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CITY REGIONS AS ENGINES OF GROWTH: POLICY MESSAGES FROM EUROPE - AND EXPERIENCE!

CITY REGIONS AS ENGINES OF GROWTH: POLICY MESSAGES FROM EUROPE - AND EXPERIENCE!. Professor Michael Parkinson CBE Heseltine Institute Liverpool 2014 . 5 Questions. 1. What done cities & economic growth generally? 2. What did we do second tier cities Europe?

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CITY REGIONS AS ENGINES OF GROWTH: POLICY MESSAGES FROM EUROPE - AND EXPERIENCE!

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  1. CITY REGIONS AS ENGINES OF GROWTH: POLICY MESSAGES FROM EUROPE - AND EXPERIENCE! Professor Michael Parkinson CBE Heseltine Institute Liverpool 2014

  2. 5 Questions • 1. What done cities & economic growth generally? • 2. What did we do second tier cities Europe? • 3. What messages urban performance? • 4. What messages policy? • 5. So what for UK?

  3. 1. What Did We Do in Second Tier Cities? • Answers to: • What contribution capital & second tier cities national, EU economic performance? • Which punch weight nationally & Europe, how and why? • What territorial impact & implications crisis? • Who does what better, differently in future? • What are second tiers? • Larger non-capital performance affects national economy. Agreed EU OECD metro region boundaries

  4. 1. What Did We Do in Second Tier Cities? • Respond EU policy concerns: • What performance second tiers, what gap capitals, what direction change? • What policy debate member states? • How gap seen, competitiveness or cohesion, explicit or implicit, any concern territorial impact? • What national policy for second tiers - greater targeting, increased capacity, more powers & resources, fewer constraints?

  5. 1. What Did We Do in Second Tier Cities? • Test key arguments: • Decentralisation powers & resources, deconcentration investment • higher performing economies • Better second tiers - better national and European economies • Relationship capital & second tiers win-win, not zero sum • National policies for second tiers crucial • Critical success factors – innovation, diversity, human capital, connectivity, place quality, strategic governance capacity • Territorial governance & place matter more not less global economy

  6. 2. How Did We Do It? • Research & policy literature – performance, policies, prospects • Quantitative data 124 second tiers, 31 capitals • Interviews - European, national policy makers, private sector • E-questionnaire • 9 case studies – Tampere, Cork, Leeds, Lyon, Turin, Munich, Barcelona, Katowice, Timisoara

  7. 3. What Urban Performance Messages? • Performance cities crucial to competitiveness • Economic contribution capital & second tier varies • Capitals dominate - but size gap varies & some cases falling • Capitals dominate national economy more in east than west • Many second tiers growing contribution national prosperity • Some second tiers outperform capital

  8. 3. What Messages Urban Performance? • Baseline: • Gap capitals & second tiers big

  9. Exceptions - Top Secondary Outperforms Capital: Germany, Austria, Italy, Belgium, Ireland

  10. Top Secondary Lags Capital by 5-20%: Spain, UK, Netherlands, France

  11. Top Secondary Lags Capital by 20-30%: Denmark, Poland, Sweden, Finland, Portugal

  12. Top Secondary Lags Capital by 30-45%: Hungary, Romania, Lithuania, Greece, Czech Republic, Slovenia, Croatia

  13. Top Secondary Lags Capital by 50-65%: Bulgaria, Estonia, Latvia, Slovakia

  14. 3. What Messages Urban Performance? • Trend: • In boom some second tiers outperformed capitals

  15. GDP per capita – average annual % change, 2000-7

  16. GDP per capita – average annual % change, 2000-7

  17. GDP per capita – average annual % change, 2000-7

  18. 3. What Messages Urban Performance ? • Governance matters

  19. Governance & Productivity Capitals and Second Tiers 2007

  20. 3. What Urban Performance Messages? • Greater decentralisation • Greater productivity second tiers

  21. Decentralisation and Second Tier Cities’ Average Productivity 2007

  22. 3. What Urban Performance Messages? • Capitals grow, regional inequality grows • Second tiers grow, regional inequality falls

  23. Capital grows more than nation: Regional inequality grows

  24. 3. What Urban Performance Messages? • Significant Risk: • Crisis undermine achievements second tiers • Competition public & private investment widen gaps within second tiers • Competition widen gap between second tiers & capitals

  25. Growth Years Growth across Europe, range of performance Strong growth Baltics, Central & South East Europe Steady growth in Western Europe Southern Europe: some falling back (Italy) UK: relatively strong performance Impact Boom European City Regions

  26. Recession Falls across Europe Reversal in Baltics Continuing strong performance in Poland & South East Western Europe – declines except Germany Southern Europe – decline UK: Falls nationwide, London, Bristol, Belfast, slightly better Impact Crisis European City Regions

  27. Impact Boom UK CitiesGVA Pc % change 1997-2008

  28. Impact Crisis UK Cities GVA p.c. % change 2008-11

  29. UK City-regions, Leading, Intermediate, Lagging, GVA per capita 2012

  30. 4. What Wider Policy Messages? • Successful investment in age austerity • Relationship capital second tiers not zero-sum, but win-win • Diseconomies scale - governments encourage development second tier cities complement capital • Little demand artificially limit capitals – not anti London • Increase national economic pie - encourage second tiers not kill golden goose

  31. 4. What Wider Policy Messages? • Successful investment in age austerity • Decentralise responsibilities & resources, deconcentrate investment • Territorial economic governance at scale • More systematic national policies second tier cities • Greater transparency territorial investment • Mainstream money & policies matter most not urban initiatives • Invest second tiers when (i) gap capital big, growing; (ii) weak business infrastructure because underinvestment (iii) negative externalities capital

  32. London matters - but not at expense everywhere else. Start with big 9. City regions in systems – Win- win, not zero sum Competitiveness, cohesion, liveability matter – hard to redistribute poverty Stick at it not quick fix Learn from Europe - UK 3 top 40 inc London, Germany 8 top 50 but not Berlin capital Recognise the global challenge 5. So What for UK? - Some Clichés

  33. 5.UK City Regions Europe’s Top 100 - GDP PPS per cap, 2010

  34. 5. GDP per capita, PPPs, 2012 range & average by World Regions & UK

  35. 5. What State of Play UK? • Hierarchy  marginally challenged boom but reasserted recession - northern cities slipping back. • Smaller southern & some Celtic performed strongly - new urban hierarchy? London devolved administrations policy advantages. • Despite London many lag Europe, north America some emerging city regions in Asia, Pacific and Latin America. • Many gains investment in boom - recession risks economic competitiveness & increase regional divisions. • Informed debate public & private investment rebalance national economy & compete internationally.

  36. Economic diversity Innovation in firms and organisations Human capital and skilled workforce Connectivity - internal and external Place quality - social, cultural, environmental  Governance, leadership, strategic capacity Decentralised responsibilities and resources, deconcentrated investment. 5. Keys to Success – Some More Clichés

  37. Continue take cities seriously But will means, as well as ends City Regions, Combined Authorities, City Deals good But more please! Rebalancing: Ghandi & western civilisation - a good idea Rewards potentially high Risks not doing – potentially higher. Bible tells us - no cities, no civilisation But research - & common sense - tell us: No successful cities, no successful nations. 5. So what for Government?

  38. THANKS michael.parkinson@liverpool.ac.uk

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