Burnley shows why you can’t rebalance the British economy through manufacturing

Hammerton Street, Burnley. Image: Tim Green/Flickr/creative commons.

Manufacturing plays a larger role in Burnley than in any other British city, taking up 22.6 per cent of its total jobs share. And yet despite this, it has one of the weakest economies of any UK city. So how does this square with calls for a manufacturing renaissance to create a brighter future for struggling places?

This isn’t something that is unique to Burnley. As the chart from our data tool below shows, those cities that had a higher share of jobs in manufacturing tended to have lower productivity in 2017. And no British city with over 10 per cent of its jobs in manufacturing met the national average in GVA per worker. On the other hand, the top ten performers in terms of productivity had much lower shares of jobs in the manufacturing sector. (Of these, Swindon had the highest share at 8.4 per cent.)

Burnley’s lagging performance in terms of productivity is reflected in how well it does on other measures too. Cities Outlook 2019 shows that it:

  • Had some of the highest levels of young people claiming unemployment benefit (60th out of 63);
  • Ranked in the bottom ten in its business start-up rate, with only 36.2 businesses per 10,000 population (the national average was 57.8);
  • Has seen the third slowest growth in population of any city in the last decade;
  • Had the lowest average house price at £107,900, and is the most affordable city, with a housing affordability ratio of 4.3.

This sits somewhat uncomfortably with the notions of both Labour and the Conservatives of rebalancing the economy towards manufacturing. The line goes that Britain doesn’t make anything anymore and, in a world of black and white and no shades in between, is over-reliant on finance and doesn’t make enough goods. But if anything, the data suggests that what Burnley needs is a rebalancing away from manufacturing if its fortunes are to improve, not more of the same.

It also challenges the notion of looking at an area’s ‘strengths’ when assessing its performance, something that many strategies and independent reviews are very fond of doing. But this is the wrong way of looking at the problem. The question for weaker cities like Burnley should not be “What do we have?” Rather, it should be “what have we not got enough of?”


In Burnley’s instance, it is a lack of higher-skilled, higher-paid jobs in both manufacturing and services. In manufacturing, data from the Census shows us that for every high skilled job in manufacturing in the city, there are five lower skilled jobs. This compares to a ratio of one to one in Cambridge and Crawley. And at 6 per cent of all jobs in 2017, it had the lowest share of knowledge-based jobs of any British city.

While national politicians may miss the point on this, it is something that is well understood by Burnley Borough Council. As a result, it has been focussing efforts on expanding the University of Lancashire’s presence in the city, has set out a masterplan for its city centre which goes beyond retail, and where it has been supporting manufacturing firms it has been to help them raise their productivity and the skills of their workforce. All with the aim of helping its economy to adapt in the face of ongoing changes to the global economy.

Assisting cities to adapt to the constant changes in the global economy should be the goal of government. Sadly too much national policy – the Regional Growth Fund and Enterprise Zones to name but two – looks to the past, ignores the situation that cities find themselves in, and doesn’t help cities to adapt to the ongoing changes in the world of work.  In many instances, national politicians are more nostalgic than local politicians.

Recent decades have not been kind to Burnley. If it, and other cities like it, are to fire again, they can’t be constrained by nostalgia. They need help to make themselves attractive to tomorrow’s businesses and workers, whatever industry they’re in.

Paul Swinney is head of policy & research at the Centre for Cities, on whose blog this article first appeared.

You can see more data for all UK cities on the Centre for Cities’ data tool.

 
 
 
 

To see how a city embraces remote work, look to Helsinki

A deeply rooted culture of trust is crucial to the success of remote work. (Sean Gallup/Getty Images)

When I speak to Anssi Salminen, an account manager who lives an hour outside Helsinki, he’s working from a wooden platform on the edge of a Finnish lake. With a blanket laid out and his laptop set up, the sun low in the sky, Anssi’s remote work arrangement seems blissful. 

“I spend around half of my time working somewhere else other than the office,” he says. “I can work from home, or on the go, and I also travel to the Netherlands once a month and work from there.

“The emphasis in my work has always been that it doesn’t matter when or where I work, as long as I get things done.”

For many people around the world, the shift to remote work was sudden, sparked by the coronavirus pandemic. Finland, however, is finding the transition much less significant. Before Covid-19, the Nordic nation already displayed impressive levels of remote working, with 14.1% of its workforce reporting usually working from home. Only the Netherlands has a comparable percentage of remote workers, while the UK lagged behind at 4.7%, and the US’s remote workforce lingered at around 3.6%

Anssi works for one of many Helsinki-based companies that offers its employees flexible policies around when and where they work. That arrangement is in part due to the Finnish capital’s thriving start-up scene. In spite of being a relatively small city by global standards it is home to over 500 technology start-ups. These companies are leading the way when it comes to keeping employees connected wherever they choose to work.

“Our company has a completely location-free working policy,” says Kasper Pöyry, the CEO of Helsinki-headquartered software company Gapps. “All meetings are made available for online participants and facilitated accordingly. Some employees have worked extensively from abroad on a working holiday, whilst others prefer the comfort and social aspects of the well-stocked office. Whatever works for our employees is what works for the company.”

Like Gapps, many Helsinki-based firms are deeply preoccupied with providing the necessary technology to attract talent in a vast and sparsely populated country. Finland has only 15 inhabitants per square kilometre, and companies understand that in order to compose teams of specialised expertise, they may have to seek talent outside of the city. Local governments take a similarly proactive stance toward technological access, and Helsinki offers free, unrestricted, high-speed Wi-Fi from city-wide hotspots, while the country as a whole boasts some of the best coverage in Europe. 

But encouraging remote work isn’t just about optimising the potential of Finland’s workforce – companies in Helsinki also recognise that flexibility has clear benefits for both staff and employees. 

“The idea of a good work-life balance is ingrained in Finnish culture,” says Johannes Anttila, a consultant at organisational think tank Demos Helsinki. “It goes back to our rich history of social dialogue between labour unions and employers, but also to an interest in delineating the rules of working life and pushing towards people being able to enjoy their private life. Helsinki has been named the best city in the world for work-life balance, and I think that this underlies a lot of the mentality around remote work.” 

For Peter Seenan, the extent to which Helsinki residents value their free time and prioritise a work-life balance prompted his move to the city ten years ago. He now works for Finnair, and points to Finland’s summer cottages as an example of how important taking time to switch off is for people in the country. These rural residences, where city residents regularly uproot to enjoy the Nordic countryside, are so embedded in Finnish life that the country boasts around 1.8 million of them for its 5.5 million residents

“Flexible and remote work are very important to me because it means that I don’t feel like I’m getting stuck in a routine that I can’t control easily,” he says. “When I’m working outside of the office I’ll go down to my local sauna and go ice swimming during the working day, typically at lunchtime or mid-morning, and I’ll feel rejuvenated afterwards… In winter time especially, flexibility is important because it makes it easier to go outside during daylight hours. It’s certainly beneficial for my physical and mental health, and as a result my productivity improves.”

The relaxed attitude to working location seems to pay off – Finland is regularly named the happiest country in the world, scoring highly on measures such as how often its residents exercise and how much leisure time they enjoy. With large swathes of unspoiled countryside and a national obsession with the outdoors, sustainability is at the forefront of its inhabitants’ minds, leading to high levels of support for measures to limit commuting. In January, Finland passed a new Working Hours Act, the goal of which was to help better coordinate employee’s work and leisure time. Central to this is cementing in law that employees can independently decide how, when, and where they work.

Yet enacting the new ruling is not as simple as just sending employees home with their laptops. For Kirsimarja Blomqvist, a professor of knowledge management at LUT University, perhaps the most fundamental feature that remote work relies upon is a deeply rooted culture of trust, which Helsinki’s residents speak of with pride. The anecdotal evidence is backed up by data which suggests that Finland boasts one of the highest levels of trust and social cohesion in Europe, and equality and transparency have always been key cornerstones of political thought in the country.

“Trust is part of a national culture in Finland – it’s important and people value it highly,” she explains. “There’s good job independence, and people are valued in terms of what they do, not how many hours they work for. Organisations tend to be non-hierarchical, and there is a rich history of cooperation between trade unions, employers, and employees to set up innovative working practices and make workers feel trusted and valued. 

“It’s now important that we ensure that this trust can continue to be built over technology, when workers might have been more used to building it face-to-face.”

As companies begin to look hopefully toward a post-Covid future, the complexities of remote work are apparent. Yet amid issues of privacy, presenteeism, and social isolation, the Helsinki model demonstrates the potential benefits of a distanced working world. The adjustment to remote work, if continued after the crisis, offers a chance to improve companies’ geographical diversity and for employers to demonstrate trust in their workforce. On these issues, Blomqvist believes other cities and employers can learn a lot from Helsinki.

“People are now beginning to return to their workplaces, but even as they do they are starting to consider the crisis as a jumping point to an even more remote future,” she says. “The coronavirus pandemic has been an eye-opener, and people are now interested in learning from Finland’s good practices… We are able to see the opportunity, and the rapid transition to remote work will allow other countries to do the same.”

Katie Bishop is a freelance writer based in Oxford.