Shine taken off London's competitive edge

13-11-2006

Shine taken off London's competitive edge
The business competitiveness gap between the traditionally dominant London and more northerly UK regions is narrowing, a new survey says.

Today's sixth annual UK Competitiveness Index shows that of the 12 areas the country was divided into, London, the south-east and the east were alone in having their economic capacity slide.

In contrast, regions more used to underperforming, including Northern Ireland, Wales and Yorkshire, all experienced increases in their competitiveness.

Northern Ireland was the biggest winner in the index, gaining 4.4 per cent, with Scotland the only region to change positions in the list, moving up to sixth overall, after a rise in business competitiveness of 3.4 per cent.

"However, while there has been little change in overall rank order, the most pronounced gains in relative regional competitiveness all come from outside the big three; the first sign that the trend towards regional economic divergence is being turned round. London's competitiveness has fallen consistently since the 1997 index," said the Robert Huggins Association, which produced the index in partnership with the Work Foundation.

Dr Robert Huggins, senior lecturer in enterprise at Sheffield University's management school and compiler of the index, explained that today's results would resonate within the business community.

"For as long as most of us can remember, the story of the UK's economic performance has been a tale of two nations; the go-ahead London and south-east region and the north and west of the country stuck in the doldrums of post-industrial blight. This year's UK Competitiveness Index represents the first signs that a new chapter is about to be written."

Ian Brinkley, director of the Work Foundation's knowledge economy programme, added: "Overall, there are very positive signs here that the gap in regional economic performance is starting to close and regional policy decisions are beginning to pay dividends. Yet a little caution is needed because the index reflects only one year's data."

The authors of the competitiveness index claim that their methodology is a more sophisticated way of gauging economic clout by incorporating research and development spending, as well as the proportion of the working population with university education.

UK Competitiveness Index 2006

London
South-east
Eastern
East Midlands
South-west
Scotland
West Midlands
North-west
Yorkshire and the Humber
Northern Ireland
Wales
North-east


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