THE latest state-of-the-region report had a depressingly familiar ring to it. Compared to the rest of the UK, the North-East has higher unemployment, higher death rates, lower wages, poorer education standards.

Other less reliable barometers of the region's economic health, such as house prices and levels of car ownership, were also way below the national averages.

The good news came from statistics on crime (down 4.6pc on 1999) and health (waiting lists down by 4.7pc). There were also silver linings in the cloud of economic under-achievement, namely less congested roads leading to fewer accidents and better air quality.

But the truly shocking figures delivered by this report, prepared for the regional development agency, One North-East, and the North-East assembly, relate to the region's business base. As well as having the lowest gross domestic product per head in the UK (£10,000 as compared to a national average of £13,000), the number of businesses in the region shrank by 5pc over the past five years. That represents a loss of 2,190 businesses over the period. There are now just 203 businesses for every 10,000 adults in the North-East compared to 354 in the UK as a whole.

As this five-year period was one of substantial economic growth in the country, the shrinking of the region's business base while the number of businesses in the UK as a whole rose by just under 2pc is a sad indictment of the lack of entrepreneurial zeal in our area.

Partly this may be explained by the area's historical dependence on a handful of very big employers, but that excuse is wearing thin now as the years since the great industrial contractions of the 1980s pass by.

This, surely, is the greatest challenge facing the region and the most important problem to fix. Creating the climate and the conditions for new business must be the priority for One North-East and its partners.