The demographic make up of the North East, and the UK as a whole, is changing. An aging population and increased competition between regions for talented individuals has created new pressures on policy makers to effectively market the region in order to ensure that the skills requirements of the economy are met. Skills are essential if the North East is to meet the targets for growth it has set itself.

Throughout the 1990s outward migration from the North East was a huge problem, at its highest point the region was losing around 10,000 people a year. However, since the turn of the millennium this situation has been turned around somewhat, with a steady surplus since 2001 rising to levels of 6,800 in 2004. One of the major factors in this change has been the success of the regional universities who are attracting young people into the region. Unfortunately the evidence suggests that too many of these students leave the area after completing their studies, the region could boost its skilled labour force if it could encourage more of these highly educated graduates to stay here to work. The North East is also now competing to attract skilled individuals from the new EU member states, these new sources of labour will become increasingly important as the size of the UK workforce, and the skills required, begin to change. 

Analysis shows that within the next ten years the proportion of the population who are aged over 65 will be far in excess of the current levels, combined with fewer numbers of births, this will result a reduction in the size of the workforce. These changes represent significant trends which could potentially have a huge affect on the economy, if they are not planned for. The prospect of an aging economy presents a number of other problems; dependency and the strain on the healthcare system will create additional pressures along with the need for suitable housing.

The region must also identify the opportunities which an aging population presents, a greater number of experienced workers and increased GVA per capita could potentially create growth, the key will be establishing how to make this growth sustainable in the long term.

Fact File

• The North East is an aging population, it is predicted that by 2021, 20.9% of the regional population will be aged 65 years +.
• By 2021 26% of the UK population will be aged 60 or over.
• By 2020 it is projected that the OECD average for proportion of the people aged 65+ will be 17.7% and the EU15 average will be 20.7%. Some countries such as Japan will have rates of close to 30%.
• It is predicted that by 2021 the percentage of the NE population made up by people aged 0-19 will have fallen nearly 10% from its current rate, to 21%.
• The region has lowest employment rate in the UK, for people aged between 55-64.
• The North East has the smallest labour force of any English region.
• The population of the NE fell by around 100,000 between 1981 and 2001. All other regions experienced population growth during this period.
• Since 1996/97 the region has been improving its net migration, at its highest point net migration was nearly 9,000 in deficit, in 2003/04 the situation had improved dramatically to a surplus of around 6,800.