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London no longer the UK's most competitive region
18th April 2010
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London has lost its position as the most competitive region of the UK according to new evidence published today.
The UK Competitiveness Index, a measure of the competitiveness of UK regions and locations first published in 2000, shows that for the first time London has slipped into second position and is surpassed by South East England as the UK’s most competitive region. The report shows that since the Labour government came to power in 1997 North West England has seen the greatest improvement in competitiveness, rising from 8th to 4th across the UK’s twelve regions.
The poorest performer is the devolved region of Scotland, which has fallen from 4th to 8th position. Also, the devolved region of Wales is now the least competitive economy in the UK. Other regions that have fallen down the rankings in recent years are the East Midlands, South West England, and Yorkshire and the Humber.
Britain’s most competitive city continues to be Guildford, followed by St Albans and Winchester. The city which has seen the greatest improvement in competitiveness in recent years is Exeter, followed by Norwich. Newcastle-upon-Tyne has also seen significant improvement, which has helped shift North East England from the bottom of the regional index. The least competitive city is Hull, followed by Stoke-on-Trent and Sunderland. Despite Scotland’s problems, Edinburgh is the most competitive large city in Britain followed by Bristol and Manchester. Since 1997 cities in the West Midlands have seen the biggest decreases in competitiveness, with Birmingham, Leicester, and Wolverhampton amongst the hardest hit.
The least competitive localities across Britain all lie in the South Wales Valleys. Blaenau Gwent is least competitive locality, followed by Merthyr Tydfil, Caerphilly and Rhondda-Cynon-Taff. Knowsley in Merseyside is now the least competitive locality outside of Wales.
Professor Robert Huggins, who devised and compiled the UK Competitiveness Index, said: ‘The fall of London from the top of the competitiveness rankings is not only a sign of the impact of the financial crisis, but also of the increasing dual economy operating within London. While many parts of London are home to the some of the world’s most competitive corporations and institutions, other parts suffer from continuing social exclusion, resulting in high levels of unemployment and low levels of economic activity.’
‘The challenge for the next government is to ensure that all regions and locations in the UK have sufficient opportunity to improve their economic fortunes. Many large urban areas have improved their competitiveness considerably, but there is little evidence that this is benefiting regions as a whole, especially the more rural parts.’
‘Infrastructure upgrades will continue to be required if our least competitive regions are going to fulfil their potential. This will mean that the distribution of resources between regions will have to be carefully considered. In particular, it will be important to ensure that the benefits of large infrastructure projects designed to maintain the South East’s and London’s global competitiveness are weighed up against alternative projects in other regions, which may yield a greater net benefit to the UK as a whole’.
The UK Competitiveness Index is published by the Centre for International Competitiveness at the University of Wales Institute, Cardiff, and is authored by Professor Robert Huggins and Dr Piers Thompson. It has been tracking data since 1997 and was first produced in 2000. The index is a more sophisticated and subtle instrument for measuring competitiveness than standard measures such as gross domestic product per head. It blends ‘input factors’, such as research and development expenditure, business start-up rates and proportion of working age population with a degree; ‘output factors’, such as exports per head of the population, productivity (output per hour worked), and employment rates; and ‘outcome factors’, such as gross weekly pay*.
The report also examines the link between competitiveness and environmental factors. It finds that more competitive regions generally have lower emissions levels per capita, with South East England and the East of England having the greatest proportion of low carbon-intensive competitive localities. It also finds that less people in competitive economies report poor health.
Notes to Editors
Copies of the full UK Competitiveness Index 2010 report can be freely Downloaded at www.cforic.org
The report is to be officially launched at an event at the Institute of Directors, Pall Mall, London at 18.30, 19th April 2010.
For further information please contact:
Kristian Ball, Communications Manager on either Tel: 02920 41 7115 or
Mobile: +44 (0)7977 569 080 or kball@uwic.ac.uk
* The Regional UK Competitiveness Index uses a composite indicator made up of the following data: Input factors (R&D expenditure, economic activity rates, business start-up rates per 1000 inhabitants, number of businesses per 1000 inhabitants, GCSE results (5 or more grades A to C), proportion of working age population with an NVQ level 4 or higher; Output factors (gross value added per head, exports per head, imports per head, proportion of exporting companies, productivity, employment rates); Outcome factors (gross weekly pay, unemployment rates). The Local UK Competitiveness Index uses a composite indicator based on a similar but narrower range of indicators.
