City-REDI, University of Birmingham
This blog post has been produced for the Greater Birmingham Chambers of Commerce to provide academic insight on the findings of the Birmingham Economic Review.
The Birmingham Economic Review 2017 is produced by the University of Birmingham’s City-REDI and the Greater Birmingham Chambers of Commerce, with contributions from the West Midlands Growth Company. It is an in-depth exploration of the economy of England’s second city and is a high quality resource for organisations seeking to understand Birmingham to inform research, policy or investment decisions.
Birmingham has one of the largest concentrations of businesses in the UK outside London. Originally primarily a centre for engineering, over recent decades the Birmingham economy has diversified into primarily a service-based economy, with strong specialisations in financial and insurance activities, education, health, defence, public administration and social work activities, as well as retail, transport, logistics and construction.
The scale and density of the Birmingham economy means that it can generate ‘agglomeration effects’ – those key knowledge interactions between people, firms and organisations – which drive local productivity growth and which allow the city to respond to the challenges arising from global and national changes.
The Birmingham economy is also the key driver within the wider West Midlands economy and its impacts are felt across the whole region and beyond. This justifies the wider economic remit provided for by the creation of the West Midlands Combined Authority, whose formation should allow for a broader and more strategic perspective on policy making.
Both the city and the wider region are today experiencing unprecedented change brought about partly by global economic changes and partly by reductions in public and national expenditure. However, to effectively respond to these changes, crucial to Birmingham’s future success will be its ability to diversify technologically into areas of higher value added and to develop further niche markets for new lines of global trade.
The major challenges and opportunities for Birmingham economy can be summarized as follows: