In conversation about the opportunities electrification offers the North East

In conversation with Paul Butler, Chief Executive of the North East Automotive Alliance (NEAA); and Ryan Maughan, founder and MD of AVID Technology, about the opportunities electrification offers the North East.

What is electrification, and why is this change in energy production and usage important for the North East?

Paul Butler:

“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.”

Ryan Maughan:

“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?

Paul Butler:

“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.”

Ryan Maughan:

“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?

Paul Butler:

“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.”

Ryan Maughan:

“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?

Paul Butler:

“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.”

Ryan Maughan:

“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?

Paul Butler:

“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.”

Ryan Maughan:

“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?

Paul Butler:

“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.”

Universities support North East’s economic recovery: Innovation Northumbria: Incubator

Universities have a vital role to play in helping the North East economy recover from the coronavirus pandemic.

The work being delivered by North East universities is supporting new and existing businesses to innovate and grow, and shaping and supporting a more sustainable and inclusive economy.

Durham University, Newcastle University, Northumbria University, University of Sunderland and Teesside University are all members of the North East COVID-19 Economic Response Group, which was established by the North East Local Enterprise Partnership at the beginning of the coronavirus pandemic to provide business resilience and ensure a collective response to the economic impact of COVID-19 on the North East economy.

Below is a case study from Northumbria University about it’s new Innovation Northumbria: Incubator, which supports its flourishing community of student and graduate start-ups, and provides opportunities for business partners to offer mentoring and financial backing.

Opened in October 2019 next to the University’s main campus, the state-of the-art facility provides high-quality support for student and graduate entrepreneurs, giving them the best possible opportunity to establish and grow thriving businesses.

The initiative has already received financial support from Santander Universities UK, Sir James Knott Trust, North East Times Magazine, Space Group and the North East LEP.

Northumbria is looking for additional support to set up an Enterprise Club, where members can offer pro-bono advice and expertise, and an Enterprise Fund through which they can pledge financial support to help fledgling start-ups develop proof-of-concept and feasibility business plans.

The initiative reinforces Northumbria’s reputation as a university that champions enterprise and innovation through its teaching, and the support it offers start-ups through the Student and Graduate Enterprise Service. Pioneering courses such as Entrepreneurial Business Management – where students run their own businesses – and the student-led consultancy service delivered on the Business Clinic programme, have also established Northumbria as a leader in entrepreneurial education.

The University has been ranked in the top three for graduate start-ups in the UK – based on estimated turnover – since 2011, including five years in first place. Businesses developed by Northumbria graduates had an estimated turnover on £84 million in 2018/19.

Since 2009, Northumbria has supported the development of nearly 300 new businesses which have led to the creation of more than 1,000 jobs, the vast majority of which are in the North East.

To find out more about the Innovation Northumbria: Incubator visit www.northumbria.ac.uk/incubatorlaunch.

Click here to read more about how universities in the region are playing a central role in supporting the region to recover from the coronavirus pandemic.

Click here to read more about the North East COVID-19 Economic Response Group.

North East Local Enterprise Partnership 2020 AGM 

Businesses will be given an update on plans to build a stronger North East post-pandemic economy at the North East Local Enterprise Partnership’s (LEP) 2020 Annual General Meeting.

Taking place online on Tuesday 24 November, the event will include a welcome from the recently-appointed Chair of the North East LEP, Lucy Winskell.

Lucy Winskell said: “As 2020 began, we were making good progress towards our goal of creating 100,000 more and better jobs here in the North East by 2024.

“However, we know that COVID-19 has hit businesses and communities in our region hard. That’s why we acted quickly to create the North East COVID-19 Economic Response Group with the CBI and the North of Tyne and North East combined authorities, which has recently published its proposal for counteracting this damage and creating a thriving post-pandemic economy.”

The AGM will also include updates on business growth, innovation, skills, transport connectivity, investment and infrastructure in the region, and how businesses are preparing for next year’s EU Exit.

Speakers at the event include Lucy Winskell, Chair of the North East LEP; Helen Golightly, Chief Executive of the North East LEP; and Paul Woods, Chief Finance Officer at the North East LEP.

Lucy Winskell added: “It’s been a tough year but there is still positive news to share as we look to the future of our region and the opportunities we have in sectors including digital, low carbon, life sciences and pharma.”

The 2020 North East LEP AGM will take place on Tuesday 24 November from 9.30am to 10.45am. Book your place here.

Proposed recovery and renewal deal for post-COVID North East published

North East COVID-19 Economic Response Group outlines proposals to transform and reimagine the North East economy

The North East COVID-19 Economic Response Group has published its Recovery and Renewal Deal for the North East, which outlines how a thriving post-pandemic economy could potentially be created.

The group is made up of the North East Local Enterprise Partnership (LEP), CBI, North of Tyne and North East Combined Authorities with the support of industry, to ensure the North East has strong economic leadership that acts quickly and collaboratively to mitigate the impacts of COVID-19.

Its proposal reflects on COVID-19 as a catalyst for change and details how the North East is ready and prepared to harness this catalyst to reinvigorate the North East economy.

The document sets out how, with the necessary support from the government, the North East could maximise opportunities to reach a goal of rapidly creating 100,000 good quality and secure jobs.

In the Recovery and Renewal Deal for the North East, the Group is asking the government for £2.8bn to directly unlock half of required 100,000 additional jobs quickly. It also wants accelerated confirmation of existing business cases, including Transforming Cities funding; a commitment to joint working in areas where the North East can lead the national recovery, specifically low carbon energy; and flexibility within national programmes to allow for maximum leverage of local and national resources.

It is envisioned that this would keep people in jobs and training, support businesses and sectors to restart and recover, and support the transition of our communities and places as they adapt to living with COVID-19.

In the long-term, the deal sets out how our future economy can be built by maximising the potential of our existing assets and exploring new opportunities and by investing in digital and transport connectivity.

Opportunities identified in the document include a series of new projects to empower our rural and coastal areas and reinvigorate our town and city centres; achieving zero carbon emissions targets; utilising new digital construction and advanced manufacturing techniques; leading the national offshore wind revolution; and delivering the first digitally-connected Freeport for the UK.

The proposals give particular focus to jobs in the key areas of data ageing, low carbon, life sciences and pharma. This will help the transition to a stronger, higher-productivity and higher-wage economy, with people primed to adapt to challenges and new opportunities.

Lucy Winskell, Chair of the North East LEP, said: “The Recovery and Renewal Deal for the North East is an ambitious proposal that is designed to create a fair playing field for everyone.

“Through our Strategic Economic Plan, it was our goal to create 100,000 new and better jobs and we were doing well – with 68,000 more jobs in March 2020. But the impact of COVID-19 will reset that, which is why our Recovery and Renewal Deal is so important.

“We have presented a proposal that puts sustainability and decarbonisation at the core. The Recovery and Renewal Deal ensures communities continue to improve and provide a strong offer for people to live, work, study and visit.”

Sarah Glendinning, Regional Director for the CBI North East, said: “Now more than ever we need to be imaginative in our thinking, brave in our approach and robust in our delivery in order to recover and thrive.

“In the Recovery and Renewal Deal for the North East, we have suggested the way to a new North East. Now is the time to come together to think bigger, greener, more inclusively and with innovation to reimagine our economy.”

Mayor Jamie Driscoll, North of Tyne Combined Authority said: “The pandemic has hit people hard. Young people need jobs. Businesses need investment. Yet we have the potential to be world leaders in offshore energy, advanced manufacturing, and sustainable transport.

“Our Recovery and Renewal deal will create 100,000 well paid jobs. It supports more affordable homes and better health. It’s what our region needs, and I want central government to back our plan and back the North East.”

Councillor Iain Malcolm, Chair, North East Combined Authority, said: “It is vital that we have a strong plan in place to help our businesses and communities to recover from this unprecedented crisis.

“The Recovery and Renewal Deal for the North East builds on the work we are already doing with government and other partners nationally and regionally to unlock all available support and financial assistance and sets out a bold vision for future prosperity.”

A dedicated North East COVID-19 Response Group web page has been launched for those looking for more information and partners wanting to engage with its work.

North East businesses can also access the North East Growth Hub, where a COVID-19 (coronavirus) toolkit provides the most up to date support and advice, including partner information.

Read the Recovery and Renewal Deal for the North East here.

New programme brings North East businesses together for economic recovery

Businesses in the North East are being invited to join a new business network programme which aims to help companies recover from the impact of COVID-19.

The Peer Networks programme will bring small cohorts of businesses together to support each other, work through common issues, and benefit from one-to-one coaching on a range of topics.

The programme is part of the government’s national COVID-19 response and up to 34 sector-specific networks will be formed in the North East, catering for businesses in a range of areas, from leisure and hospitality to advanced manufacturing.

Colin Bell, Director of Business Growth at the North East Local Enterprise Partnership (LEP), explains: “We know that many businesses in our region continue to be hit hard by the pandemic and this is a way for us to support businesses to develop a robust recovery plan.

“Whether it’s finding new ways of attracting and selling to customers, supporting staff, or learning how to use digital technology in new ways, businesses will be able to learn from others who have faced that same problem and make sure that they’re in the best possible position as our economy starts to recover from the effects of the pandemic.”

Members of each Peer Network will be able to put forward questions or issues that they are facing and support each other to develop practical solutions through a series of workshops.

Businesses will also receive one-to-one support and will be guided through the latest information on government support available to them as part of the COVID-19 recovery package.

“Being part of a Peer Network will not only provide a network of other business owners who can help you to steer your business through any issues you’re facing, it’s also about supporting each other’s wellbeing and mental health,” added Colin Bell.

“It can be lonely being the founder or a leader of a business of any size or sector, and a Peer Network can provide a sounding board and support network at one of the most challenging times many businesses have faced.”

Peer Networks are open to businesses that have been operating for at least a year, and had five or more employees, and a turnover of £100,000 or more prior to the pandemic.

Businesses can apply to join a North East Peer Network through the North East Growth Hub.

 

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Working towards an ambitious North East trade and export strategy

The North East England Chamber of Commerce (Chamber) and North East Local Enterprise Partnership (LEP) are at the forefront of developing a Trade and Export Strategy for the region.

A funding boost from the Department for International Trade will enable us, and our partners, to ensure the voice of the North East is heard as the Government prepares its forthcoming Trade and Investment Strategy.

This presents an opportunity for us to help shape the future of UK trade and export to benefit our region and we are ready to take on the challenge.

Our goal is to prepare a strategy for the LEP area which identifies a future-focused approach for the region to drive more and better jobs, and strengthen productivity and competitiveness within the business base.

To help us achieve this, the Chamber is recruiting an Export Manager for the development of a North East Trade and Export Strategy.

The Export Manager will propose and detail a forward-facing strategy for growing North East trade and export activity in the region.

The plan will focus on increasing international trade with a strong emphasis on supporting earlier stage businesses and SMEs to plan for international growth.

The appointment comes at a time when there have been significant changes in the global economic environment, including COVID-19 and of course the changes to the trading and regulatory environment as a result of the EU Exit.

Trade and investment is a growing part of our economy. The value of goods exports per adult in the North East region is higher than across England excluding London. The value of service exports per adult increased by more than 60% between 2014 and 2017. In 2018/19, the North East region had more than one and a half times more new jobs created per person due to foreign direct investment projects than England excluding London.

In 2019, 59% of the North East region’s exports in goods (by value) were to the EU and 41% were to non-EU countries.

North East exports in goods to the EU increased in value by 10% between 2014 and 2019, from £7.1 billion to £7.9 billion, while North East exports in goods to non-EU countries remained unchanged in value between 2014 and 2019, at £5.4 billion.

Almost 90% of the value of goods exported from the North East region came from three commodities – machinery and transport (55%), chemicals (21%), pharmaceuticals (12%).

As part of the North East Local Industrial Strategy, our aim is to increase the percentage of firms engaged in exporting from 6% to 9.5% by 2030 as a means of raising exports to 35% of annual GVA – with a particular focus on diversification of the goods export profile.

Our Trade and Export plan will align with these goals, in turn informing the Government’s forthcoming Trade and Investment Strategy so together we can drive forward the North East’s economic growth ambitions.

Colin Bell, Business Growth Director (North East LEP) and Julie Underwood, International Trade Director (North East England Chamber of Commerce).

Find out about the Export Manager role here.

Universities support North East’s economic recovery: Arrow: Supporting Innovation in the North East

Universities have a vital role to play in helping the North East economy recover from the coronavirus pandemic.

The work being delivered by North East universities is supporting new and existing businesses to innovate and grow, and shaping and supporting a more sustainable and inclusive economy.

Durham University, Newcastle University, Northumbria University, University of Sunderland and Teesside University are all members of the North East COVID-19 Economic Response Group, which was established by the North East Local Enterprise Partnership at the beginning of the coronavirus pandemic to provide business resilience and ensure a collective response to the economic impact of COVID-19 on the North East economy.

Below is a case study about Newcastle University’s Arrow: Supporting Innovation in the North East programme, which accelerates the North East’s economic impact by pairing Newcastle University’s research, knowledge and innovations with the needs of local SMEs.

Arrow: Supporting Innovation in the North East gives SMEs access to more than 2,500 academics, innovators and experts at Newcastle University to help them develop new products or services, access new markets, or gain market share.

Arrow matches businesses with academics, innovation specialists and world-class researchers that can provide insight and expertise in areas such as research and product testing, data analysis and artificial intelligence.

The £3.4m innovation programme can also offer eligible SMEs up to £10,000 of match funding to buy services or equipment including; proof of concept and validation; survey and feasibility testing; product design; development and prototyping; analysis and testing; and commercial and contract research.

To date, more than 50 North East SMEs have received intensive innovation support from Arrow, including Your Health and Care Ltd, which provides complimentary services for people suffering from dementia, and Armatrex Ltd, which utilises expanding foam polymers to mobilise and support injuries.

Arrow works with companies to help drive their businesses forward through innovation and R&D support, leading to new investments and jobs. In line with the LEP’s Strategic Economic Plan, Arrow’s target sectors are; life sciences and healthcare; advanced manufacturing; creative and digital technologies; offshore, subsea and energy technologies.

To find out more about Arrow: Supporting Innovation in the North East, visit www.ncl.ac.uk.

Arrow is part-funded by the European Regional Development Fund (ERDF).

Click here to read more about how universities in the region are playing a central role in supporting the region to recover from the coronavirus pandemic.

Click here to read more about the North East COVID-19 Economic Response Group.

Sowing the seeds of growth in the North East tech sector

Last week saw the launch of the London Tech Week and UK Tech Cluster Group’s 12 Clusters of Tech series. Running monthly for the next year the reports each shine a light on a different region and showcase some of the UK’s most exciting and innovative tech businesses – and brilliantly, the series opened with a look at the North East and Tees Valley.

The need to enable, support and facilitate tech businesses is a central priority of the North East digital strategy. We have a vibrant digital ecosystem in the region with multiple networks engaged in promoting it. It’s absolutely critical that we nurture the types of businesses that the report celebrates. How do we ensure that next year’s report features as many, or more, success stories? Who are our emerging companies that might be next in line for high growth? Do we have the right conditions in place to increase the birth and survival rate of tech startups?

These are all important questions because tech startups – early stage, innovation-led businesses with high growth potential that are creating proprietary technologies – have distinct needs that are different to the more generic support required by established scaling businesses. They are creating new products, services and solutions; sometimes solving problems we don’t even know we have yet. And with that they have the potential to create new supply chains, new workforces, open up new markets, give the region distinct competitive advantage and play a major role in our economic and cultural identity.

And this is where as a region we have some challenges and some opportunities. In order to see those high growth businesses born and flourish we need a pipeline of pre-seed companies developing their MVPs, their IP and their investment rounds. As a region we don’t perform as well as others in feeding that pipeline – this is reflected in our national profile with private investors and the number of new tech startups thriving in the North East. Whilst we are home to some fantastic tech businesses, as shown in the report, there is more to be done to improve the trajectory.

This is why the North East Local Enterprise Partnership (LEP), via the digital strategy, is working with founders to explore what those distinct needs are; to better understand how we can boost the sustainability of emerging startups and to establish exactly what needs to be in place to improve the picture. By asking the tech startup community what it needs, we can better facilitate and champion the right support and see an uplift in early stage tech business creation and survival. We are working with founders to create a blueprint for regional tech startup support which we will be announcing more about in the coming weeks and months.

So what’s needed? One of the privileges of my role is that I get to speak with so many inspiring tech entrepreneurs on a day to day basis. Some key observations that should inform future plans:

  • Know when to ask and when to tell: getting a tech startup off the ground is really hard work. It takes guts, determination and a healthy dash of madness. It would be easy for those of us in the wider business community to assume what the needs of founders are, but that’s only going to go so far. Equally, founders can be so enveloped in building their businesses they might forget to look up occasionally. The North East tech ecosystem needs to be shaped by entrepreneurs, for entrepreneurs.
  • Take the longview: early stage startups often navigate a precarious and unpredictable path to get off the ground. By definition they find the sweet spot between product development and market fit through iterating, experimenting, and even failing first. As tempting as it can be to shout every early success from the rafters, those companies need space and time to come to fruition. If we want to see a tranche of tech businesses born in the region over the next decade we need to plant seeds now and be ready for the long haul – if that means watching and waiting, it will be worth it.
  • Be purpose led, outcome focused: related to the above, it’s easy to lose the USP of an early idea in the mix of all things “digital” (which these days, is really just “all things”). But losing that nuance means we compromise on uniqueness. Prioritising resource onto purpose and outcome, rather than immediately tangible quick wins might go a long way.
  • Context is everything: building tech clusters is complex. To be clear, this isn’t the same as building an individual tech startup. Cluster development requires multiple factors and actors to work together as part of an overall ecosystem and each regional cluster is specific to its economy, culture, assets, identify and profile. A healthy and sustainable tech cluster is geographical, not sectoral.

As we collectively navigate the challenges of the current climate, the North East will need to be as innovative, resourceful and resilient as ever. We will need to be creative and daring to build the economy of tomorrow and to do that we can learn a lot from the tech start up community. To further bolster our status as one of 12 clusters of tech let’s continue to demonstrate that we value our tech businesses and work collaboratively to ensure they feature in future reports and more.

Laura Partridge, Digital Programme Lead, North East LEP

Find more information about London Tech Week and UK Tech Cluster Group’s 12 Clusters of Tech series, and download the North East report here.

If you want to know more about the North East digital strategy and supporting the region’s tech startups contact Laura Partridge on [email protected].