The importance of knowledge based industries to the regional economy and the role of One NorthEast

RUnUP conference

Gateshead

9th February 2009

Outline of this presentation

• Challenges facing the economy of North East England• Moving from an industrial economy to a knowledge economy• Innovation Strategy

• Stage 1 : 2002• Stage 2: 2005

• Innovation Connectors• Next steps - Building on strengths

Challenges facing the economy of North East England

• In 2006 the regions GVA was 81% of national average• The economy is reliant on manufacturing, business services and

public sector• High levels of deprivation and economic inactivity, concentrated in

parts of the region• In 2007, 59.7% of North East young people achieved five GCSE at

grades A* to C, the national averages was 61.5% • At end of 2005, 69% of 16 year olds continued into full time

education, compared with 76% nationally• In 2007, the number of VAT registered businesses per 100,000 head

of population was 41% below the national average • In 2007 the level of employment was just over 71%• Rates of entrepreneurship and investment in research &

development are low

Strengths, Assets, People

• Industrial critical mass and skills base in chemical engineering, power engineering and offshore engineering

• Europe's largest concentration of Engineering Design companies

• Large scale port, quayside and power assets• There is a flourishing cultural sector and

increasing visitor numbers • Can do and entrepreneurial culture re-

emerging• RDA – strategic partner of national

government and business on innovation

Regional Economic Strategy : targets for 2016

• increase GVA per capita in the North East to 90% of the national average

• create between 18,500 and 22,000 net additional new businesses; and

• provide employment for between 61,000 and 73,000 more people than current levels.

3 Models of Economic Regeneration

1. Regeneration of an industrial sector that has existed in the region but which had gone into decline

2. Establishment of a new industry based on excellence within the universities

3. Development of an existing industrial sector in which the region already has proven strengths and track record

Moving from an industrial economy to a knowledge economy

• Exploiting the regions research and technology base to transform economic prospects, through:EntrepreneurshipTechnology transferMaximise investment

• Investment priorities:Energy and low carbon technologiesHealthcare and life sciencesProcess industries and chemicalsUnderpinned by finance, digital, design and

software

Science and Industry StrategyStage 1: 2002

−

Centres of Excellence in Key SectorsCentres of Excellence in Key Sectors

NSTAR (early stage finance)NSTAR (early stage finance)

Scie

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Research based on ExcellenceResearch based on Excellence

Industry Clusters

Research Council Funding

Research funded from other sources

Vision in 2002 –what will success look like in 2012?

• 10 years of transition has turned research and technology into sustainable business success

• The North East is seen by scientists, entrepreneurs and investors as one of the preferred locations for building technology based businesses and developing careers

• Barriers between science and industry are as low as anywhere in Europe• The Region has internationally leading Centres of Excellence• The Region has a level of technology spin-offs as high as

anywhere in Europe• The Region has growing internationally competitive clusters, based on its

knowledge base and Centres of Excellence, with high levels of innovation, productivity and skills

Review of progress in 2004

• Strategy has potential, in overall terms, to deliver a growing, sustainable Regional economy – up to £6bn additional value

• Wide support for overall objectives and model from:BusinessGovernmentRegional AssemblyUniversities

• Some considerable achievementsNational Centres – Bioprocessing, Nano Particulates, Micro-

fluidics, PVMajor Science Developments – Stem Cells, Nano-electronics,

AgeingStep change in collaboration between universities and business£40m new venture fundsMajor increase in high tech start-upsSubstantial investment leverage (£100m+)

Science and Industry Strategy for North EastStage 2: 2005

NewcastleScience

City

BalticBusinessQuarter

Digital City, Middlesbrough

Energy Centres WiltonCentre

Skills BusinessSupport

Design and Innovation

Science and Technology Finance Skills Business

SupportDesign and Innovation

Science and Technology Finance

Healthcare &Technologies

Healthcare & Health Sciences

Process Technologies

Energy

Leadership Council

Related Activities e.g.

Biosystems Informatics Institute

New Cluster

Cels/ICfL

Leadership Council

NaREC

Related Activities e.g.

PV NorthEast

Cluster Development

Leadership Council

CPI

Related Activities e.g.

Tees Valley Hydrogen Project

NE PIC

Healthcare &Technologies

Healthcare & Health Sciences

Process Technologies

Energy

Leadership Council

Related Activities e.g.

Biosystems Informatics Institute

New Cluster

Cels/ICfL

Leadership Council

NaREC

Related Activities e.g.

PV NorthEast

Cluster Development

Leadership Council

CPI

Related Activities e.g.

Tees Valley Hydrogen Project

NE PIC

NETPark

Software City,Sunderland

ICT E-business Content SoftwareICT E-business Content Software

Universities

•Focus investment even further on actual regional opportunities•Further strengthening of research base and opening access to business•Need to integrate other policy areas and activities•Particularly integrate with physical regeneration•Create internationally competitive facilities and capabilities•Develop greater capacity for product and service innovation through design•Greater private sector investment

Moving forward

• Innovation Connectors as integrating conceptSpatially focussedNew approaches to research/applicationWorld class facilities and peopleExplicit links to regeneration, employment,

education and access• Together with enterprise support, sectoral and

technological prioritisation, people and place agendas

• Retain long term strategy and increase focus on key strengths

• Regional collaboration eg Northern Way• Integrated element of National and International

framework, working with TSB, Research Councils, HEFCE, EU, Japan and others.

Innovation connectors

• Newcastle Science City• Design in NewcastleGateshead• NETPark and Co Durham• Sunderland Software City• NaREC Energy Centre• Wilton and Tees Valley• Digital City

Newcastle Science City

• Developing internationally leading science-based research, business and education

• In a new environment, including large scale facilities integrating research, business and social interaction

• Internationally competitive location• Benefiting region as a whole• Key driver for City Regional Regeneration

Digital City

• Digital Media (including games and animation)• Focussed on Middlesbrough• University as a generator of businesses• Twin track of research and development, and business

support• Substantial number of new businesses being created

Design Centre for the North

• Iconic state of the art building

• Baltic Quays in Gateshead

• Base for design collaboration

• Industrial Design

• Product Design

• Graphical Design

• Digital Design

• Service Design

• National and international hub for design and innovation

Next steps – building on these strengths

− Build further the strategic partnership to encourage and foster Innovation between:

− Government− Universities− Private Sector

− Develop better alignment of local, regional and international agenda’s and investment

− Focus regeneration based on:− traditional industrial strengths such as energy

and process industries− new industrial specialisations such as bioscience

and software− A strategy and implementation policy to produce

dramatic change in the region within a generation.

Contact details

Mark PearsonInnovation Strategy ManagerOne NorthEastStella HouseGoldcrest WayNewburn RiversideNewcastle-upon-TyneNE15 8NY

Tel: 0191 229 6422Email: mark.pearson@onenortheast.co.uk Website: www.onenortheast.co.uk, www.strategyforsucess.info