Firms in the digital, health innovation, energy and advanced manufacturing sectors have the potential to transform the North of England’s economy, adding £97bn and 850,000 jobs by 2050.
The Northern Powerhouse Independent Economic Review identifies key capabilities across the North which could provide the foundations for closing a major gap in productivity, generating new jobs and enhancing global competitiveness.
“This review clearly identifies that, if the right investment and focus is put into these capabilities, and the infrastructure is there to support them, then 1.56 million new jobs could be generated by 2050,” says John Cridland, the chair of Transport for the North.
“Close to a million (850,000) of these will be directly attributable to the success of the Northern Powerhouse and we would expect productivity (GVA) to be 15% higher than currently which, in itself would represent a major step-change for the North.”
Transport for the North, the new body that will have statutory authority for long term transport investment strategy in the North, commissioned the Northern Powerhouse Independent Economic Review on behalf of the Northern Powerhouse partners.
This is the first time such a comprehensive report has been commissioned for the North, and it marks a landmark development in the evolution of the Northern Powerhouse, not least because this report is owned collectively by the North itself.
Analysis has shown the North lags behind the rest of the UK, and in particularly behind London, in terms of productivity and jobs.
The North currently produces £4,800 less GVA (Gross Value Added) per person per annum and over £22,000 less per person than London. Yet it contains twice as many people as London (16m) and has clear potential to be a globally competitive region.
The review has identified ‘capabilities’ in which the North is a world leader. These already account directly for 30% of the North’s jobs and 35% of its GVA and have clear capacity to drive future growth.
The North’s four prime capabilities are advanced manufacturing, digital development, health innovation and energy.
These are supported by three enabling capabilities that are vital if growth in these areas is to be successfully nurtured: education, logistics and financial and professional services.
John said that to achieve such a transformational change, including major transport interventions such as a major new road or rail routes, “a step-change in investment strategy is required and long-term collaboration between key partners across the North, and with Government and national agencies, will be essential if our joint ambitions are to be realised.”
Dr Peter Simpson, director of the N8 Research Partnership, said: “The North of England has enormous economic potential and the N8 supports the concept of a well focussed economic strategy for the region. In the light of the uncertainties caused by the Brexit decision for universities and businesses, economic strategy needs to be clear, confident and more collaborative than ever. Within the identified four prime capabilities of this review, there are hot-spots of innovation potential that, if we can fully exploit, can underpin a strong and vibrant northern economy.
“The N8 universities, a key asset for the region, have leading expertise in key aspects of advanced manufacturing and materials, from exploiting two dimensional materials through to international collaborations on new manufacturing techniques; energy research capabilities including Nuclear and Offshore renewables; world-class life and health sciences capabilities and a supportive environment for life sciences businesses collaborations; and N8 institutions host leading centres of high performance computing, data analytics and digital economy knowledge."
Sir Richard Leese, Leader of Manchester City Council, said: "This independent economic review highlights the collective strength and potential of England's great northern cities and will inform the work which is taking place between those cities and Government to come up with a single agreed economic strategy for the Northern Powerhouse.
“This will establish priorities around transport connections across and to the north, skills and employment, trade and investment, innovation and science and - where appropriate - housing to ensure the north can live up to its full potential. The prevailing economic uncertainty following the EU referendum result makes it even more essential that northern cities are given the tools and investment to work together to create the jobs and opportunities the region needs and help rebalance the nation's economy."