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Redundancies can help to fuel entrepreneurial surge

7th April 2011

As we face an estimated 50,000 public sector job losses in the North East, a huge question mark sits over whether the region’s private sector is in any way strong enough to absorb the inevitable surge in unemployment.

As someone who has played an active role in enterprise for over 16 years, I have no hesitation in arguing that we have a successful private sector; big players like Nissan and Sage, as well as the huge variety of SMEs which have kept the region buoyant and vibrant during the One North East years. Do I believe that it is strong enough to support the cost of the national scenario, government actions and subsequent public sector job losses? I’m not sure anyone can accurately answer that question yet.

What people working in enterprise can do is bolster their efforts, and work together to assure a business support infrastructure for private sector growth remains strong and intact.

Regardless of political standing or opinion on the dismantling of One North East, the region needs more small businesses, and more people to take risks in starting them. Therefore enterprise agencies are at the front line, and we must establish a common response to further private sector enterprise. Without this, regional development is in danger of entering a potentially critical period of inertia.

Despite the political fragmentation and recent indecision over the LEPs, North East enterprise agencies, including those in Teesside, still form a strong cohesion, and a sound platform for supporting and assisting new businesses.

The North East Business and Innovation Centre (BIC) is already assisting several public sector organisations which need to make redundancies, by laying the groundwork for their employees to be supported in exploring self-employment and business creation.

Our business training team has worked with Government Office North East, Sunderland ARC, and One North East, to introduce employees to the principles of enterprise, exploring any areas of their experience that could be developed as a business through idea generation sessions.

In their awareness of what lies ahead and the importance of developing new regional businesses, these organisations are funding this process internally, and they turned to the BIC for delivery because they are aware of our unwavering determination over 16 years to develop an enterprising culture for the North East region.

Recently I was speaking to Jules Preston, chairman of Northumberland, Tyne & Wear NHS Foundation Trust, who was a key member of the team which created the BIC in the early 1990s, when the rapid closure of the shipyards and mines had led to a generation of manually skilled people no longer being able to find work. Jules told me about a man he welcomed on to the site, who had worked there when it was a shipyard slipway. “You’ll never have proper jobs here”, he’d said. Jules said that this was a widespread attitude and you could understand it, yet at the same time innovative companies were burgeoning onsite. Some of these, such as the Leighton Group, have grown to now be amongst the North East’s biggest businesses.

I have little doubt that, amongst the raft of people who have already or will soon find themselves in a position of redundancy, some will be harbouring ideas that have the potential to blossom into lucrative businesses which can strengthen the future of our region.

Paul McEldon is chief executive of the North East Business and Innovation Centre (BIC) and deputy chairman of National Federation of Enterprise Agencies (NFEA).

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