How can Europe's cities ensure their citizens have the right skills?

Some upskilling taking place in a vocational college. Image: Getty.

Creating new jobs only goes so far towards addressing unemployment: people need the skills to do these jobs. And our fast-paced labour market means the skills to keep up are changing constantly.  

This is an urban challenge: cities are hubs of knowledge, innovation and industry. City authorities are in tune with the needs of local labour markets and citizens. They can identify and predict skills shortages, and ensure the right skills are being developed. This is especially true for those who find it hardest to find a job, like vulnerable groups and young people.  

It is in cities where new approaches can be tried and tested. Rotterdam was the first city in continental Europe to use a social impact bond, a relatively new financial mechanism based on a “pay for success” model, to address youth unemployment. Buzinezzclub offers a full package of support that has helped hundreds of young people gain the skills needed to realise their career goals and get off benefits for good. Projects like these can make a real impact on Europe’s unemployment levels – especially if national governments and the EU institutions work with cities to scale up and capitalise on their success.

Young people and the most disadvantaged people in society have been hardest hit by the employment crisis. Phenomena such as the “gig economy”, where independent workers are contracted to complete specific jobs, and crowdsourcing work, are on the rise.


But low-skilled workers can find it difficult to access this kind of work, which also threatens a “race to the bottom” in terms of income. This is a challenge for local authorities, who need to ensure these approaches benefit all involved.

We have witnessed a huge transition in our cities over the course of EUROCITIES’ 30 year history. The end of mass manufacturing in the 1980s left many cities in decline, while the emergence of concepts like the circular, green, sharing and knowledge economies in recent years has brought with it the need for brand new skills.

Cities need to keep ahead of the game. The green economy, for example, is one of the few sectors that continued to grow despite the economic crisis, and cities are seizing this opportunity. Glasgow operates a “green wardens” scheme to train and employ people in various greening and sustainability projects in the council’s core services. This is aimed at people who have been out of work for a long time, left school without qualifications, or have been discharged from the armed forces.

Investment in skills needs to start locally, and must meet local needs. In Ghent, the city carried out a study to assess the needs of local employers now and in future. It has helped the authorities to better understand the impact of disruptive technologies, changing demographics, globalisation and other factors on local employers, and forms part of a demand-driven approach to skills development.

Some cities offer training adapted to local needs, or provide support to jobseekers. Brighton & Hove operates the Brighton Employability Advice and Careers Hut, for example, a collaboration between local schools and employers to design an employability hub for young people.

Many cities take advantage of diverse networks to draw up programmes working with schools, educational institutes, social services, NGOs and local employers. Malmo is one such city, having recently set up partnerships with six civil society organisations to provide training and skills development and training, and to put in place measures to support labour market inclusion. This approach is being recognised at European level too, with the European Commission’s New Skills Agenda for Europe, launched in June this year, mentioning the importance of partnerships at local level.  

The work is happening in cities, but the impact goes much further. European cities are keen to scale up their success. We hope this might soon become a reality, with the launch of a new urban agenda partnership on jobs and skills by the European Commission early next year. This tests a new way of working between cities, national governments and the EU institutions, with the aim of guiding better policies and funding for the local level.

The impact of this, we hope, will be that cities are better prepared to face future challenges, to the benefit all European citizens. 

Anna Lisa Boni is secretary general of EUROCITIES.

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“Stop worrying about hairdressers”: The UK government has misdiagnosed its productivity problem

We’re going as fast as we can, here. Image: Getty.

Gonna level with you here, I have mixed feelings about this one. On the one hand, I’m a huge fan of schadenfreude, so learning that it the government has messed up in a previously unsuspected way gives me this sort of warm glow inside. On the other hand, the way it’s been screwing up is probably making the country poorer, and exacerbating the north south divide. So, mixed reviews really.

Here’s the story. This week the Centre for Cities (CfC) published a major report on Britain’s productivity problem. For the last 200 years, ever since the industrial revolution, this country has got steadily richer. Since the financial crash, though, that seems to have stopped.

The standard narrative on this has it that the problem lies in the ‘long tail’ of unproductive businesses – that is, those that produce less value per hour. Get those guys humming, the thinking goes, and the productivity problem is sorted.

But the CfC’s new report says that this is exactly wrong. The wrong tail: Why Britain’s ‘long tail’ is not the cause of its productivity problems (excellent pun, there) delves into the data on productivity in different types of businesses and different cities, to demonstrate two big points.

The first is that the long tail is the wrong place to look for productivity gains. Many low productivity businesses are low productivity for a reason:

The ability of manufacturing to automate certain processes, or the development of ever more sophisticated computer software in information and communications have greatly increased the output that a worker produces in these industries. But while a fitness instructor may use a smartphone today in place of a ghetto blaster in 1990, he or she can still only instruct one class at a time. And a waiter or waitress can only serve so many tables. Of course, improvements such as the introduction of handheld electronic devices allow orders to be sent to the kitchen more efficiently, will bring benefits, but this improvements won’t radically increase the output of the waiter.

I’d add to that: there is only so fast that people want to eat. There’s a physical limit on the number of diners any restaurant can actually feed.

At any rate, the result of this is that it’s stupid to expect local service businesses to make step changes in productivity. If we actually want to improve productivity we should focus on those which are exporting services to a bigger market.  There are fewer of these, but the potential gains are much bigger. Here’s a chart:

The y-axis reflects number of businesses at different productivities, shown on the x-axis. So bigger numbers on the left are bad; bigger numbers on the right are good. 

The question of which exporting businesses are struggling to expand productivity is what leads to the report’s second insight:

Specifically it is the underperformance of exporting businesses in cities outside of the Greater South East that causes not only divergences across the country in wages and standards of living, but also hampers national productivity. These cities in particular should be of greatest concern to policy makers attempting to improve UK productivity overall.

In other words, it turned out, again, to the north-south divide that did it. I’m shocked. Are you shocked? This is my shocked face.

The best way to demonstrate this shocking insight is with some more graphs. This first one shows the distribution of productivity in local services business in four different types of place: cities in the south east (GSE) in light green, cities in the rest of the country (RoGB) in dark green, non-urban areas in the south east in purple, non-urban areas everywhere else in turquoise.

The four lines are fairly consistent. The light green, representing south eastern cities has a lower peak on the left, meaning slightly fewer low productivity businesses, but is slightly higher on the right, meaning slightly more high productivity businesses. In other words, local services businesses in the south eastern cities are more productive than those elsewhere – but the gap is pretty narrow. 

Now check out the same graph for exporting businesses:

The differences are much more pronounced. Areas outside those south eastern cities have many more lower productivity businesses (the peaks on the left) and significantly fewer high productivity ones (the lower numbers on the right).

In fact, outside the south east, cities are actually less productive than non-urban areas. This is really not what you’d expect to see, and no a good sign for the health of the economy:

The report also uses a few specific examples to illustrate this point. Compare Reading, one of Britain’s richest medium sized cities, with Hull, one of its poorest:

Or, looking to bigger cities, here’s Bristol and Sheffield:

In both cases, the poorer northern cities are clearly lacking in high-value exporting businesses. This is a problem because these don’t just provide well-paying jobs now: they’re also the ones that have the potential to make productivity gains that can lead to even better jobs. The report concludes:

This is a major cause for concern for the national economy – the underperformance of these cities goes a long way to explain both why the rest of Britain lags behind the Greater South East and why it performs poorly on a

European level. To illustrate the impact, if all cities were as productive as those in the Greater South East, the British economy would be 15 per cent more productive and £225bn larger. This is equivalent to Britain being home to four extra city economies the size of Birmingham.

In other words, the lesson here is: stop worrying about the productivity of hairdressers. Start worrying about the productivity of Hull.


You can read the Centre for Cities’ full report here.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites

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