Swedish businesses looking to the North East
27 June 2023
Sweden is the third largest foreign investor in the North East of England. Long-standing home to Swedish household brands such as Essity, Husqvarna and Handelsbanken, the region has seen recent investments from Swedish games giants Thunderful Group and Amplifier Games, as well as the establishment of LeoVegas UK office in Newcastle, the regional capital of the North East. We spoke to Sam Cassidy, Senior Inward Investment Manager at Invest Newcastle, about why Swedish businesses are looking to the North East when investing in the UK.
"In the past ten years or so, the city has really developed. Particularly along the River Tyne there has been a real riverside renaissance.”
Coming from a history of heavy industries with shipbuilding along the Tyne and home to George Stephenson, renowned as the Father of Railways, Newcastle upon Tyne, or simply Newcastle, is slowly but surely revealing another side of itself. “In terms of what has changed recently, a lot of those businesses have pivoted,” Sam Cassidy, Senior Inward Investment Manager at Invest Newcastle explains. “We are seeing a lot of subsea infrastructure and renewable energy companies along the river. A lot of that innovation has changed from shipbuilding into these kinds of industries of the future.”
In 2000, the new Millennium footbridge connected Newcastle with its neighbouring city Gateshead on the other side of the Tyne, followed by the opening of cultural institutions such as the Sage and the Baltic Centre for Contemporary art, which have all been key investments in driving further development along the river. “We have seen real change in how the city looks from that perspective, and the investments in the region are really changing perceptions of the area – and driving further investments.”
While the number of visitors coming to the North East has been one of the lowest among the UK regions in the past, investments in for example the Newcastle United football club and a future riverside conference arena will all be pulling further events, conferences, and music gigs to the region. “When you look at Barcelona and London – Newcastle is going to be alongside those cities and driving those major events, which is really exciting.”
Along with a major investment by the BBC and an increasing density of business, including a new HMRC office complex creating 9,000 jobs by 2027, Sam is hoping that this development will help to put the region on the map.
“I think Newcastle is a hidden gem. There are opportunities here that I think are missed by businesses who might consider other cities. We have a lot of skilled people who businesses can utilise as part of their investment and part of their business purpose.”
Recent devolution deal – a milestone for the region
Recently, the North East signed a major devolution deal with the UK government, transferring powers and a £1.4bn investment fund over 30 years to the region. “The deal will finally bring the North East under one combined authority, which is a really big opportunity and a milestone for us as a region, because it gives us the ability to invest in areas which will really drive growth and support local residents.”
Sam says that he can sense real optimism and that the devolution deal, together with the ambition to transform Newcastle into a cultural capital of the North East, is encouraging more people to stay in the region. “Creating those job opportunities gives local residents a chance to work in those higher paying high-skilled careers that are going to drive economic development within the region.”
Tapping into the region’s research power
The North East region boasts five universities with some 110,000 students in total. Almost half of them are STEM students, which Sam points out are “subjects of the future”. And they are not just about educating students: “The three universities of Durham, Newcastle, and Northumbria together, are ranked as the highest research power outside of London. In terms of looking at what that means for businesses, there’s a huge opportunity for businesses to engage with that research power.”
Apart from renewable energy, digital, tech and games, life sciences is another growing sector to keep an eye on. With an NHS Trust running a large number of clinical trials, particularly in healthy ageing and wellbeing, as well as the National Innovation Centre for Ageing sitting in the Newcastle Helix innovation cluster, there are plenty of opportunities for businesses to engage in the longevity economy.
Recently, Recharge Industries took over Britishvolt’s gigafactory in Northumberland, and with Nissan’s £1bn flagship electric car hub in Sunderland, new supply chain opportunities are emerging around electric vehicle and battery production.
Sweden punching above its weight
Sweden is the eighth highest source market for foreign direct investment into the UK. In the North East, Sweden places third, after USA and Japan. “In terms of punching above its weight, Sweden does that brilliantly.”
“We have some great businesses here who we work with quite closely from an investment perspective, foremost in the digital and tech sector and particularly within games,” Sam says, mentioning Silent Games that was recently acquired by Swedish Amplifier Games and LeoVegas that established its UK office in Newcastle not long ago. “Then we have some excellent manufacturers like Essity, as well as digital construction company Byggfakta Group.”
Sam considers the Swedish business community as well developed in Newcastle and in the North East, which was confirmed by the recent Swedish Business Footprint event in Gateshead organised by the SCC, in collaboration with Invest Newcastle. “It was great to see all those businesses in the room together, and what they’re doing with the local residents in terms of upskilling and connecting with the community. Being a part of that business ecosystem is really important when we see foreign companies coming into a region.”
Warm and welcoming Geordies
In 2021-22, the North East had the highest level of job creation from foreign direct investment outside of London, which has transformed Newcastle into a truly international city. “We are at the forefront of seeing new businesses and new people come to the region,” Sam says. “Us ‘Geordies’ love new opportunity, we love new businesses, and I think that makes it particularly elan for foreign businesses to look here. And when they do come here, they can plug straight into the ecosystems and generally benefit from the warm welcoming Geordies.”