North East can weather the storm
13 October 1998
28 March 2014
25 April 2014
8 May 2014
4 July 2014
27 June 2014
Every economic forecast reaches the same painful conclusion. There is an economic “slowdown”. The UK might even be heading for recession.
So what. The North East has been in recession for so long it has become a way of life. The region consists of a handful of conurbations bounded on three sides by the Scottish border, the Pennines and the North Sea and is geographically separated from the rest of the country to the south not just in terms of distance but also in the sub-standard major roads that our taxes have not been set aside to upgrade.
But the North East has a lot going for it. Surveys frequently point to it as one of the best places to live and work not only in the UK but Europe. It is surrounded by beautiful countryside, it enjoys a legendary nightlife, infamous public art, a sexy football club (three actually) and great people.
In business it is competitive because of lower overheads and costs which can be achieved in a regional context. And there is a strong determination among the people of the North East to improve their position.
Still, there are problems. The region’s pace of economic growth is slower than the UK average and there is a widening gap between the level of prosperity in the UK as a whole and that in the North East. Among other things, this prosperity gap has been caused by: the decline in the traditional industries of coal, steel and ship building; a lack of initiative to identify and exploit new business opportunities which drove the region’s initial industrialisation; and, recently, by the speedy growth of the service economy in other parts of the UK.
But there have been more recent disappointments. German electronics company Siemens announced a factory closure with the loss of 1,000 jobs in November, Fujitsu will call it a day in the region in December, putting 570 employees on the dole, and Dutch electronics giant Philips is asking the Government for about £50m to secure the future of some 2,000 jobs. All have proved a knock to the North East’s economy. And the departure of Kevin Keegan hardly helped morale.
So how are things going to improve? The North East constituencies are represented by some of the most powerful MPs at Westminster, but there is not much help there. For example, have you heard the one about Peter Mandelson? Apparently he stopped off at a fish and chip shop during a goodwill visit to his Hartlepool constituency and asked to try the avocado puree. That will be the mushy peas then, Mr Mandelson.
So, the onus falls to those at a local level, where there is a need for regional initiatives. Great things are hoped for of the Government’s proposed Regional Development Agency. It will not have the powers that its Scottish and Welsh counterparts enjoy, but it is expected to be business-led and business-like in its agenda.
But the real issue facing the region’s economic fortunes is whether the entrepreneurial spirit that has developed among local authorities in the North can speak from a regional perspective with one voice and co-exist with the region’s commercial and industrial interests. Only then can the development agency pursue its agenda effectively.
That is a tall order, but one of the underlying issues the North East needs to address - and it is hard to stress how significant this is - is how to produce an industrial, commercial and economic culture which fosters the development of an entrepreneurial climate. Some form of education-related programme would seem to be the answer. Entrepreneurs must be seen, heard and applauded and the region must find ways to speed up the rate at which new businesses form and then provide support for growing firms.
Globalisation is having a major effect on international trade and investment patterns and the area’s exports and foreign direct investment have been rising faster than world gross domestic product.
This creates opportunities for the North East. The region is already world-renowned for its inward investment business, and as regional and national boundaries become more irrelevant, it must build on its competitive advantages in costs and overheads to capitalise on these changes.
It has to learn to look outward, to develop opportunities and, at the same time, continue to pursue the strategies that maximise the commercial and economic benefits which flow from those opportunities. And the area must wise up to the importance of retaining business in the region.
Encouraging manufacturers and firms to work together have pressed home the economic importance to “shop local” and, increasingly, there is a mutually supportive regional culture.
So what does this mean for North East law firms? Where there is a healthy economic environment, there is work for lawyers, and firms also have a key role in developing an economic climate that fosters the development of entrepreneurial business.
As for business development, the opportunities get bigger all the time. Dickinson Dees believes it has done everything it needs to do (for the time being at least) to prove it is a match for any firm in the UK.
North eastern businesses do not need lawyers from outside the region to prop them up. The area has plenty of top-notch law firms that can handle any project, and far from being defensive, they are beginning to exploit their competitive advantages to create major business opportunities outside the region.