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In conversation with Toby Bridges, Executive Chair, The NBT Group and Business Growth Board member at the North East LEP, about the importance of digital adoption in driving operational efficiency

How has the pace of digital adoption in the manufacturing sector impacted the work you do?

I chair The NBT Group, a supply chain management company that works closely with manufacturing businesses across the region and beyond. We’ve been working with our clients on automation for at least the last five years.

We’ve created and built a range of new technology that helps businesses become more operationally efficient, which in turn makes them more cost effective.

We’re aiming to move our clients, and suppliers, away from traditionally manual tasks, so they can focus on creating better jobs, which fits with the North East Strategic Economic Plan.

We enable our customers to do more with less, so they can take that saving and reinvest it into growing their business.

Why is investing in new digital tools and technology so important for the North East’s manufacturing sector?

For me, the goal is to drive operational efficiency. We need to position the North East as the most efficient location in the country to do business. That’s part of the reason why businesses continue to invest here.

Productivity is so important to the health of our economy. There are lots of places in the world where wages are cheaper, but they’re not as efficient and productive as the workforce in the North East. That has to continue, and automation will help us achieve that.

We need to encourage more companies to think about how they become 21st century, industry 4.0 businesses; otherwise they risk being left behind. That’s why the North East LEP has launched the Made Smarter Adoption North East programme, which aims to help manufacturing SMEs in the region adopt new digital technology, innovation and skills; helping drive growth in UK manufacturing.

Will the automation of manufacturing lead to job losses in the sector?

Whilst we will lose some jobs as manual tasks are replaced by technology, we will create far more ‘better’ jobs. It’s not easy to move from a traditional working model to a new, leaner way of doing things. To do that, businesses need to bring in new skills and talent.

The most important thing for the North East is to be ahead of the change that’s coming. We need to make sure we have the talent and expertise in the region to support businesses on this journey.

Understandably, many people focus on the importance of digital skills, but I think we need to invest in creative subjects too, like art and design. We need people that think outside the box. We can teach people how to code, but we shouldn’t underplay the power of the arts in helping manage change and encouraging new thinking.

What does the future hold for manufacturing? What will the sector look like in five or ten years time because of the move to advanced manufacturing?

I think basic manual tasks will become automated, but because of that, we’ll create a new skilled workforce to manage those systems.

It’s important to remember there are cultural challenges around automation too. It’s a difficult conversation to have sometimes but we can’t bury our heads in the ground – it’s coming.

That’s why the region’s focus on retraining and reskilling is so important, that two-way conversation between the educational establishments and industry on what is needed over the next 10-20 years. We need to support businesses and employees to invest in life-long learning so we continue to be prepared for and adapt to the changes digital technology will bring about in all our lives.

We need to create a positive message around digitisation and the benefits it will bring to jobs and the economy.

Toby Bridges is Executive Chair at The NBT Group and a Business Growth Board member at the North East LEP.

The NBT Group is part of a collaborative research project with Northumbria University and Senseye to evaluate new and emerging ‘smart’ technologies, helping to digitalise and transform manufacturing supply chains (read more here). The award of over £250k is part of the £18 million of funding granted through the Digital Supply Chain competition, which forms part of UKRI’s Industrial Strategy Challenge Fund (ISCF) Made Smarter innovation challenge. The Digital Supply Chain competition supports the development of innovations designed to help manufacturing supply chains become more productive and sustainable.

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Energy Minister visits projects putting North East at the forefront of Net Zero drive

As the North East is poised to become the UK’s first low carbon heat cluster, the government’s Minister for Business, Energy and Corporate Responsibility, Lord Callanan, is touring the region to see some of the projects which are leading the way in the nation’s drive to achieve Net Zero carbon emissions.

The visit follows the launch of three nationally significant activities in the region:

  • The first, a report highlighting the potential of mine energy for the UK published on behalf of the BEIS Energy Hub Network – which uses natural geothermal-heated water that has gathered in the underground networks of former deep coal mines – in helping the UK to achieve its Net Zero target by 2050.
  • The second is Gateshead Council’s Zero Carbon Heat Strategy, outlining its ambition to make all Council buildings and homes net zero by 2030, though major investment in heat networks, as well as supporting clean hydrogen and heat pumps.
  • And the third, is the launch of a ‘High Potential Opportunity’ to promote the North East and Tees Valley as an inward investment location for the UK in heat networks.

Andrew Clark, Energy Lead at the North East Local Enterprise Partnership (North East LEP), said: “The North East has an existing skills base, supply chain and infrastructure, plus a nationally-significant project pipeline, which means we are ideally positioned to make a huge contribution to the UK’s drive to achieve Net Zero.

“During today’s visit, we were able to showcase some of the globally-important energy projects which are taking place in our region, and demonstrate how the North East is on its way to becoming the UK’s first cluster for low carbon heat innovation, supply chain and delivery.”

Lord Callanan was able to meet beneficiaries of the Government’s Heat Networks Investment Project (HNIP); two mine water heat networks in the region are among those to have been awarded funding by Triple Point Heat Networks Investment Management in partnership with the Department for Business, Energy and Industrial Strategy (BEIS).

The Minister visited Seaham Garden Village district heat network in County Durham, which will supply low-carbon geothermal heat from former coal mines to a new development to the south of Seaham. It is hoped that the scheme will be a commercially viable sustainable energy demonstrator project that can be duplicated across the UK coalfields, which contain 25% of the UK population.

Energy Minister, and Heat Networks Industry Council Ministerial Champion, Lord Callanan of Low Fell said: “Heating our homes and workspaces without causing carbon emissions is going to be key to tackling climate change and heat networks are proving an effective solution as well as opening up huge potential for investors at home and abroad.“

These low-carbon technologies are allowing us to build back greener from the pandemic, and as the Heat Networks Industry Council’s Ministerial Champion, I’m excited to see the opportunities they are providing in the North-East. “As a native of this region, I’m well aware of how coal dug from under our feet powered the industrial revolution 200 years ago and it’s fitting that that legacy and heat taken from former mines is now helping drive forward a new Green Industrial Revolution.”

Councillor Mark Wilkes, Durham County Council’s Cabinet member for neighbourhoods and climate change, said: “We’re delighted to be part of the drive towards achieving Net Zero carbon emissions.

“The proposed district heating system at Seaham Garden Village will use ultra-low carbon energy from the former mine workings.  

“The use of this technology could be replicated in other parts of County Durham, the North East region and elsewhere across the UK’s former coalfield sites.” 

Also on the agenda was a visit to the Gateshead District Energy Scheme, which has been awarded funding to double its heat network, using geothermal energy from a network of old mine workings 150 metres below Gateshead to supply heat to homes and businesses. 

John McElroy, cabinet member for the environment and transport at Gateshead Council, said: “Our work on heat networks and harnessing geothermal heat shows our ambition to tackle climate change and reach our zero carbon goal by 2030.

“We already have a significant track record of investment in heat networks, so this is proven technology – now we need to move across to sustainable sources of energy and roll out zero carbon heating to a much wider audience across the borough.”

Ken Hunnisett, Project Director at Triple Point Heat Networks Investment Management said: “These two projects represent the first two mine energy schemes to be awarded HNIP funding and signify genuine levelling up in the North East in preparation for net zero. With mine energy ideally suited to district heating, the ability of our coalfields to provide clean, affordable and perpetually renewing heat should be a source of great national pride.” 

Richard Bond, Innovation and Engagement Director at the Coal Authority, said: “Using heat from former coal mines is an innovative way to decarbonise heating supplies, attract investment, create employment and lower energy bills. The Coal Authority is actively working with a number of partner organisations across the country, including the North East Local Enterprise Partnership, to help unlock the potential of mine water heat to make UK homes greener, warmer and more efficient.”

Also in Gateshead, Lord Callanan joined Anne-Marie Trevelyan, MP, Minister for Energy, Clean Growth and Climate Change who was officially opening Hydrogen House, the UK’s first house to demonstrate the use of hydrogen-fuelled appliances in a real-world setting, at Northern Gas Networks’ Low Thornley site. 

Andrew Clark added: “These projects are not just regionally significant; they’re leading the way for the entire nation and no doubt contributed to Government’s recent decision to select Heat networks in the North East and Tees Valley as part of the Department for International Trade’s High Potential Opportunities Programme (HPO). We now have a completed investment proposition to promote to foreign investors and drive investment into the region.

“We’ll continue to work with government, the energy sector in the North East, and our partners in Tees Valley, to push forward the work taking place in our region which will help the UK cut its carbon emissions and help tackle the issue of climate change.” 

On the High Potential Opportunities Programme, Minister for Investment, Gerry Grimstone said: “Our HPO programme is designed to showcase the best opportunities across the UK to international investors and attract investment that will help the UK build back better.

“Attracting investment into the UK’s clean growth industries like heat networks is critical, and with so many projects in the pipeline and such a fantastic ecosystem, the industry should take note of this huge opportunity. This programme along with the Global Investment Summit we are hosting in October will be a chance to show why the UK is a great place to invest in a greener future.”

Find out about the North East LEP’s work to support the North East energy sector here.

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In conversation with Gillian Hall, North East LEP Innovation Board Chair, about the LEP’s annual review and the importance of creating an innovation culture in the region

The upheaval of the COVID-19 pandemic has led to increased levels of innovation across the North East. But how do you build on that, and create a culture that’s always proactively searching for competitive advantage and new opportunities?

We talked to the North East LEP’s Gillian Hall, Innovation Board Chair, about creating the confidence and ambition needed to build an innovative region.

When people talk about “innovation”, often they think about scientists locked away in labs.

However, innovation comes in many forms. There’s innovation where you find a competitive advantage, or where you do something differently – not just when you invent something or carry out scientific research.

Over the last year or so, I don’t think there’s any business that’s just “carried on as normal”. Everyone’s had to re-think something or shift how they work. And when you tell people that’s innovation, suddenly they realise: “Oh, I can do that”.

We’ve talked to a lot of businesses that have had to learn new ways of doing things. Maybe a company has had to consider sourcing new parts suppliers. Maybe another has moved all its sales to online platforms, and had to master different ways of advertising.

Many businesses have changed, or pivoted. But across the region, people have rolled up their sleeves and done what was needed.

The LEP team has been hugely resilient during this time, thinking of new ways to get their job done. And the collaboration across the region has been excellent, with businesses, local authorities and the voluntary sector working together.

That’s the key to creating a more innovative region. We want to create a problem-solving culture, where solutions just might come from outside your organisation. 

We launched Challenge North East, a COVID-19 open innovation pilot in November last year, encouraging ideas on how to manage safe, in-person events and home-based services. In all, 16 projects received a total of £200,000 in funding to help develop solutions. That also gave us a best practice model to use for future open innovation, challenge-led projects.

A big part of our work over the next five years will be to help build that culture of innovation. On top of that, we will make the best use of the money we have to pump prime innovation projects and partnerships; and will continue our conversations with government around our innovation strategy and what we need from government to help deliver it.

We’ll also be seeking to increase private sector investment into our innovative companies. We’ve been working on an interconnector project with the City of London Corporation which will showcase the work we’re doing in the region to City investors. We’ve also commissioned an Economic Markets Foresight Analysis to identify potential global opportunities for our businesses to take advantage of.

We’re very fortunate to have four great universities, which bring significant muscle and reputational impact to the region. The universities’ Northern Accelerator collaboration has already created 28 spin-out businesses since its inception in 2016. Keeping graduates in the region is also a major focus. There’s also a big role for our further education colleges, which will make sure that our people are trained for the jobs of the future.

After all, the LEP is here to create more and better jobs. You have to have businesses that have market leading products and services that people want to buy; those business will need skilled workers. We want to encourage business and the public and voluntary sectors to think differently, to collaborate in finding solutions to problems, and then create employment opportunities from those solutions.

In the end, it’s about helping to build confidence and ambition. It’s about staying true to the overall objectives of the region’s Strategic Economic Plan, and encouraging government, our local authorities, business and the education sectors to work together for the benefit of the region.

There’s still a lot of work to be done, so we should always be pushing to do more. That means getting people around the table, and coming up with new ways to do amazing things.

Gillian Hall is Chair of the Innovation Board at the North East Local Enterprise Partnership.

You can find out more about the North East LEP’s Innovation Programme at www.northeastlep.co.uk.

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Support available to develop innovation projects in preparation for future funding opportunities

North East organisations are being offered support from a team of innovation experts to prepare projects for future funding opportunities. Alan Welby, Innovation Director at the North East Local Enterprise Partnership (LEP), explains how a pipeline of the most promising regional innovation projects and programmes in the North East is being championed on a national and international stage.

Securing funding for innovation-focused projects is a highly competitive process. Funding calls are regularly issued nationally or internationally, and bids must be extremely focused and well-developed if they’re to be successful.

That’s why we’re putting together a pipeline of North East projects which have the potential to have a real regional, national, and even international impact. Projects can come from any sector, but the important factor is that they are large in scale and have the promise to be successfully rolled out to domestic, commercial or industrial markets, and can help to increase investment in R&D and create new jobs in the North East.

The North East LEP can offer organisations support to ensure business cases are in the best possible shape to secure future investment and will act as a critical friend to help develop project ideas. We will help partners to identify public and private funding opportunities and ensure alignment with emerging strategic priorities. When funding calls open, we aim to have strong businesses cases ready from our pipeline and champion what our region has to offer.

We’ve already supported a range of North East innovation projects to secure £62.5 million of funding to support business case development and to move projects on to delivery. Examples include Northern Gas Network’s InTEGRel project and the Driving the Electric Revolution Centre North East project.

We’re now inviting more organisations to come forward and apply to join our official Innovation Project Pipeline, so if you have a project that’s in development, we’d love to hear from you.

We’re particularly keen to hear about projects that complement the North East’s existing strengths in digital, health and life sciences, advanced manufacturing or energy, as these are areas where we know the region has the potential to be a world-leader.

Working together as a region gives us strength, and by combining the drive and ambition of North East innovators with the expertise of the North East LEP team, we can set up our region’s businesses for success.

Find out more about joining the Innovation Project Pipeline.

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Challenge North East: the story so far

Challenge North East is an innovation programme, launched to identify solutions to issues created by COVID-19 and to enable SMEs to develop and test these solutions with large regional partners who could adopt them. Programme Director, Sarah Cox, gives an update on the response from businesses in the North East, and the drive to fast-track products that could help the region recover from the pandemic.

In December last year we put out a call to North East SMEs, asking businesses to put forward ideas that could help our region – and potentially the rest of the UK – recover from the impact of COVID-19/

The pandemic had a huge impact on businesses and communities in our region and we knew that innovation could play an important part in our recovery. We wanted to fast-track the development of new solutions, and provide SMEs with an environment where they could test and iterate, using an open innovation framework to bring organisations together.

But before we could ask SMEs to put forward ideas, we needed to narrow our focus and identify key areas where we could have the biggest impact, and help the greatest number of people.

After working with a range of large organisations and community groups, we identified two challenges which urgently needed solutions: how to safely bring people together for in-person events, like gigs, exhibitions or performances; and how to ensure vulnerable people’s safety when delivering services in the home, like health visits and home repairs.

We understood that SMEs are themselves stretched and facing uncertainty, so we wanted to provide a support system and a clear, rapid process for them to develop ideas with the potential for adoption. challenge North East was launched in late 2020, with the ultimate aim of funding the development of new solutions to these two challenges.

We’ve been lucky to have the support of organisations like Tyne & Wear Archives & Museums, Newcastle Hospitals, Northern Gas Networks and others, who have helped us understand the detail of these challenges, and are also providing a means of testing potential solutions. By bringing these supporting organisations together with SMEs, we’ve been able to speed up and de-risk the process of innovation, connecting businesses with large organisations that can provide feedback and a route to market for any new products.

More than 60 SMEs entered the challenge, with submissions ranging from virtual queuing systems for events, to smart devices that can monitor patients’ health in their homes. 16 have now been selected to progress to the next stage of the challenge, and the ideas which will have the greatest impact and which have the best chance of commercial success and social impact will be awarded funding towards further development and scaling up.

We launched Challenge North East with an open mind, and the programme has responded at every stage to the needs of our local communities and industry. The goodwill and willingness of people to work together has been truly inspiring and these SMEs are beacons of success in a difficult time.

With innovation, when you start you’re never certain of the end result, but Challenge North East has given us a route forward together.

Find out more about Challenge North East.

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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.

For more information visit https://reap.mit.edu/reap-uk/.

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In conversation with Paul Butler, Chief Executive of the North East Automotive Alliance, about the arrival of 5G and what it means for the North East

The North East LEP and the North East Combined Authority have long seen the opportunity for the North East offered by 5G technology. Can you explain what 5G technology is and how it works?

5G follows in the footsteps of 3G and 4G as the new generation of wireless technology. As well as being much faster, it also has greater capacity, which is why it’s so exciting. 5G has the potential to support new innovative services in all areas of our lives.

I believe there’s a real opportunity for the North East to become a regional test bed for 5G technologies, which is illustrated in the North East LEP’s innovative plan for a multi-site, digitally enabled Free Trade Zone.

The North East Automotive Alliance, of which you’re Chief Executive, along with your partners recently secured more than £2m in funding for a 5G technology pilot project. How will this be used and why is this such a coup for the region?

The continual drive for operational efficiency is a key focus for the automotive sector. This project addresses the next key innovation challenge in last mile logistics and builds on regional expertise in the deployment of automated logistic solutions such as indoor and outdoor automated guided vehicles which are used throughout the production process.

The funding we’ve secured from 5G Create, part of the wider £200 million 5G testbeds and trials programme (5GTT), is to support a 5G-enabled connected and automated logistics (CAL) pilot and proof of concept. Working with Nissan and Vantech, we plan to test an autonomous HGV, up to 40 tonnes, on a private road capable of carrying out 100 deliveries a day. 5G technology would remove the need for an in-vehicle safety driver, replacing it with a remote driver that can interact with vehicle should it come across an abnormal situation.

We anticipate this project will be a catalyst for something great for our region, a globally unique CAL test bed here in the North East. We have a unique mix of assets including a geographic concentration of manufacturing facilities, a fantastic road infrastructure and the new International Advanced Manufacturing Park, which offers the perfect environment to design, develop and manufacture the next generation of logistic solutions. When combined with our vehicle electrification strengths, this has the potential to deliver Zero Emission Automated Logistics, delivering against the UK Government’s Net Zero 2050 strategy and supporting the region’s economic recovery from the coronavirus pandemic.

How does this pilot project fit with the North East’s Strategic Economic Plan?

It’s about delivering operational efficiency to the automotive sector initially, but then extending it to other areas of advanced manufacturing in the region to really drive productivity and efficiency.

In addition, by attracting more R&D activities it will support the NEAA’s vision to become the location of choice for automotive investment in Europe, and a region that is recognised as a true automotive powerhouse with a very dynamic, forward looking and competitive supply chain; with strengths in research, development, and innovation in new automotive technologies and manufacturing processes.

This will undoubtedly support the key objective of the North East’s Strategic Economic Plan – to deliver 100,000 more and better jobs for the North East.

What difference will 5G technology make for businesses?

The North East automotive sector is a beacon of productivity; we have one of the most productive workforces across Europe and high levels of automation. My interest in 5G is around how it can support industry and specifically industrial digitisation.

A recent study by SMMT and KPMG stated the cumulative economic benefit of adopting digital technologies to the UK automotive sector could be £74bn by 2035. I’ve also seen a recent case study related to an overseas company that has delivered a 50% increase in productivity, a 22% increase in automation, and 27% increase in innovation over the past two years as a direct result of 5G and industrial digitalisation.

The combined opportunity of 5G and industrial digitalisation will enable businesses to realise the next significant step change in operational efficiency. As a result, North East businesses will become leaders in the adoption of digital technologies and this will make them more resilient and more competitive, securing their longer-term future.

What opportunity does this hold for the North East’s future?

The North East has ambitions to expand 5G across the region and position the region as the centre for 5G deployment in the UK. Sunderland, for example, is already committed to the expansion and rollout of 5G. The technology is currently being deployed across parts of the Nissan plant in readiness for the 5G CAL pilot and across the city centre.

I believe we have a once in a lifetime opportunity to align regional ambitions and government strategy to really capitalise on the opportunity 5G provides. This will support industry and improve regional competitiveness, attract more R&D activity, improve regional capability, and help attract more talent to the region.

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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.”

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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.”