Where are Britain's biggest city economies?

Couldn't work out how to illustrate this so here is a metaphor. Image: Getty.

The latest instalment of our weekly series, in which we use the Centre for Cities’ data tools to crunch some of the numbers on Europe's cities.

We talk a lot, round here, about which are the largest cities by population. (Nerds gonna nerd.) We talk a fair amount, too, about which have the richest residents.

What we don't talk about so much is the intersection of those two factors: which cities have the biggest economies? Where are Britain’s powerhouses and engines really located? London, obviously – but beyond that, what does the league table look like?

Let's fire up the datatron.

The first thing to say is that London is so much bigger than its nearest rivals – so many more people, generating so much more wealth – that it completely knackers the charts. Here's a scatter graph plotting population (of each city's primary urban area, explained here) against GVA (gross value added, a measure of economic output).

See if you can somehow pick London out of the crowd:

Let’s take it as read that London is far bigger than the other cities. To make these charts look in any way meaningful we're going to have to drop the capital.

Here's a bar chart showing the 20 largest city economies outside London.

GVA in £bn. Image: Centre for Cities.

Unsurprisingly, Manchester and Birmingham are way, way ahead of the pack. What’s perhaps more unexpected is that, at least on this measure, the Manchester economy is slightly bigger. I thought this might be a quirk of the population data – using a definition on which Manchester simply has more people than Birmingham – but surprisingly, no.


That said, there's not a lot of space between them. They're of the same order of magnitude, and a long way ahead of the next cities down. Which gets to be second city is an unanswerable question, but nowhere else is really in the running for the title.

There are a few more surprises in the next bit of the chart. That Bristol would have a bigger economy than Leeds, for example: maybe this is me making dodgy assumptions, but Leeds feels like it should be on the next level up from Bristol, not struggling to keep up with it. And yet.

Similarly, it's striking that Reading’s economy is nearly as big as Nottingham's, and that Cardiff is out performed by Bournemouth, Milton Keynes and Southampton. As ever, it's one thing to know there's a north-south divide in theory. But Reading? On a par with Sheffield?

Part of this is down to size, of course – more people will mean a bigger economy, generally speaking. So here's that scattergraph again, without London this time. This time it's interactive, so you can hover over a dot to find out which city it is and get the data.

 

There's a clear correlation between the two variables (duh). But it's not perfect. Dots that are higher than they should be represent cities that are outperforming the average (economies bigger than you'd expect for a given population); dots that are lower than they should be are the opposite.

Reading is on one side of that notional line; Sheffield on the other. You can probably guess which way round.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason. 

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To see how a city embraces remote work, just 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.”