North East Local Enterprise Partnership reaction to ONS regional labour market statistics
The North East Local Enterprise Partnership’s (North East LEP) Strategy and Policy Director, Richard Baker, has commented on today’s regional labour market statistics, released by the Office for National Statistics (ONS).
“As we mark the anniversary of the first lockdown, today’s data release is a timely reminder of the changes which COVID-19 has meant for our labour market. It provides the latest official data which includes regional employment information for the three months up to and including January 2021 and also annual comparisons.
“In the most recent months, the headline data has been stable. The employment rate in the North East region, which includes the North East and Tees Valley LEP areas, remains the lowest in England at 71.3 per cent, 0.1 percentage points higher than in the last quarter but 0.4 percentage points down on a year ago.
“The region has the second highest unemployment rate (6.2 per cent of the economically active) and the highest proportion of working age people who are economically inactive (23.8 per cent). Almost 30,000 workers in the region have been made redundant during the past year.
“However, some of the recent impact of COVID-19 has been masked by an increase in the use of furlough in the region. Over 114,000 North East employments were furloughed at the end of January, more than double the total of three months earlier. Most furloughed workers continue to be classified as employed in the official statistics.
“The impact on different groups in our population has been different. Younger people have experienced particular challenges both in employment and training and there have also been different patterns in the impact for men and women in the past year. The number of unemployed women has increased by 14 per cent, while male unemployment is lower (by about 8 per cent). Almost 52 per cent of furloughed workers in the North East at the end of January were female.
“The progress we are seeing towards the lifting of lockdown restrictions offers hope for the thousands of businesses unable to trade. Support for these businesses remaining under restrictions needs to continue.
“The North East LEP will continue to work with government as we look to drive forward our economy and address some of the key challenges which COVID-19 has created in our region.”
Manchester’s skyline is often used to illustrate how well the economy is performing in the North West. The sight of tower cranes and new buildings appearing across the city suggests a high level of confidence from inward investors, and a vibrant, growing business community.
The construction industry can be a good indicator of a region’s economic health, which is why there has been so much focus on infrastructure and building back better from the coronavirus pandemic.
During the first national lockdown, the construction sector was one of the few areas of industry able to fully continue working. Government further bolstered the sector by investing millions of pounds in supporting infrastructure projects across the UK, including here in the North East, through the Getting Building Fund.
A booming construction sector gives confidence to the business community, particularly startups and SMEs. It encourages businesses to continue to invest in staff, which is vital in helping retain skills and talent in the region.
The UK’s exit from the EU has brought about new labour regulations that if not managed correctly, may result in a shortage of skills in some areas of the country. At a time when we’re looking to recover quickly from the coronavirus pandemic, it’s important we don’t develop a regional cold spot in terms of skills and labour.
The construction industry in the UK accounts for 10% of total UK employment – approximately three million jobs.* It also supports a wider ecosystem including delivery partners, supply chains – even coffee shops that serve workers on their lunch breaks. And it doesn’t stop there. The construction industry is the catalyst for creating new jobs in the longer term too, be that through new office spaces, business parks, enterprise zones, etc.
Cities like Manchester, and Leeds have gained the confidence of investors and the business community. That’s reflected in the amount of investment in new infrastructure projects across both destinations. If we’re going to compete with that we must maintain a good base of capital projects in the region and build back from the coronavirus pandemic.
There are already some fantastic examples of regeneration in North East England. Newcastle Helix has helped grow the region’s health and life science sector by creating an environment where academia and business can collaborate and drive forward innovations in data science, urban science and life science.
In Newcastle upon Tyne, work is beginning at pace on the transformation of East Pilgrim Street. The £100m project will introduce new offices, bars, restaurants, car parks, and housing in the city centre. The first phase of the project will see the creation of a new landmark, 14-storey, Grade A office building.
Across the river in Gateshead, the £290m NewcastleGateshead Quays regeneration scheme is expected to create around 2,000 new jobs in the North East and provide a £60m annual boost to the local economy.
Projects of this scale and ambition have increased confidence in the North East, resulting in more inward investment and more job creation, which maintains and, in some cases, grows those important skills.
The focus of the North East Local Enterprise Partnership on investment and infrastructure is at the heart of the region’s Strategic Economic Plan. Moving forward, we need to continue the successful delivery of funding programmes in the North East – including the Local Growth Fund. We also need to develop a regional project pipeline and support SMEs in the North East to bid for local work.
Earlier this year the North East COVID-19 Economic Response Group – which comprises the North East LEP, CBI, North of Tyne and North East Combined Authorities, the region’s universities, with the support of industry – submitted its North East Recovery and Renewal Deal to government, asking for a £2.8bn investment to support the North East’s economic recovery from COVID-19.
Building infrastructure to lead transformation and encourage future investment is a key theme in the deal. It is this that will help the region bounce back from the coronavirus pandemic and support future growth and investment in the North East.
Below is a case study about Newcastle University’s START UP offer, with a focus on the impact student and graduate businesses it supports are having within the region, and how they are responding to the COVID-19 crisis.
Newcastle University is ranked Top 5 in the UK for graduate entrepreneurship based on start-up turnover and investment raised. Based on average investment per start-up, the University is ranked Top 10 in the UK for scalable graduate start-ups and has generated the most investable graduate start-ups in the North East.
START UP is an equity-free support system for Newcastle University students and graduates up to three years and includes START UP Founderships, a pre-accelerator programme to ready the individual and their businesses for market entry, investment and success.
There are currently 203 START UP-supported businesses trading with a combined annual turnover of close to £60 million. Between them, they’ve raised over £19 million in external investment, won national and global awards and created 695 full-time equivalent jobs.
*All rankings and statistics from HE-BCI Survey 2018-19.
In September 2020, Equiwatt raised over £300,000 to roll-out its innovative, energy-efficient app and create four new jobs in Newcastle. A month prior, Tea Ventures Ltd (NovelTea) welcomed 1,000 investors onboard as part of a crowdfund campaign that raised £577,000 to advance its plans to break into the US market, and in December, gained a further £1.4M investment for expansion and job creation.
Many of the START UP founders are persevering or finding ways to pivot despite challenges posed by the COVID-19 crisis. Some have received grant support through Newcastle University’s partnership with Santander Universities UK to help them survive and thrive in 2020, and others are applying to a newly launched fund of £40,000.
“Last year with Santander Universities, we launched a Covid-19 Fund to help our START UP community adapt in response to the global crisis, supporting some businesses to scale in order to meet new demand. This new Fund is about stimulating and supporting the next wave of entrepreneurs and changemakers who will have a critical role to play in our economic and social recovery” said Claire Adamson, START UP Manager, Newcastle University. “It is also about making visible and celebrating the individuals joining the growing community of Newcastle University students and graduates who have created their own graduate jobs as well as employment opportunities for others”, she added.
Santander Universities has been in partnership with Newcastle University since 2009 and has provided close to £1.7M to the University, with £189k appointed to enterprise activities.
Matt Hutnell, Director, Santander Universities, says: “Santander is committed to supporting higher education as well as local communities across the UK. We’re proud of our partnership with Newcastle University and we’re delighted to support their new Start Up Fund which will enable many more budding entrepreneurs to thrive, particularly during this challenging time.”
North East Local Enterprise Partnership reaction to ONS regional labour market statistics
The North East Local Enterprise Partnership’s (North East LEP) Strategy and Policy Director, Richard Baker, has commented on today’s regional labour market statistics, released by the Office for National Statistics (ONS).
“Today’s figures continue to demonstrate the impact of COVID-19 on our economy with a continuing decrease in employment and a rise in the number of people claiming unemployment related benefits.
“The decision to extend the furlough scheme will protect many jobs for the future. However, it remains an uncertain time for businesses as a result of Covid controls and the need to continue to adapt to new processes following the Trade Deal with the European Union.
“It is essential that government continues to support the economy through the pandemic and invests to support the proposals in our COVID-19 Recovery Plan to enable us to drive forward our region’s recovery.
“The data released today covers the three-month period to November 2020. Employment continued to decrease during this time, both nationally and in the North East. The employment rate for the North East region, including the North East LEP and the Tees Valley LEP areas, was the lowest in England at 71.2 per cent. Both the unemployment rate and the number of working age people outside the labour market were much higher than they were between March and May 2020. The number of people being made redundant was at its highest level since 2009.
“In the North East LEP area, the number of people claiming unemployment-related benefits has increased by over 31,000 since March, with rates at 10 per cent in some areas. Employment in the region has fallen in most age groups, but the largest impact appears to have been on those aged under 25 and among 50 to 64-year-olds.
“These statistics include the November lockdown period but do not include the impact of the restrictions since Christmas.
“Strategic leadership and a strong partnership with government is more critical than ever – we will work closely with government to ensure that support for businesses is reflective of the need of our region.”
In conversation with Dr. Phil Budden, senior lecturer at MIT’s School of Management, about the MIT REAP program
The North East LEP and key partners are currently participating in the prestigious Regional Entrepreneurship Acceleration Program (REAP) led by MIT. Here Dr. Phil Budden, senior lecturer at MIT’s School of Management, tells us more and explains why it’s important for the region.
Please can you explain what the MIT Regional Entrepreneurship Acceleration Program (REAP) is and how it came about?
The professors who founded the MIT REAP program were interested in helping regions understand how to harness their innovation, create jobs locally, and make a real difference. This was in response to the recession of 2009/10 when lots of regional leaders around the world were thinking about how to build back their economies.
MIT REAP was launched as a two-year program in 2012 to answer these sorts of questions and we were pleased to welcome teams from Scotland and London in the early cohorts. When the MIT REAP program created significant amounts of international interest – from Israel, Saudi Arabia, Japan and China to West Africa and Latin America – I became involved in a faculty and diplomat’s role.
Almost ten years later, the MIT REAP program is going from strength to strength with teams from around the world and we believe we are going to face similar needs in the 2020s to those we saw in 2010. We already have regions and organisations asking how to rebuild and encourage innovation and entrepreneurship: this time we are focusing on inclusivity too.
As a Brit on the team, I’m delighted that we have now created a ‘lite’ version of the global MIT REAP to focus on the UK. This pilot runs for just a year and is focused solely on the role that LEPs in England can play to convene stakeholders and collaborate to create regional economies that can bounce back and flourish.
The program aims to help regions foster an evidence-based, practical approach to strengthening innovation-driven entrepreneurial ecosystems around the world. What do you mean by the word ‘ecosystem’ and why is cross-sector/multi-stakeholder collaboration so important in making economic conditions better?
One of the words that MIT uses is ‘ecosystems’ in order to convey the ways in which we see innovation happening in the world.
In an ecosystem, which is a very organic concept, there are a variety of actors leading to a multi-stakeholder model, with roles for the government, local enterprise partnerships, large corporations, universities and entrepreneurs. These aren’t always the roles they think they should play but we help them understand their ecosystem roles.
Critically, we ask the entrepreneurs – as this is where our main focus lies – what they need to be successful with their enterprises. To thrive, regions need a spectrum of entrepreneurs, from those who form micro to small SMEs, often the backbone of a regional economy, through to the high-growth, high-tech innovation-driven enterprises, such as those which might spin out from universities.
All of these voices need to be heard, and part of the magic of MIT REAP is this cross-stakeholder discussion. Ultimately, no single organisation is in charge of the ecosystem, and no one individual has all the answers.
The North East LEP is one of six sub-regions in England chosen for the MIT REAP ‘lite’ pilot. How does this differ to the usual two-year learning engagement with MIT?
As a Brit, I was very keen to bring the insights of the MIT REAP Global Program back to the motherland in a way that we could convey the key frameworks and focus on entrepreneurial action, but in a shorter timeframe. This is how the MIT REAP-UK ‘lite’ pilot, supported by the Department for Business, Energy and Industrial Strategy (BEIS), was born.
The partners of choice are ten LEPS across England which form the six teams taking part, with the North East LEP a leading player of one of these teams. We are looking to see how much we can achieve in one year rather than two, given the challenges everyone has been facing in 2020, and the need to start re-building in 2021.
What’s the vision for the program once the pilot ends in England and what outcomes will the program achieve?
The key outcomes of the UK pilot will be the innovation and entrepreneurship impacts that will result from the action plans that the regional teams devise and implement. MIT is all about real world impact and so we judge our efforts on how useful the LEP teams have found the frameworks and our advice.
Early signs are teams like the North East LEP’s have found the multi-stakeholder evidence-based approach useful to find a strategy that plays to the region’s strengths and will deliver results in the near term, which is what we all hope for in 2021. We’ve been really impressed by their work and approach so far.
New business survey launched to assess impact of EU exit and coronavirus pandemic in the North East
The beginning of 2021 has been a challenging start to the year for many businesses. England entered another national lockdown at the end of December, and the UK’s exit from the EU on 31 December brought new rules and regulations impacting all businesses that operate in the European Union.
Because of this we have launched a brand new survey on the North East Growth Hub to find out how our region’s businesses have been impacted by the UK’s new trading agreement with the EU, and the ongoing coronavirus pandemic. We want to find out what preparations, planning and changes organisations have been able to make during this very difficult time.
All the information shared with us will be fed back to government, ensuring North East businesses get the help and support they need.
One of the main things we want to understand is how the UK’s exit from the EU – and its new trading agreement with the bloc – has affected businesses in the North East. We know from previous surveys that many regional businesses had not prepared for the new rules, which came into force on 01 January this year. We’d like to know what the impact has been in areas such as customs procedures, paperwork relating to imports and exports, supply chain disruption, and data storage and transfer. We are also keen to know if this has opened up any new opportunities for businesses.
The coronavirus pandemic continues to be the main concern for most businesses in the North East. A large proportion of our region’s businesses have been forced to close because of the new national lockdown, and business owners have to – once again – look to new, innovative ways to engage with their customers.
Through this new survey we’d like to understand what measures businesses have taken to shield some of the impact of COVID-19; whether that’s been through stockpiling, furloughing staff, adopting new technologies, or introducing new products and services.
We’d also like to know if businesses plan to retain any of the changes they’ve made after we emerge from the pandemic, for example, remote working, or a greater focus on online retail.
Businesses can also let us know if they have benefitted from any of the government’s financial interventions, including the Coronavirus Job Retention Scheme, Bounce Back Loans, and grant payments. Importantly, we’d like to know from businesses if they think some of these measures should continue.
The final part of the survey focuses on business resilience. We know many North East businesses have made huge changes to adapt to our current situation, and we’d like to know the type of measures businesses have introduced. It could be a greater investment in IT and digital, more focus on crisis planning, investing in staff training, or introducing e-commerce. Whatever changes businesses have made, we’d like to know what they are and how effective they’ve been.
All the information we gather through this new survey will help us deliver the right support, to the right businesses, at the right time. The survey takes approximately 10 minutes to complete and all the information supplied will be treated confidentially.
Thank you in advance for sharing your feedback. If you have any questions about the survey you can contact us by emailing [email protected].
And do please remember that North East businesses looking for free, impartial, one-to-one business support and advice can book an appointment with our Growth Hub Connectors via www.northeastgrowthhub.co.uk. The Growth Hub Connect team can guide you through the business support, and finance and funding available to help your business thrive in 2021.
By Emma Ward, Research and Evaluation Manager at the North East Local Enterprise Partnership.
Below is a case study from Teesside University about its support for mental health platform, Discova, which aims to help thousands of UK employees overcome problems affecting their mental health and wellbeing.
Discova – an innovative digital learning and support platform that helps company leaders and their employees battle common mental health issues via peer-to-peer support – was set up by North East Young Entrepreneur of the Year, Lizzy Hodcroft, and entrepreneur Emma Reilly.
Staff from Teesside University worked with Lizzy and Emma to help Discova raise £300,000 from government’s Innovate UK programme to accelerate the company’s plans for growth and expansion.
Innovation Manager at Teesside University, Omar Al-Janabi, provided innovation support through the Enterprise Europe Network’s Innovate2Succeed programme. He also introduced Discova to Komodo – a Tyneside web development and app agency – and authored the collaborative bid to Innovate UK.
Working alongside Komodo, Discova plans to launch its pioneering AI-assisted app in the next 12 months, further develop its online technology, invest in new staff, and strike up partnerships with like-minded businesses.
Discova is an anonymous platform that allows employees suffering from common mental health issues to seek help from others who have experienced similar problems.
Laura Woods, Director of Academic Enterprise at Teesside University, said: “We are delighted to have been able to help Discova, particularly as Innovate UK receives more than 1,800 applications for funding per annum, only 2% of which are successful.
“Discova offer an essential service which makes a real impact on people’s lives and it is fantastic that they now have the opportunity to expand this vital support.”
North East LEP confirms North East Free Trade Zone bid
The North East will be submitting a Free Trade Zone bid designed to drive forward the regional economy, protect and enhance trade and investment potential and regenerate key sites in response to Government’s Free Ports bidding prospectus, announced this week.
Lucy Winskell, chair of the North East Local Enterprise Partnership (LEP), confirmed that a collaborative bid is being prepared following months of preparatory work with a range of partners including the Port of Blyth, Port of Sunderland, Port of Tyne, Newcastle International Airport, North East and North of Tyne Combined Authorities, Business Durham, the CBI, the North East England Chamber of Commerce, University of Sunderland, Durham University, Newcastle University, Northumbria University, The Offshore Energy Catapult and NEXUS.
Lucy said: “Freeports offer the potential to generate new employment, revitalise our coastal areas and significantly boost the local economy. Over the past few months, we have been working very closely with a range of partners to prepare the ground for a collaborative bid which underlines the ambition and determination of the region to succeed.
“A North East Free Trade Zone bid will give us the opportunity to build on our industrial and logistics assets, support our supply chains and clusters and demonstrate our range of digital and innovation capabilities.
“The Government is committed to levelling up the UK economy with a focus on strengthening the economies of key industrial heartlands, such as the North East. This proposal will shore up some of our most disadvantaged communities. The region is working together to seize this opportunity to show why we are deserving of Freeport status and how it will strengthen our position on the national and international stage.”
What is electrification, and why is this change in energy production and usage important for the North East?
“Electrification is a key part of the government’s plan to bring all greenhouse gas emissions to net zero by 2050.
“Prime Minister Boris Johnson today (18 November) announced a ban on the sale of new petrol and diesel cars and vans from 2030, and hybrid vehicles from 2035, signalling the government’s commitment to its Net Zero 2050 strategy.
“Today, the North East is leading the UK’s electrification agenda and is best placed to capitalise on the global electrification mega trend driven by regulatory compliance for CO2 reduction and the UK’s Net Zero 2050 strategy. This is thanks to Nissan’s foresight to invest in the Nissan LEAF and Battery Plant production at its Sunderland Plant back in 2010, with production starting in 2013; and innovative SMEs such as AVID Technology and Hyperdrive Innovation driving the early electrification activity.”
“Electrification – in simple terms – is the transition of vehicle powertrains from petrol and diesel, to powertrains that use electricity.
“It represents a huge opportunity for the North East because of the established sectors we have in automotive and energy, as well as the skills and expertise we have around the tech involved in electric vehicle powertrains.”
Paul, you are the Chief Executive of the North East Automotive Alliance (NEAA) and Ryan, you are the founder of AVID Technology, which manufactures components for electric vehicles. Is the region well placed to capitalise on electrification? Why?
“Quite simply it’s our inherent capabilities. We are home to Europe’s most successful EV, the Nissan LEAF; to Europe’s first giga battery manufacturing facility, one of three EV battery manufacturing facilities in the North East; and we have the full power electronics, motors and drives (PEMD) capability here in the region – no other region in the UK can lay claim to that. In addition, the former Regional Development Agency, ONE NorthEast, invested in charging infrastructure and this investment has continued as Sunderland is home to the UK’s first superfast charging station, which opened in April 2019. In addition, 17 of the 21 automotive R&D sites across the region are focussed on electrification.
“We’re the only region in the country with these kinds of credentials. From this solid base we must continue to develop and build our capability and drive forward the electric agenda in the UK.”
“As a region we have real strengths in vehicle manufacturing, and a lot of talent and expertise in areas like motor controls, electric controls etc.
“The automotive industry is undergoing a huge transition because of electrification and we need to look at how we build capacity across the sector.
“The North East is well placed to respond because we already have one of the most established manufacturing sectors around electric vehicles in the world.
“There’s work to do to make sure we make the most of the transition to electrification and the opportunities it provides, but we already have a significant head start.”
How does electrification form part of the North East LEP’s wider decarbonisation and sustainability agenda?
“Vehicle omissions are one of the biggest contributors to CO2, so the electrification of the sector would have a huge impact. We see the automotive sector being an early adopter, with other sectors like construction, manufacturing, and rail following.
“Electrification is a huge opportunity to address decarbonisation and the climate emergency.”
“A big part of the North East Strategic Economic Plan is focussed on advanced manufacturing, and electrification has a major role to play in that, particularly in sectors like automotive, transport and aerospace.
“The North East used to be based around heavy industry, where as now the new industries we’re growing are focussed around renewable energy, the production of machinery for renewable power, and clean transportation. The North East is a trailblazer in that way.”
What are your plans for North East electrification and what kind of timescales are we looking at?
“It’s happening now, programmes like EV North and Driving the Electric Revolution are driving the agenda for our vibrant North East electrification community. Through EV North, our members have set out their strategy and vision for our future.
“However, electrification and the technology going into future vehicles open up the market for non-automotive companies. We need to raise awareness of these opportunities and support companies to enter the market to grow our regional capability and help businesses diversify and become more resilient.”
“My company, AVID Technology, has been involved in vehicle electrification for the past 15 years. Electrification has reached a tipping point in that demand from the market has really grown in recent years. It’s important that, as a company, we’re in the right place to ride that wave and meet the market demand.
“Looking wider, along with Paul and the North East LEP, I’m really passionate about growing the ecosystem in the North East for the benefit of all the businesses working in relevant sectors. I want to help build the talent pool, grow the cluster, and see our region at the forefront of the sector.
“The new legislation banning the sale of new petrol, diesel and hybrid cars from 2035 and the climate change crisis have had a combined impact. Things have to change and we must address air quality and CO2 emissions. The answer is electrification.
“The legislation has actually made it easier for manufacturers to invest in electrification. Before, many weren’t willing to take the risk and only a handful were focussing on R&D. What the legislation has done is level the playing field, it has de-risked electrification for OEMs (original equipment manufacturer) and there is now a lot of investment in electric powertrain development.”
How will this help with the region’s recovery post COVID-19?
“Electrification is a huge market opportunity for the North East. Forecasts just for the PEMD market suggest growth of around £5bn by 2025, largely driven by the automotive sector, but expanding to more than £80bn by 2050 as electrification becomes commonplace in other sectors.
“We do need to consider the impact of our exit from the EU, particularly around rules of origin which drives requirements for UK content. There is, however, a lot strategic focus across the UK on supply chain development from UK Government, the Automotive Council, SMMT, the North East LEP, the NEAA and others.”
“We need to build a robust regional economy that’s based on creating things – high value-added products that have a long-term sustainable future.
“We need to be encouraging school children to have an interest in STEM subjects and bringing the right inward investments into the region. We also need to create the right environment for start-ups, and do all of this with a long-term view.
“We have to work to the coherent, long-term vision set out in the North East Strategic Economic Plan and help transform the region to high value-added, high tech jobs in engineering and design, low carbon technologies, renewable energy and electrification.”
How can people get involved and find out more?
“If anyone would like a conversation about the electrification agenda, please contact the team at the North East Automotive Alliance (NEAA). We really want to support companies to enter the market and contribute to its growth in the North East, and we have support programmes funded through ERDF to support SMEs on this too.”