At the frontier
Think tank: Centre for Cities
Author(s): Guilherme Rodrigues; Olivia Vera; Paul Swinney
December 14, 2022
This report from UK think tank the Centre for Cities looks at the geography of the UK’s new economy.
The new economy encompasses knowledge-intensive sectors at the very forefront of new technologies and innovations including software, robotics, telecommunications and gaming. Fuelling these sectors is central to improving the UK’s productivity and prosperity, and to the development of the national economy. This report, published in partnership with HSBC UK, maps out the current geography of the new economy, considering where new economy firms are located and the drivers behind their locations, and sets out the policy interventions needed to kickstart the new economy. It finds that UK cities are home to 59% of all new economy firms, making the new economy distinctly urban. But this new economy is not evenly distributed between cities, with most new economy firms located in cities within the Greater South East. This means that larger cities outside this area like Birmingham, Glasgow and Manchester are missing out. While these places are undoubtedly centres of new economic activity, they have fewer new economy businesses than they should, leading to underperformance of productivity. In order to kickstart the new economy, the report calls for the Government to create a £14.5 billion growth package spread over ten years to build innovation districts in the centres of Birmingham, Glasgow and Manchester.