A quite alarming report was published last month proclaiming a 'Corporate Conquest' in the North East.
‘Big companies suck money out of the region,’ the report by the High Pay Centre think-tank exclaimed, conjuring the image of a giant vacuum cleaner nozzle snaking up the A1 from the City of London.
Beneath the colourful language, there is some truth in the notion that reliance on big companies doesn’t always provide the best economic benefit.
In some areas it is difficult to find a local alternative to large chain retailers that would see the cash we spend reinvested closer to home.
NECC members in the construction industry like Esh Group and Surgo have successfully highlighted the danger of thoughtlessly placing public contracts with large national contractors.
And the lazy assumption that the North East doesn’t deliver enough for UK plc is undermined when it can be demonstrated how much of the profit registered by corporate headquarters elsewhere is earned from shops, factories and offices in this region.
Of course that happens the other way round too and we need a stronger focus on how we develop more companies like Sage and Greggs who are bringing business back to their headquarters here. But we certainly shouldn’t leap to the assumption that all big business is bad for the North East and should be discouraged from coming here.
More and more I find that large firms with North East bases want stronger roots here, creating bigger regional supply chains and investing more in training their local workforce.
Nissan is an obvious long-standing example; Accenture is fast becoming a huge success story; while BT’s partnership with South Tyneside Council is another case in point.
Just last week, I was asked to meet senior UK management from Aon when they visited Newcastle, because they had a genuine desire to explore the region’s potential further.
These firms aren’t doing it purely out of altruism – they recognise the North East has a lot to offer, but that they can gain more from having stronger connections here. We in the region should be more confident in ourselves as equal partners in these relationships.
It shouldn’t be about big companies sucking money from the North East, or us sucking money out of them. We’ve got plenty to offer each other for mutual benefit if we work hard to make it happen.
:: Ross Smith, NECC Director of Policy