Economic Development and Urban Regeneration in Britain:

the example of Birmingham

Christopher WatsonCentre for Urban and Regional Studies

University of Birmingham

The City of BirminghamIn the centre of England.

175 km from London

West Midlands Region

With Birmingham at its centre

Birmingham in the mid-18th century at the forefront of the Industrial Revolution:

Matthew Boulton’s Soho Manufactory opened in 1761

At the centre of the national canal network:Gas Street Basin, Birmingham, around 1900

Birmingham - 1980’s recession Decline of manufacturing

Crisis in the industrial heartland 1970s and 1980s

Factory closures Job losses 30 per cent of employment in the region depended on

the automotive sector Inner city problems – unemployment, poor housing

conditions People were leaving the city

Change was needed:by the early 1980s

Local authorities were seen to have a role in the analysis of the problems of the local economy

Local economic development became a recognised element in public policy

There was a new emphasis on the multiple problems of the inner city

Housing improvement led to ‘urban renewal’, then to ‘urban regeneration’ (1990s) and eventually to ‘urban renaissance’ (2000s)

But in the 1980s local authorities were very traditional in their approach

Project oriented – an emphasis on the physical aspects of change

Departmentalism – professional territories were guarded

‘In-house’ solutions were preferred

The Thatcher governments of the 1980s

Believed the private sector could play a much more important role in local economic development and urban regeneration

Urban Development Corporations were established outside local government and designed to run more like businesses than public sector bodies

Their focus was on the physical and economic renewal of their designated areas (eg London Docklands)

Urban Development Corporation were criticised

For their lack of engagement with local authorities, other public agencies and local communities.

But governments learned from this (and other

experiences in the 1980s) and saw the need in future regeneration for a holistic approach; and to involve local communities

Other important changes from the 1980s to the 2000s

Much criticism of the way the public sector operated This led to the privatisation of many public facilities and

services and the creation of ‘agencies’ at arms length from government

There was also a shift from the ‘public administration’ of public services to the adoption of ‘managerialism’: the application of private sector management principles and practices to the public sector

What happened in Birmingham?

Long before these changes, Birmingham City Council had taken the initiative in the 1980s to produce its first economic strategy

The aims included:To diversify the local economyTo broaden the scope of economic development

beyond traditional manufacturing industriesTo create the conditions and infrastructure for future

growth and investment

The centrepiece of the strategy was the ‘Convention Quarter’ where European Union funding contributed to the development of

The International Convention Centre (ICC) Symphony Hall The National Indoor Arena (NIA)

These were followed by the private sector-led development of Brindleyplace with its canal-side housing, restaurants, offices and galleries, adjacent to the ICC and the NIA

The return of regional policy

The New Labour government elected in 1997 established Regional Development Agencies in England:

To further economic development and regeneration To promote business efficiency, investment and competitiveness To promote employment To enhance the development and application of skills relevant to

employment To contribute to sustainable development

Urban renaissance and the competitive city

New Labour supported a view that the ‘competitive city’ was important and that city centres and city living would help to drive growth

The government also supported the notion of a ‘knowledge driven’ or ‘knowledge based’ economy as the key to the country’s competitive future

These policies brought together both economic development and urban regeneration

Employment trends in Birmingham 1971 and 2006

Source: Hamish Wilson, Birmingham City Council, September 2009

1971 2006

Services45%

Other 8%

Manufacturing 47%

1971

Services 85%

Other4%

Manufacturing11%

2006

The diversification of employment

‘Services’ employment in the creative knowledge sector includes:Higher education Financial intermediationRadio and televisionArchitectureTelecommunications Sporting activities

The new Department of Culture, Media and Sport, established in 1997

Encouraged the creative industries and their contribution to the ‘knowledge economy’

Said that the creative industries had moved ‘from the fringes to the mainstream’ of policy development

Defined the creative industries [advertising, architecture, arts and antiques, crafts, design, designer fashion, leisure software, music, the performing arts, publishing, software and computer services, and television and radio] and

Emphasised their ‘close economic relationships’ with tourism, hospitality, museums and galleries, heritage and sport.

The response of Birmingham and the West Midlands

Birmingham has a range of creative industries [5.6 per cent of jobs in the city] and both the city’s and the regional view of them as an engine of growth is positive, though sometimes ambiguous

The city’s economic strategy emphasises tourism, and only mentions the creative industries sector

The Regional Development Agency has not included the ‘creative industries’ as one of the 13 priority clusters in the Regional Economic Strategy, though elements feature in some clusters such as Screen Image and Sound and ICT

On the other hand, the cultural ‘quarters’ [including the Jewellery Quarter] are an important part of the city’s economic strategy

The ‘quarters’ in Birmingham’s economic development plan

Birmingham as a creative city

In attempting to transform the image of a city, to make it attractive to skilled and entrepreneurial people and to help retain skilled local talent, a focus on culture and a creative approach to change are important

But transformation takes a long time. In Birmingham it has been going on for nearly 30 years and will continue long into the future

What conditions help to make a ‘creative cultural knowledge city’?

They include: A flexible and dynamic labour force with the right skills and

talents An economic structure that fits the growth sectors of the

current economy [services, culture, consumption, high tech firms, media]

The ability to attract new and creative talent A good urban atmosphere that can stimulate economic growth A mature urban structure and a mature social structure A relatively safe environment

[Musterd, 2004]

In the British context, a creative city is

Economy centred, supported by the use of cluster theory as a means of encouraging local and regional economic development, since creative and knowledge industries tend to cluster in cities

Birmingham is a good example of this: ‘culture’ has been a key to the renewal of the city The ‘cultural quarters’ especially the Jewellery Quarter, are

evidence of the place of creative industries in the economic development and urban regeneration of the city

The growth of ‘city living’ through new housing developments associated with regeneration has brought new life and activity to the city centre

City living in Birmingham

In conclusion, however

Consideration must be given to the need for affordable housing for lower income people on whom a competitive or creative city also depends for its success

The tendency to think of manufacturing as the ‘real’ economy must be resisted if ‘softer’ areas such as education, culture and the creative industries are to be fully recognised as part of the changing local economy and the economy of the future

These are challenges both for the city and for national policy and leadership