Any wise investor, entrepreneur or business leader knows that along with good ideas, capital constitutes the building blocks of economic growth. This means, of course, that an area needs plenty of financial capital to progress.
But there are many different types of capital, and in the UK over the last 40 years there has been a dramatic shift from natural forms of capital, such as coal, to human and intellectual capital found in leading universities, laboratories, researchers and patents.
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If you look back in time to the 19th and early 20th centuries, it was the cotton mills, coal mines and steel plants connected by canals and railways in the North of the UK that drove the industrial revolution and made Britain the workshop of the world.
Today Britain no longer possesses a comparative advantage in many of the industries it used to lead the world in, but we do still have an important role in the knowledge-intensive industries upon which our future prosperity and well-being depend, notably the health and life sciences, biotech and pharmaceuticals.
What's perhaps surprising to many is that the North of England is once again in a position to lead the UK's economic future because it occupies a leading role in some of the fastest-growing sectors in the world. The North’s life sciences industry alone represents 25 per cent of the UK’s entire health and life sciences sector, employing over 38,000 people across 1,000 businesses and generating a turnover in excess of £10bn each year.
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I wouldn’t be at all surprised to discover most Londoners had no idea that was the case. While many international investors who I speak to see huge opportunities when they look at the North, with its fantastic number of world-class universities, medical schools, teaching hospitals and researchers for such a small geographical area, many investors in the capital are blind to what is on their own doorstep.
And of all the areas worth investing into in the North, there are none that quite match health and pharmaceuticals in terms of potential rewards. It is currently an under-invested area, but as the most far-sighted members of the venture capital community realise, the way that any biomedical cluster maximises returns to shareholders or investors is by maximising returns to patients. And while the UK's persistent health inequalities between north and south are mostly problematic, the North offers firms the opportunity to make the biggest difference to patient health. To be blunt, you can more easily see the benefit of a particular new medicine or product in a less healthy population.
And in the North you also have the health economy infrastructure and partnership required to capitalise on such exciting and innovative health discoveries. The organisation that I lead for instance, brings together eight research intensive NHS hospitals, eight of our best medical schools from our top universities, plus the four Northern Academic Health Science Networks covering a population of 15 million.
The government woke up to this opportunity some time ago, and has already started injecting targeted investment, such as the £20m for the ‘Health North’ initiative announced in the chancellor’s March 2015 Budget. International investors as well as finance houses with a Northern presence are also waking up to the investment potential of the North’s health and life sciences. The question is, will the rest of the City?