A new report co-authored by the Industrial Strategy Council (ISC) and City-REDI researcher, Abigail Taylor, was published recently examining international evidence on what it takes to “level up” places.
The report analyses experiences in four international case study areas (Estonia, San Antonio, Greater Lille, and the Ruhr region) that have achieved success in levelling up local economies and closing the gap with their national economy over previous decades. Based on an evidence review of the academic literature, policy documents and analysis of economic data, as well as interviews with relevant academic experts and policy officials, the research explores what can be learned from how each of these places design and implement place-based policies.
The report identifies six key foundations for levelling up:
- Scale and longevity of investments
- Being an attractive place to live
- Investment in universities and innovation
- Investment in transport and digital infrastructure
- Skills and future sectors
More details on each foundation are provided in the diagram below:
Insights from webinar discussions
On 26th January, the ISC and City-REDI hosted a webinar chaired by Dame Kate Barker (ISC, Places Steering Group) to launch the report. The event began with a presentation by Gavin Wallis (Head of Research at the ISC) summarising the key findings from the report. Gavin emphasised the importance of places developing strengths in all of these foundations to make real progress in levelling up (although some will be more imperative than others according to the place), the need for a clear industrial strategy to support structural change in the economy of a place, the value of place-specific investment and why scale and longevity matter. To give just one example, Gavin cited experiences in San Antonio in relation to the value of place-specific investment. “San Antonio capitalised on its cultural heritage, but it also invested in its natural infrastructure […]. For example, it created the National Park. And the attractiveness of San Antonio brings not only tourism but it also brings young professionals who want to move and live and work in San Antonio. […], I think the investment that you saw in San Antonio would unlikely be delivered by a central initiative, it kind of needs people in the area to know what are the kind of assets of that area that you need to invest it.”
This was followed by a panel discussion and Q&A session. The below paragraphs summarise key themes in the discussion.
The quality of leadership in places can be crucial to addressing challenges associated with levelling up. Professor Meelis Kitsing (Estonian Business School, Rector), described how leadership has been important in enabling Estonia to transform its economy and digitalise its services. In Estonia showing leadership in relation to new digital technology and “setting positive examples” (such as allowing individuals to declare taxes online) was particularly transformative. Professor Philip McCann (University of Sheffield, Chair in Urban and Regional Economics argued the report shows coordination and consensus building are crucial to taking risks for the benefit of regions “it’s not just about enforcing rules it’s also about taking risks but doing it in a way that people can come together to share the responsibility and take the risk”.
Professor McCann stressed the “very instructive” role of international comparative research and emphasised the need for more evidence on what works for levelling up to shape policy going forward. “All too often, when we’re thinking about these things, we refer to a previous policy or a previous government, or a previous administration, what they did, rather than standing back and saying […] what’s the bigger picture”. Bringing in the idea of the “Planning paradox”, Dr Thomas Perrin (Reader in Regional Planning and Urbanism at the University of Lille) argued policymakers should learn from experiences elsewhere but build on local assets. “The idea is not to copy what has been done elsewhere, but the objective is to find the balance between benchmark inspiration other areas but also based on the local assets, […] you have to combine both”.
Universities have a key role to play in supporting innovation and skills development. Dr Perrin provided insights from Lille where the three public universities merged in 2018 in order to be more competitive internationally and to unite better to support regional economic development. One example is the U-Link scheme which aims to provide a service to enterprise business stakeholders, fostering R&D innovative projects with the university. “There is an agreement at the university providing research activity from its laboratories, research centres to provide […] services that are targeted to the needs of some companies of the territory”.
Implications for the West Midlands
The West Midlands has historically suffered from a number of weaknesses such as high numbers of residents with low qualifications levels, comparatively high unemployment and low/poor jobs growth. These challenges are being exacerbated by the Covid-19 pandemic (e.g. increasing unemployment and potential term scarring effects on young people) as well as uncertainty over the new trade regulations following the UK-EU withdrawal agreement. Research by City-REDI Professor Ortega-Argilés, prior to the signing of the Withdrawal Agreement, showed how the competitiveness of key sectors (e.g. automotive and manufacturing of basic metals) in the West Midlands which are likely to be critical to technological progress within the region could be strongly negatively affected by Brexit. The research gives pointers for how policymakers could seek to optimise levelling up efforts within the context of these challenges.
The report stresses the role of vision and strong leadership. This suggests that the elected Mayor in the West Midlands needs to be even more important over future years in setting policy direction and overseeing progress in levelling up. Collaboration at the local and regional level is also shown to be crucial in enabling struggling places to develop. Given the current challenges, it would seem to be even more important that the Mayor collaborates effectively with Local Authorities, the Local Enterprise Partnerships, universities and other stakeholders to make sure that policies are tied together and to make the case to central government for consistent, sustainable long-term investment and/or greater fiscal independence. The research reveals the value of informal structures in facilitating collaboration across institutions. In Lille, the Comité Grand Lille a large network of representatives from financial institutions, local businesses, the Chamber of Commerce, social partners, local civil servants, artists and elected politicians helped to strengthen relationships between local actors and generate ideas for flagship projects such as the area’s successful European City of Culture bid.
Policymakers in the West Midlands should be encouraged by experiences identified in the report as they demonstrate how levelling up of “left-behind” and struggling places can be achieved. The West Midlands has some big advantages in relation to some of the Foundations identified in the report. In terms of transport, the West Midlands is one of the most connected regions in the UK and is set to benefit the government’s commitment to the Midlands Rail Hub, a £2 billion rail plan to improve east-west rail connectivity and capitalise on HS2 which is due to open in 2026. The region is also home to a range of excellent hospitals and universities which mean it is well placed to continue to develop skills and investment policy to support growth in key sectors such as life sciences, digital and advanced manufacturing, new products and new processes.
Experiences in the case study areas indicate that levelling up of regions can though be achieved without necessarily achieving levelling up within regions. Indeed, the report found that “socio-economic inequalities between residents in each place were more difficult to address than attracting new businesses and high-skilled workers”. These challenges emphasise the need for regions to invest in, for example, affordable housing and targeted support for disadvantaged communities. Given the pre-existing scale of inequalities in the West Midlands and the potential negative impacts of the pandemic, this must be a particular focus. The report suggests that central government does need to provide the resources and/or fiscal independence to enable regional stakeholders to implement such policies. This is particularly important in the context of Covid-19 as, going forward, the pandemic risks worsening inequalities due to the disproportionate impact of the pandemic on certain groups. As analysed in the West Midlands Combined Authority State of the Region 2020 Report, there is a risk the pandemic will widen health inequalities, and in turn, drive further economic inequality.
Despite all these challenges, the report clearly shows that levelling up can be achieved. The West Midlands has strong assets in relation to the Foundations for levelling up.
The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI or the University of Birmingham.
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