Local universities hold key to growing private sector in Birmingham

Date: 17/12/2009

The report finds that Birmingham and its wider city economy* added more than 80,000 public sector positions to its economy between 1998 and 2007 and saw jobs expansion across a range of sectors including financial and business services.  During the same period, total private sector employment fell by 50,000 jobs. This was largely the result of manufacturing plant closures and industrial efficiency gains.  

Employment growth in Birmingham 1998-2007 

The public sector has been a key driver of growth in Birmingham.  But with government spending cuts on the horizon, Birmingham can no longer rely on public sector jobs growth.  Adding private sector jobs - particularly those in the ‘knowledge economy' - will be crucial to Birmingham's future prosperity, over the next decade.

Birmingham and its wider city economy are well placed to grow their knowledge industries with:

• Over 30,000 research students, more than any other Core City Region.

• £90 million of research funding last year, more than any other Core City Region except Manchester

• Above average success in ‘'spinning-out'' new firms from university research, compared to other Core City Regions.

To play fully to these strengths, Birmingham should re-focus its efforts on supporting new enterprise in higher-value or knowledge-intensive industries. 

For example, Birmingham should look further at the role local universities could play in supporting more private sector jobs.  Some of its universities have more success than others at "spinning out" new businesses - from waste consultancy from Birmingham University to digital photography technology from Warwick.  The universities should learn from each other to generate further profitable enterprises.

Dermot Finch, Chief Executive of the Centre for Cities said,

 "Birmingham cannot rely on future public sector jobs growth to support its recovery.  The city is much more than the UK's biggest local authority - it has a strong research base, with some world-class universities like Warwick and Birmingham on its doorstep.  Birmingham will need to draw upon their strengths to generate more high-value private sector jobs."

Cllr Neville Summerfield, Birmingham City Council Cabinet Member for Regeneration, said:

"Like every other major city in Europe, and beyond, Birmingham is having to face up to many major challenges brought about by the global economic collapse, the results of which are felt most keenly by its citizens.

"I am pleased though to see that this report rightly recognises that much work has been done in Birmingham to minimise the impact upon the city and give the city a comparative advantage in the low carbon economy which is expected to emerge in the future."

Neil Rami, Chief Executive from Marketing Birmingham, said:

"We welcome the report and have been working closely with the Centre for Cities in its examination of Birmingham's future growth prospects in a difficult economic climate.  The city's universities and the highly-skilled workforce they produce are integral to the future of Birmingham, a fact which we acknowledge through our work on the Student Birmingham campaign, aimed at attracting and retaining students to the city, and our involvement in the Birmingham Science City project.  We support the assertion that through working with Birmingham's educational institutions and engaging with the business and science communities, we will continue to cultivate and promote Birmingham's knowledge economy."

NOTES TO EDITORS

A full copy of University Challenge: Growing the Knowledge Economy in Birmingham, by Tom Aldred, from the Centre for Cities is available for download at www.centreforcities.org/birmingham  

A recent Centre for Cities report on the future for public sector employment across UK cities in a government spending squeeze identified that:

• Up to 290,000 public sector positions in the UK could be lost by 2014
• 69% of the 1.2 million jobs added to city economies between 1998 and 2007 were public sector positions
• One in four workers are employed by the public sector across UK cities

University strengths in the Core Cities

Source: Student numbers from HESA Students in Higher Education Institutions (2007/08); Research funding from HEFCE Recurrent grants for 2008-09.  Data is for MAA areas.

Knowledge-intensive industries, as classified by Eurostat include positions from architecture and advertising to computer programming and research and development.  42.6% of the workforce in the Birmingham MAA is already part of the "knowledge economy".  But this is below the national average and over half of the jobs are in the public sector - and may be vulnerable in a government spending squeeze.

Birmingham is a Partner City in the Centre for Cities research programme.  The programme is working closely with a small group of cities, including Liverpool, Birmingham, Southampton and Portsmouth.  The Centre for Cities works with these cities to inform their economic development strategies and improve economic performance.

*In late November 2009, as this report was being finalised, Coventry announced that they were leaving the city region partnership, but remained committed to the Birmingham, Coventry and Black Country Multi-Area Agreement (MAA).  Our findings on the ‘wider city economy' refer to the eight local authorities that make up the MAA - Birmingham, Wolverhampton, Walsall, Dudley, Sandwell, Solihull, Telford and Wrekin and Coventry.

For more information, please contact:

Rosamund Taylor, Centre for Cities

07876 175 426 / 020 7803 4316

r.taylor@centreforcities.org