Nuclear Futures: Implications for Local Economies

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Nuclear Futures Implications for Local Economies

• Frank Peck
• Research Director
• Centre for Regional Economic Development

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Nuclear Futures Implications for Local Economies

• Nuclear dependency as a process
• Nuclear projections for West Cumbria
• Nuclear clusters?
• Sustainable nuclear communities

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Job losses in West Cumbria 2000-2006
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Rhodia, Whitehaven

• Chemicals plant set up in 1940s Marchon
  (firelighters)
• Operated by Albright and Wilson since 1960s
  making surfactants, phosphates used in
  manufacture of detergents and cosmetics.
  Phosphoric acid used in soft drinks (e.g. Cola)
• Employed 2000 people at its peak in late 1960s
• Acquired by French Group, Rhodia in March 2000 in
  conditions of overproduction and market
  saturation
• Rhodia announced part closure plans in June 2000
  after a strategic review of its operation
• Sell off of half the site to Huntsman Corporation
  (USA)
• Phased set of redundancies announced 2001

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Rhodia Closure, Whitehaven
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Rhodia Closure, Whitehaven
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Direct impacts of Rhodia Closure
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Accounting for re-employment
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Major Job Gains in West Cumbria announced during
2004-5
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Development Path in West Cumbria

• Post 1945 - dependence on decline sectors
  including coal and iron ore mining, iron and
  steel, heavy engineering, chemicals
• Nuclear industry seen as one means of post-war
  diversification
• Expansion of nuclear fuel reprocessing 1952,
  Magnox (1964), then THORP (1994) MOX (1997)
• Underlying this, continued decline in the old
  industrial base through the 1970s and 80s with
  traditional regional policy
• 1980s and 90s, renewed attempts to attracting new
  inward investment and development of science and
  technology park
• Since 2000 continued erosion of the former
  industrial base with insufficient new investment
  or SME growth to replace it
• Service sector growth decentralised public
  sector functions alongside growth of consumer
  services
• Economy now more dependent upon nuclear industry
  than ten years ago due to the loss of other
  employers
• Possibly emerging consensus that West Cumbria
  must concentrate in the medium term at least on
  its unique position within the nuclear industry
  and develop synergies lock-in effects

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Employment projections for Nuclear Sites In West
Cumbria
Sources Life Cycle Baseline Documents for Drigg,
Sellafield, Calder Hall, Windscale produced by
BNGSL and UKAEA, 2004
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Total spend and supply chain expenditure in the
NW region
(Based upon ERM Economics 2005 page 26)
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Estimated employment effects of construction of
twin AP1000 reactors
Source ERM and IDM 2006 (page 115)
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Estimated spend and employment effects of a
nuclear waste repository
Source Based on UK Nirex Report n/067 dated
January 2003. (Table constructed from data in
Section 4 and Table on page 17)
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Nuclear Cluster in West Cumbria?

• Not just power production, reprocessing, but
  diversification into new markets energy,
  environmental restoration
• Radical shift in balance of rewards and risks
  between seeking new markets and staying with
  established ones
• Vital business support for firms prepared to risk
  diversification
• Firms encouraged to collaborate and seek markets
  nationally, internationally
• Shift in focus away from firms per se towards
  networks of firms
• Permeability of boundaries of firms to allow
  knowledge, ideas and skills to pass in both
  directions
• Vital skills agenda to facilitate change
• Less interest in mobile investment (though this
  is still an element) and shift in focus towards
  indigenous development and SMEs
• More sophisticated methods for targeting
  assistance on groups of firms with growth
  potential
• Greater emphasis on role of government as
  facilitator of networks and broker between firms
  and other public and private institutions

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Types of cluster interventions in Europe

• New technology (establish centres and institutes
  for technology transfer)
• Firm growth (incubators, assistance to groups of
  target firms)
• Cluster analysis (create observatories, conduct
  audits)
• Labour supply (pump-prime relevant provision of
  management and technical training, skills
  alliances)
• Supply of capital (financing for spin-off
  companies)
• Network improvement (fund activities to extend
  personal and organisational networks)
• Cluster leadership (map competencies and motivate
  regional partnership processes)
• Infrastructure (develop new shared ICT
  infrastructure, customised business parks with
  emphases on specific technologies)
• Marketing (create shared regional cluster brand)

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What makes an effective cluster strategy?

• Enables access to a regionally-based collection
  of expertise
• Enables networking outside the area in global
  arena
• Enables companies to collaborate for larger
  contracts locally and globally
• Enables smaller companies to increase their
  economies of scale in order to bid for larger
  contracts
• Enables companies to collaborate on joint
  purchasing, marketing, specialist production and
  inter-company communications flow
• Enables the development of infrastructure, legal,
  financial and other specialist services that
  individual companies may find difficult to
  resource
• Enables improved access to sources of finance
• Stimulates forms of diversification that are
  incremental and connected with existing expertise

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Success factors in European Clusters

• Networking and partnership 78
• Innovation technology 75
• Human Capital 73
• Physical infrastructure 42
• Role of lead firms 40
• Enterprise and Entrepreneurship 38
• Access to finance 35
• Specialisation 29
• Access to markets 27
• Access to business support 25
• ECOTEC Survey cited by DTI (2005) identifying
  each factor

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Population Losses in Local Authority Districts /
Unitaries in the NW Region
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Nuclear Futures Implications for Local Economies

• Frank Peck
• Research Director
• Centre for Regional Economic Development