With Hitachi almost ready to start building trains again in the North-East, Tony Chapman explains why the region has to be ready to grasp every opportunity.

WHEN Hitachi Rail Europe’s £82m investment in Newton Aycliffe was signed and sealed in 2011, I wanted to share the good news.

The first person I spoke to said: "aye, but what happens when they’re gone?"

Undiminished, I tried again and was told "it’s just an assembly plant which will bring jobs, but that’s it". Others saw it as a long-awaited return to the North-East’s industrial roots – back to normal – rather than a chance to do things differently. Some academics call this "cultural inertia". And alarmingly, this condition can be contagious – spread, all too often, by those who ignore or shun opportunities on principle.

Phil Wilson, MP for Sedgefield, most decidedly does not fall into that camp. He has worked tirelessly to help seal the Hitachi deal. At last week’s Institute for Local Governance conference on Japanese inward investment, held in the calming environment of Japan’s Teikyo University in Durham, he had this comment to offer to the nay-sayers. “I certainly believe that one of the things that can hold us back is ourselves”. He warned against those who want to “pull up the drawbridge and return to a world that never was.” Without irony, Mr Wilson reminded us, “If you step away from it or not, [the world] will still keep spinning.”

In its economic heyday, the North East was certainly not parochial: exporting steel, ships, engines, munitions and bridges around the world. And in a much-changed global economic environment we still punch above our weight in attracting inward investment. Foreign direct investment (FDI) is important to the whole UK economy. UKTI’s annual report, published last month shows that the UK is the top destination for FDI in Europe and that the inflow of investment rose by 50% in 2014. So something is going right.

Japanese companies have contributed much of this investment, attracted by a skilled labour force and connectivity with the much larger EU marketplace. And it’s not just manufacturing plants, the UK is a major global destination for company HQs.

The journey of Japanese companies began 40 years ago with the arrival of NSK Bearings, followed by Nissan in 1986 and Komatsu in 1987. Many others have come along too, bringing 14,500 manufacturing jobs to the region. Good jobs too. Average salaries in manufacturing stand at £29,500 compared with a regional average of just £22,000. And there’s little evidence of short-termism in investors’ minds. On the contrary, as Michelle Lowes of UKTI points out, of the 520 Japanese prospects currently in the national pipeline, 316 come from existing investors.

Neither does Dr Simon Goon, Managing Director of Business Durham, buy the argument that high-volume assembly work in automotives or railways just brings jobs. On the contrary, investment can provide a catalyst for new opportunities, if businesses have their eyes open and a willingness to change the way they do things.

In the 1980s the pressings company, Gestamp Tallent Ltd based in Newton Aycliffe, turned over just £8m. By establishing a know-how agreement with Nissan and adopting new management techniques influenced by Japanese practices, they now turn over £200m a year. Similarly, Romag, the specialist toughened glass maker, previously unknown to Hitachi, has become a preferred supplier and a well-stocked order book. According to Dr Goon, this required companies to have confidence in their own capability and to be resilient when things go wrong – that’s because innovative solutions often arise from tackling problems – not just blue-sky thinking.

There are still too few businesses in the North East to capitalise on new opportunities. We have just 633 businesses per 10,000 population, compared with 835 in each of the North West and West Midlands. In London, it’s 1,266. Could inward investment by Japanese firms stimulate new start ups? That depends very much upon how people see the world.

It’s a panacea to believe that Japanese companies will do the job for us. Even building relationships with Japanese companies can be a slow process. As with any business, it takes time to cement sufficient trust and confidence to get things right. There are cultural undercurrents too which need to be understood and respected – not barged through or cleverly worked around.

Not everything has to be planned and integrated. After all, Newton Aycliffe was not even on the list of 42 sites which had been mapped out for the Hitachi Rail Europe plant. But when serendipity comes out to play, people have to be ready. That means having the agility to think about and do things in new ways and have a never-say-die attitude. We should forever be proud of our industrial heritage. But let’s not allow fatalism to be the card in the pack that threatens to hold the North East back. It isn’t someone else’s responsibility to get us back on track. We have to do it.

• Tony Chapman is a Professorial Fellow at St Chad’s College, Durham University