Northern Powerhouse ‘can be a world force’

THE Northern Powerhouse region can overcome the disadvantages of its location away from central Europe and be a world economic force.

This is according to Dr Herbert Jakoby, head of the Foreign Trade Department of the Ministry of Economic Affairs, Energy and Industry of the State of North-Rhine Westphalia – essentially Germany’s Northern Powerhouse.

Jakoby was a guest at the UK Northern Powerhouse conference at Manchester Central.

He told TheBusinessDesk that North-Rhine Westphalia was benefiting from being at the heart of Europe.

But he went on: “Your Northern Powerhouse’s location here is not necessarily a significant disadvantage.

“For us of course it is something we profit from, but it’s just an accident of geography. But the Mediterranean countries also benefit from their geography – they have a better climate, more sunshine, while we have more rain.

“What is better, nicer weather or a central location? You can’t change geography and that explains to some extent the success we have with foreign investors because many countries, particularly from Asia – Japan and Chine in particular – have based their sales and distribution centre in our region because they came to the conclusion conclusion it was best for them for access to customers.

“I would say that every region needs to find its own place in the world economy. If you look, for example, at the more northern countries in Scandinavia, they are certainly on the periphery of Europe, but they are quite successful and have developed different strategies which turn a disadvantage – to some extent – into an advantage.

“That is something that every region must learn to do on its own. What is our place in the geography and the economy.”
In terms of linking his Northern Powerhouse with the UK one, however, it may yet be a little more difficult with Jakoby admitting trade connections with Scotland and Wales were better so far.

 He said: “I I know Scotland better than the North of England. The reason why that is that it easier to work with Scotland, because it has its own government and has its own regional institutions which makes it much easier for us to find partners to work with.

“We have worked with Scottish Government and the Scottish Development Agency for years because they more easily understand what their role is. I’ve been to Wales several times and it’s a similar situation there.

“I would not give anyone in the UK any advice on how to organise their government. I have some doubts that the Northern Powerhouse has something inherent that might lead to something similar to what we have in Germany or the United States. It’s a different thing.

“But there’s no problem about that. As I understand, the Northern Powerhouse is mainly a bottom up initiative of organisations and public authorities. It’s a little bit different.

“We know that there are a lot of excellent universities in this region and there are a lot of technologies being developed in the universities in the North. So there is huge potential.

“There is no competition and much co-operation between researchers. I think the North has huge potential if it uses these skills so that they can come to the market with products.

“One reason why Germany has a strong base in manufacturing is that we have institutions which are non-university research institutions which are close to businesses and develop products for companies in close co-operation with researchers. So they are the link between the universities and companies. That is a very important thing.

“Otherwise companies from London or even from Germany will then be able to use their developments and their results.

“It should be businesses here in the region which get spin offs from the universities, or existing companies which need to work with the universities on a day-to-day basis in order to upgrade their product range and adopt leading positions in the world market.”

Meanwhile, Jakoby echoed the words of other business leaders at the conference with regard to transport infrastructure and connectivity for the North.

“It’s very important,” he said. “I remember coming to South Yorkshire some years ago and I arrived in here at Manchester Airport and I looking at the map I didn’t expect that it would take two hours to get to Sheffield from here.

“So that is certainly a challenge. I’m not really familiar with the situation here in the region, but public transport is a very important issue. We need to travel easily from one regional centre to another.

“In our region we have five cities with a population between 500,000 and and 1 million, so that is the same number as we have here in the Northern Powerhouse. They are very close together.

“The distance between Cologne and Dortmund which are the two furthest five cities is about 100 kilometres (60 miles). That is not much. It makes it quite easy.

“There are good trains, but we still see the need for improvement and there is a huge project ongoing at the moment for a high efficiency commuter train called RRX which will link these five cities and some others at a 15 minutes interval.

“So you will be able to go to the central station of one of these cities, you don’t have to look at the schedule, and you know that within 15 minutes you will catch a train which will bring you from Cologne to Dortmund within one hour.”