IVAN TUROK

For many years governments have viewed cities as sources of economic and social problems and environmental damage. This is changing, with cities seen as sites of economic dynamism, places that can solve social and environmental challenges. There is certainly evidence of resurgent cities in Scotland. The four core cities cover less than 1% of the land but contribute almost 40% of business rates. They have created nearly half (46%) of all net new jobs in the past decade. Glasgow has created more than one in five (22%) of Scotland's jobs, Edinburgh 18%. These figures convey nothing of the unprecedented scale of investment and transformation under way in key locales, such as waterfronts.

This pattern of growth is new and distinct. It follows decades of decline and decentralisation, compounded by an anti-urban policy. The revitalisation of cities is no accident, but it needs to be sustained and strengthened. Scotland is not a single economy. Its city-regions face distinctive issues and opportunities. They are more coherent entities in terms of the way most business is conducted, information and resources circulate, labour and housing markets function, transport networks operate and people live their lives.

Many cities elsewhere are also experiencing resurgence. This is encouraging governments to treat cities not as liabilities to be contained, but as assets with productive potential. For, in a more integrated global economy, cities offer economies of scale and sources of "differential" competitive advantage that can't be readily reproduced elsewhere.

What's more, the environmental footprint of compact cities is smaller than outlying settlements because city dwellers travel shorter distances, use cars less and have smaller, greener homes. So cities are helpful in tackling climate change.

Our understanding of urban systems is far from complete, but there appear to be four reasons for this resurgence. First, cities confer benefits of agglomeration, including access to a deep labour pool, diverse business services and a large supply of property. In a fast-changing economy, there is a premium on flexibility and companies are generally leaner, more focused and buy in services. Cities enable firms to pick and mix their inputs and to alter their workforce in response to shifting needs. This lowers costs, raises productivity and enhances adaptability.

Secondly, cities are hubs of business and technological innovation. They house the major universities and research centres that promote creativity, knowledge and learning. Proximity enables people and firms to compare, compete and collaborate, creating a self-reinforcing dynamism that spurs innovation, attracts mobile capital and talent, and generates growth from within.

Thirdly, cities contain the social and cultural amenities and career choices to help small nations attract and retain population. They also have the transport infrastructure, heritage, entertainment, restaurants and hotels to thrive as centres of tourism and regional consumption.

Finally, cities have benefited from increased public spending in health and education. The trend towards centralisation in hospitals, further education and public administration has assisted cities. Public investment has helped to reclaim derelict land, upgrade housing, modernise schools and improve the public realm. These are all significant assets whose quality and efficiency have a major bearing on Scotland's economic performance. They are not one-off gains like business tax cuts, but represent deeper and more durable sources of competitive advantage.

What does all this suggest for the Scottish Government? There are three basic messages. First, cities have established growth momentum and confidence that needs to be protected. Pressures to divert the transport budget to dispersed regions should be resisted as urban traffic congestion will become a bigger constraint on productivity and growth. Scotland needs more house-building, but not in locations that could clog urban arteries. Better-integrated city-region planning is essential to create high quality places that function well and where people want to live and work.

Secondly, streamlined procedures would help improve the responsiveness and quality of decision-making. Urban development has become over-complicated, bureaucratic and cluttered. Responsibility and accountability have become confused with the plethora of partnerships and systems for micro-management. Civic leaders need to be trusted and local bodies given a clearer mandate to get on with the job. New financial freedoms in the use of business rates would help to address the backlog of investment in essential urban infrastructure.

Thirdly, government needs to focus on how to maximise the contribution of cities to Scotland's economic and social well-being. Some cities need to strengthen indigenous enterprises. Some need diversification from over-reliance on vulnerable sectors and functions. All cities need to be much more effective at extending employment opportunities to include people and places hitherto left behind.

  • Ivan Turok is Professor of Urban Economic Development at Glasgow University.