The "Melting Iceberg" dilemma in the North East of England.

Today I attended a briefing hosted by Ernst and Young's ITEM Club supported by the Entrepreneurs Forum in the North East of England.  There was some interesting information shared regarding the state and outlook for the North East economy as well as a look at the national UK picture.  I could not help but draw parallels between what was being presented and John Kotter's 2006 book, "Our Iceberg is Melting".  In this book (which is a fable) a colony of penguins discovers its iceberg is falling apart but instead of just moving to a new one, they embark upon a major transformation that leads them to a "nomadic" lifestyle where they no longer become dependant on one block of ice.

For the North East region, economically it looks like the "iceberg" is melting but is in a much better state than it was in previous recessions.  However, there is still a big dependency on a shrinking public sector as well as a few major employers like Nissan (who incidentally manufacture 33% of all cars made in the UK) and the growing wind turbine manufacturing sector.  The region's unemployment level remains stable at around 110,000 but this is set to rise once public sector cuts and resulting supply chain savings are made.  At its bleakest, this could add an extra 50,000 to the unemployment figure in the region.  Add to this the skills gap that already exists (and will be exacerbated by the difference in the skill set of those becoming unemployed in the public sector vs. the needs in the private sector) and these are worrying times.

In the past, reliance on coal mining, heavy industry and more latterly the public sector has built a dependency culture.  As each of these "icebergs" have melted, the region has found another to call home and to shift its "colony" on to.  This has led to a culture where too few individuals are willing, capable or empowered to create and work in new, small and dynamic businesses.  At a regional governance level this is as much due to an unwillingness to change attitudes and mindsets as it is to invest capital in start-ups.  Anyone who has worked in small businesses and start-ups knows it requires long hours, an acceptance of uncertainty, comfort with chaos and huge amounts of flexibility (analogous to the "nomadic" lifestyles the penguins found and had to learn in the book).  Unless we create a culture where business owners and employees learn to embrace these new ways of working and are supported to make the change in mindset, the region will struggle to take the opportunity before it.  The result will be many more years of lurching from one melting iceberg to another.

However, if those at the helm of the new LEPs and Regional Growth Fund can embrace the transformational opportunity that exists and avoid the mire of politics, short-term thinking and bureaucracy, this could be a major crossroads for the North East.  One option is to move to another new "iceberg" that may melt in 15-25 years.  Another option is to create a culture of adaptability and flexibility in the region and forever eliminate the risk of being stuck on another metaphorical block of melting ice.

Such a change requires massive amounts of leadership and an entrepreneurial mindset at a regional level.  For me, the jury is out as to whether those in control have the skills and motivation to do what is right versus what is "easy".  I guess we will find out.  As the colony found out in "Our Iceberg is Melting", this also requires a common sense of urgency, dispersed leadership, a clear vision and a systematic approach to removing barriers and creating short-term wins.