The Economic Future for Cities - Prof Stuart Gulliver

The Producer City

- the economic future for cities?

Stuart Gulliver Emeritus Professor University of Glasgow Academy of Urbanism, Bradford 2013

A Typology of the Producer City Type 1: The ‘Traditional’ Producer City (1800-1975) Type 2: The ‘Modern’ Producer City (1975-2007) Type 3:

The emerging ‘Advanced’ Producer City ( since 15th September 2008…….)

Type 1: The Traditional Producer City (1800 – 1975) • from beginnings of industrialisation, the great Victorian cities, “Workshop of the World • ‘business model’ that underpinned the TPC – culture top down and paternalistic – basic numeracy & literacy sufficient for routine working in mass production factories – only need a few well-educated professional, technical, management roles

• The Apogee of the ‘Traditional Producer City’ – The Keynesian - New Deal City (1945-75) – an organised working class, well paid and cared for – stable capital and labour relations – high social welfare provision; government commitment to full employment

The 4 Kondratieff Cycles 1st Wave 2nd Wave (1787-1845) (1846-1895)

3rd Wave (1896-1947)

4th Wave (1948-2000)

Key Innovations

power loom Bessemer steel electric light puddling steamship automobile

transistor computer

Key Industries

Cotton, iron

steel

Cars, chemicals, electronics Power generation

Industrial Organisation

small factories

large factories

Giant factories Mass production ‘Fordism’

Large and small factories, workshops and studios

Labour

machine minders

craft labour

deskilled

“ bi-polar”

Geography

small town

large town/city conurbations

New industrial regions (Silicon Valley)

Type 2: The Modern Producer City (19752007) 2 Sets of Forces Economic

Political (Neo-Liberalism)

•

intensification of overseas competition

•

inflexibility of labour market

•

global shift

•

deregulation of markets (‘Big Bang’ 1986)

•

privatisation

•

trade liberalisation

DE-INDUSTRIALISATION GLOBALISATION Early 1970’s

2011

Manufacturing share of economy

32%

11%

Manufacturing share of jobs

35%

8%

The Coming of Post-Industrial Society - a venture in social forecasting Daniel Bell 1973

• Click to edit Master text styles – Second level “this new society will not displace the older one but rather overlie some of the previous layers; - just as the previous industrial society did not completely eradicate the agricultural sector of society.”

– Third level • Fourth level – Fifth level

‘Making Things’ is not finished in Britain; its not even in terminal decline • British manufacturing is in ‘absolute’ growth but in ‘relative’ decline as a share of GDP – because services have grown more quickly over the last few decades • Jobs in manufacturing are shrinking because of the massive productivity improvement/ technology

Any well-performing city economy will continue to need a strong manufacturing sector because; i. Export Strength – almost half UK exports in 2000 ii. R & D Strength – 75% of private sector R & D is in manufacturing iii. Well paid jobs in manufacturing iv. Strong ‘Multiplier’ effects on the economy

The Manufacturing Value Chain I The idea, design, concept

Research

Design & Development

II Manufacturing

Production

III

Logistics & Distribution

IV Marketing

Branding, marketing, sales

After sales

• The Increased ‘servicisation’ of manufacturing • Manufacturer as integrated solutions provider

Type 3: The Advanced Producer City (From 15th September 2008……..)

• How has the global financial crisis, the ensuing ‘Great Recession’ and political change impacted on the thinking about the future city?

– What kind of city economy?

– What kind of city governance?

– What kind of relationship between the city and central government?

• Try and set out, what I’ve called, a Manifesto-Led Identity for the emerging Advanced Producer City, structured around 10 propositions

Proposition No 1: the ‘Economic Platform’ for the emerging Advanced Producer City will have the following key characteristics; i. International: a city economy driven by accelerated internationalisation (exports & trade)

ii. Knowledge: a city economy powered by entrepreneurship and innovation iii. Balanced: a city economy sustained by resilience and diversification iv. Green: a city economy fuelled by low carbon

A successful city economy defined less by what it makes and what it does but more by the characteristics of: â—?

its people (well educated, skilled, entrepreneurial)

â—?

its businesses (innovative & working internationally)

â—?

its economy (resilient, diversified, low carbon)

Proposition No 2: The Advanced Producer City will continuously seek to reconcile the 2 ‘Big’ Urban Development Ideas of the last 25 years i. City Competitiveness – the notion that cities actually compete ii. Urban Renaissance – the notion that cities need to function well, be vibrant, attractive and even beautiful

The need to answer 2 key questions i. How will this city earn its living over the next generation (25 years)? ii. What might this look like on the ground?

And can we make it look terrific?

Proposition No 3: The Advanced Producer City should aim to cultivate an outstanding ‘business ecosystem’ in the city rather than seeking to promote particular industrial sectors, clusters & technologies

A business ecosystem that has the right ‘soil’ and the right ‘climate’ in which everything has the potential to grow –” let many flowers bloom.”

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Sectors, clusters and particular technology development are more appropriate at the national level – our level is sub-national

– Second level – Third level • Fourth level – Fifth level

Also known as the ‘Pep Guardiola Model’ of city economic development

Proposition No 4: The Advanced Producer City will draw its ‘distinctiveness’ and ‘authenticity’ from; i.

its “DNA” – the power of history & geography, the city comes from

where

ii. its “Assets” – quality of University, professional sports teams, landmark buildings, visitor attractions, and/or institutions iii. its “leadership regime” – key people determine the character, direction and pace of change The notion of USP is probably no longer transferable to cities – if indeed it ever was

Proposition No 5: In answer to the question, what will the Advanced Producer City look like?... The answer is it will deliberately seek to become a ‘beautiful city’; the leitmotif for which will be “Careful and Thoughtful Regeneration”

• Focus on long term placemaking rather than simply building houses – on ‘Economic Masterplans’ and ’Business Plans’ rather than strategies.

• A new ‘placemaking agenda’ is emerging – ‘Shrinking Cities’; “Shrinking to Greatness” (Ed Glaeser) – Well-performing suburbs – Why is it so difficult to create brand new ‘attractive’ places?

– More diversity of house types – School quality is now clearly an important part of placemaking – What happened to district energy?

Proposition No 6: Inequality – From what we have seen so far the post-industrial city appears to have a tendency to reinforce the ‘dual city’ – whereby rich and poor are drawn further away from each other spatially as well as in terms of differential access to economic resource

–

–

–

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Is this ‘dualism’ a permanent or temporary condition?

Is it acceptable for it to be permanent?

Can a divided city survive?

– Second level – Third level • Fourth level – Fifth level Disraeli ’Sybil’ 1845

Proposition No 7: the Quality of Placeleadership is the single most important factor affecting city performance – that is within our control!

• The city is a public good – it follows therefore that the public sector will need to have the confidence to play the role of ‘Prime Mover’

Proposition No 8: The Advanced Producer City, in order to be successful, will need to become a ‘Real City’

• We now need to campaign for ‘Real Cities’ – in much the same way as the ‘Campaign for Real Ale’ (CAMRA) campaigned in the 1970’s • City boundaries need to be re-drawn to reflect the social and economic realities of C21st • We have created ‘cities without suburbs’ • ‘Real Cities’ are the ‘natural economic zones’ of Britain – not the Regions

Proposition No 9: ‘Devo Max’ for Real Cities • Cities in Britain have very little power to alter or affect their own competitiveness • Need stronger self-financing power, not one-size-fits-all, fiscal flexibility • A federal Britain should revolve around a “Britain of the Cities”; which would have a substantial degree of devolved government • Also – the ‘federal cities’ would need a ‘National Urban Development Bank’ to provide long term (30-40 year) ‘patient’ capital for development. Modelled on the KfW Bankengruppe in Germany

Proposition No 10: The Advanced Producer Cities must find a way of dealing with London and the South East or they will never improve their economic performance above the current relatively low equilibrium level – referred to by some as no more than “ managed decline”

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• “London is a first rate – Second level city with a second rate – Third level country attached” • Fourth level

– Fifth level

• Britain is the most centralised country in the Western World – only 2 regions are richer than the national average viz. London, The South East • “ London is the engine powering UK plc so don’t dare tinker with it!”

• Government(s) see provincial cities as a drag on the economy and are therefore unwilling to make the radical change and investment to ensure that they have a decent chance of becoming competitive in the long term

We need a commitment to new ways of dispersing economic activity for provincial cities – not just “back office” but the total function i.

Comprehensive relocation of national public institutions so that the regional cities can conduct NATIONAL affairs – “Serving the Nation from its Cities – not just London”

EG Home Office move to Birmingham Dept of Health to Manchester

Dept. of Business Innovation & Skills to Leeds

Dept. of Energy & Climate Change to Aberdeen

iii. Key cultural institutions iv. All new research institutions (Medical Research Facility in Central London)