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Review of Scotland's Cities - The Analysis

3.2 CITY PERFORMANCE

Some countries have developed sophisticated systems of urban data collection and urban indicators to chart city change, including economic change. Although there have been recent, significant improvements in information available at sub-national scales there is not an agreed set of urban change indicators. This is a policy evidence challenge for the future. This section therefore concentrates on what is available and provides a general description, largely focused on labour market statistics, to track and assess economic change in the cities and the city-regions and to identify key challenges for the cities and the Executive.

3.2.1 Employment and Structural Change

The Scottish cities have, in broad terms, manifested the major trends of British cities alluded to in the previous section. Glasgow stands out, in UK, even European terms, for the deep, protracted decline that the city economy encountered for almost four decades from the middle of the 1950's, whereas Edinburgh has had growth characteristics enjoyed by few other cities in northern Britain. Throughout the 1980's the characteristic of urban Scotland was decline in employment, with cities and outer attached areas declining, except in Greater Edinburgh and Aberdeen, whilst rural areas and small towns expanded. ⁶

In the 1990's, however, there was a marked shift in pattern with jobs in urban Scotland expanding whereas the overall rural totals fell (albeit that particular kinds of rural areas experienced expansion). Further, the detailed urban growth patterns altered. Over the decade as a whole the core cities have had more robust economic performance than their surrounding regions, with the exception of Dundee. Whilst Aberdeen's performance has faltered somewhat Glasgow has re-emerged as a locus of significant growth in jobs and incomes. Indeed, Scotland's largest city economy was growing more rapidly than its competitors for much of the second half of the 1990's. However the prolonged trends in employment and locational shifts over the last few decades have meant that the weight of urban Scotland has gradually shifted from west to east. In 1981 Greater Edinburgh had an employment total just under half of Greater Glasgow and this is now close to 56%. And for the cities, Edinburgh's employment has risen from 63% to 75% of the Glasgow total.

At present Greater Edinburgh produces around a fifth of Scottish output and Greater Glasgow closer to a third. In UK terms, Glasgow is the third largest employment centre overall, and is still the 4th most important centre for manufacturing. In both cities, and also Inverness, GDP has grown steadily faster than the UK average over the last decade and is significantly higher than the Scottish average (Table 3.1).

TABLE 3.1: GDP** per capita in Glasgow, West of Scotland and Scotland

*Excludes Argyll and Bute, Arran and the Cumbraes
**Figures adjusted for current prices

These general observations make it clear that the 1990's displayed a very different pattern of employment change in Scotland from previous decades and indeed from the common perception. City employment was expanding again. Employment in the cores was doing at least as well as the rest of the city-regions and, over the last half of the 1990's it was Glasgow that had the strongest jobs growth performance. It is pertinent to briefly examine these changes and the sectoral shifts, which largely underpin them. It is always a mistake to take a too aggregated view of a city economy, to look only at the net growth or decline rate rather than the spectrum of changes for different sectors and places within the city economy. For then the dynamics of change are disguised.

This is evident in the case of Glasgow where first decentralisation of firms to the rest of the region and then de-industrialisation, meant that any new urban activities were simply overwhelmed by the death of the old. But as the older base eroded it also became proportionately less significant and other activities have come to be city 'loving' in their locational requirements. There is no room for complacency in this, as business and other services can be competed away. But there does seem to be a window for change when the city has an economic trajectory which offers the potential to cut into the stock of unused land and labour in the city.

Employment figures show how Glasgow has been dramatically and disproportionately affected by the UK-wide decline in manufacturing jobs. More strikingly, it has been even less successful at retaining these jobs than other centres, such as Edinburgh. The number of manufacturing jobs in Glasgow fell from 73,200 in 1981 to just 30,300 in 2000, with the majority of these shed in the 1980's. This had a dramatic impact on total employment in Greater Glasgow, which fell 21% between 1971 and 1996. ⁷ Equally dramatic, however, the total number of jobs in Glasgow has increased from 332,100 in 1995 to 366,400 in 2001, a 10% increase. Although this trend is promising it is valid to question whether this increase represents the continuing long upswing in overall UK employment (though other post-war upswings still saw employment fall in the city) or whether Glasgow has truly changed its economic structure and has found new sources of comparative advantage.

Manufacturing employment in the city continued to fall in the city in the second half of the 1990's, see Chart 3.1, and by 2001 was 8% of employment. However there has been a very significant change in the growth of the service sector, and some 85% of city employees are involved in service provision. Public services are the largest employment sector in the city (35%), followed by financial services (24%) and retail and catering (20%).

These figures reflect the outcomes of sectoral changes that have favoured cities as well as changing UK and Scottish economic policies. For example, Glasgow's tourist employment has risen from a minor role in 1981 to constitute the fourth largest tourist destination in the UK. The qualities of the city have been the selling point, but in the context of active policy, marketing and city image building. This activity has strengthened the already strong regional centre role of the city and Glasgow is now the second largest cluster of retailing in the UK outside of London. Higher education is included within public services. Over the last decade the UK higher education sector has almost doubled and Glasgow is the fourth largest centre for research and teaching in the UK. Culture, media and finance services, not least call centre employment, have all been growing in the city as a consequence of policy initiatives.

There are marked similarities, but also important differences, between the Glasgow and Edinburgh economies. The Edinburgh economy is also similarly dominated by the service sector, which (in 2001) accounted for 89% of the city's 293,500 jobs. Within the service sector, public administration is again the most important employer (33% of all jobs), followed by the finance sector (30%). Distribution, (including retail, wholesale and hotels) accounts for 21% of jobs. Outside of the service sector, manufacturing and construction account for 7% and 3% of jobs respectively.

These city economies, relative to the rest of their regions and to Scotland as a whole, are now specialised in financial services, business services and public administration. However Edinburgh is the seat of government, a major finance headquarters, and as a centre for the knowledge economy, is pivotal to Scotland. In this regard the city has been surrounded by a more modern and buoyant region than Glasgow has (although post 2000 reductions in electronics employment will have changed this pattern). In 1998, Lothian companies spent 147 million on R&D - just over one third of the Scottish total, while between 1995 and 1998 R&D expenditure increased at three times the UK rate ⁷ (ONS). The Lothians, both by UK and Scottish standards had an above average locational specialisation in key new sectors such as software development, electronics, financial services and biotechnology.

The timing of 1990's change has been rather different in the two major cities. Over the decade as a whole, Edinburgh gained some 20,000 service jobs but shed around 10,000 in the manufacturing sector. The Lothians, gained 26,000 service jobs but lost 6000 manufacturing jobs, representing, for 1990 to 1999 a net gain of 10,000 jobs in the city and 20,000 in the city-region as a whole (and this meant a faster growth rate in the city). Since 1995 employment growth in the City of Edinburgh has been above the Scottish average (9% versus 7%) but less rapid than Glasgow (10%). Although the financial sector expanded by 24%, pressures have been more acute and there is evidence to suggest that the financial sector re-locate back-office functions to cheaper locations, such as Glasgow, whilst HQ functions have remained located in Edinburgh. The numbers of managerial and professional jobs has increased by an estimated 15-20% between 1995 and 2000 in the city-region, whilst the number of unskilled (mostly manual) employees has fallen by 35-40% over the same period. By contrast in Scotland as a whole, high value jobs have remained fairly constant, while manual work has only slightly contracted.

Outwith the city, the numbers of jobs in all of the Lothian authorities increased between 1995 and 1999 by between 13% and 19%. The Lothians have a different employment structure to the city. The service sector is less important to all 3 local authorities, whilst manufacturing (as noted above) is a more significant employer, particularly in West Lothian (though the post-2000 contraction in the electronics sector has reduced manufacturing activity in such locations). Public and other services are of particular importance to the Midlothian and East Lothian economies.

The other three cities also have large service sectors but also different and more specific dimensions to their economic bases. And they have experienced divergent fortunes over the last decade.

Inverness, the smallest of the 5 Scottish cities, had a fast growth decade throughout the 1990's. The city and its adjacent area are best represented by figures for the Inverness & Nairn Enterprise area. The service sector, including retail services, tourism, public administration, healthcare and professional services dominate their employment structure. In 1999, 83% of all employees were employed in the service sector, compared to 76% in Scotland as a whole. These figures reflect Inverness' role as a regional service centre providing services to a large hinterland, and the importance of the area's tourism economy ( see Chapter 5). In 1999 tourism employed 13% of Highland employees, compared to 8% in Scotland as a whole. Other important economic sectors are manufacturing, natural resource-based processing and construction. The challenge for the future must be to establish a growing and more diverse economic base.

Aberdeen also has some significant challenges for the future. The second half of the 1990's were difficult for the city, because economic activity is particularly linked to changes in oil exploration activity in the UK continental shelf area and, in turn, changes in the forward price of oil. This is reflected both in the recent progress of the city economy and its economic structure. Reliance on this sector is a concern for the future, given that its prosperity is closely linked to a fluctuation prone global market. Jobs in oil and gas have fallen from a peak of 54,000 to 40,000 jobs. Aberdeen City Council predicts that an additional 9,000 jobs could be lost in the sector by 2011. DTI forecasts are cautiously optimistic for the industry in UK terms in the short to medium term. Investment and the number of planned wells have increased in the last few years.

Over the decade as a whole there was a net reduction in employment in Greater Aberdeen as substantial non-service losses (including contraction in the farming and fisheries sector in the rural hinterland of the city) offset a gain in service employment. More recent employment figures for 2001 reveal that the city has experienced a 1% fall in jobs since 1995 with construction (-42%), mining and engineering (-27%) and manufacturing (-18%) off-setting gains in services. There has also been a worrying reduction in retailing and hotels activity (-8%). However, the economy of Aberdeen is still relatively prosperous. GDP is growing at a slower rate than the Scottish average. There is now concern to secure a longer term economic role as North Sea reserves are run down over the next twenty years. It is envisaged that Aberdeen has the capacity to become a leading centre for oil and gas technology and to diversify its economic base. That process has already started and the business base expanded from 9,253 businesses in 1995 to 9,730 in 1997, with the most dramatic increases in the high-value finance, banking and insurance sector.

The economic trajectory of Dundee is currently the most problematic of all of the Scottish cities. In the 1990's there were two worrying features of change. Firstly the city lost jobs in both manufacturing and services. A conscious strategy to develop a regional retail and service role for the city, which it had not previously played, did forestall more severe losses. Secondly, service growth in the surrounding region was not enough to offset decline within the city. The city and the city-region, in consequence appeared to lack any sectors or areas of significant growth. Since 1995 employment in most sectors has been in decline and overall employment has fallen by 6%. Employment in Dundee is also concentrated in the service sector, which accounted for around 4 in 5 of jobs in 2001. Compared to other Scottish cities, manufacturing is more important to Dundee (16%), whilst finance and business is less important (11%) (Chart 3.4). Finance and business sector jobs account for around 1 in 10 jobs in Dundee compared to more than 1 in 4 in Edinburgh. In neighbouring Angus, the manufacturing sector is proportionately important, compared to the Scottish average. But with this larger than average manufacturing sector declining, the structural change to attract service sector employment is struggling to maintain the city-region economic base.

Note: * Data is confidential and cannot be passed onto a third party.
¹ These figures are aggregates from which agriculture class 0100 (1992 SIC) have been excluded.
² Warning: Agriculture data in Scotland.
The June 2000 agriculture census data (which are incorporated into ABI 2000) includes 'minor' as well as 'major' holdings. This means that these data are discontinuous with earlier years.

It is critical, in shaping effective policies for Scotland's cities, that we understand current trajectories of economic change. But it is also important to relate these margins of change, these flows of new firms, new demands and new jobs to the stock of issues or factors of production, such as unused land or unused labour, which have built up over time. Past problems as well as new opportunities, the inheritance of history as well as the pressures of geography, require policy attention. When economic change occurs then adjustments in labour and land markets become the key processes in city change. But sometime adjustment is absent or incomplete. Thus when there is a slow growth in employment, or even a decline, this may be met with downward pressure on real wages and out-migration. But it is also met by higher unemployment rates. And persistent high unemployment may also manifest itself in high disability and sickness rates, low activity rates and, depending on the nature of the social security system, benefit trapping. So rates of worklessness or overall employment may be affected.

There is enough evidence from urban analysis in Britain, Europe and the USA that once more transitory or frictional unemployment occurs then a variety of reinforcing effects may set in to depress labour productivity, employability and incomes. There may be city level effects of this kind: for instance the spatial mismatch hypothesis argues that new employment locations may be too remote from the unemployed, less skilled workers to attract them into work. There may also be neighbourhood effects, which are particularly important within cities. For instance there are recognised peer group effects of young people on schools success and job take-up or employers may engage in address discrimination as a way of reducing their recruitment screening costs. Whatever the mechanisms involved, it is important to have a generalised understanding of how employment changes in our cities mesh with opportunities for all. A broad approach to this is to examine patterns of incomes, employment, unemployment and concentrated deprivation consequent to the changes discussed above.

3.2.2 Incomes, Unemployment and Employment

At first sight our cities seem prosperous. GDP per capita figures are, in the main, above city-region and Scotland averages, but this can be misleading as output figures, including the efforts of those who commute in, are divided by resident numbers. The limited available evidence suggests that productivity per worker in the cities is below the city-region performance.

Average earnings figures for those who work in cities are favourable. In April 2001 the average employee in Aberdeen earned 477 p.w. This figure was 18% higher than the Scottish average, making Aberdeen the highest ranking authority in Scotland. It also exceeded weekly earnings in Aberdeenshire (370) by 29%. With average earnings of 445 p.w. Edinburgh residents have the second highest average salary in Scotland, again exceeding those in the rest of the city-region. West Lothian average earnings, for example, are 404 p.w. In Glasgow average weekly earnings are also relatively high at 419, some 4% higher than the Scottish average, and have been rising towards the UK average over the last five years. They are also above the weekly earnings recorded in the rest of the city-region.

Average earnings of those who work in Dundee City at 392 are 3% lower than the Scottish average, though they are still higher than the average 356 in Angus. Average wages in Greater Inverness are the lowest in the Scottish cities, slightly lower than the Scottish average, but higher than those in Highland as a whole.

Although these figures stress the economic importance of the cities as generators of high incomes, as our critical base for economic activity, they do not mean that those who live in the city are equally prosperous. Commuting across city boundaries, and even across city-region boundaries (as is becoming a growing issue in Central Scotland), means that there are gaps between what is earned by city residents and city workers. The existence of this gap is indicated by different ways of recording earnings statistics. New Earnings data, as used above, looks at the earnings of the workforce where they work. Labour Force Survey data can also give an estimate of the income of workers where they actually live, at the local authority level. In the case of Glasgow, as noted above the NES data rates Glasgow earnings (at 96% of the UK average) ahead of the rest of the region (at 90% of the UK average). The LFS residence based score however indicates Glasgow at 91% of the UK average, below the 92% recorded for the region.

Commuting reduces observed income per resident household in Glasgow and raises it in the rest of the region. And different survey evidence suggests a similar pattern for Dundee where some 46% of resident households had a net annual income of less than 10,000 in 1999/2000 (Chart 3.5). The rest of Greater Dundee ⁸ has significantly higher number of households with a net income over 20,000.

In 1971 Glasgow residents held 73% of the jobs located in the city, but by 1991 this share had fallen to 58%; further declining to 55% by the end of the 90's. This means that just less than half of the job gains in the city over the last decade have actually accrued to those who live in the city and it is only in the last two years that the resident workforce actually exceeded the 1991 total. The Glasgow workforce is increasingly housed in neighbouring authorities, whilst some of Glasgow's poorest areas appear to be largely disconnected from the wider Glasgow labour market.

As the economic activity of a city expands ahead of the city supply of suitable and competitively priced housing and neighbourhoods then increased commuting is inevitable. Commuting data is most readily available from the Census, but data is only currently available for 1991. At that time some 90% of those who lived in Edinburgh worked within the city, but of the total working in the city some 30% commuted in from outside, and just under a third of that total from outside of Lothian. These inflows and lengths of commuting will almost certainly have increased significantly. See Chapter 6.

These figures are at the nub of two of the great challenges facing the cities and Scotland, namely attracting more households to live in cities and to ameliorate rising property prices in growth zones. Both these issues are explored in more detail in the next chapter about residential choices but they are also important economic issues influencing prices, wages rates, fiscal base, city mix and image.

Given the job growth and income patterns noted above it is unsurprising that Aberdeen, Edinburgh and Inverness have relatively tight labour markets and low overall unemployment. Aberdeen, despite the slowdown of the late 1990's, has all the hallmarks of a near full employment economy. The unemployment claimant rate in the city was 2.1% in July 2002. Edinburgh had a similarly low rate of unemployment, whilst Glasgow and Dundee at 6.1% and 6.3% respectively have seriously higher rates of unemployment compared to the Scottish average of 4.1%. Also of concern is the number of claimants who have been registered unemployed for longer than a year in Dundee (19%) and Glasgow (15%). These figures compare unfavourably with the Scottish average of 13%. Lower rates are invariably associated with shorter durations of unemployment. Only 9% of claimants have been signing on in Aberdeen for longer than 6 months and only 1 in 8 for more than a year.

Although the claimant rate is a useful indicator of the relative performance of the different cities, and is easily available, it is a poor measure of the degree of inactivity in the labour force, because it only records as unemployed people who are eligible for benefit. It may also distort city-suburban contrasts because it measures the number of claimants as a proportion of the total workforce, including those who commute in to work. This drives the claimant rate artificially low. The ILO rate is an alternative measure of unemployment, based on resident populations rather than the workforce. It uses survey data to count people who are actively seeking work, regardless of whether they are claiming benefit or not. At the individual city level the ILO rate, which is higher than the claimant rate (as for the UK) shows clearly that Glasgow's unemployment rate, for example, is still well above the UK (near double) and Scottish averages but has been falling more rapidly than either of these aggregates since 1995 (Chart 3.6). ⁹

Turok, Bailey and Docherty ¹⁰ have analysed changes in the ILO rate for the cities and their city-regions for the second half of the 1990's. Their work shows

• Unemployment falling in the city-regions, but with a slight upturn in Greater Dundee in 2000
• Unemployment falling in the cities but with a post 1999 Dundee upturn and with, from 1998 onwards, unemployment bumping along a low floor in Aberdeen and Edinburgh
• Unemployment rates significantly lower for city-region than city residents, but with this gap tending to close over the period
• A sharp difference between overall rates in Edinburgh and Aberdeen (and associated regions), recording 4 to 5%, and Glasgow with 12% (though it is now closer to 9%) and Dundee rising above 14%.

At an aggregate level we can draw a number of conclusions. Of the four main Scottish cities, both Edinburgh and Aberdeen have prosperous and near fully employed economies, both by UK and Scottish averages. Aberdeen's recent employment performance does raise some concerns however. Glasgow, the largest, and previously sharply declining city, is improving its relative performance markedly both by the standards of Scotland as a whole and of larger UK cities. Dundee's economic position was relatively deteriorating. Before moving on to explore further this balance of growth and disadvantage in each of these places it is important to have a more complete picture of the inherited and continuing problems of worklessness.

Although ILO is a better reflection of the numbers seeking work, it is still likely to under-estimate the true extent of unemployment, as it does not count people who would like a job, but have given up looking. One way of addressing this issue is to look at the employment rate, which indicates the proportion of working age adults who are actually in employment. Labour market analysts take the view that an employment rate of close to 80%, measured in this way, gets close to a measure of full employment as there are around a fifth of the population who are either too sick or disabled for work, full time students or early retired on significant pensions. Glasgow and Dundee are the cities with problematic employment rates.

Population change in the cities was examined in the previous chapter and Dundee's decline noted. In broad terms the decline in the working age population in Dundee has been almost offset by the absolute decline in the number of unemployed claimants. Overall, the percentage of the working age population in Dundee in employment has only fallen from 70.9% in 1994 to 69.3% in 2001 but this was over a period when employment rates in the UK grew faster than in the cities than in Scotland. Yet the deficit between Dundee and Scotland has grown over that period. The percentage of working age people in employment is lower for Dundee males than the Scottish average (Chart 3.7). By contrast, the percentage of Dundee females in employment has been close to or higher than the Scottish female average since 1994. Similarly, Dundee deviates significantly from Scottish employment patterns in terms of the gender balance in the workforce. Whilst the percentage of females in employment in Scotland is consistently much lower than that for males, in Dundee, the percentage of females in work has increased and surpassed the percentage of males. These figures, along with high male claimant unemployment, suggest that there are fewer employment opportunities for men in Dundee. However, women tend to be over-represented in low wage occupations.

The extent of continuing under-employment in Glasgow is also strikingly illustrated by the employment rate (Chart 3.8). Although the employment rate for both males and females and Glasgow has risen since 1995, the total rate of 61% is still significantly lower than the Scottish average of 73% and the UK average of 75%. The 'jobs gap' gives a measure of the number of additional jobs required in a locality to reach employment rate at the Scottish or national average. If Glasgow were to achieve the same rate of employment as the Scottish average, it would need to create 45,000 additional jobs for local residents (20% more than its current total), or 51,000 to reach the UK target. To achieve an employment rate similar to that of the prosperous South-East of England, or indeed that of Edinburgh, 71,000 jobs would have to be created for residents that live in the city. No doubt Glasgow is miles better in relation to economic performance but the challenge is that there are still miles to go. Although employment growth forecasts for the city for the decade ahead are strongly positive, and still faster than the surrounding region (BSL, Cambridge Econometrics forecasts) the rate of job generation, even if currently non-employed labour were to be as productive as currently employed workers, is unlikely to remove Glasgow's inherited difficulties, though it will continue to reduce them. Remaking places is a long haul.

The employment and economic activity rates in Aberdeen and Edinburgh, at close to 80%, stand comparison with those of the most buoyant and prosperous parts of the UK and are higher than the Scottish average. The surrounding regions also have high employment rates. The male participation rate in Aberdeen at 86% is significantly higher than the Scottish average of 73% and higher than participation rates in Glasgow, Dundee and even Edinburgh (with a rate of 84%). Female participation in Aberdeen is however much lower than that for men in the city. Although the 2001 female activity rate of 73.1% exceeds the female Scottish average of 69.8%, it falls short of the 77.2% activity for Edinburgh based women.

3.2.3 Deprivation and Disadvantage

The discussion above has made clear how different cities have had a different capacity to attract and retain jobs over time and how labour market pressures are reflected in wages, incomes and employment. Labour market and demographic changes mean that city-regions and cities display persistent differences in incomes and employment rates over long periods of time. Patterns of residential choice that see more affluent city workers commute to suburban homes also exacerbate city and suburban differences.

The workings of these processes have meant that as this millennium commenced some 55% of households in Dundee contained no one who was working. ¹¹ This is a concern, as it is indicative of, and sustains, an economy and perhaps a culture of dependence on either past incomes, for the retired, or on state benefits for those of working age. In spite of marked improvements in both the economy and the nature of the benefit system since 1997 this is no basis on which to create thriving cities. Dundee's figures are shocking, but even in prosperous places there are significant shares of workless households in some neighbourhoods and areas, and this is reflected in Edinburgh's position in Table 3.2. But even Dundee's rate of worklessness is less than for that of Glasgow.

TABLE 3.2: Intensity of Deprivation Measure (1998)

Despite the recent and encouraging performance of Glasgow in employment creation, the city still scores as by far the most disadvantaged Scottish authority. An urban perspective on problems means that it is not enough to stop at city averages. The pattern or the geography of problems matters. In Glasgow, and this issue is pursued further in the next chapter, there is extensive research evidence that worklessness and poverty are area concentrated and that the patterns produced reflect, in broad terms, the workings of the local housing system. Research for the Joseph Rowntree Foundation demonstrated at the start of the 1990's that unemployment rates were below UK averages throughout the owner occupied sector of the city and, aside from the elderly, households in owner occupation invariably had one if not two employees. ¹² However, two-thirds of council tenants were in workless households (and more recent research suggests that this proportion has remained unaltered, though there has been a significant fall in the scale of social renting, see Chapter 4). It was hardly a surprise that Glasgow, both then and now, contained three of the poorest Parliamentary constituencies in the UK

The scale of the difficulties, relative to total population in Glasgow and Dundee means that there are extensive concentrated areas of disadvantage. This is a set of issues addressed throughout Scotland by community regeneration strategies, and was addressed in the recent Community Regeneration Statement. But these communities and neighbourhoods exist within a wider context and they shape our cities as well as being shaped by them. Poverty concentrations impact the overall functioning of the city and the city-region. For example academic research in the Scottish cities shows that higher income households, especially if they have children, will not live in close proximity to or will not interact with concentrated groups of poorer households, so they often leave the city even if they work there.

There are peer group effects in the schooling of children, the use of drugs and educational and employment aspirations which mean that there are likely to be neighbourhood reinforcing effects in educational outcomes. Educational and skills outcomes affect the probability of acceptance both to further higher skill training and to employment, so other things being equal young adults from such neighbourhoods are less likely to have successful labour market progression on leaving school. Workers who become unemployed have less access to job vacancy information than those who live in employment rich neighbourhoods.

In brief, geographic concentrations of those who fare less well in the labour market, or who cannot access it at all, are likely to lead to cities confronting serious challenges of disadvantage reinforcement which more prosperous places have enough momentum to overcome. Neighbourhood difficulties are always acute for those who face them, whether in villages, towns and the big cities but they assume a city-wide salience when their existence seriously erodes the growth capacity of the city they exist in. In many senses the Glasgow and Dundee problems have clear dual economy features. Policies and strategies that could drive success for the majority of households in Aberdeen, Edinburgh and Inverness will not necessarily do so for the poorest fifth of the population in Glasgow and Dundee.

3.2.4 Jewels and Duals

This review of the recent experience of Scotland's cities, in terms of broad economic performance, makes clear that we have our 'duals' and our 'jewels' viewed in terms of performance relative to the Scottish economy. The picture is far from bleak, indeed it is much more favourable for the cities than in any decade of the last 50 years. However it is also relevant to ask how this performance compares with other cities, both in Britain and Europe and to identify what appears to make for successful, competitive cities. We have to asses whether recent better performance is simply the outcome of structural economic changes which now favour cities or whether, given their structures, our cities are performing more effectively than in the past.

The next section of this chapter looks at these patterns and assesses how the requirements of city success mesh with the science, skills and related agendas of 'A Smart, Successful Scotland'.

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