The Government should commit to a £14.5 billion 10-year innovation and growth package for Birmingham, Glasgow and Manchester.
The UK’s largest cities outside of London lag far behind their European comparators, which costs the UK economy an estimated £50 billion each year. To address this, we’re today calling for a £14.5 billion growth package centred around innovation in the city centres of Birmingham, Glasgow and Manchester to improve their lagging performance.
Innovation has been at the centre of policy thinking in recent years, with Boris Johnson’s commitment to create a ‘science superpower’, Jeremy Hunt’s identification of it as one of three growth priorities in the recent Autumn Statement, and commitments to increase public R&D investment, especially outside the Greater South East.
Innovation doesn’t happen evenly across the country. It occurs in specific places. Centre for Cities’ latest report shows that while Birmingham, Glasgow and Manchester are centres of new emerging sectors that are at the frontier of the economy, they don’t have as many of these types of businesses as should be expected. This is likely to explain their wider productivity struggles.
These large places are not performing as they should. To address this the Government should set out a big push to address their challenges. Alongside the trailblazer extensions to their devolution deals that are likely to be signed soon, ministers should set out a combined 10-year, £14.5 billion growth package centred around innovation to increase their attractiveness to investment from new, emerging industries. Although the package is designed to facilitate the growth of a certain part of the economy, it very deliberately doesn’t target specific sectors. And its components are wider than those usually under the umbrella of innovation policy – it also covers wider factors such as transport and commercial property. It includes:
Crucially, much of this would be funded through the specific allocation of existing budgets, rather than new money. While the Chancellor has set out a number of funding cuts in the coming years, he has not reversed the commitments to increases in capital spending under the previous leadership. It also works with the Government’s selection of each of these three places to be Innovation Accelerators in February’s Levelling Up White Paper.
Such an approach would mirror that which the USA is currently taking through its CHIPS and Science Act. It intends to spend $10 billion in 20 specific places to encourage innovation, with the idea being that it will select places that are lagging their potential.
In reforming the investment zones idea to now encourage the development of ‘growth industries’ around universities, the Chancellor has already set up the framework of a policy to deliver the above (indeed it was this research that helped inform the decision). The question now is whether he is prepared to seriously back his policy with sufficient money in these specific places.
This episode of City Talks delves into the detail of the CHIPS Act, exploring the new $280bn programme within the context of the UK’s levelling up agenda.
This report maps out the current geography of the new economy and calls for the creation of a £14.5 billion growth package to build innovation districts in Birmingham, Glasgow and Manchester.
Centre for Cities calls on Government to invest £14.5bn to build city innovation zones in Birmingham, Glasgow, and Manchester in order to kickstart the new economy.
This latest podcast episode unpacks the findings of our latest report published with HSBC UK which maps out the current geography of the new economy.
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