REBALANCING our economy from public to private, from imports to exports and from south to north is the key challenge we face.
Last week, CBI North East held a North East Summit to consider what more the business community collectively could do to provide the conditions for growth in the region.
CBI chief policy director Katja Hall joined the members to ensure all regional messages were reflected in national policy. Key issues for discussion included progress on the Great North Revolution.
In 2009 we developed the campaign in partnership with the Journal to identify a small number of sectors where the North East had an opportunity to be world class - these sectors included low carbon vehicles, offshore wind and sustainable processing including waste re-use.
With the Nissan battery plant and Leaf investment, the Plugged in Places trial of 49 electric vehicles, the Centre for Process Industries being announced as part of the first national Advanced Manufacturing innovation centre and the beginning of a real cluster of offshore specialists on the North of the Tyne – it is clear that progress has been made.
However, leadership is key if we are to drive forward emerging industries and there was real concern that with the demise of the regional development agency whose role is to market the region to investors, visitors and potential employees that the North East ‘s reputation may not be promoted.
Growth is unlikely to come from domestic business, the consumer or the public sector, therefore enterprising businesses need to look overseas to export opportunities.
For too long the UK has experienced a cycle of long-term decline as an exporter – any future growth strategy must have exports at its heart and seek to reverse this downward trend.
Action is needed now to position the UK in light of fierce competition from other exporting nations. In contrast to the UK picture, the North East has seen the value of its exports reach a record high of £12.78 billion this year – nearly 30% higher than a year earlier and double the 17.7% national average.
However this is based on a small number of very large exporters and more has to be done to encourage North East businesses to export.
Experian’s research on high growth businesses recognises the importance of international linkages and also notes that the North East has a great pool of potential high growth businesses which do not reach their potential.
Medium-sized businesses, often referred to as “M” businesses are defined as companies with turnover between £25m-£500m. While these businesses, have the greatest capacity to grow, they are the Cinderella of businesses as government policy has historically focused on either FTSEs or SMEs .
And finally, it is critical that business explains what business does. Business creates solutions to society’s problems, it develops the goods and services that people enjoy, it creates jobs and pays tax which fund public services.
Business has to be seen as a force for good, but people need to trust business and business leaders if this is to happen.
Business leaders need to stand up to be counted as if ever there was a need for leadership, the time is now.
The challenge to rebalance the economy of the North East provides an opportunity to recalibrate the leadership of the region and to develop the North East’s strong private sector voice.
:: Sarah Green is regional director of CBI North East
