A plethgora of strategies and schemes could be holding back both the Morth-East economy and social justice in the region, says John Adams, director of research at the think-tank ippr north.

REGIONAL economic policy matters. Without a strong regional economic policy, the UK will achieve neither economic efficiency nor social justice.

Unbalanced growth undermines national economic performance, and reducing the differences in prosperity across the UK is vital for improving every individual's life chances.

Currently, prosperity in the North-East is substantially below the UK average, and disparities between the regions have increased over the past decade.

Any forum, like today's, which provides a focus for discussion of the critical issues facing the region, must be welcome - particularly one which involves high-profile individuals.

However, while there is undoubtedly the necessary desire on the part of national, regional and local institutions to tackle the North/South divide, current strategies are not yet "fit for the purpose".

There are almost too many regional and local strategies to mention and it is virtually impossible to keep up-to-date. One NorthEast will soon publish its final version of the Regional Economic Strategy, but it is also contributing to the Northern Way, an initiative from the three regional development agencies (RDAs) in the North of England. There are also four sub-regional bodies within the North-East producing their strategies, including the County Durham Economic Partnership, and each local authority will also have its own economic development strategy. And there are many, many more.

But the number of different strategies is less of a problem than the fact that there is no consensus as to "what works" in economic development. National, regional and local institutions need to be a lot smarter at the delivery of policy and adopt a more "evidence-based" approach.

First, we need to develop a more challenging approach to economic growth. We need smart growth, which not only maintains prosperity, but also improves quality of life and spreads economic benefits to all while protecting the environment. In particular, for many years ippr has argued that the RDAs need to give a greater priority to employment issues. High levels of employment are not only important in the fight against poverty, they are a key economic indicator.

In the North-East, nearly one in five of the working age population are claiming benefits relating to worklessness, and the Government has estimated that there needs to be an increase in employment of 100,000 in the region to bring employment rates up to the national average.

This is a radically ambitious target, which means we must do much more to help disabled people into work. Worklessness is dominated by people on sickness and incapacity benefits, and in Easington about 22 per cent of people claim these benefits - the highest level in Britain.

Jobcentre Plus is the institution charged with delivering the Government's labour market strategy, but it is failing to punch its weight in regional and local debates. Unless Jobcentre Plus gets greater capacity to deliver front-line services, the success of the Government's welfare-to-work strategy is threatened. This involves hard choices from the Government - prioritising resources for programmes that seem to be delivering (such as Pathways to Work for disabled people) and away from programmes which do not appear to deliver (such as New Deal for 50 Plus for older workers).

But while proposals to reform incapacity benefit could make a positive contribution in providing effective routes off benefits and into work, it will not be sufficient to tackle worklessness in the North-East unless we develop policies to boost job growth.

We all know that the structure of the North-East economy is changing. Between 1982 and 2002, the region lost roughly mining 40,000 jobs. In the same period, we also lost about 100,000 manufacturing jobs. Manufacturing processes improve year on year, and as plants can achieve the same levels of output with fewer workers, we are almost certainly going to lose more manufacturing jobs.

The region needs to focus on growing other sectors, particularly those such as business services where the region lags behind the rest of the country.

To achieve this, we have got to focus on growth from within the region. Levels of international inward investment are not as high as they were some years ago, and the South-East gets a disproportionately high share of the inward investment which does come into the UK. In any case, we have to question whether subsidising private sector companies is really the best use of taxpayers' money. The subsidy culture will not help to revive our economy or reduce the regional economic disparities which exist. We need to focus on home-grown growth and enterprise. Yet this is an area where public policy is probably weakest.

This week is also Enterprise Week - a week-long series of events designed to promote entrepreneurship. This policy area is particularly important for the North-East because we have such low levels of entrepreneurship. It is often argued that the industrial heritage of the North East has left the region with a lack of entrepreneurial spirit. The fact that we had so many large employers in the coal mines, the shipyards or the steelworks is supposed to mean that we have an employee-culture rather than an entrepreneurial culture.

Whatever the truth of this argument, it is certainly true that the North-East needs to get better at supporting entrepreneurship. This is easier said than done.

Again, there are far too many schemes in operation, and not all of the schemes currently in operation are well-designed. For example, the focus in the Enterprise Week on encouraging teenagers to set up in business is misguided. A successful entrepreneur is likely to be in their 30s or 40s, have a strong track-record as a manager or a professional and know their business inside out. Teenage entrepreneurs may look good on television and in newspapers, but they are not representative.

Entrepreneurs are also likely to be risk-averse, despite the common perception of the entrepreneur's behaviour as a risk-taker. Del-Boy Trotter is not a good role-model. The region's decision-makers need to recognise that entrepreneurship does not spring from the ashes like a phoenix - it needs to be effectively supported.

Regional economic disparities have existed within the UK for generations, but there is nothing inevitable about the North-South divide. The challenge is to identify and bring forward the policy instruments that will begin to make a real difference, particularly in regard to supporting home-grown entrepreneurs, and to demonstrate that regional economic policy can deliver for the whole of the UK.

* ippr, which stands for the Institute for Public Policy Research, is the country's leading left-leaning think-tank with close links to New Labour. It is the only think-tank to have an office in the North-East - in Newcastle - which, refreshingly, allows it to think outside of the capital.