Bridging the productivity and prosperity gap in Greater Manchester

As the birthplace of the Industrial Revolution, Greater Manchester has long grappled with the social challenges brought about by rapid economic growth. Today, as the Fourth Industrial Revolution gathers pace, the region is developing a spatial and economic framework for the coming decades to ensure all citizens benefit from shifts in the way people live and work.

The region’s sources of industry and commerce are already changing. In Salford Quays, mixed-use property development MediaCityUK is establishing a thriving digital and creative economy. The Nobel Prize-winning isolation of graphene by University of Manchester scientists has led to the creation of the world-class Graphene Engineering Innovation Centre.

Yet despite constant innovation, Greater Manchester remains a place of economic and social inequality. It is the fifth most deprived region in the UK, according to Manchester City Council. Productivity across the region remains consistently 10% lower than the national average.

AECOM is gathering key, business, financial, educational and public sector decision makers to debate the future directions Greater Manchester could take. What are the conditions needed to generate jobs, foster equality and deliver prosperity across the entire region? Here are five key recommendations from our first morning of debate and discussion at Greater Manchester’s Chamber of Commerce.

1/ Build on MediaCityUK’s ‘cluster’ success

A decade on from the recording of MediaCityUK’s first TV show, 8,000 people are now employed at the hub, which occupies brownfield land on what was formerly Manchester Docks. The site’s purpose has expanded to incorporate office, retail, leisure and housing developments. Television studios, global tech giants such as Huawei, accelerator programmes and tourist attractions now operate side by side as the site undergoes a £1 billion expansion.

The takeaway for Greater Manchester’s planners is that ‘clustering’ – creating networks of interconnected businesses in strategic locations, which then drive innovation and productivity gains amongst each other – “is phenomenally important,” MediaCityUK managing director Stephen Wild said. Business growth is generated by “like-minded people working together, colliding in the street. Pulling assets together will put Greater Manchester into a really strong position.”

2/ Locate future industry in economically underpowered areas

The event’s keynote speaker Lord Bob Kerslake is chair of the UK2070 Commission, an independent inquiry into city and regional inequalities in the UK. To prevent regional communities being left behind, he believes Greater Manchester’s forthcoming spatial framework and industrial strategy should encourage emerging industries to actively locate themselves in economically underpowered areas.

For example, the UK’s low-carbon sector – which encompasses electric vehicle development through to renewable energy generation and climate change research – is booming, as calls for a zero-carbon society increase. This sector could be centred in strategic parts of the North, generating regional construction, manufacturing and services employment opportunities far beyond city centres.

3/ Provide cross-generational employment opportunities

To provide the skills needed by these new industries, Lucy Carraz, AECOM’s director of government sector, said talent should be self-generated across the region. Creating work and educational opportunities across generations and socioeconomic statuses will be vital, she added.

A multi-pronged approach is required to reach as many people as possible, from collaborations with universities (for example, devising outreach programmes between the Graphene Engineering Innovation Centre and local authorities) to teen and adult apprenticeships. In schools, Wild said engagement with children must start “surprisingly early” to spark ambition.

According to the Confederation of British Industry’s North West director Damian Waters, investing in cross-generational education now will pay high economic and social dividends for the region in the years ahead. “It is crucial to recognise poor educational outturns as a challenge to future productivity.”

4/ A home for everyone: the importance of placemaking

When planning and building Greater Manchester’s future housing stock, Wild stressed the social and economic benefits of ‘placemaking’ – distinguishing the region as a unique, well-resourced, attractive place to live and work.

From ensuring properties provide sufficient amenities and accessibility, to providing a variety of affordable homes within mixed-use developments and establishing build-to-rent schemes, housing strategies have to meet the wide-ranging needs of the region’s growing population.

Providing homes for families, students and the ageing population, not just high-earning inhabitants, will be crucial. The high apartment, low family home ratio is an aspect of Manchester city centre’s current housing development Wild called “a political hot potato”, but an issue that nevertheless cannot be ignored. Looking ahead, Greater Manchester must ensure there is sufficient housing to drive prosperity and wellbeing across age groups, lifestyles and income levels, he said.

5/ Recognise infrastructure as a key growth accelerator

At present, the UK has a guideline infrastructure spending cap of just 1.2% of GDP. In many other parts of Europe, this figure is 2-3%. Whether infrastructure investment is in housing, transport, skills or decarbonisation, we need to invest more and establish “different ways of assessing the benefits” of such spend at a local level, Kerslake argued.

Alex Roy, head of strategy at Manchester Airports Group (MAG) explained how infrastructure investment is already an essential generator of regional income and employment. Owned by the ten metropolitan boroughs of Greater Manchester, MAG fosters strong business relationships with the East Midlands and the capital via the Group’s ownership of East Midlands Airport and London’s Stansted Airport.

Manchester Airport alone provides direct jobs on site for 25,000 people and supports 45,000 jobs off-site. Significantly, these jobs are distributed across the region and deploy a wide variety of skills.

Beyond employment, prioritising investment in local infrastructure will boost connectivity, allowing more national and international research, tourism and commerce to reach Greater Manchester, Roy said.

Ambition for everybody

Greater Manchester has a once-in-a-generation opportunity to bring about seismic changes in its levels of productivity, prosperity and employment. To truly be a success, the region’s incoming spatial and industrial frameworks must improve the lives of all of the region’s 2.8 million residents.

To facilitate this, all of the above factors should be treated as interconnected. Hubs of education and commerce cannot be created and cannot grow without adequate physical, digital, housing, health and social infrastructure. Collaboration, connectivity and comprehensive planning will be key to ensuring the benefits of the Fourth Industrial Revolution reach everyone.

In his parting comments, Kerslake urged ambition when plotting the future of the region. “The thinking has been big in Greater Manchester, but I think you can go even bigger. Be incredibly ambitious about the future – and don’t set limits.”