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Very puzzled as how you can make the insightful observation that:
“there appears to be no link between city size and productivity in the UK… In theory, cities become more productive as they get larger because of the forces of agglomeration. But as the OECD work shows, it doesn’t appear to do so in other big cities [except London]”
and then follow it up with:
“London has boomed since 1991 – it had 1.6 million more jobs in 2013 – and **the effects of agglomeration** are very evident today.”
Surely the earlier paragraphs, the data, and Occam’s Razor strongly suggest that agglomeration is therefore NOT the direct cause of this job growth? The “industrial hangover” factors seem to have been conjured up to salvage the theory. How are they being quantified exactly? How are they predictive or verifiable?
An alternative exercise would be to compare the job growth with the amount of government investment over the period in question – see eg http://www.theguardian.com/news/datablog/2014/aug/07/london-gets-24-times-as-much-infrastructure-north-east-england
I’d be very interested to see the correlation between that data and the areas of job growth. The London figures would probably be self-evident, and Manchester received substantial redevelopment following the IRA bombing. I imagine Birmingham has received less over the same timescale. Perhaps it’s the state investment that’s the primary driver here, and the growth in “knowledge jobs” is at least partly explained as being another resulting facet of the consequent increase in land values in these areas. This would be consistent with the theories of Henry George, Land Value Tax adherents, etc.
I’d guess this would be more correlative than agglomeration theory, but can’t find any usable stats myself unfortunately.