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Last Updated: Monday, 11 August, 2003, 21:56 GMT 22:56 UK
'It's all about brains not bricks'
By Brian Wheeler
BBC News Online business reporter

In the second part of a series on bridging the North South divide, BBC News Online looks at a multinational taking a different approach to inward investment.

Siemens factory
The Siemens factory was opened by the Queen
"I have to say, the shipyard closing is the best thing that could have happened to me. It really is.

"I am still bitter about it, but it is the best thing that could have happened to me, because it has got me into a new industry.

"It's given me the confidence to understand that I can go anywhere in the world and work, and my skills are respected and in demand anywhere in the world."

Roger Pollard is nothing if not adaptable.

Ten years ago he was a project manager at Swan Hunter shipyard, wrestling with the logistics of constructing a 5,000 tonne warship.

Today, as a senior metrology engineer with US electronics giant Atmel, he spends his days measuring products no wider than a human hair.

Pastures new

The closure of Swan Hunter came as a body blow to Mr Pollard, who had worked there for 20 years.

The famous yard has since re-opened under new management and is enjoying a new lease of life.

Roger Pollard
If Atmel hadn't opened I would be gone - I would have taken my skills elsewhere
Roger Pollard
But Mr Pollard, like thousands of others, was forced to look for pastures new.

To his surprise, he found them in the electronics industry, initially with former East German state giant Jenoptik before returning to Tyneside to work for Siemens.

Siemens' arrival in the North East, in 1997, was greeted with much fanfare.

Its showpiece factory was opened by the Queen, who made a speech about it symbolising the North East's industrial revival.

But less than 18 months later it had closed, with the loss of 1,100 jobs.

Bitter taste

Siemens blamed a savage downturn in the global market for the memory chips it produced.

It has since paid back the 18m in regional aid it received.

But the experience left many in the region with a bitter taste.

The factory was eventually sold to US company Atmel, which makes silicon chips for games consoles, such as the Microsoft X-box, and smart chips that go on credit cards.

For some, Atmel's promise of 1,600 jobs and its reliance on government grants, contained echoes of Siemens.

'Sticky investment'

But the US company insists it is taking a different - and far more sustainable - approach to job creation in the region.

The buzzword it likes to use is "sticky inward investment".

Unlike Siemens, the products Atmel makes enable it grow in size with its markets.

It will only draw down its full grant when all the promised jobs have been created.

But, more importantly, it says it is serious about putting down research and development roots in the region.

It is already working with Newcastle university on a project to develop the world's fastest and most reliable chip.

It is also making its "creative thinking" conference facilities available to other firms, and has said it will take on apprentices for what it describes as "21st Century Jobs".

It recently sold 2.25 million sqaure feet of commercial space next to its factory for the creation of what is being described as the UK's biggest office development.

Intellectual property

In May, Atmel set up an incubator unit offering cheap office space and technical facilities, such as the broadband link installed by Siemens, to embryonic high tech companies.

Atmel factory
Atmel has created high tech jobs

The idea is to help build one and two person outfits into companies employing 30 or 40.

"What we are trying to do is build intellectual property on to the front end of manufacturing, it's about brains not bricks.

"We want to make this an attractive place for people to want to come to work.

"We don't put any strict laws on who can take the incubator space, but it tends to be people in software development or high tech engineering," says personnel manager Ross Forbes.

The next step, Mr Forbes says, is to develop a chip design capability, "so that if you want a chip for your latest washing machine, you come and see our designers, they will design it, and it will be made in the factory."

Aid failure

This contrasts, he says, with Siemens, which did most of its research and development "back at base".

The closure of the Siemens plant on Tyneside has been held up as an example of how regional aid policy in the UK has failed to deliver the sustainable jobs promised by government.

The North East has been one of the biggest beneficiaries of the policy, receiving 100m over the past six years.

Success stories such as the Nissan car plant in nearby Sunderland, which received 45m in aid, exceeded its 2,600 job creation target by 300, have proved it can work.

But a string of high-profile failures such as Siemens, nearby Viasystems, which closed in 2001 with the loss of 1,600 jobs after receiving 17m in aid, and the Fujitsu plant in County Durham, has led to much criticism.

The National Audit Office earlier this year called for a major re-think of the way regional aid is handed out.


So far, Atmel has created 410 jobs on Tyneside, although it has now been in its factory longer than the company that built it.

Critics might argue it has little to lose by helping out a few local software developers while it waits for an upturn in the market.

Particularly with 11,000sq ft of largely empty office space to play with.

But, Mr Forbes, another refugee from Swan Hunter, insists the new incubator unit is a key part of Atmel's strategy.

"We would have done it anyway, even if the market was buoyant.

"This place has got so much potential that wasn't developed by Siemens.

"We are all local people and we feel we have a bit of a mission to make it fly."


Roger Pollard, who rejoined Janoptik after being made redundant by Siemens, and then went on to work on contract jobs overseas, agrees.

Like many former Siemens workers, he had to be called back to the North East from abroad when Atmel re-opened the plant.

"I don't know why I'm here, really. The company I was working for offered me a job in France.

"If this company (Atmel) hadn't opened I would be gone. I would have taken my skills elsewhere.

"I would be working, almost certainly, for a company in Boston," he tells BBC News Online.

Next week News Online looks at the wealhiest region in the North of England - Cheshire.

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17 Jun 03  |  Business

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