What Cities Outlook 2013 tells us about how cities can promote economic growth

22nd Jan 2013

What can we learn from a new report about how our cities are performing? Josh Stott explores the issues.

The league table results from Cities Outlook 2013, released yesterday, are a useful barometer for monitoring the relative performance of our city economies.

The report also raises some important issues for research that we have just commissioned, which will review our understanding of city growth and shed new light on the connection between growth and poverty in cities.

Learning from the high performers

Cambridge features in several ‘top ten’ tables and is singled out as a city of innovation (with more patents per population than the next ten cities combined).

Cambridge is obviously unique. But the example raises a more general question of whether success is bound up solely in a city’s economic past and existing asset base (which of course may not include a world-class university research centre) or are there lessons that can be learnt and transferred to less successful places?

The Cabinet Office and Nesta are in the process of establishing five new sectoral ‘What Works’ centres, one of which will focus on promoting local growth. It should go live in April, but the onus must still lie with cities to look outwards and to seek for themselves what works, and, equally as important, what doesn’t work.

Rethinking strategies for the poor performers

Sunderland is one of several cities that falls in the bottom ten across a range of indicators. A shrinking population, high unemployment, low levels of enterprise and innovation… Is it time to review the approach in cities facing the greatest economic challenges?

Local economic strategies should be ambitious but grounded in a realistic assessment of a city’s potential. The reality is that not every city can support a thriving digital or biotech industry. A more honest debate is needed around how ‘growth’ resources are best targeted.

We hope the second wave of City Deals faces up to some of these realities rather than shying away from them.

Understanding inequality and poverty

Major cities – London, Birmingham, Leeds, Sheffield – are identified as being the most unequal. However, inequality is not perhaps the biggest concern if the wealth of high earners can be recycled into the local economy to create additional jobs.

Our real concern is the high levels of unemployment and low wages at the bottom of the jobs market. The links between economic growth and poverty reduction are little understood and, in the current growth-hungry environment, these links are being pushed even lower down the agenda.

We are hoping to find answers to some of these questions through the research we have just commissioned with The Work Foundation. We are not expecting any silver bullets but we are expecting to develop a better understanding of:

  • why city economies perform the way they do;
  • what cities themselves can do to promote growth;
  • the connections between growth and poverty at a city level.

Reporting in the summer, it will be vital reading for anyone involved in city policy.