Unlocking the potential of cities

Central to the Commission’s approach is the RSA’s nested systems model, as set out in our Design for Life strategy paper. This posits that the world’s economic, social and environmental systems are connected and mutually dependent. Further, these systems are currently fragile, imbalanced, and depleted. Consequently, sustainable growth is no longer sufficient; policy solutions must be regenerative. This means the Commission views replenishing economic, social and environmental systems as indivisible from developing practical steps for unlocking cities’ potential.

On a practical level, the nested systems framework has shaped our approach. The first stage of the Commission focused on the challenges and opportunities for core UK cities as they exist today. Some of the most compelling insights were found at the intersection of the nested systems. This blog shares a few highlights and explains how they are influencing the next phase of the Commission.

At its core, UKUF aims to help unlock the potential of the UK’s Core Cities for the benefit of their inhabitants, so surfacing how residents’ priorities span across the nested systems is a good place to start. This data visualisation reflects the most popular priorities of 1,000 people who responded to Demos-PwC: Good Growth for Cities 2022 representative survey. Unsurprisingly, these priorities span all the economic, social, and environmental systems. Economic priorities tend to be couched in terms of the quality of jobs in their area, focusing on the levels and distribution of income, as well as work-life balance. People also point to the importance of strong communities, low levels of crime, thriving centres and high streets, good public transport, and access to green space to live happy and fulfilling lives.

Can nurturing high-productivity industries help regenerate the environment?

The economic underperformance of UK cities outside of London is well documented. High-quality jobs tend to be found in the most productive industries but, as this heatmap shows, even when viewed through a UK-wide lens, most industry groups in the core cities sit below the average UK productivity for that sector.

Heatmap source: PwC Analysis (2023), ONS - Regional gross value added (balanced) by industry: local authorities by ITL1 region, released: 30 May 2022, accessed: 18 February 2023. Nomis - Business Register and Employment Survey: open access, released: 13 Oct 22, accessed: 6 March 2023. Core cities are defined as ‘Travel-to-Work-Areas’ (TTWAs).

Nevertheless, there are reasons for optimism. The composition of the core cities’ economies is not homogenous; patches of green in the heatmap demonstrate where cities may have successfully carved out sectoral niches that city leaders can build upon. These include some higher productivity sectors, like information and communications in Birmingham and Liverpool.

Further, UKUF Commissioner Anna Valero and colleagues have shown that the net zero transition represents an opportunity for areas outside of London to regenerate both economic and natural systems simultaneously. The UK ranks ninth globally on ‘green’ exports, accounting for 2.5 percent of the global export volume of such products. Many firms producing green products and services are found in areas with lower productivity and could serve as the basis for unlocking the potential of the local economy. For example, concentrations of industry related to low-carbon heat and buildings are found in East Wales, southwestern Scotland and South Yorkshire.

Tackling social challenges requires a systemic approach

High-value sectors are central to a city’s competitiveness but are only one part of the puzzle. The quantity and distribution of good quality jobs across city residents also matter, not least because it has implications beyond the economic system. As things stand, the interaction between core cities’ economic and social systems tends not to be regenerative. Based on the analysis of Indices of Multiple Deprivation data, the core cities contain disproportionate concentrations of deprivation and poverty. It is well established that unequal societies fare worse on a range of outcomes, and our analysis finds areas of income deprivation are also locked into vicious cycles of poor health, poor educational outcomes, and low wellbeing.

Low carbon is also a spatial angle to economic and social outcomes. Cities are the product of agglomerative forces: a combination of factors, ranging from job opportunities through to leisure and cultural activities, draw people to live in cities and allow them to power ahead. Healthy, wealthy, and highly educated people tend to cluster together in the same areas of cities. But the same forces mean that vicious cycles of deprivation entrench and exacerbate a paucity of economic and social capital in other parts (see maps of Birmingham below).

Viewed through the lens of our nested system approach it is clear that solutions to social issues in cities will not be found by addressing them in isolation. Taking the example of income and health, there is evidence to suggest both that a strong economy requires a healthy workforce, but also that the nature of work – increasingly stressful, sedentary and insecure – is damaging people’s health.

City dwellers must experience the benefits of urban life

City living is a key lever for reaching net zero (and becoming carbon negative). There are features of cities that make them the key to tackling climate change. For example, dense city dwellings mean that people can be housed and transported more efficiently and sustainably, reducing emissions. The below map of England shows how this density helps reduce carbon emissions when travelling to work, with the lowest emitting areas strongly correlating with the densely populated core cities.

However, research shows the UK core cities are less densely populated and have poorer transport infrastructure than leading European comparators. This suggests the UK will need to densify its cities to reach net zero ambitions. But there is a potential tension between these environmental aspirations on the one hand, and people’s health and wellbeing on the other. Evidence exists that dense urban environments can exacerbate health issues relating to air quality, overcrowding and a lack of exercise, while green space has a restorative impact on people’s wellbeing and health.

Meeting our climate reduction targets needs to be delivered alongside, rather than at the expense of, adequate homes and green space. What are the key trade-offs we will have to confront in light of these competing demands, the rise of ’15-minute neighbourhoods’, and an evolving future for city centres amid the decline of retail and the rise of homeworking?

Key lessons for the UK Urban Futures Commission

In the long run, the economy, society and the planet share the same interests. There are several positive spill-over effects from the three systems working in harmony – clean air and green space are strongly associated with improved health, wellbeing and children’s development; better-insulated homes improve people’s physical and financial health as well as protecting the natural world; improved transport decreases pollution and improves connectivity for community and economy alike.

However, as the Commission turns to developing practical recommendations it is important to keep the lessons from the intersections of the nested systems front of mind:

1. Practical plans for cities need to be rooted in residents’ priorities, which span all three nested systems.
2. The nested systems approach can increase the chances of devising successful policy interventions, by ensuring diagnosis of the challenges cities face is systemic and solutions developed in response are suitably comprehensive.
3. The intersection of the nested systems provides a framework for identifying opportunities for impactful action that replenishes multiple systems simultaneously.
4. It is likely that achieving long-run ambitions for cities will require trade-offs with citizens’ priorities across the nested systems, particularly over shorter time horizons.

The future of the Commission

Having focused on opportunities and challenges for cities as things stand, the Commission has pivoted to formulating a vision of what we want cities to be in future. Over the coming weeks, we will be publishing a series of blogs from our commissioners setting out their visions for cities.

The Commission will report in September 2023. The final phase will focus on shaping a set of recommendations that form a practical toolkit for unlocking the potential of cities, as well as catalysing the investment and policymaking necessary to deliver real results.

RSA Fellows can join the discussion on how to unlock the potential of our cities on the UK Urban Futures Commission page on Circle, our new dedicated community platform.