NORTHERN POWERHOUSE: BUSINESS OPPORTUNITIES FOR IRISH COMPANIES
#GlobalAmbition Message from the CEO
The UK is Ireland’s number one export market, The Northern Powerhouse, a UK Government representing a value of €7.5 billion exports and initiative to rebalance the UK’s national economy, is 35% of our total exports. As long-standing trading an example of the strong business and partnership partners, the UK is, and will remain, the largest opportunities which exist for Irish companies in the export market for indigenous Irish companies. UK. Within the Northern Powerhouse framework, As Brexit negotiations progress, without doubt, significant opportunities for growth have been significant challenges remain for Irish companies. identified in construction, life sciences digital The slowdown in the UK economy and continued technology and cleantech and these very much currency volatility is impacting the profitability play to the strengths of a large cohort of Irish of Irish companies and we expect 2018 to be a companies. particularly challenging year for Irish companies. Enterprise Ireland will play a central role to However, while there are challenges, opportunities support Irish companies to navigate and access remain and in this regard, Enterprise Ireland has these opportunities and I hugely welcome the increased resources and is focused on supporting collaboration from our UK partners on this. Irish companies to consolidate and grow exports to the UK market, while also supporting them to diversify their export markets across the globe.
Julie Sinnamon Chief Executive Officer Enterprise Ireland
2 3 Overview of Opportunities
Northern Powerhouse, a UK Government New growth economic activities, utilising initiative to rebalance the national economy, emerging strengths and capabilities, was developed in 2014 to address the North particularly in science and innovation and of England region’s economic disparities in including advanced manufacturing, digital, comparison to other regions such as London and energy, and life sciences and healthcare. the South East of England.
The region covers an area of approximately 14,400 There are also a number of supporting measures square miles, with a population of some 14.9 which should develop as key components million at the 2011 Census. If it was a country, it of Northern Powerhouse. These include would be the 10th largest economy in Europe. It improvements to skills and education, culture, and exports £50 billion worth of goods and had a GVA international engagement, including exporting. of £317 billion in 2015, representing 19% of overall There are significant opportunities arising from UK GVA. these developments. These include increased The North of England is engaged in an impressive trade, participation in growth developments, and historic transformation from its industrial past the growth of science and innovation clusters, to a bright and successful future characterised and participation in the overall development by attractive and vibrant cities and globally of Northern Powerhouse as it seeks to achieve competitive knowledge-based economic activities. greater overall prosperity.
The Northern Powerhouse approach is to Standout opportunities for Irish businesses maximise the combined potential of the North’s include: cities and city regions to achieve a critical mass • The construction of 500,000 new homes, where the whole is greater than the sum of the particularly affordable housing parts. The goal is to create a collection of northern cities – sufficiently close to each other that • Flagship regeneration projects, including the combined they can take on the world. International Advanced Manufacturing Park in the North East, the Mayoral Development That aim is to be achieved principally by Corporation at Redcar, and Sheffield’s improving connectivity between city regions Advanced Manufacturing Innovation Centre through substantial improvements to transport • The development of new life sciences and infrastructure. healthcare facilities Northern Powerhouse has a number of activity • Collaboration on scientific research and strands being taken forward by a wide range of innovation projects bodies. The initiative has also been adopted with • The supply of engineering products and enthusiasm by businesses, city governments and services related to renewable and nuclear other organisations located in the North. energy Overall, the Northern Powerhouse is creating a • Collaboration with digital start-ups through wide range of opportunities for business both virtual clusters within the region and externally. • The construction of major rail and road This report identifies three key pillars supported developments by a range of other measures, which provide a • Cultural collaboration, including joint useful framework for more detailed investigation productions and the construction of new of these opportunities. facilities.
These pillars are: Realising these opportunities will require detailed and extensive business intelligence and Growing city regions experiencing development. The principal aim of this report substantial investment and regeneration, is to provide a high-level guide to the Northern with new Mayoral authorities and increasing Powerhouse and how it could develop. Accessing powers devolved from central Government individual opportunities will require targeted activities by interested businesses and their representatives, and this guide will hopefully Improved connectivity, primarily achieved provide a context and a framework for that through improved transport infrastructure activity.
2 3 CLEANTECH & LIFESCIENCES DIGITAL RENEWABLES TECHNOLOGIES
The North East and Northern Powerhouse is home to leading The digital economy is Yorkshire are among the biotech clusters in Manchester’s Alderly Park booming, and the North is UK’s leading regions with with over 150 small biotech firms located currently at the forefront of respect to renewables here. Pharma manufacturing has seen huge this transformation. Each including wind energy, investment in high technology manufacturing of the North’s regions has water and power and the region counts for 13% of EU a unique digital specialism generation. biopharmaceutical production. – from data analytics in Major interest in the region Darlington is home to £38 million project in Leeds, to digital media has seen Siemens build Biologics with one of Europe’s largest biologic in Manchester, to gaming its offshore wind blades in manufacturing clusters in Speke also included. in Sunderland – and the North’s digital economy Hull, and Denmark’s Ørsted From a medtech perceptive there are strengths is worth £9.9 billion to (previously Dong Energy) in orthopaedic, wound care and surgical. announcing they expect the national economy, Key players: Unilever, CRODA, Nestle, Quorn, to invest £1 billion in local accounting for 5.2 per cent Davy Process Technology, ThermoFisher, businesses in the North of the region’s GVA. GSK, MSD, Piramal, Aesica, Eli Lilly, Actavis, East by 2019 as part of its Key players include the Fujifilm Diosynth Biotechnologies Medimmune North Sea wind projects. BBC, ITV, TechCulture, HS and Seqirus, Smith and Nephew, Waters, Digital, Rockstar Games, Key projects include the Surgical Innovations, Reckitt Benckiser, JRI Sky’s Betting, JD Sports Able Marine Energy Park Orthopaedics, Swann Morton and DePuy. in the Humber Port, Green and Shop Direct. Port Hull and the Wind North East Turbine Blade Test facilities in Blyth.
Tees Valley CONSTRUCTION
In recent years, many of the West Yorkshire Humber cities within the Northern LEP Powerhouse region have experienced a significant Liverpool increase in new building City Region and infrastructure projects. City Greater Manchester’s boom Sheeld Non-city across transport, energy City Region City region and residential sectors has Greater boundary been led by the ongoing United Kingdom Manchester regeneration at Manchester Airport and Salford Quays. A strong pipeline of key investments is supporting ENGINEERING & MANUFACTURING further development in the wider North West including HS2 and Liverpool Docks. The North of the UK remains a key production area for high end Key players in the region are manufacturing, automotive, off highway and Rail OEM supply chain activity spread across the private across the North East and West as well as strong aerospace clusters. and the public sector; As industrial digitalisation transforms manufacturing, IOT, AR, 3D Printing at a local, national and and robotics will become more important with the location of the Advanced international level. Leading Manufacturing Research Centre at the University of Sheffield. contractors in the region Current key players in the region include Airbus, Rolls Royce, Bae, Raytheon, include Laing O’ Rourke, Nissan, General Motors, VW (Bentley) and Jaguar Land Rover, Magellan Vinci, Morgan Sindall, John Aerospace, Thyssenkrup Aerospace, Caterpillar, Hitachi, Cummins and Elddis Sisk & Son and Mace. Caravans & Motorhomes.
4 5 Regional Examples
NEWCASTLE Key Sectors NNE Digital and Tech, Advanced Manufacturing Gross Value Added (GVA) & Automotive, Financial TEES Key Sectors & Professional Business VALLEY Advanced Manufacturing, £38.7bn Services, Life Sciences Creative & Digital, Gross Value Added (GVA) GVA per Worker and Energy Lifesciences, Biomass, Process & Chemical Includes £12.6bn £43,116 Newcastle, Gateshead, Includes GVA per Worker Population North Tyneside and South Darlington, Hartlepool, Tyneside and Sunderland £45,700 Middlesbrough, Redcar 1,970,000 Source: North East Local Enterprise and Cleveland, and Partnership. 2016 figures Population Stockton-on-Tees
Source: http://www.centreforcities. 667,500 org/tees-valley/
SHEFFIELD North East REGION
Gross Value Added (GVA) £24.3bn GVA per Worker Tees Valley £43,700 Population 1,374,600 West Yorkshire Humber Key Sectors LEP Advanced Manufacturing, Liverpool Creative & Digital, City Region Lifesciences, Biomass, City Financial & Professional
Sheeld Non-city Includes City Region City region Barnsley, Doncaster, Greater boundary Rotherham and Sheffield United Kingdom Manchester
GREATER Key Sectors MANCHESTER Advanced Manufacturing, Creative & Digital, LIVERPOOL Key Sectors Gross Value Added (GVA) Lifesciences, Biomass, REGION Advanced Manufacturing, Financial & Professional, Creative & Digital, £59.6bn Education Gross Value Added (GVA) Lifesciences, Biomass, GVA per Worker Includes Financial & Professional £29.5bn Bolton, Bury, Manchester, Includes £48,100 Oldham, Rochdale, Salford, GVA per Worker Halton, Knowsley, Population Stockport, Tameside, Liverpool, St Helens, Trafford and Wigan £48,100 Sefton and Wirral 2,756,100 Source: http://www.centreforcities. Population Source: http://www.centreforcities. org/greater-manchester/ 1,524,500 org/liverpool-city-region/
4 5 Pillar 1: City Regions
The Rebirth and Future Growth of The Innovation District – a 800-hectare Northern cities development encompassing Advanced Manufacturing Park and Sheffield Business Park in In many respects, Northern Powerhouse is a vision Sheffield/Rotherham for the growth of the great cities and towns of the North. The ongoing renaissance of the North’s Leeds South Bank – a 185-hectare city centre major cities is the most visible manifestation of the location comprising multiple mixed-use initiative. developments, including the location for the HS2 station, Leeds All of the core cities of the North have experienced major transformations over the past 30 years. Manchester City Centre – a major building boom These include Liverpool, Manchester, Newcastle that is set to continue through several major upon Tyne, Sunderland, Middlesbrough, York, mixed-use developments, including 40,000 Leeds, Sheffield, Hull and Doncaster. homes, substantial office space, cultural and leisure facilities, continuing the transformation of The key components of these transformations have Manchester to a world-class city been the physical rebuilding of areas previously characterised by large-scale dereliction; the Knowledge Quarter – a major city centre emergence of new leisure and cultural facilities and development based on education and innovation, activities; the increased prominence of universities including healthcare facilities in Liverpool and substantial student populations; and the Salford Quays and Trafford Wharfside – growth of new economic activities, particularly of continuation of recent regeneration which includes a high technology nature. Media City and facilities for the digital sector in Salford, Greater Manchester Transformational Developments These transformational developments are ongoing Housing and are spreading to other parts of the North’s city A particular opportunity also exists in respect of regions. This represents a major, multi-billion euro housing. There has been a substantial shortfall opportunity for construction and development in the number of housing units constructed in at least on a par with anywhere else in Europe. England over the past two decades. The shortfall The opportunity encompasses major flagship is estimated at 2.5 million units and is growing at a developments as well as a great many smaller- rate of 100,000 each year. scale and more diffused developments. While the most pressing shortage is perceived as Major flagship developments currently ongoing being in London and the South East of England, include: there is also both need and scope in the North. The Energy Central – a 200-hectare deep water opportunity includes refurbished units throughout access development focused on offshore energy the city regions and potential new ‘garden’ towns. businesses in Blyth, Northumberland In addition, as regeneration has progressed, there has been a return to living in central urban International Advanced Manufacturing Park – a locations, accompanied by leisure and other new location for automotive supply chain and local service amenities, which will present further advanced manufacturing businesses, next to the opportunities. Nissan car manufacturing plant in Sunderland It is worth noting in relation to these opportunities Able Marine Energy Park – a 250-hectare that the general local authority approach in development focused on offshore and renewable the North has been, and continues to be, pro- energy manufacturing at the Humber Enterprise development. Zone, North Lincolnshire
6 7 Strategic Economic Plans Devolution is now being advanced in England in a quite ambitious manner. From May 2017, additional Over recent years, local areas have been powers, budgets and responsibilities have been developing Strategic Economic Plans (SEPs), devolved from central Government to new particularly focused on developing indigenous combined authorities, with ‘Metro Mayors’, which capabilities and strengths in the knowledge are intended to encompass entire city regions. economy. These have included digital businesses Seven such deals have been agreed, four of which in Newcastle, media in Manchester, professional are in the North: Liverpool, Manchester, Tees Valley services in Leeds and advanced manufacturing in and Sheffield. A further, North of Tyne, deal has Sheffield and Sunderland. also been agreed in principle. Key to the development of these SEPs are the The Metro Mayors are directly elected, and have Local Enterprise Partnerships (LEPs), which bring powers and responsibilities to make strategic together local business and political leaders. There decisions across city regions. The exact functions are 11 LEPs in the North: Cheshire and Warrington; they manage vary across different combined Cumbria; Greater Manchester; Humber; Lancashire; authorities, depending on the detail of the Leeds City Region; Liverpool City Region; North devolution agreement reached with central East; Sheffield City Region; Tees Valley; York; and Government. The majority of city regions are North Yorkshire and East Riding. focusing on gaining powers over skills, housing and transport. Funding Supports These Devolution Deals will be central to the design and delivery of many Government policies The development of programmes to support in Northern Powerhouse. They will boost the local projects has been funded through a number capacity to achieve the aims and objectives of of City Deals, Growth Deals and, most recently, Northern Powerhouse, and confirm that cities and Devolution Deals. city regions which can combine together where City Deals commenced in 2012 and are essentially appropriate are the essential building blocks for agreements drawn up between local city the future. authorities and their LEPs on the one hand, and central Government on the other. They are based on the ‘Localism’ principle that local leaders are best placed to identify the needs of their areas. They include the transfer of funding and decision- making powers for specific purposes. Investments under the deals have included skills development, transport infrastructure, urban regeneration, housing, and low carbon initiatives.
Growth Deals were introduced in 2013, and are implemented by LEPs to progress their Strategic Economic Plans. Similar to City Deals, they are focused on funding for specific projects.
6 7 Pillar 2: Transport
Connectivity and the Creation of a The construction of the HS2 High Speed Railway Single Economic Area from London to Birmingham and then onwards to the North is at the core of England’s national A great global city has many things. Great jobs rail development. HS2 Phase 2b will see the lines and businesses. Fast and effective transport proceeding from the English Midlands on to connections. Strong universities and hospitals, Manchester and Leeds. A further £300 million has colleges and schools. It also has the entertainment, been committed to enable the incorporation of the green spaces, the housing, culture and sport onward links to other key cities in the North. that make for a good lifestyle.
North of England cities possess all of these things but are separately quite small on a global scale. Northern Powerhouse Rail The Northern Powerhouse is aimed at addressing This further phase will also see the development this by combining them into a collective which of HS3, or what is now being termed Northern is greater than the sum of its parts. That will be Powerhouse Rail. This will create new East-West achieved by providing fast, reliable, frequent and links, including high-speed routes between Leeds sustainable transport connections between them. and Manchester, and further improvements to This will connect the cities of the North to Liverpool in the West as well as to the North East. establish a single economic area that is able to The development of Northern Powerhouse Rail, make the most of its capabilities and strengths and and its links into HS2, will in many ways be the to develop these further. crowning achievement of this initial phase of the Northern Powerhouse. Transport for the North These developments present direct opportunities during their construction and operation. They will This investment in critical transport connectivity also bring about major investment opportunities is now taking place and growing in scale and in their immediate environs, such as the Leeds ambition. A key early development was the station area. They will transform the connectivity creation of Transport for the North (TfN) as of the North with other parts of the UK, notably an organisation that brought together local with London and the South East of England. government leaders and local businesses, primarily in the form of representatives of the LEPs, to Most importantly perhaps, they will transform facilitate the transformation of the transport the connectivity between the North’s key cities system across the North. TfN will be put on a and towns, creating new opportunities for statutory footing this year and will complement employment, growth, productivity, sustainability existing local transport bodies and add strategic and quality of life. value at the trans-Northern level.
The UK Government shares the view that improving transport is critical to the Northern Powerhouse and over £13 billion in transport investment has been committed during the lifetime of the current Parliament.
8 9 Pillar 3: Sectoral Strengths
Emerging Sectoral Strengths and Three ‘Enabling’ Capabilities were also identified: Capabilities — Financial and professional services to support Science and innovation have been key aspects the development of the ‘Prime’ capabilities, of the Northern Powerhouse vision since its while being sources of growth in their own inception. The North is undergoing a major shift right in its economic structure. This utilises existing — Logistics, including ports and airports strengths and capabilities in the North, in many cases associated with world-class universities — Education, primarily higher education, and teaching hospitals. They are also aligned providing research capability and knowledge with world-wide demand, and as such are likely excellence. to constitute major sources of growth and future prosperity. Emerging Clusters The economy of the North is dominated by Major clusters of activity in these areas are services activity, in common with elsewhere in emerging across the North, and there are very the UK. Much of this is of a local nature, but there significant opportunities to become engaged are also important tradeable services, including in their development. These clusters are being logistics, professional services, media, tourism, supported by a range of measures and dedicated healthcare and education. IT and digital services business investment funds, such as the new £400 are also a growing feature of many of the North’s million Northern Powerhouse Investment Fund. cities. Complementing these service activities The activities within these clusters are generally are important clusters of manufacturing and of a world-class nature and are in market areas productive activity, including manufacturing and that are growing rapidly, and are in demand chemical engineering. internationally.
Many of the developments within these clusters Future Opportunities have been supported by national UK Government The most significant future opportunities are likely funding. This has included funding from Innovate to arise from new economic activities and clusters UK Programmes and the Catapult Programme, which are largely based on science and innovation. with key elements of the latter programme The LEPs have all identified opportunities for the located in the North, including those for offshore future, and have included these in their Strategic renewable energy, high-value manufacturing and Economic Plans and investment plans. digital.
The Northern Powerhouse Independent Economic It is now of particular importance that these Review matched these opportunities with wider, areas of focus and their development are aligned international market and technological changes with the new UK Industrial Strategy which was and identified four supporting Pan-Northern launched in December 2017 and is aimed at ‘Prime’ Capabilities: identifying the opportunities and requirements of new economic activities that can be suitable — Advanced manufacturing for the UK. This will deliver ongoing support, — Energy generation, storage and low carbon momentum and investment and further facilitate technologies the creation of internationally successful clusters, providing growth, exports, and opportunities for — Health innovation, including e-Health and the the Northern Powerhouse. integration of health and social care
— Digital, including high-performance computing, data analytics, and machine learning.
8 9 References
Digital References Construction References https://www.ippr.org/publications/devo-digital http://www.centreforcities.org/reader/move- public-sector-jobs-london/relocation-bbc- activities-salford/2-regeneration-salford-quays/ Cleantech & Renewables https://www.manchestereveningnews.co.uk/ https://www.siemens.co.uk/en/wind/hull.htm business/business-news/manchester-city-centre- development-highest-12527535 https://assets.dongenergy.com/ DONGEnergyDocuments/uk/Offshore%20 https://www.my.glenigan.com/#/insight/ Wind%20Week/REGENERIS%20DONG%20 a6A20000000Gp58EAC Impact%20on%20the%20Humber%20Study%20 -%20FINAL.pdf Lifesciences References
https://www.n8research.org.uk/media/The-NPH- Engineering References Life-Science-Pitch-Deck.pdf http://www.bbc.co.uk/news/uk-england-south- https://www.armstrongceilings.com/content/ yorkshire-38906972 dam/armstrongceilings/commercial/europe/case- https://www.gov.uk/government/news/boeing-to- studies/national-biologics-manufacturing-centre- open-new-production-facility-in-sheffield case-study.pdf
https://www.pharmafield.co.uk/features/2017/06/ Top-5-RD-hubs-in-the-UK
10 11 Enterprise Ireland Supports
Helping you succeed in the UK Additional Supports Enterprise Ireland assists clients entering new Introductions to specialists in all areas, including markets with legal, recruitment, PR and taxation
Pre-Visit Support Access to Mentors
– Sector overview Enterprise Ireland has built up an excellent – Validation of the opportunity for your product network of individuals in the UK who are available or service to work with Irish client companies looking to develop their business. This includes market – Evaluation of your market entry strategy and sector specialists, business accelerators and – Suggested channels to market members of Irish business associations. – Competitor analysis – Relevant contacts/suggested itinerary Want a hot tip? Book a hot desk
Enterprise Ireland’s offices at Shaftesbury House, In-Market Support in the heart of London, offer hot desk facilities to – Introductions to buyers and decision makers client companies. To book, log on to uk.bookingbug. – Identification of potential partners com/home/33936-Enterprise-Ireland. It also has – Facilitating buyer visits to Ireland a range of meeting rooms, subject to availability, – Assistance with product launches and capable of holding between four and 18 people. workshops Contact Enterprise Ireland to find out more. – Securing reference sites Keen to accelerate your market entry? International Trade Events For a comprehensive list of business accelerators, incubators and co-working spaces in London – Inward buyers’ missions to Ireland check out capitalenterprise.org. – Group stands at international trade fairs – Overseas trade missions – Market study visits – Client knowledge seminars – Networking events with market contacts
10 11 Contact details
Marina Donohoe David Corcoran UK and Northern European Director Senior Market Adviser [email protected] BPO/Services +44 207 438 8701 [email protected] +44 207 438 8725 Deirdre McPartlin UK Manager Darragh Cotter [email protected] Market Adviser +44 748 408 6686 Cleantech [email protected] Sean Long +44 207 438 8713 Senior Market Adviser Engineering incl Aviation & Aerospace Padraic Geraghty [email protected] Market Adviser +44 207 438 8726 Digital Technologies [email protected] Sheila O’Loughlin +44 207 438 8724 Senior Market Adviser Lifesciences Anne Corr [email protected] Market Adviser +44 207 438 8721 Construction [email protected] John Hunt +44 207 438 8706 Senior Market Adviser Construction - Built Environment [email protected] +44 207 438 8719
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