England is suffering from an internal brain drain – and it’s centuries old

Watford Gap, where north meets south. Image: G-Man/Wikimedia Commons.

In recent years London has been a magnet for graduates. As the Centre for Cities’ report The Great British Brain Drain showed, the capital was particularly attractive to the highest achieving graduates.

But a recent paper shows that far from being a recent phenomenon, this migration of higher skilled people south has been going on for centuries Gregory Clark (University of California, Davis) and Neil Cummins (London School of Economics) tracked rare ancestral names (e.g. northern surnames such as AinscoughBirtwistle, and Calderbank, and southern names such as Northcott and Vanstone) across the entire population from 1837-1973. By matching the data with the detailed genealogy of 78,000 people with such names, they were able to look at the skills, migration patterns, and life outcomes of people in England since 1800.

Strikingly, the research found that the flow of skilled people southwards is centuries old, with four particularly interesting results:

  • Northern surnames are much more likely to move south than the reverse, with 40 per cent of northern surnames located outside the North by the 1970s, compared to just over 10 per cent of southern surnames.
  • These northern migrants were then much wealthier at death across 1892-1980 than those who stayed home.
  • Wealthier northerners were more likely to move south – 36 per cent of people from affluent northern families in the sample moved south from 1780-1929 (compared to less than 20 per cent of people from either average or poor families).
  • Accounting for wealth, northern migrants were still more likely to be higher skilled, have more years in education and have been more likely to go to university than either southerners or northerners that stayed put.
  • As the UK economy continues to specialise in ever more knowledge-based activities, skills relevant to these sectors are likely to become ever more important. This means that the ability of the north to retain skilled workers, and reverse what is a centuries’ old pattern, will be important to its future economic performance.

Of course, the availability of high skilled jobs will be a crucial determinant of this. If the government’s industrial strategy is to address the lack of high skilled jobs in the north, then it needs to address the barriers that hinder the ability of the region generally, and its cities specifically, to attract such activity.

In our recent briefing Why don’t we see growth up and down the country? we set out the central role ‘place’ plays in attracting business investment, and show what barriers the industrial strategy needs to address. This is part of a series of briefings looking at the issues the government should tackle in the strategy in order to boost growth in cities, from using clusters policy to encourage innovation, to evaluating the impact of public sector relocations on local economies.

Anthony Breach is an economic analyst at the Centre for Cities, on whose blog this post first appeared. 


 

 
 
 
 

“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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