Future Opportunity: Ensuring the economy of the north east is diverse enough to meet the challenge of change

Opportunity North East (ONE) is on a mission to transform the economy in the north east of Scotland and develop and deliver projects that inspire economic growth and also nurture entrepreneurship and business innovation.

As it enters its second decade, against a backdrop of successfully engaging business leaders in economic development and founders to help them scale businesses in growth sectors of energy, digital tech, life sciences, food, drink and agriculture and tourism, the organisation is focused on a future that segues from the energy transition into fully embracing diversification.

“There are two reasons why diversification is so important,” says ONE chief executive Jennifer Craw. “The oil and gas economy is shrinking – way too rapidly, given the current environment. Repositioning the region in terms of talent, knowledge, experience and supply chain base as key leaders in terms of the green energy transformation and transition has been a really important part of our role. 

“Now, the lesson for the future is building a diversified economy that has strength across a number of sectors and a balanced talent pool. This gives us much more resilience and talks to a mixed industry economy of the future, a vision that is shared as a regional economic partnership."

Craw acknowledges the oil and gas sector has been of huge benefit to the north east of Scotland, and the UK as a whole, in terms of a technology-led industrial cluster, with a doorstep market that has allowed supply chain operators – as well as the professional services; lawyers, financiers and bankers – to build up knowledge and expertise they then internationalised. 

^{ONE SeedPod | Image provided by ONE}

She says: “We knew when we set up Opportunity North East in 2015, because Sir Ian Wood had just completed the Maximising Economic Recovery report for the UK Government, that the production of oil and gas would drop significantly by 2050, the UK sector would shrink and given the dominance of oil and gas in the region, change and investment was needed in the north east economy. 

“So what we are working from is a real strength of talent, in terms of enterprising people who have built and grown businesses, and an international talent pool attracted through inward investment.”

From a ONE perspective, diversification is vital in ensuring that talent pool, with its breadth and depth of knowledge and enterprising expertise, stays in the region.

“Look at the other strengths within the economy of the north east. So let’s take food, drink and agriculture: in terms of land mass and production output, of beef or barley, we are the biggest producers in Scotland.

“So we already have these incredible heritage industries that have been part of this region’s economy for centuries. 

“What we also know is the food and drink market continues to grow. It is looking for premium products that have great provenance. So there is an incredible opportunity to ensure we continue to play into premium marketplaces. Seafood comes into that as well because sustainable fishing is an important part of the mix. 

“There is also opportunity for growth in tourism. Back in 2015 visitor numbers were driven mainly by business tourism. We knew we could develop a very strong leisure offering but it would take time to establish the brand, destination, and build a visitor economy attracting new visitors who want to have experiences and enjoy activities.”

Now, the lesson for the future is building a diversified economy that has strength across a number of sectors and a balanced talent pool

Craw notes that in the life sciences sector, statistics show the north east academic and research base long punched above its weight, but adds: “We weren’t translating this into commercial spin-outs that stayed here in the region. Again, we could see there were opportunities.

“Our focus is on those industry sectors that we know can grow with the right investment, which is around innovation, access to new markets, market development, finance and  capital and entrepreneurial growth. The focus must also be on the people who are driving the growth of these businesses: the founders and founding teams, who are starting, growing and scaling. 

“Our ambition across the region is to create strong growth sectors that will be resilient. We’re in a global economy that has known disruption but we have to build a balance of economic activities that can withstand shocks. We have a balance of founders and business leaders who can navigate uncertainty and do it in a way that is continually keeping their businesses ahead of the curve.”

In order to keep itself ahead of the curve, ONE has benefited from consistent funding over the past decade, with £64m from the Wood Foundation leveraging additional matched funding exceeding £125m.

This investment has proved a winning formula with the most recent assessments showing significant economic returns. Recent data indicates £135m added value to the north east’s economy from a £35m investment from ONE to date, creating £9 value for every £1 invested locally. In turn, this has boosted jobs, productivity and skills across key sectors such as digital, food and drink and green energy, driving economic diversification through strategic partnerships and projects.

While financial stability has enabled long-term planning and agile responses to the industry sectors’ opportunities, Craw is keen to underline the importance of securing ongoing government match funding to accelerate ONE activities.

“Our focus has been identifying opportunities and constraints with industry and partners to develop projects, deliver at pace and drive impact. One of the things our economic impact assessment has demonstrated is that approach has a much faster impact. The transformation of the regional economy is happening faster because of ONE activity.

“ONE SeedPod, ONE BioHub and ONE Tech Hub, the innovation hubs for each of the sector ecosystems are where communities of founders and businesses come together.  They share, they learn together, and it signifies the heart of the ambition of the ONE community.”

^{ONE BioHub | Image provided by ONE}

Integral to fulfilling this ambition of a thriving ecosystem is continually motivating private sector leaders to volunteer their time and expertise for ONE Boards and projects, underscoring a collective responsibility to sustain economic opportunities and create high-value jobs for future generations. 

With this in mind, ONE collaborates with Skills Development Scotland, education providers and the Developing the Young Workforce (DYW) programme to align skills development with industry needs and aspirations. Foundation apprenticeships and school engagement initiatives introduce students to sector opportunities early on, particularly in digital tech and hospitality.

ONE and partners are working closely with the Massachusetts Institute of Technology (MIT) to deliver entrepreneurial development programmes focused on founders, supplemented by workshops on finance, scaling and go-to-market strategies. The education is supplemented with a venture mentoring programme with more than 40 mentors helping founder teams refine their business models and growth plans. This comprehensive support system has led to start-ups growing job numbers and internationalising their businesses, demonstrating the effectiveness of the approach.

Craw says: “If you’re on a board, if you’re a mentor, or you’re supporting workshops, leading activity that’s because you want to do it and you are really motivated to ensure the north east region continues to offer great jobs for the future.” 

This article is sponsored by Opportunity North East.

www.opportunitynortheast.com