Clyde-built recovery
Where are the 5,000 missing businesses that should be in Glasgow?
That's the figure reached by a new economic analysis, underlining the low level of entrepreneurial activity in Scotland's biggest city.
The low level of business start-ups runs in parallel with problems with basic skills, particularly numeracy and literacy across much of its population (while it also has a high graduate rate) and what are called "entrenched levels of worklessness".
Reed in Partnership, a private company that contracts with the public sector for training and recruitment, has run a rule over the city, and concluded that closing that start-up gap should be a high priority for the next five to ten years.
The positive news is that Glasgow's hotel business has done well through the recession, with good occupancy rates and room rates holding up. It's also got the Commonwealth Games on its side.
And a small survey found that 43% of the city's businesses reckon it's holding up pretty well compared with the rest of the UK, while 17% think it's being relatively hard hit.
Another analysis of the city economy, carried out by Slims Consulting, highlights Glasgow's strength in financial and business services, representing 27% of employment and 33% of output.
That makes it vulnerable to the problems those sectors have seen through the recession. But on the other hand, the city's financial strength is in insurance, taking on more esure jobs, as well as 1300 Tesco Bank roles.
Glasgow's manufacturing heritage has now been reduced to only 6% of employment and 10% of output.
And how has it fared in unemployment?
Measured by claimants of Jobseekers Allowance (so leaving aside Glasgow's high levels of incapacity benefit), Glasgow has seen numbers rise by 51% between August last year and this, leaving it only slightly worse off than the average of English core cities, with a lower dole count than Birmingham or Liverpool, and slightly more than Nottingham.
The ratio of claimants to job vacancies does not look good, relative to English cities.
But there's an economists' cautious welcome for Glasgow emerging out of this recession in a comparatively strong position to build on its strengths.
Hullo, I'm Douglas Fraser, and I'm business and economy editor at ´óÏó´«Ã½ Scotland. Welcome to my blog, where you can read my take on money matters, viewed from a Scottish perspective.
Comment number 1.
At 21st Nov 2009, handclapping wrote:So this is what you get for 74 years of voting Labour? What a legacy.
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Comment number 2.
At 21st Nov 2009, CaltonBoy wrote:Forgive me Douglas, but you create a catchy headline and then fail to meaningful substantiate its central theme. You cite plenty of evidence contradicting the headline: low business start-up levels, high entrenched worthlessness, poor skills, weak entrepreneurial record ... the list goes on. Even one of your main pieces of 'supporting' evidence - hotel room occupancy - is undermined by the fact that the true hotel industry performance benchmark - revenue per room - has fallen dramatically in the city.
More importantly, the Financial Services sector in Glasgow is in real trouble:
Is the headline not merely wishful thinking?
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Comment number 3.
At 21st Nov 2009, Wee-Scamp wrote:The lack of start-ups and the appalling numbers on manufacturing tells me a number of things.
Firstly, the financial services sector in Scotland is mainly concerned with low value adding operations such as call centres and paper pushing not in providing the funding for the creation of new or early stage igh value adding businesses.
Therefore whilst it provides jobs it is also a liability in that those jobs are not leading to other more beneficial activities.
Secondly, this also tells me that Scottish Enterprise is simply not achieving what it should be achieving and although that's not a new story this emphasises the problem.
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Comment number 4.
At 21st Nov 2009, kaybraes wrote:Sadly due to the policies of a long line of governments and the greed of the trade unions, the men who dug the coal, made the steel and built the great ships are now shelf filling in Tesco or working as waiters or kitchen assistants. Meanwhile successive governments and Scottish enterprise seem to think that the tourist industry is the only one worth supporting. There is hardly a single manufacturer of any standing left in Scotland making their own product. The inflated wages paid,and expectations of vast profits from shareholders in Britain means we can never compete with the far east or central or south America where manufacturing is concerned. Britain sits on a 1000 year supply of coal, yet it is an untapped resource now, because of the high wage cost of mining it and the fashionable idea that it should not be used because it causes global warming.
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Comment number 5.
At 21st Nov 2009, Wee-Scamp wrote:Could be that Brown has inadvertantly done us a favour...
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Comment number 6.
At 22nd Nov 2009, forthblue wrote:It has the Commonwealth games on it's side. However, the rest of Scotland has to cough up for it. As time goes on, the costs will escalate so much that Scotland will suffer from respiratory failure due to too much coughing. Still it is the "dear green place". It certainly costs us all dear that is for sure. Time this money pit was put out of it's misery!
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Comment number 7.
At 22nd Nov 2009, pinkyperkypaula wrote:1. At 11:36am on 21 Nov 2009, handclapping wrote:
So this is what you get for 74 years of voting Labour? What a legacy.
Yup! When will the west of scotland wake up to the option of voting for other parties??
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