Larger urban markets allow people and firms to share fixed costs (particularly infrastructure and supply chains), so investment in transport is spread across a larger user base. Bigger employment markets allow firms and employees to better match their needs and their skills, and denser urban environments facilitate greater levels of knowledge creation and knowledge sharing, helping firms to innovate.
Birmingham city centre is the major economic hub in an urban area of around 2.6 million people, and should therefore provide these benefits in spades. But workers in Birmingham are currently less productive than the UK average in terms of generating GVA, and Birmingham has a lower share of its economy in high-value sectors than many of the other Big Six cities, according to Oxford Economics.
One explanation for this is that the urban area’s functional size is much smaller than its total population would suggest. This is due to the relatively low density of Birmingham city centre, and the limited public transport infrastructure connecting the urban centres and the suburbs of Birmingham and the Black Country together.
Experian’s Census estimates for 2023 suggest that there are 456,000 people in employment in Birmingham local authority and 1.1 million across the West Midlands urban area. But just 119,000 people in employment can access Birmingham city centre in 30 minutes on public transport, barely half of the equivalent figure for Manchester. Many parts of the city are reliant on buses, on which travel time can vary significantly, particularly at peak times. This means that of those living within 30 minutes of the city centre, just a quarter use public transport to get to work and almost half drive.
Improved connectivity into and around the urban core is vital in driving the positive agglomeration economies that will make Birmingham more productive, and will encourage the growth of high-value employment sectors such as science, tech and finance.