There was an unavoidable sense of missed opportunity at the round table on broadband held in Gateshead on 29 November. Even the spectacular views from the Baltic, the new centre for contemporary art, taking in the Tyne Bridge and Norman Foster's Sage Gateshead music venue, could not diminish the disappointment felt by the assembled local leaders. What should have been the devolution "big bang" had failed to go off. In a referendum earlier in the month, voters in the north-east of England had rejected the idea of a regional assembly.

In his opening remarks, the television journalist and producer Tony Baker established what became a resounding theme of the discussion. "I think we are all surprised by the devolution result," he said. "The future development of the north-east is now wide open."

Driving economic development in the region is indeed a significant challenge. As David Allison, from the regional development agency One NorthEast, pointed out: "Too many businesses in the north-east are in the decline phase of their product cycle." He argued: "We need new businesses, competing on ideas rather than cost. Businesses need to learn how to become more competitive through good practice, adoption of technology and a step-change in productivity."

However, the adoption of new technology, particularly broadband, is a hurdle for many small- to medium-sized enterprises (SMEs) in the north-east. Availability is not an issue - the region's businesses have 96 per cent broadband coverage - but take-up is low, at little more than 10 per cent.

Ray Smith, BT's regional director in the north-east, pinpointed why businesses feel nervous about adopting broadband. In addition to fears about cost and data security, Smith said, "small- to medium-sized enterprises think they will need their own IT department if they get broadband". Such simple misunderstandings about technology appear widespread. Paul Walker, chief executive of the Sage Group, argued that the IT industry itself did much of the damage during the dotcom boom and bust, which eroded confidence about what IT could deliver. "Now people are cynical about e-business and e-commerce. They've heard it all before," he said.

Walker nevertheless maintained that although SMEs recognised the importance of broadband, office practices were often unable to support the benefits the technology could bring. "Many businesses have not automated the majority of their processes, such as sales and marketing," he said. Broadband's benefits, such as increased efficiency and improved communication channels with suppliers, seem incompatible with such set-ups.

Many of the round-table participants felt that education about the benefits of broadband was vital to increasing take-up of the technology. But Joe Docherty, chief executive of Tees Valley Regeneration, and Tom Cosh, head of the City Technology Office at Newcastle City Council, argued that local government should try to push take-up. "The best way to engage SMEs is to engage with their self-interest, to say to them, 'If you don't do this, you do not procure from the council'," said Docherty.

John Hall, of the Wynyard Project (a £600m development of golf courses, housing and business parks), believed strongly that the lack of a single, unifying legislative body in the north-east jeopardised the chances of the region formulating a coherent broadband strategy. "The vision falls to One NorthEast, now that devolution is gone," he said. "Everything else is too fragmented."

One NorthEast seems prepared to shoulder at least part of the burden. The development agency has an initiative called Codeworks that aims to develop and invest in the local digital economy. The chief executive of Codeworks, Herb Kim, outlined how the region could specialise in accessible technology.

"Technology designers design for the able-bodied. What happens when people lose the ability to use the technology that they are used to?" he asked. "In the future, people will need inclusive, accessible technology. The north-east could really get ahead in this area and become a world leader in delivery of accessible products." Codeworks already supports some SMEs and large corporations to develop applications - for example, tracking systems for Alzheimer's patients.

However, despite such positive progress, concerns remained over the long-term vision for the region. After discussing how broadband could benefit tourism through broadband-enabled visitor centres and by expanding the ability to book online, participants raised the question of who would decide what ideas should be developed.

John Hall pointed to the number of quangos in the region - there are more than 170 - and said that few of them worked together. "Policies and ministers come and go," he said. "There is no coherence, and the north-east still suffers. We've got to get the economy going, make money before we spend it. There is very little cash in the region," he added. Malcolm Wright, head of new media at ITV Tyne Tees, proposed a novel solution to this problem. "The e-government agenda could be a big driver," he said. He suggested that One NorthEast should tie its strategic broadband plan into central government's budget for local government procurement, worth £2.8bn. One NorthEast could then get a slice of that sum for itself, increasing the resources available to the regional development agency to realise its broadband ambitions.

John Bridge, chairman of the Land Reclamation Trust, saw the issue in a different light. "It is about choosing the right paradigm," he said. He explained that the north-east is a two-speed economy: low skills and high unemployment characterise economy A, whereas high skills, low unemployment and high broadband take-up typify economy B. "Economy A dominates," he said, "but it should not dominate policy. People voted No at the referendum because they came from economy A and think the answers lie in economy A."

One solution to the post-devolution problem was put forward at the end of the round table. Herb Kim suggested building a community in response to the collapse of the devolution campaign. Baker found this proposal fascinating. "I've got an idea of what Herb's community could look like," he said.

The sense of missed opportunity had begun to fade.

Participants

Tony Baker (chair) Journalist, presenter and producer, BBC and ITV
David Allison Director of business and industry, One NorthEast
Alastair Balls Chief executive, International Centre for Life
Jonathan Blackie Regional director, Government Office for the North-East
John Bridge Chairman, Land Reclamation Trust
James Burke ICT strategy manager, Northumberland Strategic Partnership
Tom Cosh Head of the City Technology Office, Newcastle City Council
Joe Docherty Chief executive, Tees Valley Regeneration
David Haley North-east regional manager, BT
John Hall Wynyard Project
Herb Kim Chief executive, Codeworks
Spencer Neal Publisher, New Statesman
Isobel Robertson Director of finance, North-East Chamber of Commerce
Geoffrey Robinson Chairman, New Statesman
Ray Smith Regional director, BT
Paul Walker Chief executive, the Sage Group
Malcolm Wright Head of new media, ITV Tyne Tees