Is your economic development function full-spectrum?

I was born in 1971 in Gateshead, a town on the southern bank of the River Tyne in northeast England. My family moved to Whitley Bay in 1976, and I grew up watching an entire regional economy disappear.

Coal mines that employed thousands, including half of my family, closed one by one. The shipyards on the Tyne, once among the most productive in the world, fell silent. Heavy engineering plants that built tanks, turbines, and industrial machinery, shut their gates.

At school in the 1970s and early 1980s, we were taught craft skills and technical drawing for industries that were fast disappearing. We learned to read technical blueprints, work with our hands, and understand the machinery that had made Tyneside prosperous for a century. Those skills became obsolete before we could use them; the industries they were designed to serve simply ceased to exist.

Efforts were made to replace them. The Nissan plant in Sunderland is one of the most efficient car factories in Europe. Sage, the software company, became a FTSE100 success story. These are diamonds in the post-industrial landscape. But 54 years after I was born, Tyneside still lags behind UK averages on educational attainment, health, income, and life expectancy.

Growing up in this time of decline shaped my education and career. I wanted to know why the economy I grew up in was deemed unviable, and why it took 20 years of economic experiments to produce modest and partial improvements.

At university I studied economics and began to question the idea that recalcitrant regions could be transformed by improved competition, rational decision-making, friction-free transactions, and perfectly clearing labour markets where there is low unemployment.

Economies are human constructions and rarely operate freely or perfectly. They need institutions and laws to work. Markets are managed and don’t ‘sort themselves out’ – not when entire industries collapse and skills become obsolete; not when communities need reinventing and regions beset by institutional and structural economic weaknesses offer little support.

This is why local and regional economic development matters. It is the difference between managed transition and permanent decline; between regions that adapt or get left behind. Economies are complex and dynamic systems. As technologies, education, skills, international trading relations and competition change, our understanding, theories, and tools must evolve.

National economic conditions and policy can only do so much. They can enable local and regional economic performance and success but are often not nuanced or flexible enough to respond to specific local conditions. Without deliberate, sustained intervention places such as Tyneside won’t bounce back, they will fall further behind.