The economy of the North East has for a long time shown marked differences to most other UK regions.  This has resulted in weakness in some respects – unemployment has historically been high in the region, and GVA per head is lower than the national average, but the North East’s differences are also a source of strength and opportunity.  Economic growth in the region is not outperforming UK and EU averages, more graduates are remaining in the region after graduation, and unemployment is falling at a faster rate than the UK average.

The industrial revolution provided momentum, with coal mining, ship building, iron and steel making, and large-scale engineering all contributing to the rapid growth of the region and its establishment as a leading industrial centre.  Over the previous century it has become apparent that none of this could be taken for granted, as new technologies and new forms of competition emerged, productivity declined, and the region ultimately became less competitive in its key industries.  Many thousands of jobs were lost and the North East had to deal with great social and economic upheavals.  It is hard to avoid reminders of the region’s economic history – the modern challenge is to draw on the competencies from the past whilst embracing new trends, building a skilled and diverse workforce.

Despite the losses in manufacturing, it still provides a significant proportion of the region’s GDP.  A downside of this is that many of the employers are externally owned and their knowledge-intensive activities like research and development tend to be situated outside of the region.  Indeed the region’s relative weakness in R&D is seen as a factor that could hinder long-term growth.  The service sector has expanded in the North East, but again there is a need for more sustainable and secure service sector employment, such as in business and financial services, in which the region is under represented.  Similarly the North East relies relatively heavily on public sector employment.  Regional bodies are determined to overcome these hurdles through increased focus on enterprise and innovation, supporting world class skills, and investing in infrastructure and digital connections.  Coupled with continuing economic growth and development, it is a real possibility that the region can become nationally and internationally competitive once again.

• Gross Value Added (GVA) is around £14,000 per head in the North East, whereas the national average is around £17,700 per head.

• In terms of GVA growth however, the North East currently outperforms the UK average, with 4.4% as opposed to 3.9% per annum.

• The North East is one of the strongest UK regions in terms of exports, with £8101m worth of goods exported in 2004, a 17% increase on 2002.  Emerging markets in Asia and South America represent large potential customer bases the North East is starting to take advantage of.

• The North East accounts for around 4.18% of UK population, but only 2% of patent applications come from the region.

• Only 9.2% of North East individuals are self-employed as opposed to 12.9% nationally.

• The average weekly wage is £393 in the North East and £450 nationally.

• Over 60% of graduates are now staying in the region within 6 months of graduation – this improved to within close range of the national average.