £700 million.
Our highly diverse education system includes four
Enabling services universities, who are anchor institutions to our local
economy and communities, providing a significant research
base and educating 82,000 students each year.
A growing and productive
The further education (FE) system includes ten colleges
service economy and a range of other providers including sixth forms and
private bodies. There are 1,300 schools in the region.
Education is experiencing rapid change and new
policies within higher education (HE) and FE aim to
strengthen the contribution of research and teaching
outputs to UK productivity.
For schools there has been substantial change in
the national policy context, and we are now likely to
see a more stable period after a number of years of
Three areas of the service economy were identified Financial, Professional and Business Services (FPBS) Transport and logistics structural change.
by the Northern Powerhouse economic review as key
enablers for growth. A strong flow of graduates from our universities Transport and logistics businesses are crucial enablers The key future focus is on standards, with the removal
sustains a high quality workforce and many companies of the wider North East economy, supporting both of plans to compel schools to change their governance
Each offers opportunities for new and higher have successfully diversified from one discipline and freight and passenger movement. models. There is also a clear objective to better align
productivity jobs in the North East. work across law, finance and consultancy. the education system with the local skills agenda and
Around 4,000 additional jobs have been created in labour market needs.
Leading specialists provide advice and consultancy to key the transport and logistics sector since 2014.
industries such as offshore energy and construction. Our region Changing funding arrangements continue to create
has a particular niche in hosting shared services and call centre This comprises about 4% of the business base, plus competitive challenges.
activities, which sustain significant jobs. a range of public providers.
The North East hosts There has been increased international connectivity
These developments will affect how schools engage
There are opportunities for growth in financial
key segments of the UK’s technology, where current businesses include the head through Newcastle International Airport, growth in
with students and within society.
activity through the sea ports, rail access from stations
£180 billion
office of Fintech innovation leaders Atom Bank and fast A number of demographic and labour market challenges
growing True Potential. in Newcastle, Sunderland and Durham and a range of require a co-ordinated response from the education system.
local businesses in the public transport system, freight
Disruption from digital technologies is already creating and private hire. Six capital projects have been supported through the
financial technology, banking, opportunities for new growth and an increase in demand Local Growth Fund to support enhanced skills supply,
insurance, securities dealing, for higher level technical and IT skills. However improvements to the region’s infrastructure and a range of university investments have aimed to build
are still needed as the economy changes, particularly higher level skills linked to economic change in the region.
fund management, management Continued delivery of quality office space with excellent for those in logistics.
consultancy, legal services, digital connectivity will target new and fast growing These changes also provide opportunities for strengthened
financial technology companies and support digital Continued business growth will come from the collaboration in terms of delivery. The Area Based
and accounting services adaptation in existing businesses. development of key locations such as Newcastle Review established by government aims to understand
International Airport and Port of Tyne. opportunities and challenges currently facing FE.
sectors Key activities Logistics businesses report significant skills challenges The SEP refresh has highlighted the importance of these
••Skills retention will be an important focus and as a result of competition for labour and an ageing issues being considered collaboratively across the whole
can enhance the strength of FPBS businesses workforce. education and skills system from early years to HE.
••Invest North East England will drive inward Supporting skills acquisition and adoption of new
investment activity from professional business models will help maintain levels of growth. Key activities
services companies
•• Strengthened dialogue across the education system,
There are ••Business engagement will identify opportunities
based on industrial specialisms, promote
through the skills board, including networks and
businesses, will promote collaborative responses
Key activities
17,645
innovation and support fast growth services in to labour market challenges and support
financial technology ••Key sites will continue to be developed,
innovation in education organisations
ensuring that key transport hubs and
•• Local development will focus on excellent facilities development sites facilitate business growth ••New skills capital projects in schools, colleges
and infrastructure to encourage specialist clusters and higher education, including University
••The logistics sector will be a focus for the
FPBS companies in the region. ••Business support services will encourage skills programme.
Technology College (UTC) models, will be identified
digitisation across the economy to improve and delivered to increase the range of facilities
competitiveness. available in the region to support key specialisms.
22North East LEP
Enterprise Zone sites
1
Port of Berwick Round one sites
A place that works Berwick-upon-Tweed 1 Blyth Estuary
2 North Bank of the Tyne
A focus for investment,
3 A19 Corridor Sunderland
innovation and inclusion
Round two sites
1 Ramparts Business Park, Berwick
2 Fairmoor, Morpeth
A1
3 Follingsby South, Gateshead
4 North Bank of the Tyne Extension, Newcastle
The North East is constantly changing. Across the region A range of established sites such as Team Valley Alnwick 5 Holborn Riverside Sites 1 & 2, South Tyneside
there is support for development to deliver employment, Industrial Estate and Cobalt Business Park offer a host of 6 Newcastle International Airport Business Park, Newcastle
industry and opportunities for the future, while also facilities. Through our Enterprise Zone, further regional
guarding our culture, environment and communities. sites such as Holborn in South Tyneside, will offer 7 Ashwood Business Park, Ashington
opportunities for clustering to deliver strengthened
Our people are resilient to cycles of change. Historic towns economic outcomes for different parts of the economy.
8 Port of Sunderland, Sunderland and South Tyneside
and cities now provide centres for international culture, Targeted programmes will support more facilities for 9 International Advanced Manufacturing Park
education, services and housing. Former industrial sites incubation and business growth.
have been regenerated to provide offices and country 10 Hawthorn Prestige Business Park, Seaham
parks. Our riverside staithes now host new communities.
The rural hinterland boasts scores of historic sites which Key activities
are now part of a vibrant tourism economy. Ashington
North East Enterprise Zones: Since April
The objectives set out in this plan will require ongoing 2012, Enterprise Zone sites have focused on
2 7
change to accommodate new and growing businesses manufacturing clusters on sites in ten locations Morpeth Port of Blyth
and a growing population, in particular: close to skills and transport with accelerated 1 Blyth
planning processes and additional benefits. From A68
••Industrial clusters and the service economy will need
April 2017, new locations for energy development
sites and property to enable growth around urban
and rural business growth will be marketed.
centres and key locations 6
NewcastleGateshead Accelerated Development Newcastle Airport North Shields
••Regeneration projects in cities and town centres will
Zone (ADZ): Regenerating five sites in the urban NEWCASTLE 2 Port of Tyne
improve the environment for business investment. In
core, the ADZ aims to accelerate growth of UPON TYNE 5 South Shields
rural areas and small towns local business centres and
Science Central, close to Newcastle University; A69 Hexham 4
hubs will support business growth
the Stephenson Quarter and Central Station, a GATESHEAD 3 Port of Sunderland
3
••Ensuring access to new jobs will require new patterns key office district; East Pilgrim Street in the central 9 8
of urban development and improved transport links business district; and Gateshead Quays and Baltic SUNDERLAND
••Continuing investment into the digital infrastructure Business Quarter - mixed-use sites to include an Consett
will be needed to facilitate access to markets and to international convention centre
facilitate new forms of digital delivery Sunderland and South Tyneside City Deal:
Seaham Harbour
••Housing development will be needed to respond to the In addition to supporting investment in the A68 10 Railway
growing number and more diverse households. automotive industry, the City Deal highlights DURHAM
plans to develop a Central Business District Motorway
To support this, planning barriers will need to be addressed on the former Vaux Brewery site in the centre
BISHOP Key road
to ensure that our places work and are well connected. of Sunderland AUCKLAND
A19
Strategic local regeneration schemes: These are Enterprise Zone
Quality environments for business A1 (M)
being brought forward by local partners to renew Port
Strong industrial clusters increasingly demand proximity local town centres across the region, creating
of supply chains and effective logistics. Digital and a focus for investment and new jobs for local Airport
Durham Tees
business services seek quality offices and a well- residents. Examples include South Shields 365 Valley Airport
networked environment. Start up and scale up business in South Tyneside, the development of Ashington
communities need a range of incubators, laboratories town centre and the Durham riverside renewal.
and managed workspace.
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