Structural Transformation, Adaptability and City Economic Evolutions

Lead Research Organisation: University of Cambridge
Department Name: Geography

Abstract

Over the past few years, cities and city-regions have assumed growing prominence in discussions over economic growth and performance. Both geographers and economists point to the increasing concentration of economic activity and wealth creation in cities, and their crucial importance as the loci of national prosperity. National governments and international bodies have likewise recognized the key economic role that cities play, and have correspondingly directed attention to cities as the foci of policy intervention and governance reform. In the UK, interest in the economic performance of cities takes on particular importance given the Government's concern spatially to rebalance the economy between the less prosperous North and the more prosperous South. 'Powering up' northern cities to unlock their growth potential is seen as crucial to securing that political imperative. This project is intended to help inform these concerns and debates by focusing on how far and in what ways, over the medium to long term, cities have differed in their ability to reorientate and transform their economic structures in response to or anticipation of changes in demand, competition, trade, and technology, and how those differences have then influenced the comparative growth paths of cities.
While a city's growth performance is influenced by a wide range of factors, over the medium to long run, much turns on how successful a city is in moving out of old declining or slow-growth sectors of activity into new more dynamic ones. If, for some reason, a city's economic structure becomes increasingly uncompetitive, outmoded, or falls behind in productivity, it will fall behind in economic growth, job creation, per capita incomes and welfare. What matters then, especially when viewed over the medium to long term, is what some economists call the structural dynamics of economic growth, or adaptive growth. It is this key issue that this research project seeks to explore, in relation to some 70 cities across the UK. There is some evidence to suggest that cities have differed significantly in economic growth in recent decades, especially as between more southern cities and more northern ones. How far these divergent growth evolutions have been influenced by differences in structural transformation and reorientation is the basic focus of this research. Most of the analysis will focus on the past forty years, since 1971, a period when, nationally, a major shift in the national economy has occurred from manufacturing to services. How the structural details of this shift have played out across Britain's cities, and with what consequences for city growth patterns, are key questions the research seeks to address.
To address the research aims, new data sets for British cities will be constructed, on employment and output for numerous individual sectors. For a more recent period, since 1991, it is also possible to examine in some detail the role of various city-specific factors (such as agglomeration, skills, innovation and firm demographics) in explaining differences across cities in structural adaptation and economic growth. Further, some 10 case study cities will be examined in yet more detail over this more recent period, with a view to ascertaining how local economic and industrial policies and what are increasingly called governance arrangements (for example locally active and collectively acting political and business institutions) have interacted with and shaped the pace and direction of structural change and economic growth. It is intended that the research will not only contribute to our understanding of city economic evolutions, but also help to inform current policy debates about the creation of a 'northern powerhouse' centred upon Britain's northern cities.

Planned Impact

1. Impact Target Community
The principal non-academic beneficiaries are anticipated to be economic policy makers at both national and local scales, to assist understanding about the impact of structural change on city-region economies and the policies that are required to enable their local resource base to adjust accordingly.
Other beneficiaries include the business community and in particular those who assist with the workings of labour, land and property markets in the broadest sense including the housing market.

2. Engagement Activities
Our plans for engagement and dissemination include;
i) Developing a web-site that will focus on promoting understanding of the impact of structural change on local economies and co-ordinated with social media channels including a project blog, Twitter feed and LinkedIn group;
ii) Working closely with the Centre for Cities to ensure that all key findings are disseminated through their extensive network of contacts and publicity channels (see below);
iii) Holding three workshops during the course of the work to bring together academics, policy makers and professionals;
iv) Extensive development of professional research networks. involving HM Government, local authorities and the research community to make the relevant user groups aware of the research;
v) Knowledge exchange with local authorities through the Local Government Association, Local Enterprise Partnerships and other similar bodies in order to make them aware of the research and its findings;
vi) Distribution of four short (non-technical) summary documents and policy briefings targeted at end-users;
vii) Organisation of of a major conference to be held in Cambridge in Summer 2018 that would be an opportunity to bring together the research studies findings with that of other academic work on City and Regional Structural Adaptive Change from an International Perspective.

3. Milestones and Measures
Key measures include:
i) Establishing a Project Steering Group consisting of 8 members, four of which would be drawn from representatives from local and central government; 3 would be from the academic research community, and one from private sector data providers.
ii) Regular meetings of the project Steering Group to review progress on engagement and delivering impact.
iii) A workshop towards the end of year one would seek feedback from participants on the quality and effectiveness of the research to date.
iv) A second workshop in the middle of year two would be concerned to discuss and disseminate a number of emerging findings
v) A third workshop towards the end of the project would seek to communicate further research, including the case-study city findings, results to a wide range of the beneficiaries targeted above and would be seen as the basis for the final round of dissemination activity.

4. Resources for Dissemination: Using the Centre for Cities to Maximise Impact
Given the importance of impact, and the potential relevance of the project for policy-makers and others involved in city economic development, the project will utilise and harness the expertise and dissemination facilities of the Centre for Cities in London. The Centre has an extensive network of stakeholders and key actors involved in city development and policy across the national urban system. Their services will be used to help disseminate the research findings of the project. The Centre will assume most of the administrative, organisational and promotional activities associated with our Workshops and Conference, together with designing and issuing publicity on the project, including the summary documents and policy statements referred to above. They will work alongside and under the guidance of the Pi and Co-Is to ensure the widest possible impact of the project. We regard the involvement of the Centre for Cities in our impact strategy as a key strength.

Publications

10 25 50
 
Description The main findings thus far can be summarised as follows:

paths of cities in the UK over the past 5 decades have been highly divergent. In terms of both employment and output, southern cities have grown faster than northern cities. Further, the fastest rate of growth have been among smaller and medium sized cities: the major cities (regional capitals) have been among the slowest growing. The exception is London, which after growing slowly up to the late-1980s, has since been one of the fastest growing cites in the UK. 2. There is also a north-south division of cities in terms of productivity, with almost all northern cities having labour productivity levels, both in 1971 and in 2014, below the Great Britain average. While northern showed some tendency to 'catch up' with the southern counterparts over 1971-1991, the process stopped thereafter, and southern cites pulled ahead. 3. Contrary to much of the academic literature, our research finds that a city's economic structure - its sectoral make-up - explains very little of its growth rate relative to other cities. In fact, cities have become increasingly similar over time in their sectoral structures: there has been sectoral convergence at the same one there has been divergent growth. What seems to be more important in determining a city's growth are local' city-specific' factors other than structure. It is not so much what cities do that matters, but how well they do what they do. This finding is now being explored, to try to identify what these 'city-specific' (or what are sometimes called 'competitiveness') factors are. 4. Analysis of productivity growth for our 85 cities over 1971-2015 shows that over 1971-1991, northern cities enjoyed a faster rate of productivity growth than southern cities, but that since 1991 it has been southern cities that have led productivity growth. However, productivity growth has slowed down almost everywhere since the 1980s, if not before. Further, our work shows that while structural change - the shift from manufacturing, where manufacturing growth tends to be high, to services, where in many such activities, productivity growth is lower - only explains a small part of this general slowdown. Most of the latter appears to be due to 'within-sector' slowdown, and this dimension also differs across cities. 5. Another stream of the research has examined the changes in skills across British cities since 1981. Somewhat contrary to the experience for US cities, in the British case, there is little evidence that skills have increased faster in already-skilled cities: 'smart cities' have not necessarily become yet more 'smarter'. Nether, again in contrast to the US, have skilled increased faster in larger cities. Rather, there has been a widespread holloing out of the middle of the skills hierarchy, and polarization between high and low skilled occupations. 6. Another aspect of the research has examined the resilience of British cities to economic shocks. Analysis of four recessions over the last 40 or so years - the downturns of the mid-1970s, the early-1980s, the early-1990s and the financial crisis of 2001-2008 - reveals that southern cities recover more strongly and sooner that northern cities: that is they are more resilient. Using these results as background, further work has been conducted on the likely impact of Brexit on the 85 cities examined in this project. Estimates of the possible sectoral impact of Brexit - both soft and hard exit scenarios - at the national level were then applied at the city level, using each city's sectoral output structure, to derive estimated impacts at the city level. Our findings, which are have to be read with due caveats, suggest that the impacts are likely to be fairly evenly spread across the country, although with some indication that southern cities would be more likely to recover more quickly from the negative shock associated with Brexit than would northern cities, much in the same way as has happened in previous economic recessions.
Exploitation Route The findings are of relevance to policy makers. Indeed, our work has attracted the attention of HM Treasury, the Department of Business, Energy and Industrial Strategy. Some of our data and findings have also been used as inputs to major studies for the National Infrastructure Commission, and Transport for the North.
Sectors Creative Economy,Financial Services, and Management Consultancy,Manufacturing, including Industrial Biotechology,Other

URL http://www.cityevolutions.org.uk
 
Description 1. Our findings have been used by the Local Growth section of Department of Business, Energy and Industrial Strategy in its discussions and deliberations of local growth funds, the northern Powerhouse initiative and the Industrial Strategy Green Paper. 2. Our work has also been used in submissions to the Government's Industrial Strategy Green Paper 3. Additional work was commissioned by and carried out for the Key Cities group, to inform their responses to the Government's Industrial Strategy Green Paper 4. Prof Martin was invited to participate in a Round Table Working Group on the Government's Industrial Strategy held in 10 Downing Street, November 2017
Sector Other
Impact Types Economic,Policy & public services

 
Description Collaboration with Centre for Cities. Centre for Cities is a think tank based in London, whose goal it is 'to understand how and why economic growth and change takes place in Britain's cities, and to produce research that helps cities improve their performance'. 
Organisation Centre For Cities
Country United Kingdom 
Sector Charity/Non Profit 
PI Contribution Provide key findings of research about economic development of cities in the UK Provide expertise and content for Centre for Cities activities (e.g. website, podcast, lecture series, other events) Provide new conceptual and theoretical insights that can benefit more applied work by Centre for Cities
Collaborator Contribution Redesigned website for project, and now maintain this webstite (www.cityevolutions.org.uk) Create more accessible and short briefing papers with key findings from the academic papers written as part of the project; which are then distributed among practicioners and policy makers in the field of urban and regional economic development. Organise a series of workshops as part of the project, to present first findings in various cities acress the United Kingdom, and get feedback and suggestions from a diverse group of practicioners and policy makers. Advertise briefing papers (with key findings), academic and on-academic events, and other new developments in the project, through social media (mainly Twitter), their (widely distributed) e-mail newsletter, and personal contacts.
Impact Redesigned website for project (www.cityevolutions.org.uk) Produced 2 short briefing papers with key findings from the academic papers written as part of the project In the process of organising 2 workshops as part of the project Ongoing advertisement of events and news from the project. Project Twitter account has about 150 followers meanwhile. And Centre for Cities can reach several 1000 stakeholders, through announcements on their website, their newsletter, and their own Twitter account.
Start Year 2015
 
Description Appointed Consultant on National Infrastructure Commission's study of the Cambridge-Milton Keynes-Oxford Corridor 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Policymakers/politicians
Results and Impact Assisted in the research for and writing of major Report of National Infrastructure Commission, as input to policy deliberations concerning the funding of improved transport link between Cambridge-Milton Keynes-Oxford
Year(s) Of Engagement Activity 2016
 
Description Appointed Member of Academic Panel to oversee Consortium project on Local Growth Interventions Evaluation for Transport for the North 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact Appointed as member of Academic Panel to provide academic oversight and rigour to the evaluation of Local City Deals for the consortium led by Transport for the North and the Manchester Combined Authority
Year(s) Of Engagement Activity 2017
 
Description Appointment as Consultant and Commissioner on London-Stansted-Cambridge Growth Corridor Commission 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact Provided academic ave t the Report of the London-Stansted-Cambridge Growth Corridor commission , and appointed as one of the Commissioners of that Commission
Year(s) Of Engagement Activity 2016
 
Description Cities and Productivity 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact Response to an invitation from representatives from HM Treasury and Departmaet of Business, Innovations and Skills
Year(s) Of Engagement Activity 2016
 
Description Divergent Cities in the Post-Industrial Economy 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact A keynote presentation to open the Conference on the Transformation of Cities held at St Catharine's College July 2016
Year(s) Of Engagement Activity 2016
 
Description Divergent Cities; Structural Transformation and Productivity Growth 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Other audiences
Results and Impact Departmental Research Seminar on 'Divergent Cities; Structural Transformation and Productivity Growth', University of Portsmouth
Year(s) Of Engagement Activity 2017
 
Description Institutions and Policies in City Economic Evolution: Evidence from British Cities 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Paper presented at Association of American Geographers (AAG) Annual Meeting, Boston, 5-9 April 2017
Year(s) Of Engagement Activity 2017
 
Description Organised conference Cities in Transformation: Processes, Problems and Policies in Cambridge on 14-15 July 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Organised international conference with over 30 speakers about economic change in cities over the world. About 80 people attended, among whom many people from abroad and many policy makers and economic development practitioners (from British government departments, European Commission, Local Enterprise Partnerships, local authorities, etc.). Received very positive feedback from participants, and policy makers and practitioners reported they appreciated being informed about state-of-the-art research.
Year(s) Of Engagement Activity 2016
URL http://www.caths.cam.ac.uk/cities-transformation-processes-problems-and-policies
 
Description Organised session at Regional Studies Association Winter Conference in London 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Organised a special session at the Regional Studies Association Winter Conference in London on 24 and 25 November 2016, to present our ongoing work. Received postive feedback and valuable suggestions from academics as well as practicioners. The conference and our session was not only attended by academics, but also many practicioners, policy makers, and media; and hence was a good opportunity to showcase our work, and interact with a wide group of stakeholders.
Year(s) Of Engagement Activity 2016
URL http://www.regionalstudies.org/conferences/conference/rsawinter2016
 
Description Policies, Institutions, and City Economic Evolution: A Tale of Five British Cities 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Postgraduate students
Results and Impact Presented at Regional Studies Association (RSA) Winter Conference, London, 16-17 November 2017
Year(s) Of Engagement Activity 2017
 
Description The City Dimension of the Productivity Problem: The Relative Role of Structural Change and Within-Sector Slowdown 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Paper Presented to the Regional Studies Association Annual Conference, London, November
Year(s) Of Engagement Activity 2017
 
Description The Resilience of Cities to Economic Shocks 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact Paper presented as the City Horizons 2017 Lecture, Centre for Cities, The Shard, London, December
Year(s) Of Engagement Activity 2017
 
Description The Unequal Growth of Cities 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Study participants or study members
Results and Impact Presentation given day the Regional Studies Association Annual Winter Conference, London November 2016
Year(s) Of Engagement Activity 2016