Investing in the future of the North East

Two leading commercial property experts explain the importance of inward investment in the North East

Aerial shot of the Team Valley Trading Estate
Aerial shot of the Team Valley Trading Estate

The North East has a long history of inward investment which has brought thousands of jobs to the region.

The flagship Team Valley Trading Estate, established in the 1930s, became the base for a number of new start companies from troubled Europe, many of which grew to become major international corporates in the area.

The opening of the Nissan plant in Sunderland in 1986 undoubtedly is the greatest inward investment project for the region because of the number of quality permanent jobs created at the ever expanding plant and the large number of supply chain companies, many of which have clustered in industrial premises close to the main production facility.

On-going development at the Nissan site has provided more than 10,000 jobs, either directly employed or within component part suppliers and companies providing services to the main plant. Nissan’s Sunderland facility is at the forefront of the UK’s automotive industry and has made a major contribution to the region’s positive balance of exports and as a result the Port of Tyne is now the UK’s leading car exporting port.

The impact of the “Nissan effect” cannot be ignored as to its impact on the region’s economy and the significance of attracting this global manufacturer to the region in the 1980s. The company initially employed 400 people at the plant but the subsequent investment in the plant has seen a massive multiplier in the number of employment opportunities created.

The recent announcement relating to the £290m Growth deal secured for the region by the North East LEP and the newly established LA7 North East Combined Authority will also see investment in a 250 acre Advanced Manufacturing Park adjacent to the A19 which will attract further inward investment and create further new jobs in the automotive, off-shore and high technology sectors.

The securing of Hitachi trains to build new rolling stock at Newton Aycliffe is a major inward investment success for the region which will bring 730 new jobs to the region in the £82m plant at Merchant Park, which is scheduled to be in production by 2016. Durham County Council have been successful in their bid to secure Single Local Growth Fund cash to back the development infrastructure for a new business park adjacent to the main plant with the potential to create a manufacturing hub which could create a further 3,400 new jobs.

While the Nissan and Hitachi inward investment projects have and will bring further economic prosperity and much-needed jobs to the region not all projects have been as successful. The region has also seen overseas companies either establish plants then leave the region, or not fulfil their original potential. These include, Samsung at Wynyard, Fujitsu at Newton Aycliffe, Siemens initially then Atmel at North Shields as well as Via Systems at Longbenton.

The continuing efforts of the North East Local Enterprise and the North East Combined Authority towards securing central government funding through the Regional Growth Funds are key towards securing further inward investment to bring continuing economic and employment benefits to the region.

Danny Cramman, head of Industrial Agency, GVA, Newcastle

Skills and graduate retention is 'key to inward investment success'

Last week’s announcement of the £290m Local Growth Fund investment into the North East LEP area was welcome news. The award from the Government’s flagship regional investment scheme is designed to boost growth and create new jobs.

Of particular value is the new investment in skills and training. This is the single most important feature in attracting new inward investment projects.

The North East historically has done well in attracting footloose inward investment projects. They are attracted by the loyalty and quality of the workforce, availability of space, together with the lower cost of living and doing business here. In recent years at Quorum we have seen more than 2,000 new jobs created through such projects, with the arrival of Tesco Bank, Balfour Beatty, InsuretheBox and Ebiquity. Access to the right skills and a hard-working workforce was crucial.

Overall, the North East has a good story to tell at GCSE and graduate level. Firstly, at GCSE level, the North East has had a better pass rate of students reaching five A*-C than any other region. This isn’t a one-off, the North East has enjoyed the best results every year since 2008. This is a fantastic indication of the quality in the North East workforce.

Apprenticeships are also hugely important. At Quorum, TDR Training provide workplace skills training, particularly in the engineering sector. It is a great asset to have these learning facilities on site and accessible to our increasing list of occupiers taking on apprenticeship and training programmes.

The picture at graduate level is also positive. The region’s universities have long been attracting the best young talent from across the country and, increasingly, internationally. The main challenge has been to retain these people after graduation, so we get the benefit of the educational investment.

Graduate retention levels at Newcastle’s universities are now among the highest in the country, with recent figures showing 60% of graduates deciding to build a career in the North East.

This welcome trend is due to increasing employment opportunities in the region and the higher quality of life on offer.

Higher costs of housing, transport, entertainment and many day-to-day costs in the South mean a slightly lower salary here buys you more than a higher salary in London. That is on top of the quality of life and environment that the city region enjoys.

This is a great message to inward investors.

Fergus Trim, director Quorum Business Park, Newcastle

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