OECD - Enhancing Productivity in UK Core Cities

While productivity might seem an abstract concept, it has important consequences on peoples daily lives. The amount of output that workers are able to produce within a given time and with a given amount of resources is a critical determinant of the material well-being in a society. As resources are finite, productivity growth is the only way to increase living standards in the long term.

Raising productivity is of particular relevance to Core Cities, eleven large second-tier cities located across the United Kingdom (Belfast, Birmingham, Bristol, Cardiff, Glasgow, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield). Core Cities and the functional urban areas around them account for almost a quarter of the UK economy. Yet their productivity levels are below the UK average and significantly below the levels of similar-sized cities in other OECD countries. At a time when productivity growth in the UK has been weak for more than 10 years, the UK can no longer afford to have such a significant part of its territory perform well below its potential.

This report analyses the reasons behind low productivity levels in Core Cities and provides policy recommendations to help national and local policy makers foster productivity growth. Drastic differences in productivity across places within a country, such as they exist in the UK, cannot be addressed by national policies that apply uniformly across a country. They are often due to specific local circumstances. Thus, helping places redress their productivity levels requires identifying the specific causes and addressing them through targeted place-based policy action.

While Core Cities share some similar challenges, each Core City is unique and no one-size-fits-all solution could be applied across the board. While it is beyond the scope of this report to delve into the specific circumstances in each of the eleven cities, policy makers are encouraged to further tackle the city-specific determinants of productivity and develop targeted strategies.

The relevance of this report goes beyond the UK context. The subnational dimension of productivity is gaining increasing attention in OECD member countries, and the lessons learned from UK Core Cities can be valuable for second-tier cities in other national contexts. More generally, the recommendations from this report contribute to a growing knowledge base that helps struggling places all over the OECD to realise their full potential.