In Praise of Leeds Independent Businesses

There is an exciting and positive new dynamic in the Leeds economy. Numerous small independent businesses are being started and are growing rapidly. These firms don’t fall into neat traditional economic classifications, but instead share common features and values. They are highly creative, entrepreneurial, distinctive, and cool. They collaborate, compete and cluster. They are displaying all the features of economic agglomeration, and the trend of business innovation increasingly being focused in and on the fringes of city centres.

The entrepreneurs starting and running these firms are also working together as a new part of the Leeds business community. They are creating new bottom-up initiatives to support and promote each other, and to champion Leeds. They are doing so not for payment or profit, not because they have been tasked to do so from above, and not because of a top-down economic strategy. They are doing it because they are absolutely passionate about what they do and their city. This can be illustrated through three examples.

Last night I had the great pleasure of attending and saying a few words at a fantastic event: the first Leeds Independent Business Awards. These awards were organised by brilliant Lola Wilson (with help from many others), founder of the website / blog leedsloveaffair.co.uk. Several aspects of the event spoke volumes about the characteristics of these new business networks.

First, the award winners were chosen through an online vote, demonstrating how these businesses are engaging with the community through social media.

Second, the event was held at the Tetley, a new contemporary art gallery in Leeds South Bank, a fast growing creative business quarter and innovation district, an example of the new “innovation districts” identified by Bruce Katz (www.brookings.edu/research/opinions/2013/12/30-silicon-cities-katz).

Third, there is a value system of mutual support and goodwill here. The event did not consume a penny of public money. It was organised by volunteers, many who work for Logistik Group www.logistikgroup.com (a great fast growing creative firm in Armley, Leeds) who encourage staff volunteering. The Tetley hosted it for free, and the headline speaker Mr (Matt) Burton from Educating Yorkshire did not charge a fee.

Fourth, the centerpiece of last night’s awards was the showing of a film made to highlight the voices, importance, concerns and aspirations of the children in Leeds.    This support for the Child Friendly Leeds initiative (www.leeds.gov.uk/c/Pages/childFriendlyCity/default.aspx and www.childfriendlyleeds.wordpress.com) is one example of the commitment these firms are showing to the city and the well-being of its communities.

Another sign of this new business community at work was a visit to Leeds by TechCityUk (www.techcityuk.com) and the information economy team in BIS. Leeds City Council and Leeds and Partners hosted parts of the visit, and demonstrated support for the sector. But much of the organisation of the day was done by a group of Leeds tech and data companies. The presentation about the digital economy capabilities of Leeds came from this group. It told a story about our expertise in data science, fin-tech, our trail blazing work on open data, and the fact we are an Internet independent city. It did so in a way that was compelling because it originated from the businesses themselves.

Another example of a great bottom-up initiative was the Leeds Independent Bikes project (www.leedsindependentbikes.co.uk/). This initiative, timed alongside Leeds hosting the start of the Tour De France, has involved designing and printing 120 unique large vinyl stickers in the shape of bikes. These have been placed on the windows of independent businesses, and of other organizations that have allowed their windows to support small independent businesses without a prominent shop-front or pavement profile. It has highlighted and showcased the range, creativity and quality of Leeds independent businesses. The project was created and driven forward by Laura Wellington and James Abbott-Donnolley, whose day job is to run Duke Studios (www.duke-studios.com), an incubator for creative start-ups.

All of this is not to say large firms and traditional business networks are a bad thing. Large firms have much to gain by doing more for small independents. High street chain retailers benefit from independent traders providing appoint of difference for retail destinations (and independent retailers benefit from footfall attracted by large multiples). Today’s independent businesses are tomorrow’s high value clients for larger firms. And if large firms turn their back on dynamic new start ups, they are turning their back on new ideas, potential future acquisitions, and leaving themselves vulnerable to competition and waves of creative disruption from new ideas, products, processes and brands.

It is clear independent businesses are a good thing for many reasons. Much of the value stays in the local economy. They provide the creativity and innovation that our cities need to be competitive in a knowledge economy. They tend to train their staff well and invest in career progression for them. They create distinctiveness, an experience and brand image that our city and town centres need to succeed. They are putting lots back into their cities and communities. And they are coming together to create new business networks that are helping drive the innovation our cities need for economic success.

 

p.s. In praise of Kirkgate Market

Last night I unexpectedly came away from the Leeds Independent Business Awards with the Award for Best Place to Visit, for Leeds Kirkgate Market, which I collected on behalf of the Leeds City Council Markets team.

Kirkgate Market (www.leedsmarkets.co.uk) is the largest covered retail market in Europe, and home to hundreds of fantastic independent businesses. The award follows a TripAdvisor award (www.leedsmarkets.co.uk/blog/kirkgate-market-achieves-top-tripadvisor-award) earlier in the year. It is fantastic recognition to the efforts made by all the businesses in the Market (in what has not been an easy year). It is also recognition of the great work of the Councillors that are taking difficult decisions on the future of the market, and the Leeds Markets team that are managing and promoting the market, as well as developing plans for a £12m investment to improve it and secure its long-term future.

Many congratulations to the other winners: North Bar www.northbar.com/; The Gredy Pig www.facebook.com/pages/The-Greedy-Pig/101684753228381; Our Handmade Collective ourhandmadecollective.wordpress.com/about/; and Pastille Beauty www.pastille.uk.com/.

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HS2: The Regeneration Opportunity

Yesterday I spoke at a British Property Federation seminar (http://www.bpf.org.uk/en/newsroom/press_release/PR100529_Scale_of_HS2_regeneration_opportunities_revealed_at_BPF_seminar.php), on the potentially huge boost to regeneration from HS2. The HS2 Growth Taskforce has set our recommendations on what needs to be done to maximise the economic growth resulting from HS2 (see: https://www.gov.uk/government/publications/hs2-growth-taskforce-a-report-to-government-on-maximising-the-benefits-of-hs2). The main message is clear: we need long-term planning, investment and focus on delivery to maximise the regeneration opportunities.

Beth West of HS2 spoke about international examples of high speed rail stations that have become hubs for development and regeneration as a result of proactive planning and public investment. But she also highlighted the risks of complacency, pointing to examples of high speed rail stations that stand in splendid isolation from surrounding development.

Lorraine Baldry, Chair of London and Continental Railways (LCR), spoke about the experience of HS1 where regeneration was integral to the vision, and indeed LCR had control of the land around the stations. The impacts at Kings Cross and Stratford are now there to see. An assessment of the economic impact of HS1 has shown that the regeneration impacts around the stations alone could amount to 15,000 new homes and 70,000 new jobs.

Richard Bowker, former Chair of the Strategic Rail Authority spoke about how existing methods of transport appraisal fail to capture the full positive land-use and growth impacts of transformational projects (a topic for a future post).

Steven Norris spoke about his experience as a Transport Minister when he approved the Jubilee Line Extension. That scheme that had been delayed because of doubts around economic benefits, but it is now difficult to imagine London’s Docklands without it.

I spoke about the huge opportunity in Leeds. The proposed HS2 station will be in the heart of Leeds South Bank, an area with significant potential for development and intensification on brownfield sites to enable the growth of Leeds City Centre. This 136ha area is of a similar size to Edinburgh New Town (which is 137ha), which indicates the scale and level of ambition of the project. I outlined five areas where we need to take action to make the most of the opportunity.

First, we need to ensure the plans for HS2 are integrated with those for regeneration of the areas surrounding the stations. We must avoid the HS2 station creating severance in the way in which the existing station and railways. We need to link HS2 and existing station in a way that makes interchange feel seamless, and also enables people to access easily surrounding buildings and spaces. We might also consider how the HS2 station could act as local and retail service hub, in the same way that Kings Cross and St Pancras stations are becoming the town centres for their surrounding communities.

Second, to spread the benefits of HS2 we need to connect it to a good quality local and regional transport network. We are planning to reorientate our city centre transport network to connect new areas of growth and make more areas pedestrian–friendly. We need better quality city regional rail connections between Leeds and other cities and towns such as Bradford, Halifax, Wakefield and Harrogate. It is not a case of investment in HS2 or investment in local and regional transport. It is about positioning HS2 as part of a coherent long-term strategy for the rail and transport network as a whole.

Third, we need to put in place the right delivery mechanisms. We will need to set out a clear long-term vision, coordinate investment, assemble land, and capture the benefits of value uplift. We are developing a proposition to Government to retain business rates growth in the area around the station, to create a revenue stream against which we can borrow to fund investment.

Fourth, we need to combine a long-term perspective with flexibility over the short to medium term. HS2 is a long term project. It will not reach Leeds until at least 2032. We should think about what our economy and what our cities will look like in 20 or 30 years. But Leeds South Bank is already an established and growing location for business, culture and learning. It is the home to Asda’s UK Head Office, and has seen major new developments such as Leeds City College’s Printworks Campus, The Tetley contemporary art gallery, and Sovereign Square, a new public space and a the new Leeds office for KPMG. In this respect the area is different to the environs of the HS2 stations in Birmingham and Manchester, which present more of a blank canvass suitable for a traditional masterplanning approach. We need to encourage the continued growth and regeneration of Leeds South Bank in advance of HS2, whilst not cutting off longer term opportunities.

Finally, we need to focus on people not just places. Leeds has widespread problems of poverty (see: https://citypolicy.wordpress.com/2014/02/08/more-jobs-better-jobs/) and some of our most deprived communities are in close proximity to Leeds South Bank. We need to address the physical severance between some of these neighbourhoods and the city centre. And we need to equip our people with the skills to access the jobs that will be created by HS2 and the regeneration and growth of Leeds South Bank and city centre. That is why we need to learn from best practice on other major construction projects such as Leeds Arena (http://newsfeed.leedsvirtualnewsroom.co.uk/2010/10/leeds-arena-employment-and-training.html) or Crossrail (http://www.crossrail.co.uk/careers/tuca). It is also why we are bidding to be the home of the proposed new HS2 college (http://www.leeds.gov.uk/news/pages/Council-in-bid-for-new-HS2-college.aspx)

In short, we cannot afford to adopt a strategy of “if we build it they will come”. We need a concerted, coordinated and long-term approach to exploit the huge regeneration opportunity presented by HS2.

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Science parks or city parks? The economic importance of liveable cities.

A couple of months I attended an inspirational talk by David Simm of Gehl Architects (http://www.gehlarchitects.com/) on creating livable and human scale cities. For visitors to and residents of cities that have invested in better public parks and spaces, the quality of life and quality of place benefits are undeniable. But for economists the economic benefits can be difficult to quantify? Too often, particularly in an era of austerity, city centre public realm projects are being seen as nice-to-have, not must-have interventions.

I considered this issue in a talk (see: http://www.rsablogs.org.uk/wp-content/uploads/2014/04/Session-C2-Prince-Philip-Room-Tom-Bridges.pdf) I gave a few weeks ago at a Royal Society of the Arts conference on creating socially productive places. My argument is that the shift to a knowledge economy is transforming the geography of innovation in cities with important implications for how and where we prioritise investments to support economic growth.

Bruce Katz, in an excellent recent article and short animation (http://www.brookings.edu/research/opinions/2013/12/30-silicon-cities-katz) explained how the landscape of innovation is changing. Previously, innovative firms located on out-of-centre business and science parks to which people drove to their buildings, within which knowledge and ideas were kept secret. But increasingly, innovative firms are locating in or on the fringes of city centres where their staff cycle or ride public transport to work, and in the “hyper-caffinated” spaces between the buildings they share their knowledge.

This trend can be seen from tech city on the fringes of the City of London, to the old mill buildings of the South Bank of Leeds. Its causes are the increasing economic importance of agglomeration. It is in city centres where people, firms, colleges and universities can locate in close proximity, where they can collaborate, copy and compete across company and sectoral boundaries, and where they can access easily a skilled and creative workforce (see my previous post on this: https://citypolicy.wordpress.com/2014/02/04/cities-and-the-information-economy/).

It is for this reason that Centre for Cities argued in an excellent report last year (http://www.centreforcities.org/research/2013/09/10/beyond-the-high-street/) that the post Portas debate about city centres needs to be about more than just retail. There should be a greater focus on city centres as locations for jobs, businesses and growth, and the role of retail and leisure as part of that wider context.

This all has important implications for the spaces, places and routes between the buildings in city centres. It is the quality and attractiveness of this public realm that will affect the ability of cities to attract innovative firms, workers, as well as visitors and shoppers. As Katz argues, there are new opportunities to develop “innovation districts” to regenerate areas on the fringes of our city centres. It also creates challenges for established out-of-centre office and science parks, many of which are now seeking to retrofit an enhanced retail and leisure offer, better public and open space, and improved public transport to be more like the resurgent in-town locations.

So are we valuing or prioritising sufficiently potential investments in city centre public spaces? And this might all be very well for Copenhagen, Shoreditch, or Boston, but what does this all mean for a place like Leeds? These are questions I will return to in my next post.

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The UK’s Second City: Manchester or Hebden Bridge?

Evan Davis’ Mind the Gap programmes have intensified the debate about whether continued rapid growth of London is good for the UK economy, and what can be done to tackle the problem of the north-south divide.

In a recent post I argued we need to move away from a London versus the rest of UK narrative. London an asset to the UK economy. But we cannot rely on the “sea slug” theory of regional development with London, as described by its Mayor Boris Johnson, “like a gigantic undersea coelenterate that takes in and then expels.” If the UK is to grow to its full potential it needs to grow together. The cities and city regions outside London could contribute more to national growth, but need greater powers and investment to do so. But how?

In an interesting article last year, Professor Henry Overman of the LSE argued that the problem with the UK economy was not that London is too big, but the second tier cities are too small. He argued that these cities lack the scale and critical mass to needed to compete with London. This is because of the phenomena of agglomeration, whereby in the knowledge economy, high value, knowledge intensive economic functions such as innovative businesses, universities and high-level government functions tend to cluster in the centres of large cities. Urban scale is important because these functions need access to large workforces and markets.

Simon Jenkins argues in an article in the Guardian that the UK should pick Manchester as its second city, and concentrate investment and growth there at the expense of Leeds, Sheffield, Liverpool, Newcastle and so on. But I think Jenkins argument is flawed.

Manchester clearly is a huge economic asset to the UK economy. Its airport is a genuine global gateway. The quality of its economic leadership is undeniable. It has huge economic strengths in professional services, digital, media and science.

The reality is that none of the North’s cities are of sufficient scale or significance to register on any global list of major cities. Jenkins appears to base his argument on the success of Manchester’s football teams, the coolness of its urban apartments, and its undoubted brilliance at city marketing. These are all important factors. But other cities have important strengths. Leeds is experiencing the UK fastest private sector jobs growth, is the largest UK concentration of financial and business services jobs outside London, and has world class capabilities in data analytics and digital health. Sheffield has hugely important assets in advanced manufacturing, based around the AMRC. Leeds, Newcastle, York and Liverpool, as well has Manchester, are developing major science and innovation districts.

There is also a danger that Whitehall thinks that in funding a project in Manchester, it has ticked the box marked “the north” (think Commonwealth Games, Metrolink, BBC relocation, Northern Hub). There has to be a case for other cities in the North to benefit from similar grand projects, although clearly there is an onus on them to make a compelling case.

But the most important reason Jenkins and Overman is flawed is that the problem is not that the UK’s second tier cities and city regions are too small; because of poor transport links they are not connected well enough. The UK is a small country. Major cities and city regions in the midlands and the north are close to each other. Leeds, Sheffield and Manchester are less than 40 miles apart. But poor transport links – slow rail journey times and congested roads – mean that these city region economies are separate functionally. They have separate travel to work areas, business and knowledge networks, and commercial markets that individually lack scale and critical mass. Less than 1% of the population of Leeds or Manchester commutes daily between the two cities.

In contrast London sits at the centre of a vast functional highly networked economic area that Professor Sir Peter Hall has called the “London and South East Mega City Region”. This covers an area with a population of around 19 million within roughly an hour rail travel time of London.

A 70 mile rail journey from Leeds to Nottingham via Sheffield links three city regions with a combined population of 6million and 3 million jobs. But the rail journey will take almost two hours at an average speed of 36mph. Between Leeds and Birmingham (2 hours rail journey time) the combined city region populations are 8.5 million with over 4 million jobs. Better transport links could create a better-integrated and more powerful economic zone. HS2 will link Leeds with Birmingham via Sheffield and Nottingham in under an hour.

Improved trans-Pennine rail links can have a similar effect in the corridor between Liverpool, Manchester, Leeds, Sheffield and Hull. In particular better links between Leeds and Manchester would provide a huge economic boost. That is why Evan Davies, claims that Hebden Bridge, located between Leeds and Manchester, should in fact be the UK’s second city. It is not a literal suggestion, but he does make a serious point:

“it is a place that allows both those cities to be treated as next door. And maybe therein lies some kind of answer to the critical mass of London. It’s not a second city called Hebden Bridge, but a super-city that tries to turn the great cities of the north into one large travel-to-work area.”

I agree with Davis. We need better transport links within and between the city regions of the midlands and the north to create the economic scale and networks to enable them to fulfill their combined economic potential.

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More Jobs, Better Jobs

Yesterday Joseph Rowntree Foundation (JRF), Leeds City Council and Leeds City Region launched a major research project, More Jobs, Better Jobs, to inform policy and practice on supporting growth and tackling poverty in cities (see: http://www.jrf.org.uk/media-centre/more-jobs-better-jobs-needed-economic-recovery).

For me this is very exciting and important; not just because it is a project I have helped develop, and not just because we are taking an independent, evidence-based look at the issues. It is because for the first time in recent years we as a city and a city region are developing a new narrative, policies and interventions based on the concept of “good growth”.

For far too long policies and actions to support economic growth and to tackle poverty have taken place in different silos, by different people, with little inter-connection. The result is that well-intentioned efforts to achieve growth fall inadvertently into the trap of trickle-down economics. And efforts to tackle poverty become focused on dealing with and mitigating the consequences of deprivation, not tackling the causes.

Why is this so important now? And why is it important to Leeds? As the economy has restructures, the labour market has become more polarised, and the gap between places of affluence and deprivation has widened in Leeds and the City Region.

Leeds had the fastest jobs growth of all the Core Cities in the decade before 2008. The city’s economy was hit hard by the recession and ongoing public sector austerity, and is now bouncing back strongly. However there is still some way to go before job numbers are back at pre-recession levels. Further losses of public sector jobs mean that significant job creation in the private sector is needed just to enable us to stand still.

Problems of worklessness and deprivation remain acute and persistent in many parts of our city. Around 65,000 Leeds households (20% of the total) are living in poverty. 150,000 (20%) of the Leeds population live in wards ranked within the 10% most deprived nationally. And for those in work, low pay is an increasing problem. 68,000 jobs in Leeds (18%) are paid less than the living wage of £7:65 an hour. The cost of in-work benefits is increasing and now forms a large proportion of the benefits bill. There is increasing underemployment, particularly amongst part-time workers.  The evidence points to increases in the proportion of high paid and low paid jobs, but decreases in the proportion of mid-level jobs. In Professor Mike Campbell’s words, the rungs on the ladder that enable career and income progression are being taken away, or are getting further apart.

So what can be done? I think there are five areas where we need to take action.

First, we need to think about tackling poverty as a means of achieving growth. Worklessness, economic inactivity and low pay impose huge costs on the public sector, and impair economic performance even when assessed by traditional methods such as GDP per head.

Second, whilst we do not want growth at any cost, we do need economic growth and job creation. Otherwise the agenda will be about redistribution, the scope for which will be limited in an era of public sector austerity. Cities and city regions need to attract, retain and generate business investment. They need to put in place the right conditions for growth, which should encompass the role of anchor institutions such as local authorities, universities, colleges, and the health service. They need to ensure the base factors for economic competitiveness are in place in terms of a climate that is open for business, skills, planning, infrastructure, housing and quality of place.

Third, we need to focus not just on getting unemployed people into work, but also on encouraging in-work progression. This will help people move out of low pay, and support them, the labour market as a whole and business to be more adaptive to change and more productive.

Fourth, we need to think about sector policy in a different way. We need to look beyond just the new, glamorous and potentially game-changing sectors and areas for innovation. Other sectors, such as retail, manufacturing, waste, transport and tourism can offer entry-level job opportunities and good prospects for career progression. There is also a need to think about how the glass ceilings can be removed in other sectors such as financial and professional services, sometimes due to an inflexible approach from the professional institutions. Apprenticeships schemes have a role to play.

Finally we need to focus not just on people, but also on place. Migration patterns are an important issue. In some neighbourhoods when people move on in career and income term they then move-out. Improvements in the quality of schools, community facilities, and the housing offer have a role to play in helping lift places, not just people, out of poverty.

Our partnership with JRF will help us understand these issues better, and will inform where we can practically take action to secure more jobs and better jobs to benefit the people of Leeds and Leeds City Region.

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Cities and the Information Economy

The rise of the information economy has fundamental implications for cities and their economies.

Recently I had the privilege of joining a discussion with a group of IBM’s global thought leaders on cities and the information economy. This stemmed from a talk on I gave to the Institute of Economic Development in November (see: http://www.slideshare.net/slideshow/embed_code/28576026).

I am grateful to Rashik Parmar, President of the IBM Academy of Technology, IBM Distinguished Engineer, and Board Member of the Leeds City Region Local Enterprise Partnership (http://rashikparmar.wordpress.com/) for sharing his thinking and that of the IBM thought leaders group on five patterns in the digital economy. I have considered what these trends might mean for cities, and specifically Leeds. In doing so, I identified a sixth trend of my own (see Trend #1 below).

Trend #1: The Increasing Importance of Cities

For many years people have been predicting the death of cities as a result of the digital and information economy. They have argued that the internet, email and wireless connectivity mean we will no longer need to travel, to work together in offices, and meet face-to-face. But in fact the opposite has been the case. As the economy has become more specialised and advanced, knowledge intensive functions and jobs have clustered in city centres, which can support high densities of face-to-face interactions, knowledge spillovers and have access to a skilled workforce. Digital connectivity is important in enabling firms in these locations to access markets and information from further afield, but the rise of the information economy has made cities more, not less important.

Trend #2: Codified Services

Codified services are replacing what people do with software, which can then be sold to create revenue. This is replacing a physical presence of economic activity in cities with an online presence, with cost intensive operations located elsewhere. An example is the rise of online retail at the expense of the high street. This trend is also leading to job losses in back office functions and call centres in sectors such as financial services.

Trend #3: Pattern Augmentation

Pattern augmentation is where increased information is enabling increased performance and value of a product. This has enabled Rolls Royce to sell “power by the hour” from its aero engines, and become as much a service sector company as a manufacturer (see the excellent Work Foundation report on the rise of “manu-services” http://www.theworkfoundation.com/Reports/284/More-Than-Making-Things-A-new-future-for-manufacturing-in-a-service-economy). Another example is Trinity Leeds, the largest city centre retail scheme in Europe completed in 2013, which is the world’s first genuinely digitally enabled shopping centre. Technology is enabling new ways of communicating and engaging customers and monitoring shopping patterns.

Trend #4: Interconnected Industries

The ability to gather analyse data and information from across different sectors means that the cities that are really prospering from the information economy are those with strong capabilities in interconnected industries. The best-known example is Tech City on the fringe of the City of London. This phenomena, which was never planned by the public sector, emerged through the coming together of a number of factors: the creative sector in inner east London, a high density of tech skills, a culture of entrepreneurialism, access to finance, and the public sector in London making its data available. See the Centre for London’s “Tale of Tech City” report, of which Chapter 2 is essential reading for anyone who wants to understand how clusters emerge in the information economy: http://www.demos.co.uk/publications/ataleoftechcity.

The concept of “interconnected industries” is central to that of “Smart Cities” which I define as:  Use of intelligent technology and data analysis to enhance performance, resource efficiency, and resilience of city systems. Encompasses infrastructure, energy, utilities systems, data and information in urban areas. Emphasis on interconnectedness of technology and analysis across different organisations, disciplines, and systems.”

Trend #5: From data to value 

The big growth areas in the information economy are big data and open data.

“Big Data” refers to ways of handling data sets so large, dynamic and complex that traditional techniques are insufficient to analyse their content. “Open Data” can be used, reused and redistributed freely by anyone, subject only, at most, to the requirement to attribute and share alike.

The economic potential of data science is being driven by a number of factors. We are seeing huge growth in the creation of data: 90% of the world’s data has been created in the past two years. The UK is leading the way. We have the world’s first Open Data Institute (www.theodi.org), a not-for-profit body to promote open data founded by Sir Tim Berners. There are already over 9,000 datasets at www.data.gov.uk. Advances in computing power are making new methods of analysis possible. For example the N8 Supercomputer based in Leeds has the processing power of over 500,000 ipads. It is in cities where there are concentrations of organisations generating data, those that can benefit from its analysis, and the right skills and expertise across all sectors. For example, Leeds has the largest concentration of health informaticians in the world.

Trend 6: Digitalised assets.

The increasing use of sensors and technology such as smart meters is generating a wealth of information on the performance and condition of assets, and in relation to consumer behavior. It is also enabling new approaches to managing city utilities and infrastructure such as energy, water management, and transport.

Watch this space for further thoughts on what this means for Leeds.

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London and the Rest of the UK: Better Together.

In my previous post (https://citypolicy.wordpress.com/2014/01/12/should-the-uk-get-rid-of-london-should-london-leave-the-uk/) I considered the questions that have been posed by several commentators recently: would the rest of UK be better off without London? And what can be done about the north-south divide? My view is that a rest of UK versus London narrative is unhelpful for four main reasons.

First, if the UK economy is to grow to its full potential, it needs to grow together. History tells us that attempts to suppress and constrain growth in London and the South East does not result in it being diverted to other regions. Generally, when London grows so does the rest of the UK.  But we should not just rely on London. Most successful advanced national economies have strong second tier cities that are important engines of growth in their own right. So whilst London’s economic success should be encouraged, we need to do more to promote growth in the cities and city regions elsewhere. This is should not be an argument about economic need or inequalities; it should be about the future success of UK plc. The Core Cities and their surrounding city regions are 27% of the UK economy; London is 22%.

Second, we need to focus more on the positive linkages between London and rest of UK. London is a huge asset to the UK economy. Financial and business services have been a source of substantial jobs growth in the Core Cities (no more so in Leeds which is the UK’s second largest concentration of F&BS jobs). These firms are organised in national, as well as international networks, with London as a focal point. The same is true of other sectors, such as creative and digital. We need to understand better the business-to-business linkages and trade patterns between London and other UK cities. And London and other cities need to work together to promote investment and trade in these growth sectors.

Third, better transport and changing working patterns can strengthen positive links between London and other cities. Professor Sir Peter Hall has identified the phenomenon of the London and the South East megacity region. This functional urban system has a population of over 18 million, and stretches across the South East, and into parts of the South West and East of England. Across this mega-city region many people commute into London. But overtime, firms have decentralised activity away from London to the smaller towns of the mega-city region, and commuters have taken up jobs and started businesses closer to home. As a result, many of these smaller towns have become significant economic drivers in their own right. Transport improvements, such as HS2 or Great Western Main Line electrification could extend this positive economic reach of London to cities such as Bristol, Birmingham, Nottingham, Leeds and Nottingham. Changing working patterns, whereby people split their working week between London and other cities, could also boost this effect.

Fourth, within England the debate should not just be about winners and losers in terms of the share of the spending pie from Whitehall, it should be about the ability of Cities and city regions to finance investment themselves. That is not to say there is not unfairness in terms of how the big cities have fared in recent Local Government Finance Settlements compared to the shires, or compared to their counterparts in Wales and Scotland. But London and the Core Cities have common interests and are forging a common cause in making the case for greater freedoms and flexibilities to finance and invest funds to support economic growth (see: http://www.corecities.com/news-events/london-and-englands-largest-cities-join-call-greater-devolution-drive-economic-growth).

 

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