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Economic Market Foresight Analysis

Taking a fresh look at global trends and economic markets that present opportunities for future regional growth in the North East LEP area.

Key emergent markets in the North East

The North East Local Enterprise Partnership (North East LEP) in delivering its ambitions for the North East needs to understand the future course of global trends and how these may shape market opportunities in the future.

The North East LEP therefore commissioned an economic markets foresight study to provide an independent and objective assessment of the opportunities for the North East LEP arising from new and emergent markets. 

The result is a portfolio of 16 market assessments. Each assessment presents an analysis of an economic market that is emergent in the North East and yet to reach its full potential. Each of these markets presents opportunities for regional growth given the North East’s strengths and capabilities.

These profiles highlight how the convergence of global trends such as advanced manufacturing, the green economy and an ageing population are creating opportunities for the North East. These opportunities are in diverse set of markets including electric and autonomous vehicles, immersive technologies, and robotics.

Market profiles 

The 16 market profiles can be accessed below while more detail on the methodology behind the project can be found underneath the individual market profiles. Each profile describes the global prospects for the market, the current position of the market in the North East along with relevant regional assets, and how the continued development of global trends will interact with the market in the future. 

Autonomous & Electric Vehicles

Autonomous and electric vehicles (EVs) are among the key innovation areas within the automotive market.

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Bio Pharmaceuticals

Development and manufacturing of medical drugs and vaccines using biological sources and/ or is semi-synthesised using biological sources.

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Cybersecurity

The protection of online devices, networks, programs, systems, and data bases from unauthorised access and exploitation.

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Cloud Computing

On-demand delivery of computing services over the internet, hosted at a central data centre and often managed by the Cloud Service Provider (CSP). 

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Data Analytics

As enterprises, governments, and consumers produce more data, it is fast becoming unfeasible for them to manually analyse it to guide their decisions. 

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Energy Storage

Energy storage systems make use of large battery powered installations to store power by charging them, which can be available as per demand.

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Energy Generation

Moving away from conventional energy sources such coal in the wake of increasing call to reduce the carbon footprint of the energy industry.

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Financial Services

A broad set of services delivered to individuals or corporations across banking, investment, financing, insurance, credit facilities, fund-transfers, and financial technologies.

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FinTech

Collective use of technology, algorithms and applications employed to deliver efficient services to the consumer across banking and other financial segments.

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Healthcare Services

The sub-segment within the healthcare domain which is provided by medical professionals, paramedics, organisations and ancillary healthcare workers.

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Immersive Technologies

Immersive technology has transformed the digital experience by bringing together the virtual with users’ sight, sound, and even touch.

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Payment Processing

The facilitation of secure and successful transaction between a bank and the merchant, usually using a payment gateway. 

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Robotics

Robotics (and drone solutions) are increasingly growing in demand owing to the need for improved operational processes, lower manufacturing costs, and efficient logistics.

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Smart Grids

Integration of digital technologies in power distribution and management, enabling a two-way ‘communication’ between the system and the user. 

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Software Development

Software development has been the core driver behind the rapid transformation of several industry verticals, enabling smart processes and solutions. 

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Space and Satellites

The research, design, manufacture, operation and maintenance of aircraft and spacecraft, including satellites.

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About this project

The aim of this project was to analyse a range of global trends, issues and growth drivers and situate their impact in a North East context. In doing so the project identified 17 markets that are likely to present opportunities for regional growth in the North East over the next 10-15 years. 

The first stage of analysis was to identify a long list of 97 global markets that are likely to be affected by the continued development of global trends. This horizon scanning process was undertaken independently by Frost and Sullivan using their BEETS framework, a key tool for foresight analysis on which more detail is provided below. The next stage was to narrow these markets and trends to those that are most relevant in the UK context. Trends were narrowed to those that are ‘high impact’ due to the convergence of several trends operating in the same direction. The markets were narrowed down to 62 on the basis that these markets are likely to present opportunities for growth in the UK. After placing these markets in the UK context, the next stage was to cross reference these markets and the high impact trends alongside wider economic and social aims in the North East. This led to a shortlist of 28 markets to be assessed in the North East context.

Finally, Cambridge Econometrics assessed the North East LEP’s strengths and position in these 28 markets to identify a final 17 markets that present the most probable prospects for regional growth. This review triangulated data from a variety of sources, including analyses of literature and regional assets, data from ONS sources and innovative data sources such as the Data City. This last data source was especially important because many of these markets do not map straightforwardly to standard industrial classification codes. Further information on the Data City methodology is available below.

These final 17 markets have been developed into the 16 market profiles accessible above (autonomous and electric vehicles were condensed into one profile due to their overlap). These describe the global prospects for each market, the regional assets available in the North East, the current position of the market in the North East and the strategic opportunities available for the region.

Looking at global trends

To independently identify the trends likely to drive future global market growth, this project followed Frost and Sullivan’s BEETS framework. The BEETS framework is a key tool for foresight analysis and one way of segmenting the complexity in global trends. The model stands for:

  • Business Model Transformations
  • Economic and Political Shifts
  • Environmental Trends
  • Technological Progress
  • Social and Demographic Shifts

A horizon scanning exercise was undertaken by Frost and Sullivan to identify as many trends within this framework as possible. This exercise focussed on the potential impact of these trends and the degree of uncertainty over their impact in a 10–15 year time frame.

It’s important to note that the term ‘trend’ is a shorthand in this context for the implications of processes of change. Trends as commonly understood will always break or bend eventually, but the analysis conducted by Frost and Sullivan used a holistic approach focussing on the drivers and issues that are the underlying causes of change, allowing a degree of extrapolation into the future.

High-impact trends and convergence

It's also clear that some trends will potentially have a greater impact than others. To focus on these ‘high impact’ trends Frost and Sullivan looked for convergence, where several trends are leading to change in the same direction. 37 ‘high impact’ trends were identified as meeting these criteria and are highlighted within the BEETS framework opposite. You can also explore the trends by category below and read about how we mapped these trends to markets in the North East.

 

Business model transformations

Business model transformations

High impact trends that are changing the way businesses across all sectors operate

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Economic and political shifts

Economic and political shifts

Macro trends that are changing the business environment in the economic and political spheres

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Enviromental trends

Enviromental trends

Trends that are changing the natural environment and our relationship to it, including climate change

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Technological shifts

Technological shifts

Trends which demonstrate how innovation and discovery are set to change the business landscape

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Social and demographic changes

Social and demographic changes

Societal trends that are changing customer attitudes and employee perspectives  

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Mapping trends to markets

Mapping trends to markets

Exploring how future trends are driving growth in North East markets

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The Data City

The selection of the 17 markets most likely to present opportunities for regional growth in the North East was an evidence-led process. However, due to the emergent nature of many of the market considered, traditional data sources relying on Standard Industrial Classification codes (SIC codes) are limited in their insight.

To help mitigate some of these limitations these market profiles supplemented the insight from SIC data sources with data from the Data City platform. This platform links companies house data to companies’ websites and uses the website text and machine learning to classify firms into Real Time Industrial Classification Codes.

Gathering data

The Data City web-scrapes activities off company websites...

Linking data

...and links this to Companies House data...

New taxonomies

...to create a taxonomy of UK companies beyond SIC codes.

There are two key advantages to the taxonomy of firms provided by the Data City. The first is that by using a company’s own description and narrative the platform can provide business counts for fast emerging markets that are not captured well (or perhaps at all) by SIC codes. Firms can also be classified in more than one sector in the Data City taxonomy, unlike SIC codes which are a 1 to 1 classification system. This allows the user to understand the interdependencies between sectors.

In addition, the platform also scrapes location data from firm’s websites. This allows the platform to identify companies that have a branch or office in the North East LEP even if they are located elsewhere. All the analysis in the market profile uses these additional locations. We have also used this data to understand the extent that different sectors have a branch economy in the North East LEP area.

The main limitations of the platform are it is not possible to assign turnover and employment counts to individual local authorities. The fact the classifications change over time, while meaning the data is always up to date, also limits the possibility of time series analysis. Nevertheless, the results from the platform can be used to provide data on markets that would otherwise be difficult to assesses.

Each market profile contains data on the position of the market in the North East LEP area from the Data City platform, in addition to data from sources using standard classification codes, to provide a holistic profile of the current position of the market in the North East LEP.

Interested in the data?

To find out more about the data used to generate this evidence base, please get in touch with the Strategic Economic Planning team. 

Email the team