Can you have too much connectivity? At last week’s City Growth Commission seminar on connectivity, Mark Kleinman, (Director of Business and Economic Policy at the Greater London Authority), highlighted that connectivity is not just a factor, it’s the factor in London’s success: economic power in the global economy is defined by connectivity. The seminar considered how different forms of connectivity affect London and other UK cities.
Connectivity operates at many scales. London’s resurgence since the 1980s has depended both on movement of capital and labour, both globally and nationally. If looking to grow a business globally, London is well-placed. As well as hosting global links (language, time zone, financial institutions etc.), London is well connected to its main trading partners: other UK cities. However, intercity connectivity has only slowly risen up the policy agenda for London. Since the demise of Regional Development Agencies, London’s leaders have found strategic engagement with other cities more difficult.
The most contentious debate was whether London is reaching limits to growth. Some argued that cities don’t decline simply because they “get too full”. London is desirable, but increasingly expensive and congested as well.
The dynamism of some of London’s sectors could be stifled by the very success of the model of economic development which has been so praised. Rising costs can serve to break up the powerful agglomeration economies which benefit firms locating in urban areas. While supreme global connectivity commands a high value from London’s financial and business services, smaller firms in creative and emerging industries, drawing on local and national revenues, can’t keep up.
Investment in local transport, walking and cycling make a greater portion of territory accessible and liveable, effectively expanding the borders of urban economies. But some speculated on whether a start-up firm, priced out by rising rents in central London, would be more likely to choose Newcastle or Berlin as an alternative – rather than outer London or elsewhere in the South East.
Firms in all UK cities are making decisions affected by the national and global connectivity their location affords. Our image of global connectivity is often businessman rushing through the airport terminal, but enterprise links can come from migration and diaspora.
Along with transport issues, worker visas are always among the top concerns of UK business. Sunder Katwala, director of think tank British Future, picked up the migration issue, considering how public consent for immigration can be maintained.
Sunder argued policy makers are complacent about shifting negative attitude, and don’t address the majority of people whose views are not radical but who perceive and feel the pressures and benefits of migration: they are open-minded but concerned about change.
Support for immigration – meeting the demands of business – is a political conversation as much as an economic one. In short, facts don’t win arguments when there is little trust, and trust is undermined by the pro-immigration line that “there is nothing to worry about”. A progressive line of engagement is to ask the public to own the trade-offs; say “this needs talking about; what should we do to manage the pressures and secure the benefits?”
Sunder noted that fast growing industrial cities across Europe in the previous century built strong identities among their new communities through secular institutions such as football clubs, municipal government and civil society institutions. Mark noted that London’s elected mayor helps visibility and promotion globally, attracting media and acting as a single voice for the city, but acknowledged political leadership is not the only form of business diplomacy; influential figures in arts and culture also represent city and national brands around the world.
We then come on to the geography of identity. Comparing UK geography with other parts of the world like the Pearl River Delta or Southern California, much of England might in fact be considered a single large city-region; a proposition explored by the Economist last week. It was noted that UKTI markets London as a business capital to overseas investors, drawing on the wealth of assets in the UK; but UKTI shies away from giving other cities this “national gateway” status for fear of being fair to all others. Several also bemoaned central government’s vision of fairness in broadband connectivity: money is used to raise speeds in rural areas to urban levels, while urban UK business premises fall behind foreign competitors, reliant on the “last mile” of copper.
In investing in the connections to power city growth, we need to acknowledge and respect the centres of identity people feel. These are inevitably messy. People in different parts of the country respond to infrastructure opportunities in different ways, based on their sense of territory. Just as some Londoners are reluctant to cross the Thames in their job search; some Northerners will be reluctant to commute to a different city by HS2.
One consistent consensus from our seminars is that the elite who make policy have completely different views to everyone else. In particular, they hanker for a neat solution: a “silver bullet” statistic which will prove the case for migration or high speed rail, vaporising opposition with rationality.
Identity issues are thereby seen as parochial and nostalgic barriers to modernising projects. But local and civic patriotism can be a driver. As neighbourhood belonging, civic belonging and national belonging increasingly overlap, LSE Professor Tony Travers, concluding his chairing of the session, noted that business finds itself “oddly, the useful, neutral player” in building consensus on issues like immigration and new transport projects, vital to long term city growth.
Jonathan Schifferes is research lead for the City Growth Commission (@jschifferes). Thanks to Brhmie Balaram at the RSA who contributed content.
The second battle of Orgreave
In the summer of 1984, the industrial dispute between striking miners and the national coal and steel firms came to a head in violent clashes at Orgreave, outside Sheffield. For many, the defeat of the unions signified the inevitability of de-industrialisation, and Britain’s service industries - from financial professionals to burger-flippers - have led employment growth since.
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