Roles and Economic Potential of English MediumSized Cities: A Discussion Paper
Paul Adrian Hildreth
10 October 2006
Available at www.surf.salford.ac.uk
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Preface
My interest in writing a paper on the roles and economic potential of English
medium-sized cities developed through two practical pieces of work I
contributed to in late 2005 and early 2006.
In December 2005, I was asked to devise a conceptual framework to define
cities and city-regions for the then Office of the Deputy Minister (ODPM), for
inclusion in a presentation to the Minister for Communities and Local
Government. These definitions, which distinguished between different spatial
understandings of cities, were subsequently included in a HM-Treasury led
report on the economic role of cities, published with the 2006 Budget (HMT,
DTI and ODPM 2006, page 12).
In early 2006, I was commissioned by the OECD and the Presidency of
Galicia in northern Spain to write and present a paper on a typology for
medium-sized cities at a conference in Santiago de Compostela on 30 and 31
March 2006 (Hildreth 2006). This work, which built on the city definitions
project, highlighted three issues:
 First, the relative lack of published papers on medium-sized cities,
compared with the breadth of material on large and global cities
 Second, that a route into understanding the role of medium-sized
cities was to begin by evaluating differences between medium-sized
and large cities and then use these distinctions as a base to consider
how medium-sized cities might vary in their economic profile and
performance
 Third, these differences between cities might in turn be explained
through a typology of medium-sized cities
These two assignments were related. They both offered the insight that cities
come in different shapes, sizes and roles, and that appreciating this was
important to understanding city-region and regional economies. Also there
are flows and interconnections between cities and the way they operate may
be affected by their different economic role or typology. These are ideas that
are explored further within this paper. In particular, it brings these two
assignments together to consider whether a typology for medium-sized cities
is a useful tool to both understanding differences in the economic role and
performance of English medium-sized cities, and offering insight into
differences in economic performance between the English regions.
After the conference in Santiago de Compostela, I was encouraged and
supported by colleagues at the then ODPM (now the Department for
Communities and Local Government) to continue to pursue my research on
medium-sized cities. I have had opportunities to give presentations and
receive feedback on this work. I have also met with local authority Chief
Executives and other local government Policy Officials around England to test
out ideas in this paper in relation to their cities.
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Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Whilst this paper is now completed, my research on medium-sized cities will
continue in the coming months. There is still a great deal to understand
about the roles and economic potential of medium-sized cities, both in their
own right and also in terms of their relationship with other large, medium
and small cities.
ii
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Acknowledgements
I would like to thank the following for their contribution to the research and
writing of this paper in many different ways:
Soo-Jin Kim, at the OECD, for the original commission that started me off on
my journey of research on medium-sized cities. The Presidency of Galicia and
the Regional School of Public Administration for their original commission,
with the OECD, of a paper and presentation on medium-sized cities.
Professor Mark Kleinman, Jessica Matthew, Keith Thorpe, Greg Clark, Diana
Cook, Sarah Fielder and Rebecca Carpenter at the Department for
Communities and Local Government (DCLG), for providing opportunities to
enable me to develop my research within the Department’s work with smaller
towns and cities. Nick Allan, Kenneth Cameron and Stephen Hayward-Smith,
also at the DCLG, for their help in arranging and attending city visits with
me.
I have valued the opportunity to meet with local authorities in medium-sized
and smaller cities/towns. I am grateful to Ada Burns, Richard Horniman and
Richard Alty (Darlington), Philip Bostock (Exeter), Mike Robinson and Laird
Ryan (Stoke-on-Trent), Anthony Lockley (Blackpool), Derek Whyte and Peter
Kuit (Preston), Brian Bailey (Blackburn) and Kate Thorpe (Burnley) for their
time and interest. David Marr and Richard Williamson, from Government
Offices for the English Regions, also helped in arranging meetings.
Professor John Raine, my supervisor at the School of Public Policy at
Birmingham University, provided valuable encouragement and advice.
Professor Simon Marvin and Professor Tim May, colleagues at SURF at
Salford University, were always a source of inspiration. Professor Alan
Harding and the North West Development Agency gave permission to use
Figure Two in advance of publication. Professor Brian Robson provided helpful
comments on an earlier draft of my OECD paper. Dermot Finch and Max
Nathan for offering and organising a round table brainstorm with colleagues
at the IPPR Centre for Cities.
Thanks go to Jacky Moran, who worked with me at DCLG for the first half of
2006, for her extremely helpful comments on drafts of this paper and her
analytical work on data from the ‘State of the English Cities’ to test the
typology in this paper for English cities as set out in Appendix One. Judy Cox
very professionally read and suggested corrections to proofs of this paper.
Finally, I am grateful to Vicky Hildreth, who has been constant in
encouraging me in my studies and work on cities.
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Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Disclaimer
The cities typology framework underpinning this paper was originally
commissioned by the OECD, on behalf of the Presidency of Galicia and
Regional School of Public Administration, for presentation at a conference in
Santiago de Compostela on 30 and 31 March 2006. The original paper
“Trends and Economic Potential of the City-Regions and Medium-Sized Cities”
is due to be published shortly by the Galicia Regional School of Public
Administration.
This discussion paper includes subsequent research on the application of the
typology to English medium-sized cities. It was submitted as a dissertation to
the School of Public Policy at the University of Birmingham towards the
degree of Master of Science in Public Service Management.
The author intends to produce a further version for journal publication. It is
being made available as a discussion paper on the SURF web site to stimulate
discussion on the issues raised. Comments and feedback would be very
welcome and can be sent to [email protected]
The author and opinions presented in the discussion paper are those of the
author.
iv
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Summary
This paper considers how differences in the economic role and performance
of English medium-sized cities might be explained. It addresses this through
a stepped approach. First, generalised differences between large and
medium-sized cities are explained. Second, a typology of medium-sized cities
is developed as follows:






an industrial city
a gateway city
a heritage or tourism city
a university knowledge city
a city in a large or capital city-region
a regional services city
This typology is then tested in two ways. First, the 56 cities covered within
the ‘State of the English Cities’ report (Parkinson et al 2006) are allocated to
a typology and tested in relation to key economic variables. Second, this is
followed up by a small number of meetings with city local authorities, to
further test the findings.
Marked structural differences in the economic role and performance of
English medium-sized cities were found to exist. These in turn reflect and,
most likely, contribute to differences in the economic performance of English
regions.
Whilst limitations in the typology are acknowledged, the paper concludes that
there are potential policy implications from this research. These apply for the
design of regeneration and regional economic policy at a national level, and
for the importance of effective collaboration between cities and between
cities and their regions at the local and regional level.
v
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Contents
Preface
i-ii
Acknowledgements
iii
Disclaimer
iv
Summary
v
Contents
vi
List of Figures
vii
List of Tables
viii
Chapter One
Introduction
1-7
Chapter Two
Background to a typology for medium-sized
cities
8-23
Chapter Three
A typology for medium-sized cities
24-33
Chapter Four
Methods used to test the typology
34-41
Chapter Five
Policy issues for medium-sized cities
42-50
Chapter Six
Conclusions, limitations and ways forward
51-52
Appendix One
Key trends in English medium-sized cities
53-62
Appendix Two
Notes from city meetings
63-70
Bibliography
71-75
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Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
List of Figures
Figure One
What is a medium-sized city?
3
Figure Two
Gross value added change at sub-regional level
in UK – 1995-2003
5
Figure Three
Under-bounded city
11
Figure Four
Well-bounded city
11
Figure Five
Connected city
12
Figure Six
Simple national urban system
14
Figure Seven
Development of a simple national urban system
25
Figure Eight
Cities categorised under typologies
35
Figure Nine
Different economic performance characteristics
of medium-sized cities
38
Figure Ten
The scale and consistency of the regional
economic performance gap in England
39
Figure Eleven
Central Lancashire cities
vii
40-41
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
List of Tables
Table One
Differences between large and medium-sized
cities based on simplified assumptions
18
Table Two
Comparison of performance across city
typologies
36
Table Three
Ranking of performance across city typologies
37
Table Four
Comparison of typologies for medium-sized
cities
43
Table Five
Employment rates, 16-64 year olds
55
Table Six
Primary, secondary and tertiary sector
employment
56
Table Seven
Employment in knowledge-intensive business
services
57
Table Eight
Employment in knowledge-intensive
manufacturing/R&D
58
Table Nine
16-74 year olds with no formal qualifications
59
Table Ten
16-74 year olds with graduate level
qualifications
60
Table Eleven
Gross value added full-time-equivalent
61
Table Twelve
Average gross weekly pay (£)
62
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Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Chapter One - Introduction
Research questions
This paper addresses two practical questions:
 How can differences in the economic role and performance of English
medium-sized cities be explained?
 Does understanding these differences offer insight into reasons for
disparities in economic performance between the English regions?
How the questions are addressed
These two questions are addressed through a stepped process.
Chapter Two considers spatial definitions of the concept of the ‘city’ used in
this paper. This is followed by the development of a typology for mediumsized cities in two stages. First, generalised differences between large and
medium-sized cities are examined. Then, factors are identified which could
help to explain the significant differences in the economic role and
performance of large and medium-sized cities.
Chapter Three uses this evidence to propose a typology for medium-sized
cities:
 an industrial city
 a gateway city
 a heritage or tourism city
 a university knowledge city
 a city in a large or capital city-region
 a regional services city
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Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Chapter Four explains the methodology used in the paper. In particular it
explains how the typology was tested in two ways. Each of the 56 cities
covered in the ‘State of the English Cities’ report (Parkinson et al 2006),
including large cities, was allocated to a typology and tested in relation to
key economic variables. This was followed up by a small number of meetings
with Chief Executives and Policy Officials from local authorities, to further
test the findings.
Chapter Five outlines policy implications from this research in relation to the
research questions.
Chapter Six offers conclusions, including acknowledging limitations of the
approach taken, and proposes possible further lines of enquiry.
What is a medium-sized city?
An immediate challenge is to offer a definition of a medium-sized city for use
in this paper. There is currently no standard definition of medium-sized cities
(European Commission 2005b), as the concept of a medium-sized city is
context-specific. For example, a city which is categorised as medium-sized in
China would be a large or very large city in Europe (see Figure One).
A second issue is that different measures could be chosen to define a
medium-sized city, such as population or economic size of the city, as
measured by gross value added (GVA). The use of GVA would change the
ranking of cities compared with measurement by population size (e.g.
Cambridge would be lower down the scale of medium-sized cities in England
based on population size than it would be based on GVA score).
2
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Figure One – What is a medium-sized city?
Source: UNHabitat (The
State of the
World’s Cities
2004/2005) and
UN Population
Division
It depends on the context. For instance, a medium -sized city in Europe is smaller than a
medium-sized city in China. What is important is that medium - sized cities can be
distinguished from large cities.
A third complicating factor is that there are different ways to define a ‘city’
(for example, using physical footprint as opposed to administrative
boundaries). This is addressed in Chapter Two.
These factors mean that there is no simple objective definition of a mediumsized city available. One way around this is to draw on distinctions made in
the literature between large and medium-sized cites in relation to economic
characteristics.
In recent years, English urban policy has been primarily focused on London
and the eight English Core Cities1 (Parkinson et al 2004) (ODPM 2003)
(ODPM 2004a) (ODPM 2004b). The recent ‘State of the English Cities’ report
(Parkinson et al 2006), whilst making an important contribution to restoring
the balance of evidence on smaller cities, made a clear policy distinction
between these large cities (referred to in the report as the ‘Big Nine’ because
1
Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield.
3
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
of their relative economic scale) and the other 47 cities (or Primary Urban
Areas2) covered by the report.
A clear distinction between the relative economic scale and the role of large
and medium-sized cities is central to the analysis by Henderson (1997),
which is reviewed in Chapter Two. This offers a route into understanding the
role and economic performance of medium-sized cities, both in relation to
large cities and to each other.
For this reason London and the eight Core Cities (Primary Urban Areas) are
defined in this paper as large cities and the remaining 47 as medium-sized
cities.
Why are medium-sized cities important?
Cities are moving up the policy agenda in OECD countries. There is a general
trend to devolve responsibilities from national governments to regional and
local levels, with an increasing appreciation of the importance of cities to
regional and national economies. Countries like the United Kingdom, France,
The Netherlands, Denmark and Belgium have been developing explicit
national policies for cities (Parkinson et al 2006).
However, high-profile world cities such as London, New York, Madrid, Paris
and Tokyo, and other city stars such as Barcelona, Helsinki, Munich and
Stockholm, get most of the attention. In England, as already indicated, much
of the policy interest has been on London and the Core Cities. There are
reasons for this.
2
Primary Urban Areas were used as the primary unit of analysis in the ‘State of the English Cities’ report
(Parkinson et al 2006). PUA boundaries seldom align with political or administrative boundaries. They are
normally bigger than local authorities and frequently contain several of them. PUAs are closest to the
Metropolitan City definition in Chapter Two of the report. PUAs in England with populations of over
125,000 were covered by the report.
4
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Figure Two – Gross value added change at sub-regional level in UK 1995 –
2003
Source:
Harding, A for
North West
Development
Agency, 2006
5
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
First, there is considerable evidence of a positive correlation between city
size and economic performance, higher productivity and higher per capita
incomes. The biggest cities and city-regions tend to perform best (Polèse
2005).
Generally there is a performance gap between London, the South East and
East, as the highest performing regions, and the other six regions (HMT
2001) (HMT 2004). Figure Two shows a comparison of gross value per capita
change 1995 to 2003 at the sub-regional (NUTS 3) level which reveals the
higher rates of growth in London and the South East and elsewhere,
predominantly in the city-regions, e.g. South Manchester, Leeds, York and
Edinburgh. However, some of the cities that fall within our definition of
medium-sized cities have also done well, such as York and Derby.
Second, the increasing importance of information and producer services has
led to a progressive shift in advanced economies from goods production to
information-handling services. Relatively few of the largest cities (e.g.
London, New York and Tokyo) perform best as centres of knowledge-based
services (Hall 2003), which offer developed countries their best opportunity
to keep ahead in an increasingly competitive global economy (Parkinson et al
2006).
Third, the largest cities perform multiple roles, nationally and internationally,
which puts them at the head of a global hierarchy of cities and at the centre
of the world economy. They are centres of government, advanced financial
and business services, medicine, law, arts, higher education, culture and the
consumption of both luxury and mass-produced goods (Hall 2003). Under
these circumstances it is not surprising that the largest cities are the places
where the most talented and entrepreneurial are most likely to converge
(Hall 2000) (Florida 2002) (Polèse 2005). In contrast, medium-sized cities
may be perceived to play a relatively peripheral role.
6
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
However, the very many medium-sized and small cities, whilst generally
neglected in policy, are important to both regional and national economies.
They are where a significant proportion of a country’s population live and do
business. In the European Union for instance, over 60% of the population
live in urban areas of over 50,000 inhabitants (European Commission
2005b), many of which can be classified as medium-sized cities.
Therefore, it is timely to give medium-sized cities appropriate attention.
However, this is challenging. Unlike the treatment that capital and highprofile cities have received (Parkinson et al 2004), medium-sized cities
cannot be approached as stand-alone places. This is because medium-sized
cities do not operate as islands, surrounded by open sea. Rather, they sit
within a wider regional and national urban hierarchy. Their success in
attracting and retaining firms and workers, and generating jobs, depends as
much, if not more, on the linkages that exist between them and other cities
and with their wider region (Turok 2004) as their own economies.
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Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Chapter Two – Background to a typology for medium-sized
cities
This chapter draws on literature on medium-sized cities and cities in general
to develop a typology for medium-sized cities.
What is a city?
Defining a city ought to be a straightforward matter. However, recent work
on city-regions (Harding et al 2006) (New Local Government Network (NLGN)
2005) (Marshall et al 2006) has shown that there are different ways of
understanding a city.
In practice, cities come in all shapes and sizes and have different
relationships with each other. Three definitions are offered that reflect the
different spatial dimensions of cities:
The municipal city
The city as an administrative local authority
For example – Manchester City Council, Nottingham
City Council
The metropolitan
city
The city as the physically built-up area
The city-region
The City in terms of its economic footprint (e.g. travelto-work area, housing and retail markets)
For example – the metropolitan area of Manchester
covered by the Association of Greater Manchester
Authorities (AGMA), London Mayor/Greater London
Authority (GLA)
For example – Manchester City-Region as defined in its
City-Region Development Plan
8
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
The municipal city
The municipal city is the city defined by the area administered by the city
council. This concept is important because it offers insight into key
information about a city’s social, civic and historical identity and its original
market place (Polèse 2005).
Apart from new towns and cities (such as Milton Keynes), medium-sized
cities usually have long histories. Many were originally formed as settlements
based on economic and geographical advantages that in some cases no
longer exist. These include access to minerals such as coal (essential for
steel-making, as in Sheffield), a relatively damp climate (important for cotton
manufacture in the towns and cities of Lancashire) or access to a safe
harbour.
Cities are likely to have gone through generations of changing economic
purpose. Their history will have shaped their current distinctive identity and
will remain a vital factor in influencing their future economic role (Turok
2004). History will have influenced their physical development, as well as the
external challenges they face. Their historical background frequently
influences the political outlook of cities and how they see their role in the
wider world.
The metropolitan city
The metropolitan city is the city identified by the contiguous built-up area,
including adjacent towns and suburbs. This concept of the city is shaped by
the spread of development and economic activity beyond the core, through
the growth and spread of suburbs. This is the perspective of a city that is
seen looking down from an aircraft.
9
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
The metropolitan city is important for the typology where its boundaries no
longer correspond to those of the municipal city, potentially limiting the
control that the municipal administration has over its contiguous built-up
area.
It is possible to identify three types of relationship between metropolitan and
municipal cities. The first is a well-bounded city where the city council has
political control over the entire contiguous built-up area (i.e. municipal city >
or = metropolitan city, e.g. Leeds and Sheffield).
The second is an under-bounded city where the city council does not have
control over the entire contiguous built-up area (i.e. municipal city <
metropolitan city, e.g. Bristol and Nottingham).
The third is a connected city where two or more cities have grown from
smaller independent settlements to form one contiguous built-up area, and
where no one single council has political control over the whole area (i.e.
metropolitan city > or = sum of connected municipal cities, e.g. Manchester
with Oldham, Rochdale, Salford, Stockport, Trafford and Wigan).
The city-region
The city-region is defined by the ways people live their lives and how the
economy operates between cities and the towns and areas that surround
them (Harding et al 2006). It is a dynamic concept expressed in terms of
connections and flows from home to work, home to shop, home to home in
housing moves, home to cultural entertainment, as well as the way
businesses relate to their customers and suppliers.
10
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Figure Three – Under-bounded City
Nottingham
ie l
hf
ox
Br
As
Nottingham is a classic
example of underbounding.
d
we
to
y shi re
ngham
Derb
Notti
Gedling
Nottingham
The footprint of the
Nottingham economy
overlaps with that of
Derby and Leicester.
shire
Erewash
This means strategic
decisions at the
metropolitan level
need to be taken
across five District
Councils and two
County Councils.
Rushcliffe
To promote
sustainable
development in these
cities it makes sense
to plan at the cityregion level which
encompasses the three
cities.
Source: HMT, DTI and ODPM 2006
Figure Four – Well-bounded City
Leeds
Harrogate
Craven
Leeds is a classic example of a
well-bounded city. The City Council
has a remit over the whole of the
contiguous built -up area of Leeds.
This has advantages. For example,
the Leeds Initiative has been a
leading example of a strategic
partnership operating across the
city since the early 1990s.
York
Travel to work
Built- up area
Bradford
Leeds
Selby
Leeds has a relatively large and
successful economy, with a
significant economic footprint
shown by its wide travel -to-work
area. It is a major UK centre for
finance, legal and business
services. Howeve r, the long -term
success of the Leeds economy
requires the capacity to capture the
larger economic scale and the
sharing of assets across the cityregion.
Calderdale
Kirklees
Wakefield
Barnsley
Source: HMT, DTI and ODPM 2006
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Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Figure Five – Connected City
Birmingham/West Midlands city-region
Travel to work
Sandwell
Lichfield
Birmingham is an classic example of where,
through industrial develop ment, existing towns
and cities have grown and connected to form
one large contiguous built-up area.
Birmingham has a large economic
footprint illustrated by the travel to-work area. Birmingham is also
competing with the expanding
London city-region and growth
areas to the north (e.g. around
Milton Keynes).
Walsall
Wolverhampton
Dudley
Birmingham
This is incentivi sing collaboration
between cities in the metropolitan
area and the travel-to -work area.
Built -up area
Solihull
Coventry
Source: HMT, DTI and ODPM 2006
Unlike the municipal city (which is defined by administrative boundaries), and
the metropolitan city (which is defined by a physical footprint), the cityregion is a ‘fuzzier’ concept. Labour, housing, retail and cultural markets can
operate at different spatial levels and they can change over time. As a result,
city-regions have flexible boundaries. However, despite their inherent
‘fuzziness’, city-regions are an important economic concept as they offer a
valuable insight into how functional economic markets operate.
Medium-sized cities in an urban hierarchy
A typology of medium-sized cities can now be developed using a stepped
process, which draws on important characteristics of cities.
The first is that the size distribution of large, medium-sized and small cities
and their sectoral composition is relatively stable over time, even in rapidly
growing economies.
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Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
This feature has been explored by Henderson (1997) by examining the size
distribution of cities within three countries (US, Brazil and Japan) over the
period 1970 to 1990. Henderson concluded that the proportion of the urban
population in medium-sized cities (defined as those with a population of
100,000 to 500,000) is fairly stable across countries and time, even in
rapidly growing economies. He showed that in the United States there was
hardly any change in the size distribution of cities from 1970 to 1990.
In Brazil, the urban population grew at 4-5% per year from 1950 to 1980.
Despite that, the distribution of the urban population across different-sized
cities was almost identical in 1950 and 1980. Any variation has been a result
of a reduction in the share of large metropolitan areas (population over
500,000) with gains in other categories.
Stable relationships in the size distribution and sectoral composition of cities
have been observed by others. Duranton and Puga (2001) identify a stable
urban size distribution and sectoral composition in France and the United
States, despite a high rate of firm turn-over. In addition, the population ratio
of greater Paris to Lyon, the next largest city in France, has remained stable
over nearly two centuries (Guérin-Pace 1995). Overall, empirical evidence
suggests that the hierarchy of cities in Europe has changed little since the
Second World War, or even before, and is unlikely to change very much in
the future (Hall 2003) (Batty 2001).
Davis and Weinstein (2002) document the underlying stability of Japan’s
economic geography over the past 1,000 years, especially the remarkable
resurrection of Nagasaki and Hiroshima. These cities resumed their historical
position in the Japanese urban hierarchy within 20 years of the end of the
Second World War.
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Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
The relative stability of national urban hierarchies over time is interesting for
an analysis of medium-sized cities. In particular it raises questions about the
relationship between cities. Indeed, do large, medium-sized and small cities
have an inter-dependent relationship within the national economic system
(Polèse 2005)? If so this would have implications for both cities and regional
policy.
The relationship between large and medium-sized cities
This is examined using a simple model of a national urban system (see
Figure Six). In this model there are two large cities (A and C, where C is the
capital city) and eight medium-sized cities. The country is divided into three
regions. It is assumed that there are only two industrial sectors in the
country – manufacturing and services - but that different cities may produce
different goods.
Figure Six – Simple national urban system
1
8
Key
2
Regional boundary
A
Cities C – capital city
4
3
A – large city
1 – 8 mediumsized cities
7
5
C
6
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Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Agglomeration: urbanisation and localisation economies
The relatively stable distribution of cities of different sizes has been explained
in terms of economies and diseconomies of agglomeration (Henderson,
1997). An economy of agglomeration refers to the benefits that firms obtain
when they locate in close proximity to other firms, people, capital, goods and
services. Proximity raises the productivity of firms and workers through
advantages in:
 Market size – Improving access for firms to markets and to suppliers
of goods and services (known as forward and backward linkages)
 Larger labour markets – Enabling workers to be more effectively
matched to vacancies, offering employers better access to a range of
specialised skills, and lowering the risk for employees from being
exposed to redundancy
 Knowledge spill-overs3 – Firms may experience substantial
advantages from being close to each other, by observing other firms’
activities and developments, exchanging ideas and learning from other
firms’ innovations
However, as cities grow in size and physically spread, costs rise due to
increasing land costs, increasing congestion, commuting costs and rising
wages. Henderson (1997) gives examples from the US where differences in
the cost of living between small and very large cities were between 60100%. In Brazil the difference was even greater at 250-300%.
3
The concept of knowledge spill-overs goes back as far as Marshall (1890). He wrote that in dense areas
“the mysteries of the trade become no mystery but are, as it were, in the air”.
15
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
A distinction also needs to be made between urbanisation and localisation
economies:
 Urbanisation economies apply to industries across an entire urban
area; whilst
 Localisation economies apply to gains from scale within a particular
industry.
Larger cities benefit from urbanisation economies, while medium-sized cities
are unlikely to do so. Instead, they tend to benefit from localisation
economies within the industry (or industries) located in or near to the city.
Differences between large and medium-sized cities
Returning to our earlier model, clear distinctions can be made between large
cities A and C and medium-sized cities (1 to 8), based on the analysis in
Henderson (1997).
Large cities (A and C) offer urbanisation economies of agglomeration, whilst
being costlier locations to live (through higher commuting and housing costs)
and run a business in (due to higher land and wage costs).
By contrast, the eight medium-sized cities offer localisation economies of
agglomeration from the specialist industry(s) increasing within the city. At
the same time they are cheaper locations to live, work and run a business in
compared with the large cities, because they have shorter commuting and
lower land and wage costs.
As a result of these economic distinctions, the following generalised
observations can be made for large cities A and C and for the eight mediumsized cities (Henderson 1997):
16
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
 Specialisation – Large cities A and C produce more experimental and
evolving products, where there is a high premium on innovation or
design. Conversely, the eight medium-sized cities concentrate on the
production of standardised items.
 Product development - Large cities A and C act as incubators for
Research and Development (R&D) and the creation of new products.
R&D by firms in A and C encourage the creation of new companies out
of a dynamic, knowledge-rich local economy as well as increased
demand for goods and services to support the R&D firms. However,
once new products become established their production is
decentralised from cities A and C to the eight medium-sized cities, due
to their cheaper labour and production costs.4 This may work on three
levels. First, decentralisation from A or C to towns and cities within
their city-region (cities 6 and 7). Second, from A to C to the other
medium-sized cities. Finally, production may be transferred from A and
C to cities elsewhere in the world.
 Skill base – Large cities A and C have industries that are more skillintensive in production. They also benefit from larger and more diverse
labour markets which provide firms with specialised knowledge and
skills. By contrast, the medium-sized cities have industries that are
less skill-intensive in production. They also have smaller and less
diversified labour markets.
 Sectors – Large cities A and C are stronger in services and weaker in
manufacturing, while medium-sized cities tend to be stronger in
manufacturing and weaker in services. This is because modern service
industries are knowledge-intensive and require people who are well
4
Duranton and Puga (2001, page 1455) make a similar point: “When diversified and specialised cities coexist, it is because each firm finds it in its best interest to locate in a diversified city whilst searching for its
ideal process, and later to relocate to a specialised city where all the firms are using the same type of
process.”
17
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
educated and with specialised skills. Such people tend to concentrate
in larger cities. Also, the cost of land (e.g. as reflected by the rent
charged for business premises) is higher in large cities. Therefore,
firms may choose to locate their head office in a large city, but their
manufacturing operations in a medium-sized city.
 Market size – Large cities A and C benefit from larger and more
diverse local markets which provide opportunities to test new products
and ideas (e.g. in culture and design). By contrast, medium-sized
cities have smaller and less diverse local markets.
Table One - Differences between large and medium-sized cities based on
simplified assumptions (derived from Henderson 1997)
Large cities
Medium-sized cities
Agglomeration
economies
Urbanisation
Localisation
Specialisation
Produce less
standardised and more
evolving products
Produce more
standardised products
Product development
Incubators for R&D with
new firm creation spillovers
Production of
established products
Skill base
Higher and more
specialised skill base
Lower and less diverse
skill base
Sectors
Stronger in knowledgebased services and
weaker in
manufacturing
Stronger in
manufacturing and
weaker in knowledgebased services
Markets
Larger and more diverse
markets
Smaller and less diverse
local markets
18
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
The above framework identifies generalised differences between large and
medium-sized cities that reinforce their economic inter-dependency and
maintain stability in the national hierarchy (see Table One).
On the basis of the framework explored in this section, firms in different
sectors and at different stages of the production process will choose to locate
in different-sized cities (Duranton and Puga 2001). Cities of a similar size will
attract or develop similar functions, giving large and medium-sized cities
distinct roles which in turn reinforce stability in the national urban system
(Polèse 2005).
Towards a typology of medium-sized cities
The previous section explored a relatively simple framework based on two
types of cities, large and medium-sized. Using this framework, a number of
generalised differences between them were identified (Henderson 1997).
However, reality is more complex and medium-sized cities do not perform as
a single type. In practice, they perform different roles within the urban
hierarchy and there will be shifts in the relative economic fortunes of cities
over time, such as the dramatic rise in the competitive performance of
Helsinki and Barcelona (Parkinson et al 2004).
Hall et al (2001) examined changes in the urban hierarchy in England from
1913 to 1998, based on a set of defined criteria for urbanity (e.g. university,
highest star hotel and football club). Centres that satisfied more criteria were
ranked higher in the urban hierarchy. The most significant shift was the
steady rise of towns and cities in southern England within the London Mega
City-Region and the decline of older industrial cities in the Midlands and the
North that were largely dependent on a single industrial sector.
19
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
It is therefore not sufficient to explain general differences between large and
medium-sized cities. It is also important to explain why medium-sized cities
perform different roles and why some medium-sized cities are more
economically successful than others. This is examined through a broad
typology for medium-sized cities, from which policy implications are drawn.
However, before the typology is introduced, it is important to stress that
cities are not just places. As the city-region concept illustrates, city
economies are shaped by flows, particularly of people and firms,5 which work
to the relative advantage of some cities and disadvantage of others.
People and firms in cities and city-regions
In a knowledge-economy, access to highly skilled people is a key factor in
differentiating between successful and less successful medium-sized cities:
“Cities that succeed are those which offer proximity to something
valuable. Historically, cities succeed by offering proximity to a port, or
a coal mine, or the government. Today, cities succeed by offering
proximity to people and their ideas.” (Glaeser 2005)
People are perceived to be highly mobile. However, whilst workers are
relatively mobile in the United States they are relatively immobile in Europe
(Krugman 2005) (Cheshire and Magrini 2005). In Europe, people live
relatively ‘city-regional’ lives, particularly after their first career moves. They
are more likely to work and move homes between centres within their cityregion (Harding et al 2006b), rather than between city-regions. Highly
qualified, and hence more affluent, workers are more likely to commute
longer distances to work as they have greater choice about where to work
and live. By contrast, those with no qualifications and low skills have more
restrictive choices in both labour and housing markets and, as a result, are
more likely to become concentrated in areas of the city that are under
5
Glaeser E L (1998, page 140) “Conceptually, a city is just a dense agglomeration of people and firms. All
the benefits of cities come ultimately from reduced transport costs for goods, people and ideas”.
20
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
physical, social and economic stress. Whilst workers respond to wages and
cost signals in employment and housing markets (Combes et al 2006), in a
European context these pricing mechanisms appear to impact more on
commuting flows firstly within and secondarily between city-regions rather
than on migration flows between city-regions (Cheshire et al 2004).
This has at least three consequences for medium-sized cities:
 Where a medium-sized city is part of a dynamic city-region it is likely
to benefit from the economic success of the large city in the cityregion (e.g. in the form of spill-over employment). Highly qualified
workers who wish to live within easy commuting distance of the large
city are also likely to locate in the medium-sized city. There are many
examples of medium-sized cities (including those which were relatively
un-industrialised 50 years ago) which have benefited in this way
(Krugman 2005).
 Where an economically weaker city-region is close to a more dynamic
city-region, disparities between the two (and the medium-sized cities
within them) may grow as a result of changes in commuting patterns.
These changes can arise due to growing employment opportunities in
the dynamic city-region compared with the slower-growing city-region
(Cheshire et al 2004).
 Where a medium-sized city is located in a weak or relatively rural cityregion, the city may find it harder to attract and retain highly-qualified
workers unless it has some inherent economic advantage (e.g. the
presence of a university). As a consequence, it may become
dependent on a relatively weak endogenous skill base that suffers
from a lack of outside enrichment. Poor educational attainment and
economic performance may become entrenched, reinforced by a cycle
of low aspirations (Frontier Economics 2004), which is found
21
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
particularly within the North East, North West and Yorkshire and
Humber regional economies.
Some medium-sized cities will be better placed to attract and retain firms
than others for the following reasons:
 Not all sectors benefit evenly from agglomeration or localisation
economies. Evidence suggests that whilst positive urbanisation
economies exist in most service industries, they are weaker in
manufacturing and non-existent in primary sector industries (Graham
2006) (HMT and ODPM 2006). Medium-sized cities that are strong in
knowledge-based services are likely to benefit more from
agglomeration benefits than those with an historical industrial base.
As will be shown in Chapter Four, medium-sized cities that are strong
in knowledge-based services are concentrated in the South of
England, whilst industrial cities are largely found within the Midlands
and the North.
 Medium-sized cities that have a strong knowledge base and
innovation culture are more likely to gain from strong localisation
economies. The revolution in electronic communications has greatly
reduced the marginal cost of transmitting information across space.
However, the marginal cost of transmitting knowledge, and
particularly ‘tacit’ knowledge, still rises with distance (Polèse and
Shearmur 2004). Therefore face-to-face contact remains as, if not
more, important in an increasingly global economy (Peters and May
2004). A close-knit and thriving network of researchers, skilled
workers and businesses are likely to facilitate advances in knowledge
and innovation. Medium-sized cities with these assets (e.g. a
university or a regional services function) are likely to be at a
considerable advantage. By contrast, cities with economies historically
22
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
built around one or more traditional industrial specialism(s) are likely
to be at a considerable disadvantage.
 While connections to national and international markets are important
for firms at the sharp end of knowledge-based service industries, they
may not be so important for firms in more traditional manufacturing
industries (McCann 2005). This is because, whilst the cost of
transporting goods has reduced, the value of face-to-face contact has
increased. Medium-sized cities in city-regions with excellent access to
international markets (for example, in close proximity to Heathrow
Airport) are likely to be at an advantage in attracting knowledgebased service industries, compared to those with poor access.
Once the flows of people and firms are taken into account, it becomes clear
that medium-sized cities do not operate on a level playing field in relation to
their access to people (particularly the highly skilled), firms (particularly
knowledge-intensive firms) and key assets in the modern knowledgeeconomy.
As a consequence, medium-sized cities play different roles within the urban
hierarchy. Some medium-sized cities have economic advantages over others,
and these are reinforced through the interactions and flows between cities
and city-regions. This offers an insight into reasons for relative differences in
the economic performance of the English regions.
23
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Chapter Three - A typology for medium-sized cities
This section offers insight into why there are differences in the economic role
and performance of English medium-sized cities.
A typology invariably involves simplification. In particular, it is recognised
that many medium-sized cities may have characteristics of two or more
categories. For this reason the allocation of cities to a typology later in
Chapter Four is based on its dominant characteristics. Therefore, whilst the
typology can improve understanding of the current position and future
strategy of the city, it cannot be used to explain all of the unique variations
that exist between cities.
To illustrate this typology, the simple model of a national urban system is
developed in Figure Seven, with two new additions. First, the city-region
dimension is represented by travel-to-work areas. Second, the medium-sized
cities are assigned roles within the typology. These are first summarised and
then described below:
 An industrial city (cities 1 and 2) – a city that historically had one or
more dominant industrial sectors which may have developed as a
consequence of physical geographic advantages (e.g. climate), or
proximity to raw materials (e.g. coal)
 A gateway city (city 5) – a city that provides connections to the
international economy (e.g. location of a major port or airport)
 A heritage or tourism city (city 3) – a city that attracts national
and/or international visitors due to its advantageous position (e.g.
coastal), natural assets (e.g. lakes) or its historical, cultural and/or
architectural heritage
24
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
 A university knowledge city (city 4) – a city that contains a leading
university with expertise in science and/or technology, and the
capacity to promote innovation and clusters of spin-off companies in
the local economy
 A city in a capital city or large city-region (cities 6 and 7) – a city
that benefits from its physical connection to, or position in, a capital
or large-city region, by specialising in complementary knowledgeintensive industries that give the capital or large city its comparative
advantage in the national or global economy
 A regional services city (city 8, capital city A and large city C) – a
city that supplies employment opportunities, retail and other services
to its wider region. This definition may extend to larger cities that
service the national or even global economy
Figure Seven – Development of a simple national urban system
1
Key
8
Regional boundary
2
Cities:
A
C – capital city
A – large city
1 – 8 medium- sized cities
City Typology:
1 & 2 – Industrial
4
3
3 – Heritage/Tourism
4 – University
5 – Gateway
7
6 & 7 – City in city-region
8 – Regional Services Centre
5
C
6
Travel-to -work Area
(TTWA)
25
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
An industrial city
The industrial city is a dominant typology, so much so that even if it falls
within other typologies its industrial characteristics are likely to dominate.
This is the case, even if it is located in a large or capital city-region (e.g. city
2 in Figure Seven).
Industrial cities derive their industrial specialisms from historical or
geographical advantages. A challenge for many of these cities at the
beginning of the 21st century is that the historic competitive advantages that
enabled these industries to prosper no longer exist. Nearby raw materials
may have been exploited, the industry may have become obsolete or other
centres in the world may be able to produce the same goods at considerably
cheaper prices due to lower labour costs.
As a consequence, these cities may display characteristics that, in
combination, make their economies particularly vulnerable (Crouch 2005).
First, the economy may be based largely on a single industry (e.g. steel in
Sheffield and Duisburg). Second, there may be a relatively small number of
firms in the industry. Third, the labour force may have a narrow range of
skills gained from working in an industry with a strict division of labour. This
working method does little to develop transferable skills or foster a selfemployment culture. Fourth, the city’s connections to markets may have
developed to serve the efficient transportation of manufactured goods, rather
than people, which may leave them less fit for purpose in the modern
economy.
Industrial cities may be tempted to seek new opportunities in service
industries, since these characterise the modern knowledge-based economy.
However, in doing so, they run the risk of attracting low value-added
services, such as call centres, which are highly mobile and more inclined to
relocate to alternative locations to seek out lower costs (Crouch 2005).
26
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Past history should inform choices about future economic activity in
industrial cities (Henderson 1997). These cities offer a particular pool of
industrial knowledge and skills that local firms, or firms relocating to the city,
can draw upon. Therefore, an appropriate strategy for industrial mediumsized cities is to develop new industrial specialisms that build on existing
experience, skills and knowledge in the city, and that are relevant to the
modern economy.
A gateway city
Gateway cities originally developed to provide efficient connections to the
national and/or international economy, primarily for the transportation of
goods. This role historically arose where cities had easy access to the sea in
the form of a safe harbour. Ports retain an important economic role for the
transport of goods, and to some extent, for people. More recently, gateway
cities have arisen due to the location of an airport (city 5 in Figure Seven),
primarily for the transport of people.
A gateway city is more likely to be a secondary than a dominant typology,
and in the interests of achieving a diverse economic base this is the preferred
outcome. The risk for a specialist gateway city is that it becomes a place to
travel through rather than a destination. If this happens, the primary focus of
the gateway may be routine service and logistic functions that provide little
opportunity for it to move into more specialised or higher value-added
services.
A heritage or tourism city
This may be a dominant or a secondary city type. It attracts regional,
national or international visitors due to its advantageous position (e.g.
27
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
coastal location, proximity to lakes or mountains) or its historical, cultural
and/or architectural heritage.
Cities that have a primary reliance on tourism are economically vulnerable
due to the seasonal nature of some tourism, and the possibility of changing
fashions. They are likely to have a relatively unskilled workforce
characterised by a high proportion of seasonal and part-time employment.
However, if these cities are able to diversify into other sectors (see regional
services city below) they are more able to achieve synergies between their
tourism/heritage industry and other service-based industries, thereby
increasing the knowledge-base of their economy (Hall 2000).
A high-quality historical built environment is a significant heritage asset for
medium-sized cities. Various forces influence the physical layout of cities
today, including the decisions of firms, individuals and civic authorities.
Ideas and fashions in architecture also play a major role in transforming city
layout. However, historical decisions (medieval street patterns, for example)
continue to shape the physical layout of cities hundreds of years later (Batty
2001). Whilst architectural fashions change over time, the vast number of
tourists who visit historical streets, squares and buildings in cities such as
York, Florence, Sienna and Paris, demonstrate the universal attraction of a
6
quality built environment. The value of ‘quality of place’, as well as quality
of life, is a lesson that other cities can take from tourism and heritage cities.
A university knowledge city
The typology of a university knowledge city is far from new. From the early
Middle Ages, university cities such as Toledo, Heidelberg and Oxford were
centres for the spread of knowledge and new ideas which transformed
6
‘Quality of place’ can be defined as: “The sum of all those factors – culture, local environment, public
realm, access, safety, health – which together make somewhere – whether a town, city or region – an
attractive place to live.” Source: Yorkshire Forward
28
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
thinking and practice across the European continent. The modern concept of
a university knowledge city as a centre for innovation and creativity is
consistent with the role of university cities throughout their history.
Universities can contribute to regional economies in different ways including
the development of knowledge workers through education, technology
development and transfer, and the creation of a favourable networking
environment. The potential outcomes include productivity gains, business
start-ups and spin-off companies, and an increase in regional economic
development capacity (Goldstein and Renault 2004).
Cambridge and Oxford are the UK’s most remarkable illustrations of a
university knowledge city. Cambridge thrives as a leading knowledgeeconomy by being a centre for the expansion of technological industries,
centered around its university. Like other university knowledge cities, a key
component of its success is a highly educated workforce (Parkinson et al
2006)
City 4 is the sole university knowledge city in Figure Seven. However, in
reality other cities, and in particular regional services cities, (cities 8, A and C
in Figure Seven) frequently have universities. For example, the Hungarian
cities of Pécs, Debrecen and Szeged house important universities, and are
nodal points for information creation and dissemination outside the capital
city Budapest (Nagy 2001).
A university is a major asset to a city. The presence of a university may be
an important factor in the transformation of historical industrial cities into
regional services cities (e.g. Nottingham). Evidence suggests that it is the
knowledge spill-overs from a university’s research and development roles
that generate economic benefits for their wider regional economy.7 Even so,
7
Jaffe, Trajtenberg and Henderson (1993) present evidence showing that a new patent is much more likely
to cite a patent that is in close spatially, even controlling for firm effects.
29
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
other factors such as a city’s connectivity and economic relationship to the
regional and national economy may be even more important (Goldstein and
Renault 2004).
A city in a capital or a large city-region
A city physically connected (an ‘edge city’) to or situated within a capital or
large city-region is a typology that is often combined with other city-types
(e.g. a gateway city or regional services city). Cities 6 and 7 in Figure Seven
illustrate this typology.
The success of these cities can be explained by their proximity to a large or
capital city (e.g. cities and towns in the city-region around Budapest (Nagy
2001), and around London (Hall and Pain 2006) (Hall 2003)). They
represent a relatively cheap location to live and to run a business in
compared with the larger city. At the same time, they are in close proximity
(up to an hour’s travel time (Polèse and Shearmur 2004)) to the large city,
which allows easy travel to and from the large city for face-to-face business
meetings.
Improvements in technology have made the latter advantage more, not less,
important. Internationally, the increased ability to communicate
electronically (e.g. by e-mail, conference calls, or video-conferencing) has
actually created increased demand for business meetings and travel, as
illustrated by evidence from Canada (Polèse and Shearmur 2004) and from
north-west Europe (Hall and Pain 2006). Improvements in technology have
steadily reduced the costs of transporting goods since the beginning of the
Industrial Revolution.8 However, whilst technology has revolutionised the
8
The average cost of moving a ton a mile was 18.5 cents (in 2001 US dollars). Today, this cost is 2.3
dollars. At their height, the transportation industries represented 9% of GDP. Today if we exclude air
travel, they represent 2% of national product. Two factors have acted to decrease the importance of
transportation costs for goods. First, the technologies designed for moving goods have improved. Second,
the value of goods lies increasingly in quality, rather than quantity, so that we are shipping far fewer tons of
goods relative to GDP than we have in the past. (Glaeser and Kohlhase 2004)
30
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
speed of travel of people, cost reductions have been more than offset by
increases in opportunity costs of time, through rising real wages (Polèse and
Shearmur 2004) (Glaeser and Kohlhase 2004).
As already discussed, one of the agglomeration advantages enjoyed by large
cities is a reduction in the cost of face-to-face contact. This is important in
activities where creativity, co-ordination, flexibility and the ability to build
relationships based on trust are important, such as in higher-order services,
high-tech services (software-related services, scientific and technical
consulting and research) (Polèse and Shearmur 2004) and creative
industries (Hall 2000). Therefore, cities in large dynamic or capital cityregions benefit from easy access to global markets through the airport(s) of
the large city.
A symbiotic and dynamic relationship exists between the large city and
medium-sized cities within its city-region. The large city depends on the
supply of labour from its hinterland, and the economic success of the
medium-sized cities reflects their proximity to the large city (HMT and ODPM
2006). Firms operating in national and international markets are more likely
to have offices in the large city, whereas firms with a regional focus will tend
to locate within the surrounding medium-sized cities to reduce costs.
Industry sectors that predominate in the large city are likely to be reflected
in the strengths of medium-sized cities. For example, whilst 24% of all
British cultural industries employment was to be found in London, the
highest regional concentration is in the surrounding South-East region (Hall
2000).
A regional services city
This is a dominant, or in some cases, an emergent typology. It may equally
apply to smaller medium-sized cities at the centre of a relatively rural region
31
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
(e.g. Norwich and Exeter), to larger medium-sized cities in mixed urban and
rural regions (e.g. Nottingham and Leeds) as well as to global cities (e.g.
London, Paris, Tokyo and New York). What they have in common is that they
service regional (city-region), national or global markets, depending on their
size and importance. This typology is illustrated in Figure Seven by cities 8, A
and C.
A regional services city may combine key elements from other city types. For
example, it may have developed originally because of its locational gateway
advantages (e.g. Exeter as a leading port for the wool industry). It usually
has an industrial past. But, unlike industrial cities, they have been successful
in modernising their economy because of their historical wider service role in
the regional economy and asset base. They may attract visitors based on
their interesting history and architectural heritage. They frequently have a
long-standing university, which is important in building an information-based
economy (Nagy 2001). They operate as gateways to their regions, the
national economy or to the world. But they also have advantages over
specialist gateway cities in being places to meet and stay rather than just
pass through. They are invariably directly connected by road, rail and air to
the capital city.
Often, as a result of their relative size and strategic location, they are able to
combine a spread of service industries covering financial and business
services, creative and cultural services and tourism. Some of the larger ones
are also centres of government. These services tend to synergise with each
other. Thus, hotels and conference centres are simultaneously part of
business services and tourism, and advertising is both a creative media and a
business service (Hall 2003). Therefore, it is not surprising that the presence
of such services in a city contributes to an economic environment that
attracts other economic activity to the city (Moyart 2005).
32
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
However, making the transition from a primarily industrial to a modern
services economy is likely to have involved painful economic restructuring
and social costs in the form of unemployment and the redundancy of old
skills. As a consequence, regional services cities with an industrial past are
likely to enjoy relative economic success alongside the challenge of
concentrated social inequality (for example, Manchester).
Across Europe, regional services cities are also typically market cities that
serve their rural regions. They have grown because they provide local
services for their hinterland and often offer services to the national economy,
such as a university and tourism, for example Pécs, Debrecen and Szeged in
Hungary (Nagy 2001).
33
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Chapter Four – Methods used to test the typology
The typology for medium-sized cities was tested in two ways:
 First, using information from the ‘State of the English Cities’ database
to compare typological groupings across a range of key economic
indicators. This draws on data from the Office for National Statistics
(ONS), 2001 Census and Annual Business Inquiry and Annual
Employment Survey
 Second, by carrying out a small number of interviews with chief
executives and other policy officials from local authorities
Typological groupings
Each of the 47 medium-sized cities (Primary Urban Areas) included in the
‘State of the English Cities’ report and database (Parkinson et al 2006) were
allocated a typology. London and the eight Core Cities were included under
separate categories (i.e. London and regional services cities). The allocation
of the 56 cities to typologies is shown in Figure Eight.
It is acknowledged that there are potential weaknesses in this approach,
given that many of the cities fall into more than one typology. Where cities
exhibited characteristics or two or more typologies, they were classified
according to their perceived dominant typology, although some of the
typology allocations might be subject to debate. For example, Preston was
categorised as an industrial city because of its industrial past. However, on a
visit to Central Lancashire it became clear that it is developing characteristics
of a regional services city.
Nevertheless, there are marked regional differences in geographical
distribution of cities within the typologies. Industrial and gateway cities are
heavily concentrated in the North and the Midlands. This distinction would be
34
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
even more marked if some of the smaller southern England cities were
included, such as Exeter, Gloucester, Northampton and Guildford.
Figure Eight – Cities categorised under typologies
• Industrial
• Heritage/Tourism
•
Coventry
Doncaster
Huddersfield
Warrington
Wigan
Birkenhead
Bradford
Blackburn
Preston
Luton
Stoke-on-Trent
Barnsley
Bolton
Burnley
Mansfield
Middlesbrough
Plymouth
Portsmouth
Rochdale
Sunderland
Hastings
Blackpool
Bournemouth
Worthing
York
Reading
Aldershot
Chatham
Crawley
Southend
• University/Knowledge
•
• Gateway
Hull
Grimsby
Ipswich
Cambridge
Oxford
• Regional services
Wakefield
Brighton
Norwich
Derby
Gloucester
Leicester
Milton Keynes
Northampton
Peterborough
Southampton
Swindon
Telford
City in the London
city-region
Regional services
(Core Cities)
Birmingham
Bristol
Leeds
Liverpool
Manchester
Newcastle
Nottingham
Sheffield
•
London
Data analysis
Data for each of the 56 cities was collected across a range of key economic
indicators as set out in Appendix One.
The cities were then separated into their perceived dominant typological
groups, and the scores averaged across each grouping (Table Two). In
addition, each typology was assigned a ranking from 1 to 8 to represent its
relative performance for each indicator (from highest to lowest average
value). See Table Three.
35
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
The following two tables provide comparisons across the indicators for each
of the typologies. Table Two compares average values for each indicator and
Table Three ranks each of the typologies by indicator. See Appendix One for
a more detailed analysis.
Table Two – Comparison of performance across city typologies
Employment
Rate
Industry:
Primary
Secondary
Tertiary
(%)
(%)
Skills Graduate
& above
(%)
11.5
2.8
34.0
14.5
35573
415.04
81.8
16.3
4.9
28.0
17.4
36705
418.61
10.0
89.9
31.8
4.2
17.4
39.0
40890
473.09
2.0
15.1
82.8
20.1
5.4
24.6
18.8
42156
529.25
66.2
0.6
19.9
79.4
17.5
2.4
33.1
17.3
35342
422.60
Regional
serv. (not
Core Cities)
72.6
1.3
19.3
79.5
17.4
3.2
29.8
17.0
37453
436.97
Gateway
71.0
0.8
27.3
72.0
10.7
1.8
39.2
10.2
35588
383.84
London
69.1
0.4
10.6
89.0
25.8
1.8
23.8
29.7
44774
602.35
(%)
(%)
(%)
(%)
Industrial
67.3
0.9
26.4
72.7
Heritage/
Tourism
71.6
1.1
17.0
University/
Knowledge
62.7
0.3
City in
London
City-region
76.5
Regional
serv.
(Core Cities)
Knowledge
Industries:
Busn Serv.
(%)
Manu.
and R&D
No
Skills
GVA
per
FTE
(£)
Gross
weekly
pay
(£)
Tables Two and Three illustrate marked differences between the typologies.
In particular gateway and industrial cities perform consistently more poorly in
having characteristics of weaker economies. These include higher secondary
employment, more people with no formal qualifications and lower skills,
lower proportions of graduates, lower knowledge-intensive employment and
lower labour productivity.
By comparison, university knowledge cities and cities in large (London) cityregions have mirror-opposite characteristics of stronger economies: higher
service employment, fewer people with no formal qualifications, more
graduates, higher knowledge-intensive employment and higher labour
productivity. The fact that these cities are almost all located in the South,
36
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
whilst the industrial and gateway cities are almost all found in the Midlands
and North, suggests important structural economic differences between
medium-sized cities between regions (see Figure Nine).
Table Three - Ranking of performance across city typologies
Employment
Rate
Industry:
Primary
Secondary
Tertiary
(%)
(%)
(%)
(%)
Knowledge
Industries:
Busn Serv.
(%)
Industrial
6
4
2
7
Heritage/
Tourism
3
3
5
University/
Knowledge
8
8
City in London
City- region
1
Regional serv.
(Core Cities)
Manu.
and R&D
No Skills
Skills Graduate &
above
(%)
GVA
per
FTE
(£)
Gross weekly
Pay
(%)
(%)
7
5
2
7
7
7
4
6
2
5
4
5
6
8
1
1
3
8
1
3
3
1
6
3
3
1
6
3
2
2
7
6
3
6
4
6
3
5
8
5
Regional serv.
(not Core
Cities)
2
2
4
5
5
4
4
6
4
4
Gateway
4
5
1
8
8
7
1
8
6
8
London
5
7
7
2
2
8
7
2
1
1
Where:
1 = the highest value for the indicator (percentage or value)
8 = the lowest value for the indicator (percentage or value)
Note: The rankings are NOT intended to indicate whether a typology is performing poorly or well for any indictor
37
(£)
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Figure Nine – Different economic performance characteristics of mediumsized cities
Tends towards…..
North and Midlands
e.g. Hull, Grimsby
Gateway
Industrial
Lower knowledge-intensive
employment
e.g. Bradford,
Blackburn, Barnsley,
Stoke-on-Trent
Higher primary employment
Fewer graduates
More with no formal qualifications
Heritage/tourism
Regional
Services
City in large
city-region
University/
knowledge
Lowest pay
e.g. Blackpool,
Worthing, York
Labour productivity is low
South
e.g. Birmingham,
Bristol, Leeds,
Gloucester, Norwich
Higher knowledge-intensive
employment
e.g. Reading,
Aldershot
More graduates
e.g. Cambridge, Oxford
Highest pay
Higher service employment
Fewer with no formal
qualifications
Labour productivity is high
Indeed, these structural differences are so distinct, they may offer insight
into the long-standing differences in regional economic performance between
the Greater South East and the other six regions in the Midlands, North and
South West (see Figure Ten).
38
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Figure Ten – The scale and consistency of the regional economic performance
gap in England
GVA Per Head (£)
25,000
20,000
15,000
10,000
5,000
2 004
2 003
2 002
2 001
2 000
1 999
1 998
NMW – North, Midlands and South West
1 997
1 996
1 995
1 994
1 993
1 992
1 991
1 990
1 989
NMW
GSE
GSE – London, South East and East
Source: Department for Communities and Local Government
Regional services cities and heritage/tourism cities tend to achieve scores in
between the other typologies, with variations within the typologies. Thus
within heritage/tourism seaside towns like Blackpool perform poorly, whilst
York, which has wider economic attributes, scores well.
Interviews
In order to test propositions from the typologies further, with the support of
the Urban Policy Directorate of Department for Communities and Local
Government (DCLG) and the cities involved, a small series of meetings were
held with local authority Chief Executives and other Policy Officials. The
purpose of these meetings was not to label the cities with a typology. It was
rather to use the typology as a tool to explore the city’s current economic
position, possible strategies for the future, and economic connections with
other cities and within the English region which it is located.
39
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Meetings were held with:
 Darlington
 Exeter
 Stoke-on-Trent
 Central Lancashire cities: Blackpool, Preston, Blackburn and Burnley
See Appendix Two.
These visits confirmed the value of the typology, whilst at the same time
showing that a simple allocation of cities to typologies as shown in Figure
Eight has limitations. Darlington, for example, was found to have some of the
characteristics of three of the typologies. As already mentioned, Preston is
increasingly developing characteristics of a regional services city and
breaking out of its past as an industrial city. However, the typology proved to
be useful in focusing discussion on the current economic characteristics and
performance of the city and identifying future strategy.
The typology provoked an interesting discussion at the meeting with central
Lancashire cities on the economic and geographical interaction between the
cities within the ‘city-region’, which is illustrated in Figure Eleven below.
Figure Eleven – Central Lancashire cities
This diagram uses the medium-sized cities typology to explore economic
interactions between the four ‘cities’ within the central Lancashire city-region.
Blackpool shows characteristics of a heritage/tourism city, Preston a regional
services city, Blackburn and Burnley are classic industrial cities. As the
typology would suggest, there are growth pressures on Preston, because of
its relatively advantageous position for North-South connectivity and its
wider economic assets, including a university. It has more significant travelto-work patterns than the other ‘cities’. Blackburn and Burnley have
relatively more insular economies (although Blackburn’s is larger than
40
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Burnley’s). Interestingly only 2% of travel-to-work movements occur EastWest from Blackburn and Burnley, whilst 12-14% occur North-South from
the Ribble Valley (residential area of gentrification) and to Manchester.
Key: Cities with
characteristics of
Tourism/Heritage
To Glasgow
Regional Services
Industrial
Travel to work
M6
area
Rail
I
r
i
s
h
bl e
Ri b
Blackpool
M55
y
l le
Va
Burnley
Preston
S
e
a
Blackburn
Note – brown arrows
indicate direction of
main travel-to-work
movements
M65
M61
To
Manchester
To LondonAirport
41
Greater Manchester
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Chapter Five - Policy issues for medium-sized cities
Building on the definitions and evidence set out in the previous chapters, it is
now possible to identify distinguishing characteristics for each of the
typologies. See Table Four.
A number of policy issues for medium-sized cities can be identified:
 History is important. Future economic development is a ‘pathdependent’ process.
 Medium-sized cities are inter-dependent within the regional and
national urban hierarchy. Within this hierarchy, most are too small to
independently shape their own future.
 As a result, the best economic strategy for medium-sized cities is to
collaborate with regional/city-regional partners.
 The connectivity of people internationally, regionally and locally is an
important issue for the success of medium-sized cities.
 The key economic advantage a city has in a modern global economy is
as a location of modern knowledge-based services and industries.
However, within the typology, some types of cities will be at a relative
disadvantage to others in the knowledge economy.
 As a result, whilst some generic policy approaches will be appropriate
for all medium-sized cities, differentiated policies will also be required
to reflect their different economic and social characteristics.
42
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Table Four – Comparison of typologies for medium-sized cities
Industrial city
Heritage/tourism
city
University
knowledge city
Gateway city
City in a large
city-region
Regional
services city
Dominant or
secondary
typology
Dominant
Can be dominant, but
is usually secondary
Dominant
Dominant or
secondary
Dominant
Dominant
Agglomeration
economies
Localisation
Localisation
Localisation or
urbanisation
Localisation
Localisation and
some urbanisation
from larger city
Specialisation
Historical
specialisation in
relatively
standardised
industrial products
Hospitality and
related service
industries
Clusters of hightechnology and/or
science-based
industries at sharp
end of innovation
Services, industrial
and logistic
functions related to
gateway functions
Mix of specialised
and general ICT,
financial and
business services
Localisation or
urbanisation,
depending on size of
city
Mix of services
(financial, business,
cultural and retail)
supporting wider
region
Product
development
Establish new niche
markets building on
local strengths and
opportunities
Investment in the
quality of city assets
and infrastructure
which make the city
an attractive
destination
Incubators for R&D
in large and small
companies. Creation
of new companies
out of knowledgerich environment
Diversify from
largely routine
functions to higherorder service and
industrial functions
Develop products
with high knowledge
component which
reflect large city
specialisms. Firms
seek to benefit from
easy access to
global markets
Diversify and
develop knowledge
content in which city
has a regional and
national market
Skill base
Skill base in
traditional economic
specialisms, which
may be limited. May
have relatively low
employment rate
and low levels of
entrepreneurial
activity
Relatively low skill
and knowledge base
to support tourism
industry. Seasonal
and part -time
employment may be
common. Large
number of small and
micro-enterprises
Very high skill and
knowledge base to
support both
academic and
company base.
However, may also
experience
employment gap for
lower skilled and
educated workers
Likely to employ a
large number of
relatively low-skilled
workers. As a
result, may have a
high employment
rate
Highly educated and
skilled workforce,
choosing a relatively
cheaper location
than the capital or
large city
Workforce is a
mixture of high- and
low-skilled.
Diversity of both
opportunity and
disadvantage may
be a characteristic
of these cities
Markets
Historically exported
to national/
international
markets, but may be
unable to maintain
this position
Many centres will be
dependent on
regional or national
markets. A few will
draw visitors from
international markets
Diverse national and
international
markets
Limited markets
servicing gateway
functions
Large national
international
markets
Large national
and/or international
markets
43
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Historical ‘path-dependency’
History is an important factor. A city’s current economic role has been
shaped by the long-term interaction of its location and the economic and
social forces that have impacted on it (Parkinson et al 2006). Its future
development is best understood as a ‘path-dependent’ process where new
industries are founded on and shaped by inherited or historical conditions
(Turok 2004). This is a particularly important issue for industrial and gateway
cities. These face the prospect of an increasing performance gap, compared
with cities with assets and a broader economic base and those which benefit
from being part of a dynamic large or capital city-region.
Collaboration and city-regions
Cities are inter-dependent within the national urban hierarchy and with other
towns and cities in their region. In a global economy, there are reasons to
doubt the viability of the individual medium-sized city as a distinct economic
development unit (Crouch 2005). This is reinforced by the observation that
the municipal city is frequently under-bounded when compared with its
metropolitan area (Polèse 2005). Also, in some cases, the key economic
sectors which support the city are located on its metropolitan fringe, outside
the municipal city.
The best strategy for most medium-sized cities will therefore be to seek to
collaborate with regional/city-regional partners to influence their economic
future. A number of recent studies have considered the case for city-regions
as an appropriate spatial level for co-operation or even governance (NLGN
2005) (Marshall et al 2006) (Harding et al 2006). In addition, there are
examples of initiatives to encourage city-regional working between local
authorities with the city-region, including the Northern Way city-region
development plans, Scottish Cities Growth Fund and the Communauté
Urbaine initiative in France.
44
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Different governance solutions have been proposed, from formal city-region
Mayors for large city-regions (Marshall et al 2006) to more informal voluntary
collaborations in the form of city-region boards of local authorities (NLGN
2005). Incremental processes have also been proposed (Harding et al 2006).
There are good reasons for the considerable interest in city-regions; not least
that people live increasingly city-regional lives with regard to where they live,
work, shop and undertake leisure activities (Harding et al 2006). The cityregion therefore represents a functional economic entity.
However, the city-region may not always be the appropriate spatial level for
medium-sized cities to collaborate:
 City-regions are not defined by natural boundaries. They reflect the
outward energy of the city or cities within the region and are about the
dynamic interaction between the city(s) and the surrounding area (Parr
2005). Because some cities fail to create such an impact, 9 the city-region
concept should be applied more sparingly (Jacobs 1984). For instance,
due to the relative weakness of their economies, medium-sized industrial
cities may not create, or be impacted upon by, a city-regional effect.
 Wide travel-to-work areas are not always an indication of a strong cityregional dynamic between the city and its surrounding area. Instead, they
may reflect the absence of any other significant settlement for
employment, retail and other services (e.g. regional services cities in a
relatively rural region).
 A city-region solution may not be appropriate where there is a strong
regional identity and devolution is occurring at that level, as in Italy and
Spain (Giordano and Roller 2003).
9
Warsaw is an example of a city whose dynamism has virtually no spill-over into its surrounding small
town and rural region (Crouch, 2005).
45
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
The city-region concept may work best where there is a strong regional
services city at the heart of the city-region in mixed urban and rural regions.
This offers the possibility of a relatively natural grouping of cities and towns
whose economies are interconnected, a relatively large economy that may be
performing below its full potential and sufficient common identity within the
city-region for partners to perceive the benefits of formal or informal
collaboration. Examples from the UK where a city-region approach makes
economic sense include the city-region around Birmingham, Leeds, and the
three cities of Nottingham, Derby and Leicester.
It may also be sensible for a group of industrial cities within the same region
or sub-region to co-operate together. Whilst technically not a city-region in
terms of their functional relationship, they are likely to share a similar history
and ‘path-dependency’ and may be able to create greater economic scale by
pooling strategic and, where appropriate, financial resources (e.g. on
marketing). Whilst not all industrial cities, the central Lancashire ‘city-region’
formed of Blackpool, Preston, Blackburn and Burnley fits this model.
Rural regional service cities may seek to collaborate as part of a regional
strategy (particularly where the region has a strong identity, for instance
Galicia in Spain). This collaboration may include other cities that are
relatively widely dispersed beyond a single city-region, such as in Regional
Cities East.10
Connectivity
In the modern global economy place matters. Being well-placed for
connections between people is more important than being centrally located
for the transport of physical goods (Polèse and Shearmur 2004) (Hall 2003).
10
Regional Cities East comprises a partnership of Colchester, Ipswich, Norwich, Peterborough and Luton
in the Eastern Region.
46
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
This applies at different spatial levels: internationally, regionally (with other
cities) and locally. It also operates in a number of dimensions: physical
transport connections, information communications technology (ICT) capacity
and face-to-face networks (Parkinson et al 2006). The best-performing
medium-size cities score well on all these dimensions and the worstperforming score less well:
 Cities in a capital or large city-region benefit from international
connections through the large city’s airport(s) and by proximity to the
large city in terms of sector development, well-developed ICT networks
and the value of face-to-face contact and networks.
 University knowledge cities are normally well placed in relation to a large
dynamic city (e.g. Cambridge in relation to London), and benefit from its
international connections. They also benefit from face-to-face contacts
with highly educated and creative workers and researchers for the
transfer of tacit-knowledge.
 Medium-sized regional services cities may not be as well placed for
international connections. Whilst these cities may have an airport, it is
likely to have a more limited range of destinations than the airports of
capital cities. However, an increasing proportion of European mediumsized cities are becoming connected to the European high-speed rail
network. Some regional services cities have led the way in promoting
collaboration, both across the public and private sectors within the city
and its city-region.
 The position of heritage and tourism cities depends on whether they are
serving national or international markets and whether tourism is their
dominant sector or they are more diversified. The narrower their market
and the more they are dependent solely on tourism, the less likely they
are to be well connected in all respects.
47
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
 Once again, it is industrial and gateway cities that are likely to be most
disadvantaged. 11 Industrial cities may have poor international and
national connections and, because of their industrial specialisms, may
have less well-developed knowledge networks. They may even be
disadvantaged when they are in close proximity to a large city as highly
educated workers are likely to flow towards the economically stronger city
(Cheshire et al 2004). Specialist gateway cities are reasonably well
connected, but they are likely to be disadvantaged because they are not
final travel destinations.
Centres in the knowledge economy
Cities that are a key location for knowledge-based industries and services are
at an advantage in the modern economy. The most successful cities combine
being a centre for innovation, a highly educated workforce, advantageous
locations for face-to-face contact and networks important for imparting ‘tacit
knowledge’, as well as excellent connectivity into the global economy.
However not all cities, including many medium-sized cities, share these
assets. They are characteristics found within cities in large dynamic or capital
city regions as well as university knowledge cities, which are predominantly
found in the South East of England. They can also be found, to varying
degrees, in regional services cities depending on where they are placed on
the transition path from industrial to regional services cities. Industrial and
gateway cities have economies that are worst placed to do well in the
modern knowledge economy because of their industrial structure and
relatively low skill base (van den Berg et al 2005), which are most likely to
be found in the Midlands and the North of England.
11
As an example, despite the short distance involved, the journey time from Burnley to Manchester is over
one hour. By comparison, the considerably longer journey time from London to Manchester is only just
over two hours.
48
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Policy options for medium-sized cities
Within the typology, university knowledge cities and cities within a large
dynamic or capital city region are likely to be economically most successful.
The overall performance of regional services cities will depend on their
economic scale and their progress in transforming from industrial to regional
services cities. The performance of heritage/tourism cities will depend on
how well they are able to diversify their economy and the breadth of their
visitor markets.
By contrast, industrial and specialist gateway cities are the least likely to
have strong economies. They are the most likely to specialise in one or a
narrow range of industrial sectors, have a small number of high knowledgebased companies and have a low-skilled workforce. In addition, they are
worst placed to develop a modern knowledge-based economy. They have to
work hard to establish new niche opportunities built on local assets. Their
experience clearly demonstrates that not all cities are drivers of growth in the
global economy.
Economic diversity, innovation in firms and organisations, a skilled workforce,
connectivity, leadership capacity to mobilise and take decisions (within a city
and wider collaborative context) and quality of life are universal
characteristics of all economically successful cities (Parkinson et al 2004).
However, some city typologies will have to work harder and place different
emphasis upon factors within the list, particularly as market forces, which
operate through decisions by people and firms, tend to reinforce economic
differences between medium-sized cities. For example, for industrial and
gateway cities, raising skill levels and developing a more entrepreneurial
culture will be important. Also, ‘quality of place’ is more likely to be a priority
within the strategy of these cities. This is to capture the value of the city’s
industrial heritage, and its likely locational advantages in offering quality of
49
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
life and to motivate pride in the city as part of a retention policy for its
workforce and local firm base (Frontier Economics 2004). These cities will
also have to work harder at building effective collaboration across the public
and private sectors. Face-to-face transfer of tacit knowledge will be less
developed given the sectoral base of firms within the local economy.
50
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Chapter Six – Conclusions, limitations and ways forward
This paper has developed and tested a general typology for medium-sized
cities which is underpinned by municipal, metropolitan and city-region
concepts of the city. It has shown how the historic market place and civic
raison d’être have shaped the direction of industrial, university knowledge,
gateway and heritage/tourism cities. The physical expansion of the
metropolitan city, often well beyond its municipal city boundaries, has also
been shown to be of importance. The concept of the city-region has been a
major factor in shaping the economic development of cities in a large or
capital city-region and regional services cities, as well as the development of
the role of university knowledge cities.
This paper has illustrated the considerable diversity that exists between
medium-sized cities and shown why some medium-sized cities are
economically more successful than others. It has shown that as a result there
are marked economic structural differences between many of the cities in the
Midlands and the North (particularly industrial and gateway cities) and
medium-sized cities in the South, and in the context of the primacy of
London. It has raised questions as to whether these structural economic
differences may in turn offer insights into the long-standing regional
economic performance gap in England. In addition, this diversity in
performance exists within the context of a national urban system that is
remarkably stable over time. Market forces, through the behaviour of firms
and people, tend to reinforce economic differences between medium-sized
cities in a knowledge-based economy, and are therefore in turn likely to
reinforce differences in regional economic performance.
Policy responses at the local and regional levels should build on the
respective strengths and opportunities of the medium-sized city typologies,
and recognise the value of collaborative actions between medium-sized cities
and their city-region or regional partners.
51
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
At a national level, evidence from this work suggests that regional economic
policy needs to take into account more fully than at present the significant
structural differences that exist between cities and regions. This is so
particularly if the aim of improving economic performance in all regions and
in the long term of narrowing the gap between the regions, as stated in the
joint HM-Treasury, DCLG and Department of Trade and Industry Public
Service Agreement target, is to be achieved.12 There are also potential
implications for national regeneration policy in that a ‘one-size-fits-all’
approach across England is unlikely to be appropriate. The evidence in this
paper offers insights into why regeneration policy has been effective in some
places and ineffective in others.
Finally, it is recognised that the ground covered in this paper represents the
start of a journey on medium-sized cities, rather than anything like the end
destination. The typology has been found to be useful, but it has also been
shown that it is important not to over-simplify its application. More case
studies are needed both of individual cities and between cities. It would also
be useful to examine it in the context of a range of other issues. These
include the regeneration of places, the impact of international migration and
the role of governance in the economic performance of medium-sized cities.
These came up during the city visits, but there was not the space to consider
them fully within this project. They suggest themselves as obvious next areas
for further research.
12
The Government’s regional economic performance public service target and the current measures to
achieve it are set out in an annex to the Spending Review 2004 Technical Note to the Regional Economic
Performance PSA target www.communities.gov.uk.
52
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Appendix One – Key trends in English medium-sized cities13
As outlined in Chapter Four, data was sourced from the ‘State of the English
Cities’ database, which includes data from the Office for National Statistics
(ONS), 2001 Census and Annual Business Enquiry and Annual Employment
Survey. The data was used to analyse key differences across the city
typologies and comparisons were made between the 47 medium-sized cities,
London and the nine Core Cities.
Most of the cities exhibit characteristics of two or more typologies. To
address this, cities were classified according to their (perceived) dominant
typology, although a degree of arbitrariness in this process is acknowledged.
A list of cities categorised under the typologies is set out in Figure Eight.
Typological groupings were compared across the following key indicators and
their relative performance was ranked:
Employment
Employment rates (%) – The percentage of the working age population (16-64 year
olds) in paid employment, including students and the self-employed
Qualifications
Graduate level or above (%) – The percentage of the population aged 16-74 who
have attained level 4 skills or above
No qualifications (%) – The percentage of the population aged 16-74 who have no
formal qualifications
Industrial profile
Industry sectors - The percentage of workers in each Primary Urban Area who are
employed in the primary, 14 secondary15 and tertiary 16 sectors
13
The author would like to thank Jacky Moran at the Department for Communities and Local Government
for her analytical work on data from the ‘State of the English Cities’ which informed this Appendix.
14
Primary = agriculture and fishing, energy and water
53
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Employment in knowledge-intensive industries – The percentage of full-time
equivalent workers in each PUA who are employed in knowledge-intensive business
services, or manufacturing/research and development (R&D)
Productivity
Gross value added per full-time equivalent employee (£)
Pay
Average gross weekly pay (£)
The following tables and accompanying notes summarise the key findings
and trends across each indicator.
Employment rates
Cities in the London city-region have the highest rates of employment as
London’s dynamic economy creates employment opportunities for the wider
region. Many people commute to London to work. Others are employed in
local businesses which provide support services to London or benefit from its
success.
University knowledge cities (Oxford and Cambridge) have the lowest rates of
employment. This may be due to the large number of unemployed students
of working age. It could also indicate the presence of an ‘employment gap’
for unskilled workers.
15
Secondary = manufacturing and construction
Tertiary = distribution, hotels and restaurants, transport and communications, banking, finance and
insurance, public administration, education and health and other services
16
54
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Table Five - Employment rates, 16-64 year olds
% 90
80
70
60
50
40
30
20
10
Lo
nd
on
G
at
ew
ay
In
du
s
tri
al
H
er
ita
ge
/t o
U
ur
ni
is
ve
m
rs
it y
/k
no
wl
ed
ge
C
it y
in
Lo
nd
R
on
eg
C
io
-R
na
ls
er
R
vi
eg
ce
io
s
na
(C
ls
C
)
er
vi
ce
s
(n
ot
C
C
)
0
Typological grouping
Source: State of the English Cities Report (2006). Data: Census data 2001
Employment by industry sector
Gateway cities have the highest percentage of workers in secondary sector
employment, and the lowest in the tertiary sector. This can explained by the
nature of local industries required to support the port or airport, the
relatively low skill-base and under-representation of ‘knowledge industries’.
Unsurprisingly, industrial cities also have a high percentage of secondary
sector employment. This reflects their traditional skill base/local knowledge in
certain industrial sectors. Decline of their historic industrial base may result
in relatively low employment rates, low skills and entrepreneurialism.
55
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Table Six – Primary, secondary and tertiary sector employment
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
nd
on
Lo
ay
G
at
ew
He
rit
a
In
du
st
ria
l
ge
Un
/
t
iv e
ou
ri s
rs
i ty
m
/kn
ow
C
ity
le
dg
in
e
R
L
on
eg
do
io
na
n
R
ls
Ceg
e
R
io
rv
na
i ce
ls
s
er
(C
vi
C
ce
)
s(
no
tC
C)
0%
Tertiary
Secondary
Primary
Typological grouping
Source: State of the English Cities Report (2006). Data: Annual Business Inquiry,
Nomis (2003) and Annual Employment Survey
University knowledge cities have the greatest percentage of employees in the
tertiary sector, and the lowest in the primary and secondary sectors. These
cities tend to be incubators for innovation and R&D. Spin-off companies may
grow up around the university and benefit from effective informal networks
of highly skilled people.
56
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
‘Knowledge-industry’ employment
Table Seven – Employment in knowledge-intensive business services
Happy
% 35
30
25
20
15
10
5
n
nd
o
Lo
ew
ay
G
at
In
du
st
H
r ia
er
i ta
l
ge
Un
/to
iv
ur
er
ism
si
ty
/k
no
w
C
le
ity
dg
in
e
Lo
R
n
eg
do
io
n
na
C
-R
ls
R
eg
er
vi
io
ce
na
s
ls
(C
er
C
vi
)
ce
s
(n
ot
CC
)
0
Typolo gical gro upin g
Source: State of the English Cities Report (2006)
London and university knowledge cities have a high percentage of
employment in knowledge-intensive business services. Firms that locate in
London benefit from economies of scale, making it a relatively desirable
location for specialised service industries.
University knowledge cities do not have the advantages of economic scale
compared with large cities, but specialised service industries are attracted by
the presence of the university and benefit from the advantages of the spread
of tacit knowledge.
57
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Knowledge-intensive manufacturing/R&D industries tend to cluster around
London. They benefit from proximity to a large market for their output,
relatively low location costs and strong national and international transport
links (e.g. Heathrow Airport).
Table Eight – Employment in knowledge-intensive manufacturing/R&D
%
6
5
4
3
2
1
n
nd
o
Lo
ay
ew
G
at
ur
ve
is
rs
m
ity
/k
no
w
C
le
i ty
dg
e
in
Lo
R
nd
eg
on
io
na
C
-R
ls
Re
er
gi
vi
on
ce
al
s
(C
se
C
rv
)
ic
es
(n
ot
C
C
)
ge
/to
Un
i
He
rit
a
In
du
st
ria
l
0
Typologica l grouping
Source: State of the English Cities Report (2006)
Skills – no qualifications
The highest proportion of people of working age with no formal qualifications
are found in gateway cities. This is likely to reflect their focus on
standardised manufacturing and construction (which support the port or
58
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
airport function), and the relatively low presence of high-value tertiary or
knowledge-intensive industries.
Industrial cities also have a high percentage of people of working age with no
formal qualifications. This can be explained by their historical specialisation in
the manufacture of relatively low-tech, standardised products using a high
division of labour.
Table Nine – 16-74 year olds with no formal qualifications
% 45
40
35
30
25
20
15
10
5
Lo
n
do
n
a
y
G
at
ew
In
du
st
H
ri
er
al
i ta
ge
/t
Un
ou
iv
r is
er
m
si
ty
/k
n
ow
le
Ci
dg
ty
e
in
Lo
n
R
do
eg
io
n
C
na
-R
ls
Re
er
g
v
io
ice
n
s
al
(C
se
C
rv
)
ic
es
(n
ot
CC
)
0
Typolo gical gro upin g
Source: State of the English Cities Report (2006). Data: Census data 2001
Skills – graduate level and above
Nearly 40% of 16-74 year olds in university knowledge cities are educated to
graduate level or above. The presence of students undertaking post-graduate
study contributes to this total. However, the presence of the university also
59
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
helps to retain graduates once their studies are complete and attracts other
educated workers to the area through the promotion of innovation, R&D and
spin-off companies and employment.
Employment opportunities in London attract skilled workers from elsewhere
in the United Kingdom, Europe and the world.
Table Ten – 16-74 year olds with graduate level qualifications
% 45
40
35
30
25
20
15
10
5
do
n
Lo
n
ay
G
at
e
w
)
C
(n
ot
R
eg
io
R
na
l
se
rv
ic
e
s
ice
s
al
se
rv
eg
io
n
C
(C
C
)
-R
n
do
n
C
e
C
it
y
in
Lo
no
w
le
dg
ty
/k
/t
ou
ri
sm
U
ni
ve
rs
i
ri
ta
ge
H
e
In
du
s
tr
ia
l
0
Typolo gical grouping
Source: State of the English Cities Report (2006), Data: Census data 2001
Labour productivity
Labour productivity is highest in London and cities in the London city-region.
This reflects the London ‘city-region’ effect – firms located in the city-region
benefit from economies of scale.
60
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Table Eleven – Gross value added full-time-equivalent
£
50000
45000
40000
35000
30000
25000
20000
15000
10000
on
Lo
nd
ay
Ga
te
w
In
du
st
He
ria
r it
l
ag
e
Un
/ to
iv
ur
er
i sm
si
ty
/k
no
wl
Ci
ed
ty
ge
in
Lo
Re
nd
gi
on
on
Cal
R
se
Re
rv
gi
on
i ce
al
s
(C
se
C
rv
)
ic
es
(n
ot
C
C)
5000
0
Typological grouping
Source: State of the English Cities Report (2006). Data: ONS 200 1
Gross weekly pay
Average gross weekly pay is highest in London, followed by cities in the
London city-region and university knowledge cities. As these cities contain
the greatest proportion of highly skilled workers, and the most productive
workers, this comes as no surprise.
Industrial and heritage/tourism cities have the lowest average gross weekly
pay. This can be attributed to the relatively low-skilled workforce, and
relatively low-tech industries that characterise these economies (e.g. tourism
and customer service or the manufacture of more standardised products).
61
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Table Twelve – Average gross weekly pay (£)
£
700
600
500
400
300
200
100
Lo
nd
on
ew
ay
G
at
In
du
st
He
ri a
ri t
l
ag
e/
U
to
ni
ve
ur
ism
rs
ity
/k
no
w
Ci
le
ty
dg
in
e
Lo
R
nd
eg
on
io
na
C
ls
Re
-R
er
gi
vi c
on
es
al
se
(C
rv
C
ic
)
es
(n
ot
CC
)
0
Typolo gical gro upin g
Source: Sate of the English Cities Report (2006). Data: New Earn ings Survey (2003)
62
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Appendix Two – Notes from city meetings
The following notes summarise main points arising from meetings held with
local authority Chief Executives and Policy Officials in:
 Darlington
 Exeter
 Stoke-on-Trent
 Central Lancashire cities: Blackpool, Preston, Blackburn and Burnley
Darlington
Typology
Exhibits mix of characteristics of industrial/gateway cities and
features of a regional services centre.
Historical
Grew from being an old market town in County Durham,
development
providing services to a wide agricultural area, and then, as the
th
birthplace of steam railways in 19
engineering tradition. In the later 20
century, grew a strong
th
century service sector
employment grew to replace losses in manufacturing industry.
Economy
Darlington has an important role as a sub-regional
employment and retail centre covering South Durham and a
large part of North Yorkshire. Due to its advantageous location
(see Connectivity below) Darlington has a distinct ive economic
profile compared with the rest of Tees Valley. Main sectors (by
employment) are business services, health, retail, some
specific manufacturing and engineering sub-sectors, and civil
engineering, together with the public sector employment.
Logistics and financial services also have strong location
quotients. By comparison Tees Valley has strategically
important sectors in chemicals, process engineering and
renewable energy.
63
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Education, skills and entrepreneurial attainment are better
than North East regional averages. Schools performance is just
better than the national average, but higher skill levels and
new business formation are lower than the national average
(in common with the rest of the region). These issues will
require long-term strategies and investment to resolve.
Connectivity
Best connected part of Teeside by rail (main line to London,
Edinburgh and other city-regions) road (A1M) and Durham
Tees Valley Airport. However, local connections into Teeside
are perceived to be poor and an obstacle to Darlington firms
providing services to support Teeside industries.
Governance
The Council has had stable political leadership since 1991, with
a significant degree of consensus on economic development
issues. It recognises that the Darlington economy is too small
to go it alone and there is therefore a strong emphasis on
collaboration with the other Teeside authorities.
Exeter
Typology
Regional services, with elements of university knowledge and
tourism/heritage.
Historical
Exeter has a history going back some 2,000 years to Roman
development
times. In the Middle Ages it developed as a major port and the
centre of the wool industry. In the 17th century it was the sixth
largest city in England and became a major railway centre in
the 19
th
century. It is now a regional services centre and
‘county town’.
Economy
Exeter plays a regional capital role, serving much of Devon,
Cornwall and parts of Somerset with quality retail and cultural
facilities. The city provides some 86,000 jobs. Buoyant growth
64
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
in the local economy over the past decade has been reinforced
by significant inward investment, including the Met Office.
Exeter has primarily a service-based economy (89% of its
employment base). The city has a mixture of public sector
(health, education – including specialist schools for the deaf
and blind and public administration) and commercial
employment (retail, banking and insurance). The city is
developing a significant concentration of assets in the
knowledge economy, such as the university and Met Office.
This together with the offer of a high quality of life is
strengthening its graduate employment base. The retail heart
of the city is being regenerated through a major private
sector-funded development scheme, which will replace
outdated post-war development.
Connectivity
Well connected by rail (to London Paddington and Waterloo),
by road (M5/A30/A38) and through a growing regional airport.
Nevertheless, a significant scientific institution perceived the
two hour journey from London as a potential obstacle to
relocation from Bracknell to Exeter. However, quality of life
was an important counter factor in ensuring that employees
were prepared to move with the institution.
Governance
District Council boundaries fit well with the contiguous built-up
area of the city. This helps to reinforce a strong civic identity
and promote clear ambition and direction for the city, which is
shared across political parties. Also, they reinforce the ability
to work effectively across the public and private sectors (e.g.
in securing £150 million redevelopment of the city centre).
However, Exeter strongly argues a case for unitary status.
Stoke-on-Trent
Typology
Classic features of an industrial city.
65
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Historical
Stoke-on-Trent’s development was built on the ceramics
development
industry, powered by local coal and supply linkages by canal,
rail and road. It developed rapidly as an industrial city around
six neighbouring pottery towns. Unlike other developing
industrial cities (e.g. Manchester), the investors in the new
industries were not located locally in Stoke-on-Trent and had
little incentive to invest in creating a civic heart to the city. In
addition, the local area’s economic identity was built around
the extraction of three ‘low value’ minerals – coal, marl and
ironstone. The economies of those industries meant that the
pitheads, quarries and mineral railways had top locational
priority and workers’ homes and civic infrastructure came
much lower in the pecking order. These factors, combined with
limitations of topography (the Potteries are wedged into a
series of ridges in a relatively inaccessible spur of the
Pennines), inhibited the emergence of a mature, nucleated
urban form. As a result the quality of Stoke-on-Trent’s built
industrial heritage is relatively poor with weak ‘quality of place’
assets, and the absence of a significant city centre compared
with other cities. Stoke-on-Trent was created in 1910 through
the union of the six towns.
Economy
Unlike many other industrial cities where the historical industry
has now been lost, Stoke-on-Trent retains internationally wellknown ceramics manufactures (e.g. Wedgwood, Portmeirion
and Spode). However, a significant proportion of jobs and
production in the industry has been lost from the local
economy in recent years, as producers seek cheaper
production locations. There has been some diversification of
the local economy, including other manufacturing, distribution
centres and some services. A successful initiative has been the
‘Hothouse Centre for Ceramic Design’ to build on the
traditional high level and specialist skills developed in the
industry to apply them in other areas and retain the city’s pre-
66
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
eminence in this sector.
The industrial history has left a legacy for the economy. The
pottery industry operated a strict division of labour where
divisions within each pottery operated as a barrier to the
transfer of employment between potteries. This continues to
impact on people in the city. There is a culture of dependency
and low aspirations reflected in one of the lowest proportion of
people setting up their own businesses in England and a low
level of people continuing in post-16 full-time education.
Connectivity
Stoke-on-Trent is located between Manchester and
Birmingham (on M6 and London to Glasgow line), but is too far
away from either to benefit from the development and growth
of their city-regional economies. It is within one hour’s drive of
four international airports.
It is acknowledged that economic success depends on
achieving an effective relationship between the city and
surrounding towns. Overall, Stoke-on-Trent is losing
population from its core area, as people move from the central
area to surrounding centres. There is some replacement by
people from minority groups which is rapidly changing the
ethnic profile of the city.
Governance
The City’s Executive comprises the Elected Mayor and council
manager. Six political groups are represented on the Council.
Whilst Labour holds the Mayoralty and the six positions on the
Elected Mayor’s Advisory Panel, the Council is in no overall
control. Stoke-on-Trent is unique in having the Mayor/council
manager structure (it also retains a Lord Mayor who chairs full
Council
and
plays
a
traditional
ceremonial
role).
It
is
recognised that the city needs to work collaboratively with all
the councils in the city-region area. These include Newcastleunder-Lyme, Staffordshire
67
(including
the County Council,
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Staffordshire Moorlands and Stafford Borough), as well as
Crewe
&
Nantwich
and
Congleton
in
Cheshire,
North
Shropshire and (arguably) parts of Derbyshire to resolve its
economic challenges.
Central Lancashire cities
City-region
Blackpool, Preston, Blackburn and Burnley are co-operating
together
to
develop
the
Central
Lancashire
City
Region
development plan. As such, they are one of the eight ‘cityregions’ within the Northern Way.
Typology
Blackpool has characteristics of a tourism/heritage city/town,
Preston is developing features of a regional services city and
Blackburn and Burnley are classic industrial cities/towns.
Economy
The Preston economy is growing, benefiting from its strategic
position within the ‘city-region’. It also has assets such as the
University of Central Lancashire, which offers an opportunity to
improve Preston’s knowledge economy in the longer-term,
particularly if increased graduate retention is achieved. Growth
of the university was an important issue in the award of City
status to Preston in 2002. Although Preston City Council has not
been particularly proactive in intervening in the economy, the
economy has grown significantly in recent years.
By contrast, Blackpool is fighting for its long-term life as a
tourism town. It is not unlike other coastal towns in being
affected by adverse trends in the tourism industry, a lack of
funding and a shortage of land for housing development, putting
land at a premium. These factors are compounded by being in a
relatively peripheral location with the city-region.
Whilst
demographic trends show that people are moving away from
68
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
Blackpool,
there
has
been
a
recent
increase
in
Eastern
Europeans, especially Polish, who are moving into the area to
take up employment, for example in hotels.
Blackburn and Burnley are more traditional industrial cities.
Blackburn in particular has been very proactive in seeking to
promote its economic future. It faces challenges as its older
white population move out of the city to be replaced by new
ethnic minority migrants. The Council is actively promoting new
entrepreneurial activity amongst the new migrant population.
Connectivity
Preston is establishing itself as the ‘third city’ in the North West
region behind Liverpool and Manchester. These aspirations are
supported by its good transport connections, by road through
the M65, M6 and M55 and by rail on the mainline to London and
Glasgow. There is a strong symbiotic relationship between
Blackpool and Preston in terms of a developing a complementary
economy in retail services and housing, as well as connections to
British Aerospace at Wharton and Blackpool Airport.
Whilst there are good east-west commuter rail and road linkages
between Burnley and Blackburn (and westwards to Preston)
(M65), only around 2% of workers commute in this direction. By
contrast around 12-14% of workers commute north-south;
skilled workers to residences in the Ribble Valley to the north
and some commuting to Manchester. The train journey from
Burnley to Manchester takes around one hour.
Governance
There are 12 local authorities in the ‘city-region’. A combination
of their large number, variations in their political make-up and
under-bounding in relation to natural economies sometimes
makes political decision-making difficult. Preston is underbounded, with the contiguous urban area being divided between
Preston to the north of the River Ribble (population 129,000)
and South Ribble District Council to the south (population
69
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
29,000). Blackpool sees its unitary council status as being
instrumental in galvanizing efforts to reinvent the town’s product
offer and in maintaining its heritage and tourism industry.
However, Preston is under-bounded with parts of the natural
Blackpool area in Fylde local authority area (for example in
having little say about development at Blackpool Airport).
Blackburn is a unitary council and considers that this has been a
significant factor in making progress in achieving economic
development. However, it feels its current boundaries are
restricting development, particularly to the east.
70
Hildreth P A (October 2006) Roles and Economic Potential of English Medium-Sized Cities
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