Report predicts high growth for UK's North East

The North East advanced material electronics industry is projected to contribute nearly £900m to the UK economy over the next five years, according to a new report published on behalf of Business Durham and the Compound Semiconductor Applications (CSA) Catapult.

Undertaken by Urban Foresight, the report identifies ‘significant growth potential’ in the sector, which is already providing many jobs and contributing to the UK economy.

The report maps the landscape of the advanced material electronics (AME) sector in the North East. AME are electronic systems using materials that have been engineered to have superior properties compared to conventional materials.

The North East AME sector is particularly strong in developing sensors, microwave communications, and display technology for the defence and security, space and aerospace, telecommunications, and healthcare industries.

Highlights from the report include:

- The North East AME sector currently employs 2,798 people, an increase from 1,800 in 2020.

- The North East AME sector could employ a total of 7,583 people in the next five years.

- The North East AME sector currently provides £369.9m of gross value added (GVA) to the local economy, an increase from £183.9m in 2020.

- Accounting for wider economic impacts, the total projected GVA contribution to the North East economy is £893.8m over the next five years.

- There are currently 58 businesses in the AME sector in the North East, 96 percent of which are SMEs.

According to the report, the barriers facing these businesses are skills, funding, and the development of new products.

However, business growth support programmes, such as the networking body North East Advanced Material Electronics (NEAME), are helping to address these challenges.

The report estimates that 46 percent of new jobs and £50.6m of the increased GVA is because of support from these programmes.

CSA Catapult is the UK’s authority on compound semiconductor applications and commercialisation. It provides expert knowledge and access to specialist equipment that enables businesses to de-risk their technologies and speed up their time to market.

In 2023, CSA Catapult opened an office at NETPark in Durham to help support a thriving cluster of businesses specialising in compound semiconductor technologies.

Martin McHugh, CEO at CSA Catapult said: “This new report provides clear evidence of the growth opportunity across the North East electronics industr

“The region is supporting critical industries such as defence, telecoms and healthcare by developing next-generation semiconductor and compound semiconductor technologies in collaboration with a strong academic base.

“CSA Catapult is committed to supporting growth in the region. Our role as a trusted, neutral convener is to help the region achieve the significant projections outlined in the report.”

Kerry Walker, business growth director at Business Durham, said: "We are delighted to see the significant growth potential of the North East electronics industry, as highlighted in this report. Business Durham is committed to supporting the growth of this important sector, which is creating jobs and contributing to the economic prosperity of the region.

“The North East has a strong track record in innovation and manufacturing, and we believe that the advanced materials electronics sector has a bright future ahead. We will continue to work with our partners to support businesses in this sector to access the skills, funding, and research and they need to thrive.”

Emma Clement, principal consultant at Urban Foresight said: “We were thrilled to be able to refresh our landscape research from 2020 and produce a new report that demonstrates how investment from the council has directly supported business growth.

“The main difference between the 2020 report and this new one, however, is the broader definition of AME. This encompasses a wide range of electronics and material technologies. Our research found that the full breadth of technologies, services and markets are served by the region – surely a unique offer in the UK.

“As a North East business ourselves, we are proud to help showcase these strengths.”

Steve Clements, CEO, aXenic said: “As a rapidly growing SME focused on satellite communications and aerospace, with its base at NETPark and a founder member of NEAME, we are pleased to operate with our key partner suppliers in the region. We have witnessed the significant growth of the advanced manufacturing sector particularly over the last five years and experienced the supportive business climate. We look forward to participating in the continued support for the region to deliver further growth in the next five years.”

The report is an update of a previous landscape report published in 2020 and was commissioned by Durham County Council and the Compound Semiconductor Applications Catapult. Urban Foresight compiled the report from desk-based research and business surveys.

A copy of the report can be downloaded here.