Globally competitive cities: how the UK compares

Mission one of the Levelling Up White Paper states ‘by 2030, pay, employment and productivity will have risen in every area of the UK, with each containing a globally competitive city, and the gap between the top performing and other areas closing.’


Introduction

Mission one of the Levelling Up White Paper states ‘by 2030, pay, employment and productivity will have risen in every area of the UK, with each containing a globally competitive city, and the gap between the top performing and other areas closing.’ The technical annex accompanying the White Paper provides further detail on how a globally competitive city might be measured. It explains ‘the traditional metric for measuring living standards is GDP per capita, but when looking at sub-national data, this metric can obscure factors, such as commuting flows, that distort the picture’. Instead, the accompanying notes recommend that, to gain a rounded view of a globally competitive city, the following should be measured:

  • GVA per filled job
  • Services trade balance
  • Share of Knowledge Intensive Service sectors
  • Percentage of 16-64 year olds with an NVQ4+ qualification
  • City density

As a starting point we have examined how cities across the UK compare with the three largest cities of each G7 country using some of the metrics outlined in the technical annex. Where sub-national data on a city level is not available, we have instead looked at how the UK compares with the other countries for each metric. To compare urban data across the world we have used the OECD’s metropolitan areas data.

The Levelling Up White Paper sets out aims to have a globally competitive city in every area of the UK so for this reason we have analysed data for the largest city in every region of England, and the largest cities across Wales, Scotland and Northern Ireland. These are:

  • East – Norwich
  • East Midlands – Leicester
  • North East – Newcastle
  • North West – Manchester
  • South East – London
  • South West – Bristol
  • West Midlands – Birmingham
  • Yorkshire and the Humber – Leeds
  • Northern Ireland – Belfast
  • Scotland – Edinburgh
  • Wales – Cardiff

City density

City density is described as the number of people per given area. It is affects quality of urban life including the environmental quality, transport systems, physical infrastructure, and social and economic factors. 

How UK Cities Compare

Of the largest cities in each region of the UK, London was the city with the fourth highest density with 3,494 people per km2, fewer than Leicester (4,820), Bristol (4,164), and Norwich (3,622). However, London has seen the highest percentage change in city density between 2008 and 2018 with a 13 per cent increase. Both Edinburgh and Leicester saw the same 13 per cent increase over this time period, too. The smallest change in city density seen between 2008 and 2018 was in Belfast where the density only increased by 4 per cent.

How the UK compares with the other G7 countries 

There is no comparable data for the whole UK so instead we have calculated the average city density for the three largest cities in all G7 countries.

Between 2008 and 2018, the three largest cities in England saw the second largest increase in density of all G7 countries at 9 per cent. The average city density of the three largest cities in Canada saw the greatest increase in city density at 13 per cent.

The average population density for the three largest cities in England in 2018 was the third lowest of any G7 country at 2,897 people per km2. Only Canada and the United States saw lower averages with 1,905 people per km2 and 838 people per km2 in the three largest cities respectively. Both France and Italy had similar numbers of people per km2 across their three largest cities, almost 1,500 more people than England.

Percentage 16-64 year-olds with a NVQ4+ qualification

An NVQ4+ qualification refers to ‘degree level or above’ which includes degrees (for example BA and BSc), higher degrees (such as MA, PhD or PGCE), BTEC Higher level, and RSA Higher Diplomas. It also encompasses professional qualifications such as teaching, nursing and accountancy. Measuring qualification level is important in understanding labour market access and productivity within a place.

This data for this metric was only available for England and Wales using the LGA’s local area benchmarking tool – LG Inform.

How UK cities compare 

Of the largest cities in each region of the UK in 2021, three had over 50 per cent of residents with an NVQ4+ qualification. These were Edinburgh (69 per cent), London (58.9 per cent) and Bristol (56.4 per cent). In comparison, in 2011 no UK city had more than 50 per cent of 16-64 year olds with an NVQ4+ qualification. The city with the lowest per cent of 16-64 year olds with a NVQ4+ qualification in 2011, Birmingham (25.1 per cent) saw the largest increase (60.9 per cent) in the proportion of 16-64 year olds with the qualification in the next ten years to follow. In comparison, there was only a 7.4 per cent increase in 16-64 year olds with a NVQ4+ qualification in Norwich between 2011 and 2021, the lowest of all regions.

How the UK compares with the other G7 countries

International data available measures the number of 25–64 year-olds nationally who have completed tertiary education (the educational level following the completion of secondary education).

The average per cent of people across the UK in 2019 who have completed tertiary education is 25 per cent higher than the average across Italy (where only 19.6 per cent of 25-64 year olds have been in tertiary education). Between 2016 and 2019, the UK saw the third highest increase in 25-64 year olds in tertiary education of the G7 countries, with a 7.4 per cent increase behind Italy (10.7 per cent) and France (9.8 per cent).

GVA per filled job

GVA per filled job apportions GVA to the number of jobs in the subregion. The metric was not available for all G7 countries so instead the GDP per worker was calculated. GDP per worker addresses productivity rather than overall economic well-being.

How UK cities compare

Across the UK, the highest GDP per worker produced was in London at $112,729. Of the largest city in every region, GDP per filled job was lowest in Norwich at only $70,242, almost $20,000 below the UK average of $89,530.

GDP per worker increased four per cent across the UK between 2008 and 2018. This was almost 10 per cent lower than increase of 13 per cent seen in Edinburgh across the same time period. There was no change in labour productivity per worker in Newcastle between 2008 and 2018 and only an increase of one per cent in London, Leeds and Norwich.

How the UK compares with other G7 countries

When analysing GDP per worker across G7 cities, the three largest cities in the United States saw higher levels of labour productivity in comparison to the largest city in every UK region across the whole time period. Similarly, the labour productivity levels were higher in the three largest cities in France compared with the largest city in every region of the UK except for Edinburgh and London.

The largest cities in Canada (Toronto - $88,416), Germany (Berlin - $87,000), Italy (Rome - $99,180) and Japan (Tokyo - $112,651) all had lower levels of GDP per worker compared with London in 2018.

The largest cities in Italy all experienced decreasing levels of labour productivity between 2008 and 2018. Italy was the only G7 country to see this trend. Between 2008 and 2018, the average increase in productivity across Canada (seven per cent) and the United States (12 per cent) was higher than that of the UK (four per cent).

Share of Knowledge Intensive Service sectors

Knowledge intensive services (KIS) are services that involve activities that are intended to result in the creation, accumulation, or dissemination of knowledge, where knowledge-intensiveness refers to how knowledge is produced and delivered with highly intellectual value-added.

How UK cities compare

The share of employment in knowledge intensive sectors in London was over ten per cent higher compared with the UK average in both 2009 and 2019. London saw an increase of just under three percentage points in employment in knowledge intensive services in this time period.

How the UK compares with other G7 countries

The data for G7 countries was only available on a national level.

Using the data available, in 2019 the UK had the highest average share of employment in knowledge intensive services of all G7 countries at 50.55 per cent. While France had a lower share of employment in knowledge intensive services (46.65 per cent), the percentage change over the last ten years previously was higher than that of the UK at 8.79 per cent.

Key Findings

  • London is consistently higher than the UK average for every metric, however it has not always seen the highest rate of growth of all UK cities over a given time indicating there is an opportunity for other UK cities to catch up.
  • While productivity levels in the UK are lower than the majority of G7 countries, in 2019 the UK had higher levels of employment in knowledge intensive services and 25-64 year-olds in tertiary education compared with the majority of G7 countries.
  • There is no clear correlation between the metrics given. A spearman rank correlation found there is a near zero coefficient (0.014) between the density of a city and its productivity across the G7.
  • A lack of available data both within the UK and across the G7 means comparisons are limited.

Opportunities for new data

The metrics in the technical annex focus on the labour market and productivity. However, inspired by the future of cities videos and essays, we have explored other ways in which a globally competitive city could be measured.  

Inclusive cities 

If cities are to become globally competitive, they need to tackle systemic inequality and create equal opportunities for their diverse citizens. The metrics outlined in the technical annex are high-level and output focussed. Data evaluation approaches should be long-lasting and monitor agency, attitudes and behavioural changes rather than just outputs. If a city is to be truly competitive it needs to ensure the benefits of growth are felt across all communities.

As a first step, it might be of interest to analyse the metrics identified in the technical annex on a more granular level, looking at whether there’s different levels of productivity or access to the labour market for groups of people with different protected characteristics:

Sustainable cities 

Cities only cover two per cent of the world’s surface, yet they consume 78 per cent of the world’s energy and produce more than 60 per cent of greenhouse emissions. Decarbonising cities will be fundamental to achieving the UK’s net zero goals by 2050. A globally competitive city might use renewable energy sources, have cleaner production techniques, greater regulations to limit industrial emissions, and have strong transport links.

As a result, a metric used to measure the success of cities in tackling the climate crisis might be levels of air pollution:

Healthy cities 

The Levelling Up White Paper sets targets to improve both health and wellbeing with the health mission stating that ‘by 2030 the gap in Healthy Life Expectancy (HLE) between local areas where it is highest and lowest will have narrowed and by 2035 HLE will rise by five years’. Urban areas have a key role to play in making this a reality putting the mental, physical and social health of city residents at the heart of future policy.

As a starting point we have looked at life expectancy broken down by gender: