Responding to Powerhouse 2050: The North’s Routemap for Productivity

Richard Baker

Richard Baker, Head of Strategy and Policy at the North East LEP, comments on the Northern Powerhouse Partnership, Powerhouse 2050, report.

On Friday, the Northern Powerhouse Partnership (NPP) published their report Powerhouse 2050: The North’s Routemap for Productivity, which sets out proposals for driving forward four areas of Northern Industrial excellence.

The report has been produced following a summer of discussion and engagement with economic partners from across the north and the proposals aim to show how, with government funding and business support, the North of England can make a step change in economic performance to rival the best countries and regions in the world.

The NPP highlight Advanced Manufacturing & Materials, Energy, Digital Technology and Health Innovation as the areas of the economy in which the North of England is seen to have the opportunity to achieve the greatest global competitive advantage. They set out an ambitious vision to create an additional 850,000 jobs by 2050 and contribute an extra £97bn to the UK economy, and call for collaboration between the Government, Northern Leaders and the business community to transform the North and truly unlock its potential.

Long term opportunity

The proposals are, of course, strongly welcomed by the North East LEP. We share with LEPs and other partners across the North of England a determination to rebalance the UK economy, ensuring that we deliver not just more, but better opportunities for our residents and our businesses and strengthen our role in the UK. As we move towards a UK Industrial Strategy and contemplate the challenges and opportunities created by Brexit this is a ‘must do’ for the UK as a whole.

We welcome the recognition of the many assets we have here in the North East and the synergies between the areas of opportunity identified in the report and the proposals we set out in the North East Strategic Economic Plan (SEP) refreshed earlier this year.

And the proposed collaborative approach mirrors that which we believe to be central to the successful delivery of the SEP – as we work to foster strong partnerships between the business community and leaders from National and Local government and education to deliver More and Better jobs. We are aiming to strengthen our work with other areas across the North and other parts of the UK where this collaboration can deliver more by pooling our strengths and our voice.

Encouragement to do more

We should take encouragement from some of the central findings of the report. The NPP draw from a significant piece of independent economic analysis which was undertaken for Transport for the North last year to underpin their proposals.

The analysis looked at which parts of the Northern economy had the most potential to drive long term growth and improved productivity. It modeled the impact which could be delivered from the kind of determined and focused long term investment set out in the report. Looking to the long term, we should note that of the 11 LEP areas of the North of England, it is the North East which is projected to deliver the highest rate of gross value added and productivity growth in the second quarter of the century (at 2.9% GVA and 2.2% GVA per head per annum compared with 2.5% and 1.8% respectively for the whole of the North).

This data should prompt us to renew our determination to press on with the delivery of the North East SEP, to ensure that our areas of opportunity can deliver this long term growth for our region, as well as driving our own more immediate targets of 100,000 more jobs between 2014 and 2024, with 70% of them being ‘better’ jobs.

This work is already underway

The proposals identified in Powerhouse 2050 draw from and complement the work being delivered through the SEP by partners across the North East which aims to maximize the impact of our four key areas of opportunity as well as our key enabling service sectors and investment in our business environment and key infrastructure:

Our digital technological capabilities, which boast specialisms in data analytics, virtual reality, smart data and cyber security.
World leading businesses in offshore and subsea technology working in a number of sectors including oil and gas and offshore renewables and a range of new energy technologies coming on stream which can increase our contribution to the UK’s energy economy.

Strengths in globally focused advanced manufacturing with strong clusters in automotive and medicines. As the NPP recognise, there is significant growth potential available through inward investment, supply chain development and exports in these sectors and new opportunities to embed a focus on innovation and higher skills.

New innovation centres in healthcare and life-sciences, including national centres of excellence in ageing, smart data formulation and healthcare photonics are now coming on stream and will create opportunities to take advantage of world class science, innovative small businesses and a research focused health care system.

Opportunities for significant growth in ‘better’ jobs in areas, including financial and professional services and education and through logistics.

Opportunities to do more

Powerhouse 2050: The North’s Routemap for Productivity clearly recognises the North East’s potential, and supports new proposals for investment here in the North East including the recently awarded National Innovation Centre for Data, supporting the recently announced 5G testbed programme and new North East proposals to focus on a new national Centre for Smart Medicine and a Centre for Sustainable Advanced Manufacturing (CESAM). Alongside key investments such as the Metro replacement programme, critical to regional labour market mobility, and a range of other key infrastructure developments across the region, there is a strong pipeline in place on which to build our future.