The Northwest is the United Kingdom's 'academopolis', boasting the highest concentration of students in Europe. Harriet Swain and Alison Utley look at how institutions are working to give the region's economy a boost.

For the Northwest, ÖйúAƬ is a key element in turning a jigsaw of communities into a picture of economic health. Hit by the decline in traditional manufacturing over the past 25 years, the region is looking for salvation in the latest technologies and a trained workforce able to exploit them.

Education and business leaders, recognising the benefits of working together, have founded an umbrella group, the North West Partnership, which aims to establish a common sense of identity.

Peter Toyne, vice chancellor of John Moores University says: "There is no doubt that in trying to promote the Northwest for inward investment the existence of a network of universities is a major selling point. If you look at them together it is an enormous resource and a potentially very large magnet for investors."

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But rivalries have not been forgotten altogether. Among the 18 ÖйúAƬ institutions in the region are four of the country's most important research centres: Liverpool, Manchester and Lancaster universities and the University of Manchester Institute of Science and Technology.

All will be jostling for the next allocation of research funding while Merseyside and Manchester are already battling it out for European funds and the claim to be the nerve centre for new technology.

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The 65 further education and higher colleges are also fighting over a limited pool of students. But more and more institutions are finding that they can increase potential learners by working together.

Liverpool University, for example, accredits degrees at Chester College and Hope University College. Oldham College and Oldham Sixth Form College are collaborating with Oldham TEC on providing language support for businesses.

Lodged between the Irish sea and the Pennines, with Scotland to the north and the Midlands to the south, the Northwest is characterised by important urban areas, but includes seaside resorts and huge swathes of agricultural land.

Its population, now about seven million, is one of the most crowded and mixed in Europe. Pakistanis, Indians and Bangladeshis have been established in Manchester and Bradford since the 1960s, while Liverpool has one of the oldest Afro-Caribbean communities in the country. Chinese, Vietnamese and Somali families, many of them former refugees, are scattered across the region.

Standards of living are among the highest in the United Kingdom in areas of Cheshire, while in parts of Merseyside more than 14.7 per cent of private housing stock is considered unfit - the fallout from the region's industrial decline.

Large parts of the Northwest qualify for European structural funds because of particular economic problems. Unemployment, though falling, remains above the national rate and the number of self-employed is well below the UK average. Skills and qualification levels are also lagging behind the rest of the country, with 65 per cent of 16-year-olds failing to achieve A-C grades in GCSE English and maths last year.

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Further Education Funding Council estimates indicate that the increase in part-time students will be significantly below the national level, reflecting concern about reduced student financial support and the region's slow recovery from recession.

An FEFC spokeswoman said: "The North West Partnership has been very valuable in identifying national benchmarks, stimulating people to work together and improve the participation of young people and achievement rates which in some areas are quite lamentable."

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Nevertheless, the region still provides 15 per cent of the UK's manufacturing output and is the second largest regional economy outside the Southeast.

The Northwest, with its lively cultural life, is the UK's third most popular area to study, taking 29,665 out of 265,536 accepted ÖйúAƬ applicants last year. Nearly half the accepted applicants from the Northwest chose to study in their home region.

Together, Manchester's four universities and the Manchester Business School have more than 50,000 students, the largest campus in Europe, while Liverpool University and John Moores University have more than 20,000 each.

Universities complain that the economy of the Northwest remains too weak to make proper use of the graduates they produce. Many students are lured south by better wages and career opportunities.

Tony Gill, North West Training and Enterprise Council regional co-ordinator, said: "The Northwest is seen to have performed poorly in inward investment compared with other regions because it has failed to get its act together."

But collaborations are starting up between further education colleges and universities, between universities themselves and between universities and businesses. They are also drawing on easy access via the M62 corridor to the academic resourses of Yorkshire and on Cumbria's links with universities in the north-east.

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A founding principle of the North West Partnership states: "What the region can earn depends very heavily on what it can learn."