Measuring productivity across the UK’s cities

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The Centre for Cities has recently published a number of articles on UK productivity that I have read with great interest. One offering – that forms part of the Centre’s excellent series on the Industrial Strategy – provides productivity data for UK cities against a number of sectors. It is a useful and interesting resource.

Place and the Industrial Strategy

Alongside “place”, productivity is one of the hot topics related to the Industrial Strategy and economic growth. The UK’s productivity problem is well documented, if not well understood, but we also know that the UK is boasting high employment and low wages. It is likely that these things are linked; that we have too many low value, low output jobs.

Discussing  and analysing productivity

This recent article discusses the inequality in productivity across the country. The conclusion is that as you head away from the South East productivity falls. The Greater South East area defined by CfC as, London, the South East and East of England, is one of the most productive areas in Europe, but in the rest of the UK we are lagging far behind.

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Productivity chart for the East of England (click to enlarge)

These findings are not a surprise and validate the calls for the economy to be re-balanced. Indeed our northern and midland cities are under-performing and increasing their productivity is crucial to driving national growth. However, we also need to build an economy that works for all – looking through this lens the picture is less clear.

Taking the East of England as an example we see that other than Cambridge productivity is low in the regions other cities. Proximity to London does not mean that all is well, and places like Peterborough and for that matter Chatham in Kent have similar productivity problems with too many low wage jobs.

In our response to the Industrial Strategy Green Paper we argued that – although we do need to re-balance our economy geographically, we must not lose sight of the need to provide greater opportunities to people wherever they are.

The rhetoric around the South East and the Golden Triangle is understandable and as a convenient short-hand it makes sense.  However, there are two consequences: the first described above, it ignores intraregional disparities and pockets of deprivation; the second that it enforces a sense of competition between “the south” and “the north”.

The south however defined and London are significant assets to the UK economy, the Golden Triangle has two of the world’s finest universities and globally leading research capabilities.  Post-Brexit their importance to the UK will only grow.  We need to support and encourage the south to work with other areas of the country to spread capabilities and ultimately prosperity.

Productivity then, is key issue. The adoption of new technology and practices drives better productivity but the short-term impact on jobs could be equally significant (and localised in terms of impact).  Technological advances will impact the UK whether they are adopted here or not.

This means that skills will be as critical as technology in supporting a more productive and more equitable economy. We also need to help people adjust, retraining them to make them fit for the changing economy and the higher and better-paid jobs that can result. The Industrial Strategy has a key role in addressing this.

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