A new report by leading business and financial adviser Grant Thornton UK LLP's Place Analytics team has identified significant growth prospects in English cities outside the country's capital. It also suggests a limited number of trade corridors are driving sustainable growth across the country's regions.
The report, based on Grant Thornton's High Growth Index, provides a ranking of English cities and districts according to their growth over an eight year period (2004 – 2012). London maintains nine of the top 10 best performing districts overall. However, outside of the capital, it places Manchester, Birmingham and Milton Keynes in the top three cities (in descending order), as measured by economic and demographic growth.
The analysis also assesses the quality of local growth - or 'dynamism' - to identify areas with a vibrant and dynamic economy capable of supporting future expansion, based on a basket of key drivers. London again tops the ranking, with nine out of the top 10 dynamic growth areas. Outside the capital, Cambridge, Reading and Manchester top the cities list of future sustainable growth.
Based on this analysis of past progress and future prospects, Grant Thornton's report also reveals a number of 'growth corridors' – functional and large scale local economic areas in England – which are playing a significant role in the country's overall growth levels. Though predominantly stemming from London, the intra-city growth corridors include a number of other large cities at their core, creating a network of key strategic linkages between high growth and dynamic areas.
Phillip Woolley, Partner, Grant Thornton UK LLP, commented: "The High Growth Index raises a number of interesting questions about current economic policy, as London makes up around half of the 50 top performing districts. The focus needs to be on re-balancing the economy and creating economic scale to drive sustainable growth outside of the capital, as much as within it.
“The growth corridors identified by the report highlight a number of implications for those local authorities and LEPs, both in and out of these corridors. For local economies within a growth corridor, it's vital that their leaders and economic stakeholders collaborate to manage and deliver growth in a joined up and complementary way, and also consider their local strengths and assets in a broader context, be that human capital or local amenities.
“The economic impact of these corridors requires those cities outside of these areas to identify accessible growth corridors and understand how they can engage with them to grow their own local economy. For some, this could be about becoming part of the corridor over time through the creation of physical, governance and operational linkages. For others, it will be about identifying opportunities and services it could provide in relation to demand from the growth corridors, given its own economic selling points, this could be availability of land, housing or lower labour costs.”
The report also explores the economic, social and regional characteristics of high growth and dynamic areas. It cites high-value, knowledge-intensive businesses, and a supportive environment for enterprise as key economic indicators of dynamic growth areas. It also highlights that diverse communities with a young and economically active workforce, coupled with strong transport and IT connectivity are also important factors for economically resilient areas.