Newcastle has got momentum behind it - that’s the feeling of inward investment agency Invest Newcastle after a week that brought another jobs boost for the city.
Global defence giant Leonardo will base some of the 200 North East-based jobs it intends to create, including data scientists, systems and software engineers and analytics experts at the Spark building on the Newcastle Helix business and science park. The €14.1bn revenue company is just the latest to plump for Newcastle, following the likes of cybersecurity firm Arctic Wolf and digital consultancy Monstarlab in choosing the city. At least a couple more significant announcements are expected in the coming months and Newcastle has been identified as being one of the top areas in the country for attracting overseas investment.
And while the success of Newcastle United Football Club has undoubtedly generated good international PR for the city, there is more at play when it comes to attracting investors, according to Invest Newcastle director Jen Hartley. “I think in my 12 plus years in trade and investment I think I’ve never known a busier time,” she said.
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“We’re really riding a wave of investment enquiries at the moment and it’s really built a bit of momentum. As we announce one company, which is the fantastic global brand that is Leonardo, we’ll start seeing enquiries from others who realise that those companies are coming to the city and why shouldn’t they too.”
Leonardo’s choosing of Helix is evidence, Ms Hartley says, of a growing defence cluster. “We all saw the acquisition by Rafael of Pearson Engineering and they’ve got huge investment plans in the city as well. We’re starting to see a real traction of this cluster of companies coming together - all bound by the need for science, technology and data-driven roles. That’s something Newcastle has been very focussed on developing and becoming a key location for.”
And up the the road in Alnwick, space tech start-up NORSS has signalled its intention to grow following its acquisition by another global defence giant, Raytheon, last year. There is also firms like Ford Aerospace in South Shields and Lockheed Martin’s eyeing up of the region for a forthcoming space engineering facility.
It’s part of a wider direction of travel for Newcastle which has positioned itself as a tech hub - a strategy that appears to be paying off. Ms Hartley explained: "Out of all the enquiries for us, tech-related enquiries probably outweigh the others five-fold. They’re the companies that are creating the most jobs and also that have a lot of transferable skills. We talk a lot about the fact that we have a really strong, and historic, games cluster in the city. A lot of those skills - animation, software development - can be transferred into these other industries which is a good position to be in."
That’s acknowledged by Leonardo, which says it chose Newcastle partly because it has a tech skills base that is untapped by industry rivals. Had the firm chosen the North West, head of media relations John Stevenson says, it would be in competition with the likes of BAE Systems for suitable candidates.
Leonardo joins The Spark neighbours Womble Bond Dickinson - occupying four floors - and the National Audit Office. And there many more jobs-focussed sites elsewhere in the city including the Stephenson Quarter development, the Pilgrim Street development where 9,000 HMRC workers will be stationed, the AirView Park business site next to Newcastle Airport and developable land on the North Bank of the Tyne where there are hopes for further growth of the offshore services cluster.
It’s a story that Invest Newcastle is taking to the South of France for next month’s MIPIM conference - the world’s biggest real estate event. Around 60 Newcastle delegates hope to woo international developers, investors and potential occupiers. In May, they will do similar, albeit closer to home at the UK’s Real Estate Investment and Infrastructure Forum (UKREIIF) in Leeds.
Overseas appetite for Tyneside is building, Ms Hartley says. "I’ve worked in foreign direct investment for a really long time and I’ve worked with the likes of Nissan and Hitachi, and their supply chains, but I do feel like we’re starting to see a lot of foreign-owned companies looking at the city. And they’re foreign-owned companies that might already have a base, or several, in the UK and they’re looking at other cities like Manchester, London, Leeds and Belfast. And it may be that now some of those other cities have become overheated so they’re looking at other technology hotspots such as Newcastle.”
She added: "We work with companies at every scale - including big global brands and also smaller firms. For us, it’s about creating really good quality jobs in Newcastle that our residents are able to access. We’re really pleased to be working with tech, space, security and defence companies as well as health and life sciences companies as there’s a real demand for space for those types of businesses in the city. We’ve got key strengths in health tech, diagnostics and clinical trials and then we’ve also got large corporate service brands.”
Newcastle’s pitch to job creators must now talk up the city’s hybrid working credentials. That includes all the usual selling points such as affordable housing, decent commuting times and easy access to coast and countryside but it’s also about the success of other employers in bringing people back to the city. Ms Hartley points to studies by consultancies such as Savills and Avison Young that suggest some regional cities - such as Newcastle - have recovered faster than larger rivals in terms of returning workers to the office.
Leonardo’s John Stevenson agrees and says the firm’s “custom working” model has helped make the case for its eighth UK location. He said: “In the case of Newcastle it’s actually helped us ramp up. We’ve already employed people here even though the office isn’t ready yet because, for now, they can work from home while we prepare the base.”
Is there more to come in 2023? “We’re not sure if we’ll plateau at some point,” said Ms Hartley. “But, at the moment, our pipeline is really strong. I think we’ll finish this year - at the end of March - on a high. The companies we work with will have created in excess of 1,500 jobs. Those companies that we helped perhaps a couple of years ago are now looking at bringing other operations and functions to the city, which is exactly what we want to do."
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