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Foreword

There is a real commitment and appetite to drive growth across the North to help rebalance the economy.

The northern powerhouse concept launched by government in 2014 is at the forefront of this, and is helping to map out and accelerate that ambition – presenting the strengths, opportunity and potential of the northern regions on a global stage. Rather than working separately, and at times competing against each other, the regions that make up the northern powerhouse can join forces and focus attention and investment into the whole of the North.

But it needs to be more than just an ambition. The UK economy as a whole is predicted to contract over the next three years. The impact of this is exacerbated in the North as we are failing to catch up. It is imperative that we seize the opportunity and showcase tangible examples of the northern powerhouse in action. This report aims to do just that.

In the North we have a lot to be proud of, with over 1 million businesses employing over 5 million people. We have centres of excellence within this: a strong manufacturing sector, which accounts for over a quarter of the UK’s total manufacturing output; a thriving pharmaceutical sector, which accounts for nearly half of all medicinal exports in the UK; and a booming tech sector, with seven of the UK’s 27 key tech clusters located in the North, including the largest tech cluster outside of London, in Manchester. We also have natural resources that will lie at the heart of a decarbonised energy system, and a world-class higher education system.

This report centres on a number of case studies, drawn from across the north of England and across these sectors. It looks at the wider policy initiatives that are helping turn the northern powerhouse into reality, and where further work is required.

Key lessons include the following.

Collaboration at a local level is needed to maximise central government investment. There is significant central government investment taking place across the North, which has now been further strengthened by the prime minister’s industrial strategy approach. The northern powerhouse effect will only come about, however, if business then capitalises on this investment, which a number of companies featured in this report have done.

Close alignment is needed on skills to maximise central investment in local industries. A key finding of this report is that the northern powerhouse concept is helping to make it easier to recruit and retain talent by creating opportunities for people in North. The business community needs to take this a step further. By creating industry clusters, for instance, the case studies in the report have been able to work more efficiently with local authorities and align skills needs in that area with the needs of strategic sectors. This has driven innovation and developed far more integrated supply chains in the region.

The North needs a role on the global stage. Underpinning all of this is the need to continue to push the northern powerhouse concept on the global stage. We have a strong story to tell as to why the North is a great destination, not just for business but for every aspect of it that supports a thriving business community, such as quality of life, culture and the lower cost of living. A common thread running through the case studies presented in this report is that success comes as part of a package, not just one initiative.

There will be many opportunities ahead to keep the North in the public eye. The devolution agenda will take on a whole new level of momentum when the metro mayors are appointed in May. Manchester, Liverpool and Tees Valley in particular will come under the spotlight. I look forward with interest to the policies and changes that will come about as a result of their appointment. Having a close relationship with the local business community will be an important facet of this.

While there are many more examples that we would have liked to see included in this report, hopefully it will inspire you to look further into your own networks, business model and decision-making, to find ways to be an active part of the northern powerhouse and to boost the northern economy.

Bob Ward
North West senior partner,
EY