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Enhancing Productivity Enhancing Productivity ENHANCING PRODUCTIVITY ENHANCING PRODUCTIVITY Executive Summary From the waterfront in Greenock to the farmlands of Lanarkshire, Glasgow City Region is the largest metropolitan area in Scotland. Whilst there is still much to do, the Region is beginning to blossom as it transforms from its industrial past. In doing so, it is benefitting from taking a regional approach to addressing its challenges and taking advantage of economic opportunities. Glasgow City Region is: Key to the success of the Scottish Economy – it provides 34% of the country’s jobs. Growing – it is expected to add another 30,000 jobs from 2017 to 2021. The largest growth rates are seen in the ICT, Engineering, Tourism, and Legal industries. Providing Quality Jobs – recent analysis by the Office of National Statistics shows that the region has the second highest proportion of ‘residents in quality work’, just behind the West of England Combined Authority. Increasingly Competitive – its productivity levels have grown by 30% in the last decade. It is currently projected to have higher productivity levels than other post -industrial regions in the UK such as Manchester, Liverpool, Cardiff and West Yorkshire in the next few years. Prosperous – the Region’s residents have the highest weekly income amongst the UK’s Core Cities. Educated – it has the 2nd highest rate of residents (16-64) educated to degree level amongst Core City Regions. 2 I GLASGOW CITY REGION GLASGOW CITY REGION I 3 ENHANCING PRODUCTIVITY Introduction Glasgow City Region (GCR), is by far the largest metropolitan region in Scotland and one of the largest regions in the UK. It is Scotland’s economic powerhouse, generating almost one third of Scotland’s GVA (Gross Value Added). The Region is made up of eight Member The associated regions for the Core Cities are: Authorities: East Dunbartonshire; East Renfrewshire; Glasgow City; Inverclyde; North CITY REGION Lanarkshire; Renfrewshire; South Lanarkshire Birmingham West Midlands and West Dunbartonshire. Manchester Greater Manchester The eight City Region Member Authorities Leeds West Yorkshire have an established history of successful collaboration which has been vital to its Glasgow Glasgow City Region economic transformation in recent decades. Liverpool Liverpool City Region While the economy and population have grown Cardiff Cardiff Capital Region substantially over the last decade not everyone has shared this success. A significant number Sheffield Sheffield City Region of residents are working in relatively low skilled, Bristol West of England low paid jobs and many are living in poverty. Newcastle North of Tyne This following pages set out a snap shot of how GCR is performing. Some areas for Based on findings, a suite of 117 indicators have improvement are identified through a been developed which cut across the themes of comparative analysis against the regions of Business, People and Place. In response to some the UK’s other Core Cities (1). of the key challenges and opportunities identified The Intelligence Hub has completed a Regional within the Regional Strategic Assessment, a Strategic Assessment (RSA), an individual and series of the policies, strategies and action plans collective analysis of the economic performance will be launched in the near future. These are of the Region and the eight local authority identified at the end of this briefing. areas that make up the Region. It assesses our performance on a wide range of indicators over time, compared to competing UK City Core Regions. 50% of all spending by the local authorities is 92.7% kept within GCR of Commuters to the Glasgow City Region reside within the Region Notes: (1) Core Cities; Core Cities is an association of ten large UK cities: Birmingham, Bristol, Cardiff, Glasgow, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield. GLASGOW CITY REGION I 3 ENHANCING PRODUCTIVITY Developing the Regional Approach The Glasgow City Region City Deal is the first and largest City Deal in Scotland and one of the largest in the UK. The success of the collaboration between the Member Authorities paved the way to establish a more formal Regional partnership which brings together a wide range of other partners including: UK Government, Scottish Government, Scottish Enterprise, Skills Development Scotland, Glasgow Chamber of Commerce The Regional Economic Partnership is tasked with supporting the growth of the Regional economy and tackling some of the issues noted in the following sections. The Glasgow City Region City Deal Work with 19,000 unemployed 21 people major infrastructure projects £2.2 billion per annum (4.4%) > 4,500 generating a permanent uplift support people back into in GVA for the Region sustained employment Generate an estimated £3.3 billion private sector investment 44 II GLASGOW CITY REGION ENHANCING PRODUCTIVITY Business Core to Business Economy If it is to close the productivity gap with the UK average, it needs to find opportunities to add GCR is at the heart of the Scottish economy. value locally in some of its existing core sectors. It provides almost 30% of the country’s business This is driving a wide range of public investment base and 34% of its jobs. However, it should decisions across the Region, such as the City be bigger. In 2018, it had the lowest number of Deal, and will be a core component of the future companies per 10,000 residents amongst all Regional Economic Strategy. the Core Cities and was significantly behind the Scottish and UK averages – although none of Economic Structure the Core Cities achieved the UK average (2). BUSINESS BASE Closing the Productivity Gap GCR has a strong SME base and its three Forty years ago, the Core Cities, along with largest sectors for businesses are: London, were the driving force behind the UK economy. Since then they have all found it Professional, scientific and technical difficult to shake off their industrial past and Wholesale, retail and vehicle repairs transition into new highly productive industries. In 2017, the average productivity levels within Construction the Core Cities (measured through GVA per hour EMPLOYMENT SECTORS worked) was 91% of the UK average (3). In 2007, GCR was the poorest performing of Generally, the GCR economy is largely service the Core Cities in terms of productivity. That based, with the three largest employment has changed. If current growth continues, GCR sectors personal and local services: will have a higher productivity than most post- industrial regions such as Manchester, Liverpool, Human health and social work Cardiff and West Yorkshire (4) by the middle of Wholesale, retail and vehicle repairs the decade. Admin and support service GCR has a broad business base. This helps to protect it from external shocks such as changes JOBS to trade agreements. Its rise in productivity is 34,000 jobs were added to the City Region driven in part by specialisms in some of the UK economy between 2014 and 2017 (5) – with the most productive industries such as: largest growth seen in: Financial and insurance Tourism Food and beverage ICT In terms of employment, it is largely service- Legal based. The three largest industry sections are focused on ‘personal and local services’ (as Engineering opposed to tradeable/exportable services). At current job growth rates, GCR could add A challenge for GCR is that that exportable over 30,000 jobs from 2017 to 2021 (6). services generally bring higher value to both the wider economy and the individual employee. The Office of National Statistics has recently Whilst it is doing better than most of its Core published data which shows that with 75.2%, Cities competitors, in terms of service exports GCR has second highest proportion of per job, it could be better. ‘residents in quality work’ just behind the West of England Combined Authority – 76.1% (7). Notes: (2, 5) NOMIS: Business Register and Employment Survey (October 2017) (3) Office National Statistics: Sub-regional productivity: labour productivity indices by city region (4,6) GCR Intelligence Hub analysis GLASGOW CITY REGION I 5 (7) ONS: Job quality indicators in the UK – hours, pay and contracts: 2018 ENHANCING PRODUCTIVITY PRODUCTIVITY The Core Cities value noted Productivity Increases - GVA per hr Worked does not include North of £36.0 35% Tyne. £33.7 £34.0 £33.1 Source: Office National 29.2% 30% 27.9% Statistics: sub-regional £32.0 25% productivity: labour £30.1 £30.0 £29.3 productivity indices by city 21.3% 20% region £28.0 19.4% 15% £26.0 10% £24.0 £22.0 5% £20.0 0% /Scotland United Kingdom Glasgow City Region Core Cities 2017 10 Year % Change Source: NOMIS: Business Register and Employment Survey: open access 2018 6 I GLASGOW CITY REGION ENHANCING PRODUCTIVITY People Growth in Population and Income difference between the 10th and 80th percentile. However, the income difference has risen by 9% Levels over the last 9 years. Whilst this is lower than In 2017, GCR had almost 1.83 million residents, most Core Cities, and less than the UK average one third of the country’s population. Over the (10.9%), given the negative societal impacts preceding 10 years, the population grew by 4%. caused by inequality, this is something that will This was behind the UK average of 8%. Although need to be closely monitored. the 4th largest, it had the second lowest growth rates within the UK’s Core Cities regions Addressing High Levels of (excluding North of Tyne). West Midlands and Deprivation West of England had the highest growth rates of approximately 10% during the same period. A key reason for the rising inequality in GCR is workers in low skilled, low paid jobs. From 2013- In 2018, GCR residents, on average (median), 2018, the numbers of employees earning less earned a weekly income of £462.7. This is the than the Living Wage has remained steady at highest amongst the UK’s Core Cities, helped by 18.4% to 19.8%.
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