Aberdeen City Region Deal - your weekly progress update 14th December 2015
In this week’s newsletter update on the Aberdeen City Region Deal, Professor Ferdinand Von Prondzynski, Principal of the Robert Gordon University in Aberdeen, outlines the importance of prioritising innovation in key industries to help safeguard the future of the north-east economy.
The Robert Gordon University hosted last month’s ‘Aberdeen Scotland – the Next Chapter’ economic summit, which aimed to support the Aberdeen City Region Deal by engaging local, national and international leaders to come together to shape a new economic direction for the area.
Prof Von Prondzynski: “Over the past decade or two one of the key observations that have been made about successful economies is that they are the ones that have transitioned successfully from investment to innovation.
“An economy that relies on low value activity – manufacturing rather than R&D, or basic services such as call centres – will be particularly vulnerable to economic downturns. The businesses affected will be relatively footloose and can move to other countries or regions where costs are lower.
“An innovation-based economy has much more security. Investments made by firms will be bigger, they will rely more heavily on in-demand employees with key skills, and they will have strong connections with other local organisations such as universities. They will not want to break up these relationships, and will tend to stay even when economic conditions get bumpy.
“The North-East of Scotland has a powerful oil and gas industry, and has real strength in other sectors such as food and drink and biopharmaceuticals. But the big companies with a presence here do very little research and development in this region, and this is a key risk factor for us. It is therefore of vital importance that our planning for the next phase of development in the North-East should take account of the innovation agenda.
“In the last decade I led a university in Dublin, and during that period it became clear how important Ireland's investment in high value industry-linked research has been. When the recession hit from 2008 onwards, the Irish were still able to attract more R&D-intensive foreign investment than any other European country. This in turn meant that Ireland was able to move out of recession quickly, and now has the highest GDP growth rate in the EU.
“Prioritising innovation is what will secure our future. This will require some investment in research, and also in a workforce with significant skills and an excellent education. Securing the City Region Deal will depend on a really strong plan for innovation in our key industries. And having this innovation will secure our future in the North-East.”
Aberdeen City and Aberdeenshire councils are continuing to work with the UK and Scottish governments on the City Region Deal proposals to help secure a successful future for the north-east economy.