The Knowledge Economy in the South West

1
The Knowledge Economy in the South West

• Professor Martin Boddy, University of the West of
  England, Bristol

2
The Study

• Current views on knowledge-driven economy,
  characteristics, importance
• Operational definition of knowledge economy
• Scale and characteristics of knowledge economy
  across South West
• Likely growth and future structure of knowledge
  economy in South West
• Potential for future growth and links to
  institutional and economic drivers
• Recommendations for RSS and RES to support
  knowledge economy

3
THE CONCEPT

• Knowledge, and the ability to create, access
  and use it effectively, has long been a tool of
  innovation, competition and economic success, and
  a key driver of economic and social development
  more broadly. Yet several dramatic changes in
  recent years have fundamentally increased the
  importance of knowledge, and the competitive edge
  that it gives to those who harness it quickly and
  effectively. (World Bank, 2002, 4)

4
Concept II

• Fuzzy concept but captures fundamental shift in
  competitive advantage, wealth creation
• ICT and high technology but wider than this
• Codified knowledge (recorded, transmitted)/tacit
  knowledge (face to face contact, context-specific
  know-how)
• Embedded knowledge (smart products)/embodied
  knowledge (smart people)

5
Concept III

• Innovation and the application of knowledge DTI
  Innovation Report but more than this
• Geographically uneven clusters, networks, scale
  economies
• Overlap with competitiveness and productivity
  driver
• Central to new growth theory endogenous growth
  models new economic geography creative classes
  skills, amenity and urban growth.

6
Operational definition

• Knowledge-based industrial sectors developed
  from OECD technology and knowledge-based
  industries (ABI workplace employment)
• Higher level skills NVQ 4 and above (LFS
  resident workforce)

7
Knowledge Economy Sector Based
8
Knowledge Economy in SW

• 20.6 of total employment (21.7 nationally)
• 4th behind London (29.5), South East (23.9),
  Scotland (22.9)
• Up by 13.5 in five years to 2003 ahead of
  national rate, 4th equal with NE (behind YH,
  Scotland, Wales)
• Seven districts in top 100 nationally on
  percentage share including Bournemouth (18th), S
  Gloucs (28th), Bristol (38th).
• On absolute numbers, Bristol 9th, S Gloucs 23rd,
  Plymouth 44th

9
Knowledge Economy employment SW 2003, of total
employment
10
Top 10 SW LADs on KE employment
11
Next 10 SW LADs on KE employment
12
Sub-regional picture I

• Very uneven distribution across the region
• Major concentrations in absolute terms Bristol
  (66,000), S. Gloucs (39,000), Plymouth (25,000),
  Bournemouth (24,000), Swindon (22,000)
• Nine of top ten are Principle Urban Areas in
  terms of absolute scale of knowledge economy
  employment
• Thirteen of top twenty districts in terms of
  percentage share are PUAs

13
Sub-regional picture II

• Eleven PUAs account for 66 of knowledge economy
  employment - and 60 of growth in last five years
  
• Growing strongly S Gloucs, Bournemouth, Taunton
  Deane, Exeter, Poole
• But high share in smaller places Tewkesbury
  (6th), Salisbury (10th), Carrick (11th)
• And some smaller places growing strongly
  Tewkesbury, South Hams, North Devon, West Dorset

14
Knowledge Economy employment, SW, change,
1998-2003, absolute
15
Knowledge Economy employment, narrow definition,
SW, 2003, of total(Narrow definition KE
Higher Education Hospital Activities)
16
HIGH-LEVEL SKILLS AND THE KNOWLEDGE ECONOMY
17
High level skills in SW

• 28.3 of workforce in SW qualified to NVQ4
  compared to 28.6 nationally
• Fourth highest behind London (36.9), Scotland
  (32.5), South East (31)
• Up by 12.7 in three years to 2003 well ahead
  of London (7.6) and South East (10.7)
• Well behind NE (24) and NW (16.5)

18
Resident workforce with higher level skills (NVQ
4), SW, 2003,
19
Top 10 LADs higher level skills

20
Next 10 LADs higher level skills
21
Sub-regional picture

• Marked variation across region from Cotswold
  (40) to Sedgemoor (18).
• In absolute terms Bristol 1st, followed by S
  Gloucs, BNES and N Somerset 165,000 highly
  qualified workers in the West of England,
• High concentration in smaller, high-status
  urban areas (Salisbury, Cheltenham, Christchurch)
  
• And in more accessible rural areas accessible to
  M-Ways or larger urban areas (Mid-Devon, S Hams,
  Mendip, Cotswold)

22
Conclusions and implications I

• Concentration of knowledge economy in larger
  urban areas particularly WoE. Important to
  support and facilitate future growth. Growth
  theories point to role of concentration,
  spillovers, scale economies.
• Bristol/WoE major asset in knowledge economy
  terms. Also Bournemouth/Poole, Plymouth, and on
  smaller scale Swindon, Exeter.
• Quality of life plays key role in attracting and
  retaining high skill, creative classes and
  businesses that rely on them. Therefore, enhance
  quality of life in major urban areas.

23
Conclusions and implications II

• Supports overall thrust of The Way Ahead
  capitalize on growth potential of the region and
  expansion of major urban areas in particular.
• Plymouth key role as economic driver for
  peninsular SW with advantage of scale, growth
  potential, medical and university sectors
  Cornish towns low potential for knowledge economy
  development.
• Some smaller urban areas show some concentration
  of and growth in knowledge economy selective
  but shows there is some potential identify
  drivers and build on this?

24
Conclusions and implications III

• Historic towns and rural areas attractive to
  highly skilled increase housing supply and
  attract in high-skill workforce? But local
  resistance, increasing congestion, reduction of
  amenity.
• Hospitals and HE key components of knowledge
  economy maximize contribution to employment and
  economic development. West of England and
  Peninsula Medical School/Combined Universities in
  Cornwall.
• Region a net importer of graduates but graduate
  retention strategy could still reinforce
  high-skill labour force and attract business
  investment particularly in SW.

25
Conclusions and implications IV

• Evidence points to importance of knowledge
  utilization, process and product enhancement
  rather than leading edge innovation in boosting
  productivity.
• Ensure model of HE-Business interaction is
  appropriate to needs and structure of regional
  economy including workforce and skills
  development, part-time, CPD and foundation degree
  provision.
• High quality ICT and broadband provision linked
  to training and measures to promote adoption
  crucial to knowledge economy in general
  currently good in places but patchy?