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For many decades UK policymakers have sought to boost the performance of cities outside of the South East by mitigating and reversing the decline of more traditional industries, from post-war attempts to redistribute industry around the country to George Osborne’s 2011 Budget rally cry for the ‘march of the makers’. But our new report, A Century of Cities, demonstrates that the problem for those cities with acute and long standing economic challenges has not been the loss of jobs in more traditional industries, but rather their inability to support growth in new and emerging areas of economic activity.
The report, which looks at how cities have performed over the last 100 years, highlights the differing performances of cities across the country during this period. For example, cities such as Peterborough and Reading have more than doubled their number of jobs, while cities such as Rochdale and Blackburn have fewer jobs today than they did a century ago.
Source: Census 1911; ONS 2014, Business Register and Employment Survey
But overall jobs growth doesn’t tell the whole story. In a century of great change, ranging from ever increasing globalisation to the rise of air travel, cities have had to constantly adapt. Their main challenge has been to replace jobs in more traditional industries brought about by these changes with jobs in new, knowledge-based areas of activity.
Some, such as Bristol and Brighton, have done this well, seeing strong jobs growth in knowledge-based employment. They have reinvented their economies in the face of constant change. Others, such as Doncaster and Swansea, have done less well – replacing coal mines with call centres and dockyards with distribution centres. In other words, they have replaced one set of low skilled jobs with another, replicating their economic structure.
And there is a clear geography to this. Of the 41 cities classed as replicators in the report, 30 are in the North, Midlands or Wales. Out of the 16 cities classed as reinventors, 11 are in the South.
The implication is that it is the geography of knowledge that has driven the widening ‘North-South divide’. Contrary to much of the public and political discourse on this issue, it is not the decline of manufacturing that has been the cause of the struggles of many cities in the North, Midlands or Wales – it has been their inability to attract new, knowledge-based employment. And this is the reason that for every 1 job created in the ‘North’ over the last 100 years, 2.3 have been created in the ‘South’.
If this pattern is to be reversed then cities need to focus on how to reinvent their economies. The irony is that for 80 years policies intent on closing the gap have inadvertently reinforced replication instead of encouraging reinvention. Examples range from the Special Areas Act of 1934, which attempted to boost industry in areas of high unemployment, through to today’s Regional Growth Fund, which has in large part attempted to rebalance the economy towards manufacturing and the North.
The future of cities is knowledge. Policy – both local and national – needs to focus on increasing the stock of knowledge in their economies if they are to thrive over the coming century. There are two elements to this.
The first is to improve skills of the workforce – knowledge-based businesses need high-skilled workers. And the second is to encourage innovation. New knowledge and innovation rarely develop in a vacuum but through the links that people have in a ‘knowledge network’. High-skilled workers aren’t more productive just because of their own abilities but because of their connections to other high-skilled people too. Increasingly this is occurring in city centres, and so cities should focus on making their city centres as attractive places to do business as possible.
The move from the industrial revolution to a knowledge revolution has fundamentally changed the role that cities play in the national economy. It is those cities that have adapted to constant economic change, moving to a more knowledge-focused economy, that are our strongest performers today and make the biggest contributions to national growth.
Read the full report here.
This blog is the first of a series to mark the launch of A century of cities. Over the coming weeks we’ll post a series of blogs that will look at aspects of the report in more detail and go into other areas not covered in the full report.
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