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.

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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

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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

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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%. Since the Public Sector is one a 23% rise from 2008-2018. This growth has put of the largest employers in the Region, Living GCR above both the UK and Scotland’s median. Wage initiatives by Member Authorities will be Relatively Low Inequality important to reducing In Work Poverty. A further challenge to increasing earnings and Reducing inequality within and between regions improving productivity is the lack of qualifications is a complex issue that governments are of some residents. Although GCR has the grappling with. In GCR, despite the relatively second highest rate of 16-64 years educated to high median earnings the challenge is not as degree level, it conversely also has the second acute as elsewhere. At £470, GCR has the 4th highest rate of residents with no qualifications lowest level of income inequality within the Core (12.5%) across the Core Cities. Cities, measured on the basis of weekly income

Source: NOMIS: Annual Survey of Hours and Earnings 2018

GLASGOW CITY REGION I 7 ENHANCING PRODUCTIVITY

Whilst the productivity of GCR’s labour relatively large numbers of (16 - 64 year old) force is increasing, the GVA per resident residents who are economically inactive due to is significantly behind the UK and Scottish long term sickness. There were 87,000 in 2018. averages. Addressing this means bringing On a positive note, GCR has seen the largest into the workforce, a large part of society who, percentage drop across the Core Cities over for too long, have suffered the impacts of the ten years from 2008-2018. However, worklessness. GCR has the highest levels of getting this down to the UK average of 22.9%, Workless Households across the Core Cities. would require a further 6% point reduction. Whilst this has fallen from 24.8% to 21.2%, This highlights how important it is that GCR there is a need for a significant increase in jobs continues to focus on working with its partners (over 55,000) for the number to come down to to grow more businesses. the UK average of 14.5%.

A key challenge in reducing the amount of Workless Households, is addressing the Source: NOMIS: Annual Population Survey 2018

Source: ONS: Households by combined economic activity status (Aug 2018)

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West Dunbartonshire East Greenock Milngavie Dumbarton Dunbartonshire Cumbernauld Bearsden Bishopbriggs Inverkip Inverclyde North Lanarkshire Renfrew Glasgow Airdrie Renfrewshire Coatbridge Johnstone Paisley

Barrhead Motherwell Newton Hamiltonl East Mearns Renfrewshire East Kilbride Larkhall Carluke

Lanark South Lanarkshire

GLASGOW CITY REGION I 9 ENHANCING PRODUCTIVITY

Place

Attracting and Retaining Talent From 2007 to 2017, affordability (9) – when measured based on median house prices versus For GCR to increase employment and its gross disposable household incomes – improved productivity, it is vital that it can retain existing across the Region. It dropped from a ratio of and attract new talent. Equally, it needs to 8.8 to 8, in line with the Scottish average. provide the environment and networks that allow This makes it the most affordable in terms of businesses to flourish and draw in national and home buying across the Core Cities. It is one of international investors. GCR has been focused the reasons that there is expected to be a 10% on providing a physical environment which growth in households to 2035. enhances on the amazing architecture, parks A key focus of the Region is shifting the modal and infrastructure that its forefathers delivered. share of adults travelling to work by all forms of It is providing business spaces that encourage public transport or active travel as this remained innovation, infrastructure that meets business’s fairly static at between 30-32% from 2007 to 2016. demands and places that families want to live in. A real draw for the Region is its housing market. Creating Places that Everyone is In 2017, there were over 837,300 households Proud to Live In within GCR (8). The Region’s housing offer has many strengths including a wide range and Analysis by Clydeplan on the Scottish Indices of choice of locations and good access to green Multiple Deprivation 2016 shows that the Region spaces and countryside. accounts for 59% of the most deprived data zones in Scotland. These are communities which Overall, the Region’s housing offer is relatively have been the focal point for housing investment affordable compared with other city regions. across the region over the last ten years.

Glasgow Aordable Housing Programme 2018-2019 and 15% SIMD Areas EAST DUNBARTONSHIRE

Scottish Index of Multiple Deprivation (SIMD) 2016 Most Deprived 15% 1-25 >25-50

>50-186 NORTH LANARKSHIRE

GLASGOW RENFREWSHIRE

0 1.25 2.5 5 mi EAST RENFREWSHIRE SOUTH LANARKSHIRE

042k8 m

Reproduced by permission of Ordnance Survey on behalf of HMSO. © Crown Copyright and database right 2012. All rights reserved. OS Licence No 100023379. You are not permitted to copy, sub-license, distribute or sell any of this data to third parties in any form. Web AppBuilder for ArcGIS Notes: 10 I GLASGOW CITY REGION (8) National Records for Scotland (NRS) (9) http://housingevidence.ac.uk/wp-content/uploads/2018/09/R2018_02_01_How_to_ measure_affordability.pdf ENHANCING PRODUCTIVITY

See the investment map for Glasgow on long-term challenge for the Region. Whilst there page 10.This investment has been carefully has been a 22% reduction in the amount of VDL designed to maximise impacts. In tandem, in GCR over the past five years, the Region still delivery partners accompany the investment has over 30% of Scotland’s total. with provision of employment opportunities and a wide range of training programmes for local The particular challenge faced by the Region is residents. the proximity of this land to residents. In 2018, almost half of local residents were within walking A recent longitudal study by GoWell on the distance (500 metres) of a VDL site. This is impacts of housing investment with GCR found much higher than the Scottish average of 29.1%. that: Residents within the top 15% SIMD areas are most acutely impacted. As shown in the map “Although the renewal investment was below. Almost 30% of the sites are within top based on housing considerations, it 15% SIMD areas. Of all the VDL sites across the also followed a pattern of allocation to country within top 15% SIMD sites, almost two needs related to health and area-level thirds are within GCR. deprivation. Furthermore, the ‘higher GCR is looking to find new ways of bring these need’ group of areas experienced wasted assets back into productive uses that relatively favourable mental and physical enhance the socio-economic prosperity of local health outcomes after receiving higher communities. A Regional Vacant and Derelict levels of investment compared to areas Land Strategy is currently under development. of lower need.” It will focus on partner action to tackle this long standing issue. The amount of vacant and derelict land (VDL) within GCR, a legacy of its industrial past, is a

Vacant and Derelict Land/ Buildings with 15% SIMD Areas EAST DUNBARTONSHIRE

Scottish Index of Multiple Deprivation (SIMD) 2016 Most Deprived 15%

Vacant and Derelict Land/Buildings

NORTH LANARKSHIRE

GLASGOW

RENFREWSHIRE

0 1.25 2.5 5 mi EAST RENFREWSHIRE SOUTH LANARKSHIRE

042k8 m

GLASGOW CITY REGION I 11 ENHANCING PRODUCTIVITY

Creating Places that Unlock Glasgow Caledonian University (GCU) has pioneered the integration of social innovation as Innovation a pivotal element of its ‘common good’ mission. GCR has the benefit of three leading universities GCU has established an incubation unit, Uhatch, operating across the Region. As a consequence, specialised in supporting social enterprises and Glasgow has the UK’s biggest academic value-led SMEs, helping them to demonstrate community outside of London. the positive societal impact they have within the region and beyond. Strathclyde has just been voted the University of the Year by the Times newspaper. It opened The Region has the people, business and the first Innovation District within Scotland – institutional ingredients to enhance its now home to 18 major research centres and productivity by turning itself into a world leading innovation organisations along with more than centre for Innovation. 30 innovation companies and SMEs. This is one of the reasons why CGR is The University of Glasgow has recently investing so significantly, through the City Deal created the Glasgow University Innovation programme, in its innovation districts, often in District which includes zones for biomedical vacant and derelict land. and interdisciplinary innovation. It focuses on a diverse range of areas including Precision Medicine which is revolutionising how we view healthcare, quantum technology, nanofabrication and photonics.

CLYDEBANK BEARSDEN ERSKINE

Clyde Waterfront and Renfrew Riverside GLASGOW

ADVANCED MANUFACTURING RENFREW Lanceﬁeld Quay INNOVATION DISTRICT Glasgow Airport SEC Expansion SCOTLAND (AMIDS) Investment Zone Central Quay Custom House Quay Glasgow Airport Access CLYDE RIVERSIDE INNOVATION DISTRICT GLASGOW CITY INNOVATION DISTRICT

Paciﬁc Quay PAISLEY Buchanan Wharf

RUTHERGLEN

Development Areas

BARRHEAD Innovation Districts

City Deal Projects 0 1.25 2.5 5 mi

New Developments 042k8 m

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Upcoming Developments and Research

To drive the necessary physical and social transformation, we need to deliver a step change in the economy which will help to further unlock potential and drive improvement to productivity.

To support this ambition, a series of work is being progressed by the Regional Economic Partnership which is anticipated to be completed within the coming months.

FEBRUARY/MARCH 2020 The Independent Commission on Economic Growth will present the Futures Report, a body of research which will complement the RSA and set out the Region’s future challenges and opportunities. It will report on a number of distinct areas including the growth drivers of city region economies, innovation systems and issues we will face in the coming years in relation to skills, the labour market, housing and infrastructure.

SPRING 2020 The Glasgow City Region Investment Prospectus.

JUNE 2020 A refreshed Glasgow City Region Economic Strategy (RES), co-produced with the Scottish Government, and informed by the findings from the extensive Regional Strategic Assessment. The RES will set out a series of clear actions to be delivered by the Regional Economic Partnership, designed to support Glasgow City Region to deliver on its economic potential for the benefit of all our residents and for Scotland.

GLASGOW CITY REGION I 13 ENHANCING PRODUCTIVITY

The Glasgow City Region Intelligence Hub

This report was produced by the Glasgow City Region Intelligence Hub. The Intelligence Hub provides a range of intelligence related services, such as research, analysis, evaluation and reporting for the City Region and the City Deal on a range of economic issues - including demographics, land use, sustainability, inward investment, economic growth, tourism, transport, enterprise, skills, employment and housing.

The work delivered by the Hub provides the evidence base for future policy and investment decisions across the region. www.glasgowcityregion.co.uk/IntelligenceHub

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