Improving skills levels and new business formation have been the key long-term drivers of city growth since the financial crisis, according to the seventh annual Demos-PwC Good Growth for Cities 2018 index that ranks cities on a combination of economic performance and quality of life.
The latest Index analyses a decade of economic and social data to determine what long-term factors drive Good Growth. The average city in our index has improved its good growth score significantly over 10 years from 2005-7 to 2015-17, and has now more than recovered from the recession and downturn triggered by the global financial crisis.
Improving average skills levels for the UK’s youngest workers and driving new business formation have been the strongest drivers of good growth over the past decade, while unemployment levels have fallen back to around pre-crisis levels. However, this long-term retrospective analysis also highlights areas where there have been structural deteriorations for cities across the UK, particularly around reduced housing affordability and owner occupation rates and steep increases in average commuting times.
These longer term trends contrast with shorter term movements in the index, which have been driven primarily by falling unemployment rates and, in part due to this, higher household income levels.
The index sets out to show that there’s more to life, work and general well-being than just measuring GDP. The index measures the performance of 42 of the UK’s largest cities, England’s Local Enterprise Partnerships (LEPs) and the nine Combined Authorities, against a basket of ten indicators based on the views of the public as to what is key to economic success and wellbeing. These include employment, health, income and skills – the most important factors, as judged by the public – while housing affordability, commuting times, environmental factors and income inequality are also included, as is the number of new business starts.
To report can be read in full via the PwC website here.