HSBC’s announcement is part of Birmingham’s knowledge-led revival
Birmingham has struggled to deal with its industrial hangover, but it is gradually adjusting to the 21st century economy.
Birmingham has struggled to deal with its industrial hangover, but it is gradually adjusting to the 21st century economy.
It was very interesting to see yesterday’s announcement that HSBC will be relocating its retail operations from London to Birmingham.
Now there’s nothing new about companies splitting their operations. Numerous companies have head office functions in London and back office functions elsewhere in the UK. This split usually occurs because the head office functions require access to the high-skilled workforce and marketplace of ideas that London provides (despite its high costs); the more routinised back office functions meanwhile require neither, and so are moved to less expensive locations outside of London.
But this announcement is different: HSBC is relocating the head office functions of its retail operations out of London.
This decision is a massive vote of confidence for Birmingham. It has struggled to deal with its industrial hangover in recent decades, and has seen a decline in its overall number of private sector jobs as a result. But its city centre has performed very strongly in recent years, creating many thousands of jobs in knowledge-focused sectors, despite its wider struggles. HSBC obviously think that its improved city centre economy, in combination with the 370,000 graduates that live within commutable distance, means Birmingham has become somewhere attractive for them to do business. And HSBC’s arrival and the follow-on opportunities for new retail and services businesses will further reinforce the attractiveness of the city centre to high-skilled companies as a place to do business.
Whilst, Birmingham still faces a number of challenges, most notably around skills and employment, as we showed in A Century of Cities, the city appears to have passed through a turning point in recent years, and is seeing growth in a more knowledge-focused economy. This announcement is further indication that Birmingham is gradually adjusting to the 21st century economy, and it bodes well for the city’s future.
You can hear me taking about the announcement on BBC 5 Live (1:50 in)
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