Rather than competing for the next big thing against stronger, larger urban economies, left-behind places would be better served by policies aimed at securing their foundational economyby John Tomaney and Andy Pike / September 19, 2019 / Leave a comment
The problems facing Britain’s former industrial regions have been well-documented. They are characterised, in contrast to national averages, by low growth; a lack of white-collar and graduate level jobs; lower than average pay and employment rates; high numbers of working-age adults in unemployment or on incapacity benefits, and high rates of poverty.
Currently, a powerful orthodoxy suggests that cities offer productivity and growth premiums because they generate agglomeration economies through their scale, density and diversity. Thus, London acts as the dynamo that powers the UK economy, through its financial, digital and knowledge-intensive business services. Meanwhile the recent growth of Manchester, based on the expansion of services and property development, has been presented as the standard for other city-regions.
City centre regeneration has acted as a proxy for industrial strategy. The Northern Powerhouse operates primarily as a brand for the marketing of northern England for investment, in residential and commercial real estate, infrastructure, and, to a lesser extent, advanced manufacturing, R&D, and culture. The push to create ‘metro-mayors’ is based upon matching decision-making with ‘functional urban areas’.
The implications of this strategy for former mill towns, mining villages, coastal and rural settlements are ambiguous at best. Widening inequalities between and within places are the accepted consequence of this development model.
Crucially, this model neglects middle- and low-paid workers in the low-productivity, non-traded sectors, and the civic infrastructure required to develop research and innovation across the whole economy. It also overlooks rural areas and towns. The pursuit of major inward investments and the development of knowledge-intensive business services or advanced manufacturing are unlikely to create inclusive growth in left-behind places.
There is little evidence, for example, that London’s growth benefits other regions. Instead, fortuitously capturing the benefits of globalisation through its specialisation in financial services, the attraction of multinational companies, foreign investment and international migrants, London has ‘de-coupled’ itself from the UK economy.
Similarly, there is little evidence that faster growing cities in the north are contributing to the growth of neighbouring places. The economic performance of cities is crucially determined by region. Cities in northern England have grown slower than counterparts in southern England…