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Where are we now?
Economy

The region’s economy has evidently changed very substantially. The long- term shift has, of course,
been away from the traditional industrial base of coal, steel and engineering, and towards a much
more diverse, services-based economy. There is now little left of the nineteenth-century industrial
structure and occupations. In County Durham and Darlington, collieries, steel mills and wagon
works may be well remembered by older people, but can mean little to anyone under 30.

Key features of the contemporary economic structure include:

A much-reduced manufacturing sector, which now only accounts for just over 17% of jobs
in County Durham and only 12% in Darlington. Manufacturing is still more important here
than nationally – manufacturing accounts for 11% of jobs in Great Britain (Table 2).
The area is heavily reliant on public sector jobs and spending. 33.4% of jobs in County
Durham, and 32.5% in Darlington are in public administration, education and health.
Business services such as Finance, IT and other business activities are very underrepresented
in County Durham and Darlington.
A weak entrepreneurial culture – the North East continues to have relatively low levels of
business start-up activity, new and small businesses. There are some signs of improvement.
For example, Darlington now has a rate of business start-ups above the national average.

Structural weaknesses include under-representation in sectors with the highest growth rates, such
as business services and creative industries, and relatively little investment in R&D. In relation to
entrepreneurial activity, the State of the Region Report (2006) comments:
'The North East has a much lower number of businesses per 10,000 population than
any other English region and there is little sign of growth. 32,000 additional businesses
would be required for the North East to reach the current national rate of businesses
per 10,000 population.’

This low level of entrepreneurial activity is despite the great amount of effort and resources which
have been devoted towards encouraging self-employment.

County Durham and Darlington are heavily dependent on the public sector and have very few
medium or big companies that are locally based and locally rooted.

Gross Value Added (GVA) per head is a useful measure of economic activity and performance. The
North East’s GVA per head has declined, down from 85% of the national average at the start of the
1980s, to 79% in 2005. Only Wales had a lower GVA per head than the North East (78% in 2005).
County Durham has an even lower GVA per head (only 64% in 2004), but Darlington, at 96% in
2004, is above the regional average.

The region’s growth rate (change in GVA) has improved in recent years, and if that were sustained,
the North-South economic divide would narrow. It is disputed whether that narrowing will occur.
One NorthEast has an ‘aspirational’ target anticipating a significant closing of the gap, with the
region reaching 90% of the UK GVA per head by 2016. But the new Regional Spatial Strategy
assumes relatively little change, with the gap staying much the same over the next decade or so.
Farmers market in Middleton in Teesdale.

Where are we now? Economy

Where are we now?
Economy