Long-term economic plans

John GourdChairman

Current Picture (1) • Our economy is growing again

– GVA grew by 0.6% to 3.9% over 2012-2013– 6th highest growth across 39 LEPs– Hertfordshire is now a £30.4bn economy– Fifth largest upper tier economy outside London

• Back towards full employment– Workforce of 600,000– Lowest level claiming JSA since 2008– 2014 Unemployment rate at 4.6% (UK 7.6%)– Still wide sub-county variances

Current Picture (2)

• Growing business population– Circa 50,000 businesses– During the recession the county lost over 1,000 SMEs – From 2012-14 and increase of 3,630 businesses (net).– Average business size is increasing

• Signs of overheating?– House prices rose by 13.2% (UK average 7.6% )– Skills shortages emerging– Lack of suitable employment sites

The SEP - smart growth

Key Principles:– Anchoring/growing high value sectors, jobs and

skills in the county– Unblocking connectivity constraints– Being clear on what growth and where (jobs

and homes)– Working across boundaries where it adds value

Global excellence in science, technology & creativity

Key Drivers - Innovation

Strengths

• High levels of corporate R&D

• High concentrations of Knowledge Intensive Business

• Large professional, scientific & technical services sector

• High levels of University/Business collaboration

Weaknesses

• Public R&D investment • Corporate R&D

dominated by a single sector – Life Sciences

• Below average concentrations of product and process innovators

• Publication of scientific papers & research

Key Drivers - Enterprise

Strengths

• Large SME base• Above average start-up

rates• Total number of SME’s

lost since the recession have been replaced

• High rates of private sector jobs growth

Weaknesses

• Slower to grow £1m+ turnover businesses

• High than avg micros (<10 employees)

• Below average presence in non-micro SME

• 90% SMEs don’t make it to 10th birthday

Key Drivers - Infrastructure

• No major infrastructure projects on local highways network planned beyond 2019 to meet growth impacts. Poor East-West routes

• Employment floorspace being lost to residential – through permitted development and planning applications.

• The lowest level of new house building in the last two years in Hertfordshire.

• Housing affordability and link to availability of workforce/ability to attract and retain staff

INSERT MAP FROM GAFGrowth is complicated…

Delivering success through

new Growth Areas

Conclusions

• Our economy will grow, regardless of public intervention – we can help shape it or accept the consequences

• We have a high value, diverse, complex economy that is a net contributor to UK plc – we need to work hard to keep it that way

• There isn’t a simple linear path for growth – each area is different and requires a different roadmap

• We need to shift the perception of Hertfordshire from ‘no growth’ to ‘smart growth’

We have been here before…