To learn from their European counterparts, UK cities must compare like-with-like

Hamburg: better than Manchester, alas. Image: Getty.

For cities to better understand their strengths and weaknesses, and what policies might help them to grow, it is crucial that they can compare themselves to the performance of other places. However, making these comparisons can be very difficult, especially at an international level, as cities often struggle to find data that covers comparable urban geographies. And there's another more basic problem, given the hundreds of cities in the world that could be used as potential benchmarks: knowing where to look.

As a result, it is tempting for places to simply replicate well-known examples of “iconic” cities’ policies – such as Barcelona’s economic development strategy, Copenhagen’s green transports approach, Leipzig’s urban regeneration success, and Bilbao and its famous “Guggenheim effect”. However, what works in one place is dependent on specific social and economic conditions. That means policy replication is potentially ineffective unless you are comparing like-with-like.

Instead, cities need a better insight into which places they are closely related to economically, to understand what they can learn from their similar counterparts. That is why in our recent report Competing with the Continent, the Centre for Cities created groups of comparable cities across Europe based on their industrial structure. For each UK city we considered the share of jobs in each sector and looked for the continental cities with the statistically closest industrial mix.

Comparing the performance of cities that have a similar industrial structure is particularly useful, as it helps us to better understand the reasons for any differences between places that the analysis highlights. 

Take Manchester, for example – based on the proportion of jobs in each sector of its economy, out of all European cities, it is most similar to Hamburg in Germany. But although the economic structure is similar in the two cities, productivity levels are considerably different: the average economic output of each worker in Manchester was £43,500 in 2011, more than 50 per cent less than that of workers in Hamburg (£67,100).

What can explain such a productivity gap between two highly similar economies? Our analysis shows that one major difference between the two cities is the level of education of their resident population. Interestingly both cities have a similar share of high-skilled residents (31 per cent in Manchester and 32 per cent in Hamburg), but Manchester is home to a much higher sharer low-skilled residents than Hamburg: 34 per cent of the former’s residents had less than 5 good GCSEs as their highest education level, while only 15 per cent of Hamburg’s population had an equivalent level of education.

Another difference is the number of patent applications in the two cities. In 2011, there were around 24 patents applications per 100,000 inhabitants in Hamburg, but just 5 per 100,000 inhabitants in Manchester.

These comparisons suggest that the reason for the productivity gap between the two places is likely to be the contrasting quality of their economic output: although the overarching industrial structure in the two cities is the sames, firms in Hamburg are more innovative overall and have access to a higher-skilled labour pool, making them more productive. 

For Manchester, this means that the answer to boosting productivity does not necessarily come from changing its industrial mix, but rather from improving the quality of the goods and services it produces. Above all, to upscale their production, firms in Manchester need access to a more skilled -- and therefore productive -- labour force than is currently available.

Further investigation is required to fully understand local differences and potential policy implications that this kind of city-by-city comparison can offer. But comparing places based on their industrial structures provides a first step to more relevant city comparisons and better policy prescriptions -- a much more effective strategy than for cities to copy ideas from other places which their economic structure bears no relation to. To find out which of their continental counterparts each UK city is closest to, explore our data tool.

You can read about these findings in more detail here. Or you can head to our European Cities Data Tool to explore all our data on the 330 cities covered in the report.

Hugo Bessis is a researcher for the Centre for Cities, on whose blog this article originally appeared.

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Seven climate change myths put about by big oil companies

Oil is good for you! Image: Getty.

Since the start of this year, major players within the fossil fuel industry – “big oil” – have made some big announcements regarding climate change. BP revealed plans to reduce its greenhouse gas emissions by acquiring additional renewable energy companies. Royal Dutch Shell defended its $1-$2bn green energy annual budget. Even ExxonMobil, until recently relatively dismissive of the basic science behind climate change, included a section dedicated to reducing emissions in its yearly outlook for energy report.

But this idea of a “green” oil company producing “clean” fossil fuels is one that I would call a dangerous myth. Such myths obscure the irreconcilability between burning fossil fuels and environmental protection – yet they continue to be perpetuated to the detriment of our planet.

Myth 1: Climate change can be solved with the same thinking that created it

Measures put in place now to address climate change must be sustainable in the long run. A hasty, sticking plaster approach based on quick fixes and repurposed ideas will not suffice.

Yet this is precisely what some fossil fuel companies intend to do. To address climate change, major oil and gas companies are mostly doing what they have historically excelled at – more technology, more efficiency, and producing more fossil fuels.

But like the irresponsible gambler that cannot stop doubling down during a losing streak, the industry’s bet on more, more, more only means more ecological destruction. Irrespective of how efficient fossil fuel production becomes, that the industry’s core product can be 100 per cent environmentally sustainable is an illusion.

A potential glimmer of hope is carbon capture and storage (CCS), a process that sucks carbon out of the air and sends it back underground. But despite being praised by big oil as a silver bullet solution for climate change, CCS is yet another sticking plaster approach. Even CCS advocates suggest that it cannot currently be employed on a global, mass scale.

Myth 2: Climate change won’t spell the end of the fossil fuel industry

According to a recent report, climate change is one factor among several that has resulted in the end of big oil’s golden years – a time when oil was plenty, money quick, and the men at the top celebrated as cowboy capitalists.

Now, to ensure we do not surpass the dangerous 2°C threshold, we must realise that there is simply no place for “producers” of fossil fuels. After all, as scientists, financial experts, and activists have warned, if we want to avoid dangerous climate change, the proven reserves of the world’s biggest fossil fuel companies cannot be consumed.

Myth 3: Renewables investment means oil companies are seriously tackling climate change

Compared to overall capital expenditures, oil companies renewables’ investment is a miniscule drop in the barrel. Even then, as companies such as BP have demonstrated before, they will divest from renewables as soon as market conditions change.

Big oil companies’ green investments only produce tiny reductions in their overall greenhouse gas emissions. BP calls these effects “real sustainable reductions” – but they accounted for only 0.3 per cent of their total emissions reductions in 2016, 0.1 per cent in 2015, 0.1 per cent in 2014, and so on.

Myth 4: Hard climate regulation is not an option

One of the oil industry’s biggest fears regarding climate change is regulation. It is of such importance that BP recently hinted at big oil’s exodus from the EU if climate regulation took effect. Let’s be clear, we are talking about “command-and-control” regulation here, such as pollution limits, and not business-friendly tools such as carbon pricing or market-based quota systems.

There are many commercial reasons why the fossil fuel industry would prefer the latter over the former. Notably, regulation may result in a direct impact on the bottom line of fossil fuel companies given incurred costs. But climate regulation is – in combination with market-based mechanisms – required to address climate change. This is a widely accepted proposition advocated by mainstream economists, NGOs and most governments.

Myth 5: Without cheap fossil fuels, the developing world will stop

Total’s ex-CEO, the late Christoph de Margerie, once remarked: “Without access to energy, there is no development.” Although this is probably true, that this energy must come from fossil fuels is not. Consider, for example, how for 300 days last year Costa Rica relied entirely on renewable energy for its electricity needs. Even China, the world’s biggest polluter, is simultaneously the biggest investor in domestic renewables projects.

As the World Bank has highlighted, in contrast to big oil’s claims about producing more fossil fuels to end poverty, the sad truth is that by burning even the current fossil fuel stockpile, climate change will place millions of people back into poverty. The UN concurs, signalling that climate change will result in reduced crop yields, more waterborne diseases, higher food prices and greater civil unrest in developing parts of the world.

Myth 6: Big oil must be involved in climate policy-making

Fossil fuel companies insist that their involvement in climate policy-making is necessary, so much so that they have become part of the wallpaper at international environmental conferences. This neglects that fossil fuels are, in fact, a pretty large part of the problem. Big oil attends international environmental conferences for two reasons: lobbying and self-promotion.

Some UN organisations already recognise the risk of corporations hijacking the policy-making process. The World Health Organisation, for instance, forbids the tobacco industry from attending its conferences. The UN’s climate change arm, the UNFCCC, should take note.

Myth 7: Nature can and must be “tamed” to address climate change

If you mess with mother nature, she bites back. As scientists reiterate, natural systems are complex, unpredictable, and even hostile when disrupted.

Climate change is a prime example. Small changes in the chemical makeup of the atmosphere may have drastic implications for Earth’s inhabitants.

The ConversationFossil fuel companies reject that natural systems are fragile – as evidenced by their expansive operations in ecologically vulnerable areas such as the Arctic. The “wild” aspect of nature is considered something to be controlled and dominated. This myth merely serves as a way to boost egos. As independent scientist James Lovelock wrote, “The idea that humans are yet intelligent enough to serve as stewards of the Earth is among the most hubristic ever.”

George Ferns, Lecturer in Management, Employment and Organisation, Cardiff University.

This article was originally published on The Conversation. Read the original article.