Selling cities by the pound

Originally posted on Centre for London blog 26 June 2015

The Cole Commission on UK Exports has published its report at a time when the Government’s target of achieving £1 trillion in exports by 2020 seems as distant as ever, with export levels stalled at around half that value, and a widening trade gap.

The Commission, originally set up by the Labour Party, recommends some sensible streamlining, including a new cabinet committee and the merger of UK Trade and Investment and UK Export Finance, and also recommend a more locally tailored ‘one stop shop’ service for small businesses wanting to expand through exporting, delivered through chambers of commerce.

But they seem to miss a trick in ignoring the potential role for the UK’s cities. Indeed, the report hardly seems aware of the gradual programme of negotiated devolution overseen by this government and the coalition, nor of the active role being played by cities like Sheffield, Manchester, Leeds and London in pushing exports promotion at a metropolitan level.

These cities have been learning from the experience of their US competitors (and potential partners). Research by the Brookings Institution, as part of a join initiative with JPMorgan, identified that the 100 largest US cities accounted for 75 per cent of exports of goods and services, and that export growth accounted for 50 per cent of their output growth following the 2008 recession.

Centre for London worked with JPMorgan and Brookings to review London’s exports strategy (our report Trading Places was published in November), and convened a meeting with the UK’s ten core cities to discuss how cities could play a more active role, using city-to-city partnerships, sharing experience with US cities with the same economic profile, and working locally to create the business environment that international trade requires.

We found huge enthusiasm for more active engagement among city governments, but also some frustration. Statistics don’t allow the detailed breakdown of data (especially on service sector exports) that would allow cities to identify priorities, set targets and monitor performance. Performance targets for UKTI don’t reflect the diverse make up of different local economies. And the task of planning for export growth is not within the remits of local authorities or local enterprise partnerships.

With continuing austerity, the UK’s cities are facing huge challenges, but are also rediscovering the civic entrepreneurialism that created many of our great city centres, and which can recreate thriving economies. Cities will never supplant the international infrastructure of embassies and trade missions, but they should become partners, not just bystanders, as we seek to regain our eminence in global trade.