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Competitive Scottish Cities?
Placing Scotland's cities in the UK and European context

Are Cities Getting Bigger or Smaller?

3.19 Figure 3.10 demonstrates the way in which cities are attracting or losing population. Despite a tendency for the decentralisation of population that can be found in most European countries, the relative performance of the study cities has varied significantly during the past five years. Those Scottish and English Core Cities that have been under-performing economically in relation to their counterparts in Europe have also been losing people. Population is down by 4.4% in Dundee and 3.4% in Glasgow. During the same period Edinburgh has experienced an increase in population size. Of course if the trends in the wider conurbation were taken into account the picture would be more complex. But the big picture is clear, continental cities have been becoming more attractive to live in, whilst many Scottish and English cities have continued to lose population. Although this trend may be coming to an end as some UK cities have recently experienced small increases in their residential population, see page 6.

Figure 3.10: Percentage change in residential population 1996-2001

Who lives in cities?

3.20 Figure 3.11 gives an overview of the structure of the residential population living in UK and continental cities. The Population Dependency Index shows the proportion of people too old or too young to be in the workforce, and therefore not directly contributing to the city's economy. It is calculated as the number of under 20 year olds and the number of over 65's divided by the population aged 20-65. Edinburgh and Aberdeen perform well on this index with relatively large working age populations, whilst the other Scottish and English Core Cities have more dependent populations than their European counterparts.

Figure 3.11: Population Dependency Index 2001

Note: PDI: Under 20s + over 65's / 20 - 65 year olds
Source European Urban Audit 2004

Who works in these cities?

3.21 The UK has a relatively high employment rate - in this case defined as FTE employment divided by working age population adjusted for commuting - when compared with many European countries. Within the UK the regions surrounding Edinburgh and Aberdeen have high employment rates. However, many of the English Core Cities have relatively low employment rates in relation to their European competitors.

Figure 3.12: Employment rate 2002

Source: Eurostat: Region: Statistical Yearbook 2003

3.22 Figure 3.13 shows unemployment rates for our cities, here the picture is mixed with the more successful Scottish and English Core Cities performing well - Bristol, Leeds and Edinburgh. However, Liverpool and Glasgow lie at the bottom end of the table.

Figure 3.13: ILO unemployment rates 2001

Note: * Regional Rates
Sources: Urban Audit 2004, City Sources, ONS - Labour Force Survey

How does the private sector see our cities?

3.23 One important dimension of cities' competitiveness is their relative attractiveness to business and private sector investors. We explore this here by examining the most reliable study of these issues, the Cushman & Wakefield Healey & Baker European Cities Monitor. Table 3.7 lists the cities which, during the last decade, have been seen by over 500 business people and private sector investors as the best place to locate a business.

Table 3.7: The best cities to locate a business today

Source: Cushman & Wakefield Healy & Baker European Cities Monitor 2004

3.24 In important respects these subjective surveys confirm what our comparative quantitative data have already shown. First, the global cities of London and Paris are rated the best. Second, capital cities in general are the most attractive. Third, only one Scottish and one English Core City make it into the top thirty. However, when asked which other European cities are important business centres Edinburgh features, with fewer mentions than Birmingham and Luxembourg but ahead of Stuttgart and Toulouse. The cities that we have identified as having the highest GDP, highest innovation levels, skilled workforces and better external connections are frequently seen by the private sector as the best places to locate.

3.25 It is also worth noting that there has been no change in the relative attractiveness of the top five cities during the thirteen years this survey has been conducted, even though this has been a relatively unstable period economically. The European urban hierarchy is basically stable. However, it is not completely so. It is possible for cities to improve their performance, for example Barcelona and Madrid have both improved their standing with the private sector reflecting the growth and modernisation of the Spanish economy during the 1990s. But equally Copenhagen and Helsinki, which were outside the top 30 a decade ago, have entered the private sector's perception as attractive for investment. For this reason we included Barcelona and Helsinki in the original study. It is also possible for a city to drop down the rankings and Glasgow fell from 10 ^th to 24 ^th between 1990 and 2004

3.26 Table 3.8 provides a more detailed understanding of the ways in which the private sector judges cities' attractiveness. It identifies the three most important features of a city for the private sector. They are: the quality of the workforce; access to markets; and external transport links. All correspond fairly closely to the key drivers of competitiveness identified in the Competitive European Cities report. The table shows the comparative rankings of European cities on these three characteristics. Once again they correspond fairly closely to the quantitative analysis presented above.

Table 3.8: Best cities in terms of . . . .

Source: Cushman & Wakefield Healy & Baker European Cities Monitor 2004

3.27 Further evidence of the Scottish cities' relatively low profile in the eyes of the private sector is provided in Table 3.9. Although this is relatively soft data it ranks international cities in terms of a quality of life score generated from 39 indicators. Many of our successful continental cities appear in this list, but no Scottish cities do. However, it is the only ranking that consistently places global cities and capital cities, in particular, lower down the list. There is some evidence here that there are opportunities for non-capital cities, which could have advantages over the larger currently successful ones in terms of quality of life.

Table 3.9: Quality of life survey 2001 - 2004

Source: Mercer Human Resource Consulting Quality of Living Survey 2004

Conclusions

This study updates our earlier 'Competitive European Cities' work and incorporates data for the six Scottish cities. It compares the performance of the Scottish cities with the English Core Cities and with a number of successful European cities. The original study defined and measured urban competitiveness in terms of six critical characteristics:

• economic diversity
• skilled workforce
• connectivity
• strategic capacity to implement long-term development strategies
• innovation in firms and organisations
• and quality of life

The data presented here shows that in many respects Scotland's cities are performing well. However, in terms of size and scale only Edinburgh and Glasgow are comparable to the English Core Cities and even these are smaller than many of the successful continental cities.

Scottish cities tend to have high employment rates and a well-qualified workforce. Levels of GVA are high in Edinburgh, Glasgow and Aberdeen. Connectivity - both within the UK and with the rest of Europe - is improving, and this is likely to continue with the expansion of the low-cost airlines.

This report made use of readily available quantitative data and it is just a starting point. Whilst we have made best use of the best available material, important gaps remain. Many of the factors central to urban competitiveness, including innovation, strategic capacity and quality of life remain little quantified. And these are areas that need to be explored further if we are to truly understand the relative performance of Scotland's cities.

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