Young wealth creators key to generating jobs and growth

Young wealth creators key to generating jobs

Caroline Haynes tells us why UK cities must be magnets for young wealth creators.

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With some of the lowest gross domestic product (GDP) rates in the developed world, UK cities outside London must reinvent themselves as magnets for young wealth creators, in order to generate long terms economic growth, according to the new research by KPMG.

Drawing on extensive interviews and economic analysis, KPMG’s Magnet Cities report outlines nine successful city reinvention programmes around the world; and identifies common principles that UK cities can adopt to encourage growth. The analysis suggests cities are like magnets – they either attract or repel - and it is difficult to flip a negative city magnet into a positive one, as many UK cities have found. Over the last ten years GDP across UK’s ten largest cities (excluding London) grew by just one per cent, while the average GDP growth in the magnet cities was 2.8%.

Caroline Haynes, Public Sector Director at KPMG and author of the report says: “This research highlights the growing economic gulf between UK cities, and other non-capital cities in the developed world. If the ten UK cities had grown at the same rate as the magnet cities, this would have equated to an additional £35bn in national GDP, and a net addition of 750,000 jobs, creating greater economic balance across the country.”

The research, conducted over a one year period, outlines the seven principles that the Magnet Cities case studies adopted to reinvent themselves. In addition to targeting specific groups of young people, the cities underwent continual physical renewal and established a clear and sharp, globally competitive city identity. Also many of the cities found ways to fund their reinvention programmes themselves and through partnerships with the private sector.

Caroline comments, “London will always dominant UK GDP, however now is the time for bold city thinking in the UK, to redress the balance of growth. The magnet cities selected for the report reinvented themselves to attract a targeted group of ambitious and energetic young people. As soon as the cities started to attract young wealth creators, the investment and jobs followed.”

Kru Desai, Head of UK Local & Regional Government at KPMG says: “While everyone is agreed that greater local devolution is the direction we should be travelling to, it is not the only answer. The Magnet Cities research shows there is much UK cities have the power to do today - to up their game nationally and globally. The more UK cities can demonstrate they are learning to become self-sufficient today, the stronger the case for devolution tomorrow.”


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For further information, contact:

Ann Burton, KPMG Press Office

T: +44 (0)207 311 6497

M: +44 (0)7467 339 719


KPMG Press office: +44 (0)207 694 8773


About the report

The Magnet Cities report profiles the city-wide reinvention programmes of the following cities:

  • Bilbao, Spain: once an industrial city with a toxic river, today a capital of culture
  • Changwon, South Korea: once a collection of three small manufacturing cities, today a newly merged ‘green’ city with a thriving arts core
  • Christchurch, New Zealand: the city is using the devastation caused by the recent earthquakes to repurpose the quality of life and economic based of the city
  • Denver, United States: once a military and mining city, today a capital for the millennial generation
  • Incheon Songdo, South Korea: once a middling industrial city, today an newly-built international business capital
  • Malmö, Sweden: once a ship-building city, today a cleantech capital
  • Oklahoma City, United States: once a mining and cattle city, today an energy company hub and smart technology
  • Pittsburgh, United States: once the steel capital of the United States, today one of the leading cities in the world for medical technology and robotics
  • Tel Aviv, Israel: the city has bounced back from acute economic and political difficulty to become one of the start-up capitals of the world

Note on methodology:

GDP source data from the OECD and local statistic offices was analysed over the 2000-2010 period except for the following cities where data was available for a shorter time period: Birmingham, Leeds, Manchester, Songdo, and Christchurch. GDP figures were converted from USD to GBP using the IMF average exchange rate for the period. Finally, GDP figures were converted into the equivalent number of UK jobs using ONS regional figures for GVA per job in 2010. It was assumed that 75% of the GDP increase would result in job increases, while remaining 25% would result in productivity increases due to agglomeration affects.

About KPMG

KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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