We are pleased to present the newly released briefing paper “The Yorkshire and The Humber and North East Productivity Challenge”. The paper was written by Kate Penney from The Productivity Institute (TPI), an ESRC-funded initiative that seeks to identify and address the causes of the UK’s weak growth in productivity.
The briefing paper has been produced to inform the discussions and actions of the Regional Productivity Forum (RPF) for Yorkshire, Humber and the North East, which is one of eight regional productivity fora established by TPI. The RPF’s membership is composed of representatives from the region’s business, policy and academic communities.
The paper provides key insights into productivity growth within the region and highlights a number of strategic initiatives for growth and development.
This paper provides extremely important information about productivity in our region and the obstacles to improvements in economic performance that different parts of our region face. The paper’s content will help our RPF to develop initiatives that we hope will make a strong contribution to improving productivity in Yorkshire, Humber and the North East.
Professor Jason Heyes
RPF's academic lead and Professor of Employment Relations at Sheffield University Management
The paper firstly examines productivity levels and growth (between 2008-19) in the region, comparing them to the UK average. While overall productivity in the region is below the national average, Sunderland, with its strong manufacturing base, has exhibited higher productivity levels and growth rates than the UK as a whole. However, cities in Yorkshire and the Humber, including Bradford, Leeds, Sheffield, and York, have struggled to match the national average in productivity growth over the past decade.
Several factors contribute to the productivity challenges faced by the region. The prevalence of low-productivity firms, under-investment and inadequate regional connectivity have hindered substantial productivity improvements since 2008. Additionally, the North East and Yorkshire and the Humber were among the least resilient regions to the 2008 global financial crisis and have been significantly affected by Brexit, given their reliance on EU markets for trade.
However, the briefing paper highlights various initiatives that offer potential for future productivity improvements. In the North East, the new governance structure resulting from the devolution deal will provide greater powers and opportunities for growth and innovation in areas such as advanced manufacturing, health and life sciences, energy, tech, and business services. Notable projects include the development of a Net Zero Innovation Centre, the creation of a fully decarbonized industrial cluster through the Net Zero Teeside project, and the establishment of the SeaH Monopile Facility for offshore wind turbine manufacturing.
In Yorkshire and The Humber, the focus is on leveraging the region's strengths in sectors such as healthcare and innovation, manufacturing, financial and professional services, and digital technologies. The region has established itself as a major centre for financial and professional services outside of London and earns billions from advanced manufacturing and R&D activities. However, there is a need for increased investment, both public and private, in research and development to unlock further growth potential.
The study also examines various factors and bottlenecks that shape regional growth. By adopting a comprehensive 'scorecard' approach, it analyses key metrics across five core drivers: business performance, skills and training, policy and institutions, health and wellbeing, and investments and infrastructures.
One of the common challenges faced by both Yorkshire and Humber and the North East is the need for improved connectivity and transportation infrastructure. The cancellation of the planned HS2 rail eastern leg to Leeds has raised concerns, but the Transpennine route will receive upgrades to enhance connectivity. Infrastructure investment is crucial to facilitate economic growth and ensure efficient access to markets.
Overall, the briefing paper highlights the importance of addressing the productivity gap in Yorkshire and the Humber and the North East. The regions have enormous potential for growth and prosperity, particularly in sectors such as clean energy, advanced manufacturing, digital technologies, and healthcare innovation. By implementing strategic policies, fostering innovation, and increasing investment, the regions can unlock their productivity potential and contribute to the national economic landscape.
For further information, access the full briefing paper.