Stuart Patrick

Last week I had the privilege of being part of the Lord Provost's delegation to Chicago. The primary task was to work alongside the LP's office in deepening the formal relationships with the Mayor's office and other civic institutions, as part of a sustained engagement between Glasgow and Chicago.

It's worthwhile doing because of some of the similarities in past economic history that the two have been through. Both cities have made the transition from dominant heavy manufacturing to a more mixed economy of advanced manufacturing, renewable energy, service-based industries and the increasingly important role of education.

We had meetings with both Chicagoland Chamber of Commerce and World Business Chicago - the Mayor-led business-dominated organisation tasked with promoting Chicago as an investment location and setting out economic development strategy for the city of Chicago

They had just published their strategy the week before we arrived, so there was quite a lot of scope for discussion about the main themes they were going to pursue. There was real common interest in advanced manufacturing and in renewables, where we felt there was potential for valuable interaction.

As a long established urban Chamber we have begun exploring options for opening up relationships with a small set of Chambers overseas, helping to supplement our work in promoting members' business overseas.

We've already had some discussion with Greater Seattle Chamber who sent across a civic and business delegation on a learning visit to the UK last year and so Chicago is our second target.

Chicago is a substantial city and with a population approaching 10 million population - almost officially a mega-city - there is a clear size difference. But there are significant issues and ambitious business investment in common - one of which is the robust health of Chicago central business district, which unlike other mature American cities has maintained its vibrancy.

Chicago has had strong mayoral leadership - most prominently from the two Dalys - Richard M and Richard J - together sharing 43 years in post. And now Rahm Emanuel has begun his tenure following on from his role as President Obama's Chief of Staff. So there is a strong culture of decisive local politics.

They have fought vigorously for the right kind of investment to keep Chicago central business district healthy. As one example the city has worked hard to build the student population.  With 65,000 students living in and around the city centre the impact on creative industries, leisure and retail is strong.

Of course it helps that Chicago also has the fourth-busiest airport in the world at O'Hare International, and also that its performance with a diverse range of industry has been powerful - notably in financial services including the Chicago Futures Market, and in professional services where there is a significant number of headquarters.

But from our perspective, there was an affinity with some of the aspects of what Chicago has tried to tackle, including an ageing, crumbling infrastructure, and the need to find ways of funding that increasingly through private means rather than public. And of course they have a fierce budget deficit to reduce.  This is familiar territory.

They've gathered together the senior business leaders with the view of setting up an infrastructure trust to help find the routes to funding to upgrade this infrastructure and Mayor Emanuel is arguing the establishment of this trust through the democratic system right now.  There are some lessons we may happily learn from what they're trying to do.

The other thing that strikes you in Chicago is the sheer scale of philanthropy, notably in Millennium Park, at the Art Institute of Chicago, at Newberry Library - all beneficiaries of substantial donations from the wealth-creators of the city.

All in all this trip was an excellent opportunity for Glasgow Chamber to open up interaction both with Chicagoland Chambers of Commerce and with World Business Chicago, and we intend to build on these relationships in the months and years ahead.

For your interest, there were two historical links between the cities that people we met were pleased to talk about - the substantial donation Glasgow made to help Chicago after the 1871 Fire, and also a very strong shared cultural interest in architecture through the legacies of  Frank Lloyd Wright and Charles Rennie Mackintosh.

Please let us know if there's anything you think we should be doing that would help you open up business in the Windy City.

Stuart Patrick

We welcome the announcement from the Scottish Government which gives approval to Glasgow City Council's application to use Tax Increment Financing (TIF) in support of the expansion of Buchanan Galleries by the Buchanan Partnership.

Glasgow Chamber of Commerce acknowledges that this is a project that is not without controversy, recognising that it reflects the experimental role of TIFs and the likely impact of such a large investment on a substantial stretch of the city centre.

The Buchanan Galleries TIF has obvious parallels with the city's International Financial Services District (IFSD), in which fresh office buildings on the Broomielaw were built by the private sector.

These shiny new blocks - which are highly relevant to the demands of companies both local and national with big floorplates, appropriate telecoms and all the other pre-requisites of a modern office - have played their role in attracting inward investment that has brought 15,000 new jobs to the city.

Notably the IFSD was supported by public sector investment, and left us with older central business district offices that we need to recycle as they no longer fit demands.

We're supporting the TIF announcement firstly because we believe that it helps to keep the Glasgow retail offer, which we're pleased to say is still number two in the UK after London's West End, fresh and modern alongside the marvellous new investment at the St Enoch Centre.

Secondly it is a very significant private investment - over £350m of private investment with the accompanying construction and jobs. There is precious little of these in the current circumstances , and this is a significant long-term vote of confidence in Glasgow's city centre.

Thirdly, the TIF component will allow funding to be released by the Council to invest in the continued upgrading of Glasgow's public realm.

We have seen the positive effects of the high-quality public realm investment in the Merchant City and the IFSD, and the TIF means that we are now in a position to realise more of these.

We will have substantial investment in the area of Queen Street Station - and it's worth noting how poor the entrances into the city are from that station, and the repaired bridge at Cathedral Street that will allow it to re-open to traffic allowing options for reducing traffic in George Square, allowing the Square's refurbishment and improvement as a civic space to meet the requirements of both residents and overseas visitors.

Clearly there are conditions that the Scottish Government has placed on this announcement, largely related to displacement and the impact that this will have on other part of the city centre retail offer.

We will happily work with the Government and the City Council to ensure ongoing development of the strategy for the city centre, designing and delivering the heart of Glasgow for the future.

We will actively participate in developing that strategy, helping businesses - many of whom will have investments that could be affected by the TIF plans - to make their views known.

But the bottom line is that the Buchanan Galleries TIF is a major jobs generator and this announcement reinforces the long-term role of the regional centre for retail for decades to come.

Stuart Patrick

The first Glasgow Talks event of 2012 brought the city's vibrant media industry under the spotlight.

Glasgow Chamber of Commerce has long been keen to host an event covering this sector.  It's such an important, though surprisingly somewhat unsung, part of our business community.

Glasgow is the primary centre of media activity in the country and at one time would easily have been seen as the second most important centre after London. But now we have vigorous competition from Manchester and from the Cardiff/Bristol combination.

So we were delighted to bring together and discuss the views of senior representatives from Scottish television (Rob Woodward, STV), radio (Paul Cooney, Global Radio) and newspapers (Andrew Harries, Scottish Sun).

At least in one respect Glasgow and the West of Scotland remain firm - as consumers we still have a strong appetite for the media product. We watch more TV, listen to more radio and read more newspapers than elsewhere in the country.  There is still a strong demand for content coming from the Glasgow media hub - and there is clearly scope for further development and growth of the sector in the city as part of the subset of Creative Clyde.

There has been much investment in facilities in the past decade or so with the new BBC Scotland and STV bases at Pacific Quay and the recent announcement of enterprise area status for sites at Pacific Quay sustains Scottish Enterprise commitment to Creative Clyde.

Right at the heart of the Glasgow Talks debate though was how different parts of the sector have faced the challenges brought on by the digital age and ever-increasing access to free online content.

Both TV and radio seem to have found a way to play off social media with their staple content being very effectively promoted through these new digital channels. Both Paul Cooney and Rob Woodward provided strong examples of their organisations using the internet to great effect.

However newspapers have clearly found this a greater challenge - with their online versions effectively giving away their offline content free of charge.

So the current challenge for the print press - as we're seeing through a steady introduction of various "paywalls" - is to find a business model which can support both and allow the black and white format to continue.

There are also important issues for Glasgow which we must tackle to help us retain our proud role as the voice of Scotland.

Retention of talent is one. The high volume of young people studying degrees covering the various facets of the media shows the appetite for this career path is still very strong. Unfortunately, precious few opportunities exist to meet this demand.

While London will always be the dominant player in the UK, the BBC's redistribution of programming has played a major part in creating new hubs in Manchester, Belfast and Cardiff as well as in Glasgow. So in the face of such competition we have our work cut out to ensure we can attract and retain top talent and maintain our position as a leading UK hub.

There is also the ongoing issue of the availability of both high-speed broadband and digital radio which we must continue to invest in to ensure people have best access to new media. 

There will undoubtedly be some practical measures the city, national agencies, the Scottish Government and the businesses together can take to help the media thrive in the city. To that end the Chamber convened a Media Forum for media and related businesses across the city region. We will look to that Forum to tease out the measures that could have the most impact.

And finally ... it seems you can't get through any session these days without at least one question on independence. So for those wondering what its impact would be on the Scottish media should the country vote yes in 2014 - rest easy, we were reassured we'd still get access to Emmerdale!

07 February 2012

Cities strategy

Stuart Patrick

The Government has issued its Cities Strategy, and clearly significant work has been done within the Civil Service and across the country to have a look at the role the cities - Glasgow, Edinburgh, Aberdeen, Dundee, Stirling and Inverness - play in Scotland.

It has been acknowledged that the Scottish Government ought to be developing strategies to reflect that role and support the growth of our cities.

I previously wrote on this subject recognising that the importance of the cities in attracting investment and in achieving connectivity outcomes, especially in the kind of business which depends on knowledge, design and creativity.

Cities need to be big and they need to be growing for them to be an attractive place for investment to come, and so we must judge the Cities Strategy against that standard - and to what extent it's going to help to develop the tools to help cities to grow.

We warmly welcome the Government's intent in acknowledging the role of cities and establishing some of the structures for discussing and developing related policy.

It has always been a bit of a bugbear for me that when you look around policy making, rural issues are always well covered and well catered for whilst cities policy tends to be understated and assumed. Undoubtedly this is because there has always been a strong rural lobby, and the urban lobby is comparatively weak.

So the very recognition that Government has now taken on the cities agenda is welcome. It's also welcome that it has set up the Scottish Cities Knowledge Centre with Professors Duncan Maclennan and Iain Docherty of the Universities of St Andrews and Glasgow - both of whom are top academic players in the field.

Duncan was involved in the previous Cities Review, which set out what the challenges to cities were, and Iain is well understood to have a particular strength in the key area of transport infrastructure. They both have very strong views about how cities ought to develop, and that component of the set-up is very promising indeed.

I do though have a few modest reservations at this stage that I hope will work their way out over time.

Firstly the degree of resource at this stage is small, despite the recent £2m added to the Cities Investment Fun. I am hoping that this is really just the research stage helping to flesh out in the future where more serious investments can be made.

Secondly, although I recognise the importance of each our cities, there is a tendency within the report to try to draw an equivalence among the six, with for example the same space being given to Stirling as Glasgow.

With the best will in the world, a city like Glasgow, with its history, differs radically from a city like Stirling with the challenges faced being totally different.

Let's not forget that Glasgow, even within its narrow boundaries, is 10 times the size of Stirling, and the challenges of a large post-industrial city involve really quite complex issues. It's hard for example to find anything like the scale of contaminated and derelict land outside the Glasgow city region.

Thirdly the report starts to go down into why it's a top priority that connectivity between the cities is developed, where actually it's just as important that the connectivity within the city regions is strengthened because that's where you're going to get scale, that's where you're going to compete in international markets.  Of course my caveat to that point remains the attraction of faster, cheaper transport between Glasgow and Edinburgh because together that really would offer an internationally competitive labour market. And even then it's the connectivity from the cities to the international markets themselves that is the most important of all. It's not yet clear that the national transport strategy fully appreciates that.   

All in all we should take the steps towards a Cities Strategy as a welcome opening salvo and look forward to more to come.

Stuart Patrick

I recently had the opportunity to attend a conference in Amsterdam which boasted the grand title of Cities and Investment in Europe: Crisis or Catharsis?

This gathering looked at the challenges that European cities are facing, and in particular the financial issues they are trying to resolve.

It was particularly relevant to this country, given that in Britain we now have a Chancellor who is speaking of finding ways of getting pension funds to invest in infrastructure. Some really startling statistics were revealed about the scale of infrastructure investment needed across Europe. For instance, that EU countries now have up to two trillion Euros of identified investment demands.

Given that the Eddington Report showed just how far behind the continent we are in investing in infrastructure, obviously the challenge for British cities is where is that money going to come from?

There were a number of messages and challenges for a city like Glasgow.

Firstly - size matters - Professor Paul Cheshire presented some compelling evidence that the bigger your city is the more productive its economy will be for the companies that settle there, and clearly the more attractive your city will then be for investment.  It's the cities of the scale of London, Paris and Amsterdam that are benefitting from this.  Metropolitan Glasgow is by far Scotland's largest city and together with Edinburgh can make a genuinely productive offer for investment in global markets. It really does matter that we grow our two major cities.

Secondly we are in an interesting comparative position with European cities. Many are going through severe municipal debt crises. Some have either gone bankrupt or are on the verge of it. Madrid and Athens are publicly in trouble, but there are a whole host that are struggling with their debt.

There is potentially an opportunity in that for UK cities which haven't traditionally had the freedom to incur levels of debt. For that reason we may be in the position to offer a more certain environment for investors than those European cities that are struggling with bankruptcy.

When the conference delegates were looking at infrastructure investment needs, there was a lot of discussion about what pension funds were really interested in. The first challenge is to try and find mechanisms that will encourage funds to look at riskier new developments as opposed to simply buying in to existing developments that have a set return.

There were interesting comments from some major companies about their appetite for investment and their desire to find the right form of investment class. They were still quite positive about real estate, but there was recognition that the challenge to find sources of investments in infrastructure to go alongside the real estate is a substantial one right across Europe.

But on the other hand there was a pretty positive assessment about what the future of cities would be - because of the importance of skills and the likelihood that cities will continue to be able to offer deeper, richer and wider labour market opportunities, with more and more skilled people attracted there.

Glasgow has generally been pretty successful at exploiting this via the International Financial Services District, but increasingly we'll have to work at widening the range of offer in the city for those who want to use their university degrees. That's why our Economic Leadership Board is focused on the growth of a mix of sectors like energy, engineering and financial services that will be needed if we are going to retain a graduate population.
The importance of the city in attracting students and creating a highly-educated labour market in Glasgow is central to its long-term success.

There was also an interesting little aside - the impact of low-cost airlines on the comparative advantage of UK cities in the air industry. The cost of flying from the UK to European destinations is significantly lower than say flying from a destination in France to a destination in Germany. The impact of low-cost carriers such as easyJet has obviously been dramatic on the pricing structure of the traditional mainstream carriers operating between the UK and Europe. This healthy impact is something that we perhaps haven't acknowledged in our thinking towards low-cost carriers. We really shouldn't be undermining this advantage with Air Passenger Duty. The sooner we remove or at least significantly reduce this tax the better.

So some very helpful ideas about the role of cities, some challenging ones for a city the size of Glasgow - and if size matters, them we have to think much more about the growth and the scale of the city to be a player.

Perhaps in having an asset base, pension funds and a city balance sheet which is not overburdened by debt we have opportunities that some other cities may not have.  We have lots to play for.