We want our cities to offer a thriving, aspirational environment with abundant employment opportunities and high quality of life. For businesses, access to labour, capital and markets are crucial. Balancing these elements is not easy. UK cities are competing for resources and opportunities. Determining future prospects depends on effective and resilient infrastructure, affordable housing, a broad skills base and a quality education system. Furthermore, a strong global brand, favourable business environment and unique ‘attraction factor’ add to the potential for long-term prosperity. For UK cities, the ability to attract this combination of social, economic and human capital sits at the root of the investability challenge.
“All cities have strengths and weaknesses, and no area is fundamentally ‘un-investable’. The important thing is to recognise which levers need to be pulled – whether that’s more affordable housing, more efficient transport or better digital connectivity – to ensure a city attracts the type of investment it needs. Every region needs to look at what it has, and how it can make the most of it.”
– Peter Hogg, Arcadis UK Cities Director
Established Economic Centres
Britain has world-class centres of excellence, including London and the great University Cities, which are pivotal to our national economy. These drive high levels of inward investment and job creation and, due to network effects, the agglomeration of talent and resources. However, the pressure of success brings its own challenges and these ‘top tier’ locations require high levels of investment to sustain themselves. The positive agglomeration effect of business location cannot be sustained unless fundamental quality of life issues around infrastructure and housing capacity are addressed.
Future Growth Hubs
Challenger Economies like the Northern Powerhouse and West Midlands do not face the same pressures on housing and infrastructure. They benefit from a more balanced housing market, healthy business environment with a sustainable pace of growth, and often a better quality of life. For cities like Manchester and Birmingham, a lack of skills is the biggest barriers preventing them from moving further up the rankings. In these areas, the agglomeration effect of industries such as manufacturing and automotive has created a thriving environment for investment, but skills shortages will need urgent address through training and education if these cities are to remain attractive to investors.
Smaller Regional Cities
These cities need to consider different levers for attracting investment. Without the world-class status of London, Oxford or Cambridge or the agglomeration effects of Manchester and Birmingham, they must build on different strengths and opportunities, including lower housing costs, readier access to schools and hospitals, thanks to lower population numbers, and a better quality of life. In some cases, raising city profile and brand presents a further opportunity to increase investment potential. Recognition can come from regeneration, innovation, sporting success or even the idea that a city is a great place to live. Short term measures to increase momentum in this respect can help city leaders make an immediate impact and attract further employment and inward migration.