Framing a place-based investment strategy for South Tyneside

South Tyneside is a borough with strong community values and a clear ambition for inclusive growth, but it faces persistent challenges in productivity and wellbeing. Our latest study for South Tyneside Council, part of The Productivity Institute’s Investment in Productive Places Campaign, explores how targeted investment across seven types of “capital” – physical, human, social, financial, intangible, institutional, and natural – can transform outcomes.

What we found:

• Productivity is lagging: South Tyneside’s productivity is well below regional and national averages, and growth since 2008 has been minimal. Employment rates are low, and economic inactivity due to illness is high.
• Human and social capital are weak: Poor health outcomes, high child poverty, and low skill levels remain major barriers. These issues are compounded by short-term funding cycles that limit long-term impact.
• Physical and intangible capital need attention: Infrastructure constraints — from transport bottlenecks to limited commercial premises — hinder growth. Innovation and R&D capacity are among the lowest in the UK, reducing competitiveness.
• Strengths to build on: South Tyneside has sectoral advantages in advanced manufacturing and clean energy, supported by assets like the Port of Tyne and offshore wind projects. Financial capital is relatively strong, with high rates of new business formation and high growth firms.
• Opportunities through collaboration: Devolution and the North East Combined Authority offer a chance to align local priorities with regional strategies and develop more responsive, relationship-based funding models.

Our recommendations:

• Invest in health, skills, and employment support to tackle economic inactivity and raise productivity.
• Upgrade transport infrastructure to improve connectivity and business growth.
• Reform funding practices to prioritise long-term social value over short-term metrics.
• Strengthen South Tyneside’s external narrative to attract investment and influence policy.
• Align local and regional priorities to maximise shared resources and impact.

South Tyneside has the vision, partnerships, and sector strengths to succeed. By focusing on these strategic areas, the borough can unlock inclusive growth and move toward a more productive future.

Authors Marianne Sensier, Kate Penney, Michael Francis, Abhi Sharma, Alfonso Silva Ruiz and Philip McCann

Part of the Investment in Places Campaign.