Birmingham, UK and Cleveland, Ohio

Birmingham, UK and Cleveland, Ohio An Anglo-American comparison

Edgar A. Rose

This article compares the recent decline of two older industrial cities in the UK and USA. The similar development trends are pointed out, attention being paid to national and international trends (such as the shift from goodsproducing to service-producing economies) which have affected both cities. Differences in the national contexts are pointed out - emphasis being placed on the relatively centralized nature of policy making in the UK and the greater role of the private sector in the USA. The historical backgrounds of Blrmingham and Cleveland are outlined and their changing economic structures analysed: in particular the rise in urban unemployment and the decline in population facing both cities. The article concludes with policy recommendations designed to combat the fiscal crisis and economic problems facing Birmingham and Cleveland. Keywords:

Physical planning;

UK; USA

Professor Rose is Professor of Planning in The University of Aston in Birmingham, Gosta Green, Birmingham 84 7ET (Tel: 021-359 3611). He is also Levin Professor of Urban Studies and Public Service, College of Urban Affairs, Cleveland State University, Cleveland, OH 44115. Professor Rose also engages in private consultancy work. This article is part of an ongoing research effort involving academics, researchers and urban managers in both countries.

0264-2751/84/040387-17$03.00

The political and economic strengths of many older industrial cities in both the UK and the USA have been weakened by structural shifts and regional changes in employment and population. However, their institutions have changed relatively little as the cities have attempted to come to terms with a growing number of problems. This article looks at two cities, together with their metropolitan hinterlands, which are perhaps representative of this process (Table 1). At the same time as this relative decline the roles of public and private agencies are changing and local initiatives are, and are likely to continue, playing an important, if subordinate, role in the attempts of national governments to come to terms with the consequences of the scientific and technical revolution. The impacts of new technology on the spatial and socioeconomic structures of the city have to be looked at in the context of continuing decline in the older manufacturing industries and high levels of long-term unemployment, hitting hardest those who are already the least fortunate members of our urban society. The concern of the article is with policy and action to arrest this decline and with the ways that Birmingham and Cleveland are responding. The comparative perspective is topical for a number of reasons, perhaps the most important being that the evolution of public policy in the UK is much influenced by the US experience and that there exists an apparent accord between the two countries on economic and social objectives, underpinned by largely similar ideological assumptions. The themes of the article are, therefore, the current preoccupation with: 0 0 0

0 Butterworth

revitalization of local economies; public and private partnerships; local initiatives and promotion.

However, themes and preoccupations are not explanations, nor are current policy options necessarily relevant or effective. In many instances we will have to await both evidence and evaluation. Nevertheless, we need to compare what is happening and why. The 8 Co (Publishers)

Ltd

387

Birmingham

and Cleveland: An Anglo-American

Sources: US Census of Population and Housing, 1980; UK Office of Population and Census Statistics, 1981. aCleveland City Estimated Population: 564 000 in 1982. bsirmingham is the largest Metropolitan Borough including those making up Greater London. ‘J#ith the exception of Greater London this is the largest population of any Metropolitan County. donly the South-East Region has a higher population. astandard Metropolitan Statistical Area (SMSA) of Cleveland, referred to as Metropolitan Cleveland, includes the counties of Cuyahoga, Geauga, Lake and Medina Counties.

comparison

Table 1. Cleveland, OH, and Birmingham, UK: comparative population statistics. USA

England and Wales (excluding Scotland and Northern Ireland) Birmingham City Population (1981) Rank sizeb West Midlands Metropolitan CountyC (WMMC) West Midlands Regiond

1022300 1 2674 000 5181000

Cleveland City Population (1980) Rank size $y$ga SCSA Ohio State

England and Wales only

49 592 900

USA

County

573822a 18 1498 400 2106300 2834062 10796624 226 504 825

relationship between the specific problem - say of de-industrialization and institutional and administrative contexts is critical. A study over both time and space yields important insights as to the way the two different cities are having to come to terms with loss of population and economic decline.

Similar development

trends

Both towns and their hinterlands had been very dependent on steel, heavy metals, and the production of motor cars. However, the steady and prolonged decline of Cleveland’s fortunes is not paralleled to the same degree in Birmingham and its metropolitan hinterland. This may explain the greater sense of shock, outrage, and bewilderment that one experiences from people in Birmingham and the West Midlands as they contemplate the relative suddenness with which the bottom has fallen out of the economy and in some cases their lives. In an important sense they have been beneficiaries of a range of public social and industrial policies which has provided temporary shelter from the sharper winds of competition beyond the boundaries of the UK. Moreover, if decline is the common factor in both cities, the causes are complex. A Birmingham City Memorandum suggests that: of employment and , . different mechanisms have affected the decentralisation population, and these have proceeded at different rates. The effects on the ground have been as diverse as the history and geography of the cities themselves, and are further complicated by their regional settings.’

‘Memorandum of Evidence by Birmingham City Council before the House of Commons Environment Committee on Problems of Management of Urban Renewal, HMSO, 13 December 1982. *R. Vaughan, ‘Local business and employment retention strategies’, Urban Consortium information Bulletin, US Department of Commerce, Washington, DC, 1980, pp 34.

Such trends are transnational. They present both problems and opportunities for central cities such as Cleveland and Birmingham to undertake revitalization and redevelopment of older industrial and residential areas. The US and UK economies are undergoing rapid structural changes from largely goods-producing to more service-producing economies. The trend in the UK is more marked, with manufacturing imports exceeding domestic production for the first time since the industrial revolution in the summer of 1983. The impact of this trend on cities is difficult to predict and is likely to vary considerably. The more environmentally attractive centres may compete for appropriate investment and activities more successfully. Outcomes may depend on the provision of those residential and ancillary amenities that attract the highly educated and mobile work force required in the modern service sector.2 Structural changes in the economy and the economic transformation of the manufacturing base of the city region are creating a demand for

CITIES May 1984

Birmingham

and Cleveland: An Anglo-American

comparison

new, small, specialized firms that will create new divisions of labour, provide new jobs and meet new needs. This demand will require a substantial increase in the birth rate of high technology companies and will require innovative financing programmes. If the focus of this article is the development process in conditions of considerable economic turbulence, the policy perspectives are directly concerned with the potential and the realities of restructuring the local economies of these two city regions. In essence such policy perspectives require both an understanding of the composition, distribution, and value of a city’s stock of assets as well as an understanding and identification of opportunities for asset growth and development and, conversely, the problems and obstacles to such growth and development .3

Different planning histories

3H. Gam and L.C. Ledebur, ‘Economic growth and development issues’, The Urban Institute, Washington, DC, December 1978. 4H.W.E. Davies, international Transfer and the inner City, OP5, University of Reading, UK, 1980. 5As Sir Colin Buchanan, the internationally known authority on traffic in towns, remarked recently: ‘the main achievement of [British] planning has been to prevent the wholesale spread and sprawl of development as market forces might dictate irrespective of other considerations’. %terview, Local Government News, October 1983, pp 12-13.

CITIES May 1984

The similarities of the processes at work in Birmingham and Cleveland should not obscure the distinct or unique problems of particular cities and regions. However, the two cases are representative of a large class of European and US regions and cities having to respond to declining heavy manufacturing industries. The problems of decline have been less evident in UK cities. Planning policies have encouraged a planned dispersal of population from the congested inner city areas and have simultaneously promoted their redevelopment. 4 In the case of Birmingham, for example, on a scale that was unequalled. Moreover, the redevelopment was virtually all public housing. However, perhaps the greatest contrast between the physical and spatial processes of development and redevelopment in the city regions of the two countries has been the extent to which the commercial and retailing core of many US cities suffered from the exodus of such facilities and the growth of new centres at strategic access points to the Interstate and rapidly growing freeway systems. The visitor to Birmingham from Cleveland would immediately perceive the marked contrasts in the ‘downtowns’ of the two cities (Figure 1). The differences are striking, and they are due in no small part to the planning policies pursued within the metropolitan region and the systematic application of green belt policies which have provided the ‘hard edge’ to urban growth and development in the UK’s urban regions.5 In the words of the UK Environment Secretary, Patrick Jenkin: ‘our land resources are so few and the pressures on them so great, that to abandon planning is unimaginable’.6 Nevertheless, the same visitor venturing further afield would find massive evidence of the extent of structural change, the decline of traditional industries, and apparently derelict and unused land across the West Midlands. Underlying change and development processes in the two cities are not dissimilar, though the deep-seated shifts in the economy of cities - and especially in a city like Birmingham - may not have been widely evident until the mid-1970s. In the USA, the widely held view was that cities possessed ‘negative externalities’ which deterred investment and made deterioration inevitable. These negative externalities, it was thought, could be offset by direct and indirect subsidies to the private sector. Such subsidies, it was argued, would create new enterprises providing jobs and additional tax revenues. Unskilled urban residents would ultimately benefit from the

389

Birmingham

and Cleveland: An Anglo-American

comparison

Figure 1. Looking westward across Cleveland State University campus towards Terminal Tower and Public Square.

7G.N. Conley, ‘The technology of public entrepreneurship’, Paper delivered at the First Anglo-American Colloquium on Urban Policy Innovation, Cleveland State University, April 1983, proceedings forthcoming. 8N.J. Glickman, ‘Emerging urban policies in a slow-growth economy’, international Journal of Urban and Regional Research, 1981.

growth in employment, either directly or through a ‘trickle down’ process. ’ The dilemma faced by public sector officials of the cities most affected by structural shifts and high levels of unemployment is that the it will bring the ‘trickle down’ process takes time, even supposing benefits promised. Moreover, the state of the physical infrastructure of these cities reflects long years of disinvestment and near insolvency; in the case of Cleveland, actual default. Little wonder then that the the new breed of public officials, is approach of ‘public entrepreneurs’, in the tradition of boosterism; a category of political rhetoric which seized upon the visible success stories of urban USA and cities which, it is claimed, are being ‘turned around’. As Glickman has pointed out, much of what is happening is far more deeply rooted than today’s policy makers imagine.x Structural changes demographic, economic, political and social - have changed the nature of our societies. Long-term migration patterns have been reversed; birth rates have fallen; productivity has slowed; unemployment has grown and increases in incomes have become smaller; inflation is a constant reminder of the fragility of the economic order; and political and social tensions are on the rise. In the UK, state intervention may well have contributed to the vulnerability of communities relying on the traditional industries of mining, steel, and heavy metals. Current policy developments are

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Birmingham

and Cleveland: An Anglo-American

comparison

relatively untried and it is too early to make firm judgments limited evidence available.

on the

National contexts The Atlantic Ocean divides more than it unites. There are difficulties in defining terms and differences in scale of operations’ and in the environment within which policies are formulated and implemented. The critical point of difference at the national level is that the UK’s economic performance has steadily worsened over the last 20 years. The UK gross domestic product has been falling” and at the same time public expenditure as a percentage of GDP rose steadily from the mid-1960s until the mid-1970s when it started to fall. It has begun to rise again more recently. The attempt to manage the UK economy is a relatively centralized activity of government and requires control of public spending. The apparent endless diversity and variety found in the USA between north and south, between states of the union, and between cities needs to be contrasted sharply with the relative standardization of services and public goods in the UK, irrespective of region or city. The environment of public policy making in a federal system is very different and is of decisive importance in understanding its characteristic style. The national economic scene in the UK, with its mixed public/private sector economy means that there are limits to regional or city initiatives. These limits, which in many cases can be accurately defined, restrict the effect any particular local authority can have on reviving the flagging fortunes of its local economy. Birmingham’s Chief Executive, Tom Caulcott, has underlined this fact: National decisions are so pervasive in the U.K. that there is very little chance of an individual city being able to bring itself through to a change of economic situation in a way that here and there individual cities, even in the frost belt, have succeeded in the USA.”

gWhat Finer calls ‘scale cleavage’ (F.E. Finer, Comparative Government, Penguin, _ Harmondsworth, Herts UK, 1970). ‘OL.C. Thurow. The Zero Sum Sociefv: Distribution and the Possibilities for Econbmic change, Basic Books, New York, 1980. “T. Caulcott, ‘Developments in urban government’, Paper deivered at the First Anglo-American Colloquium, Cleveland State University, April 1983, proceedings forthcoming. “Bradbury, Downs and Small, futures for a Declining Cify, Simulations for the Cleve/and Area, Academic Press, New York, 1981.

CITIES May 1984

Policies which were considered appropriate during an era of population growth, full employment, and relative affluence are no longer appropriate in the UK today. Important ideological shifts have accompanied this realization. Likewise, discussion in the USA on the ‘New Federalism’ has replaced the vision of the Great Society which dominated the urban stage in the late 1960s. If the extent of the differences in contexts has been emphasized it is because despite similar technological and structural changes in both Cleveland and Birmingham, there are some important dimensions of difference: differences in the extent and weight of problems; differences of perception of the problems; differences in policy responses mediated by differences between public and private sector roles. Where trends appear similar it is worth stressing the importance of quantifying these trends to secure a more precise understanding of relative performance between or within cities and their metropolitan regions.‘* The search for the general in the apparently unique, and the unique in the apparently general, the search for regularity as well as difference; these must be major objectives of comparative study methodology across national boundaries. Furthermore, such a comparative analysis must incorporate the very different historical and geographical contexts of the two cities. 391

Birmingham

and Cleveland: An Anglo-American

comparison

Historical development Specious ‘causes’ of city growth are what Jane Jacobs has called locational and one-dimensional explanations.‘” As she pointed out: ‘cities are not ordained; they are wholly existential’. When she suggests that all Birmingham seems to have had in the beginning was a good supply of drinking water she was not far off the mark. Moreover, geographical description alone cannot account for the actions of men able to use the opportunity that geography provides.14 The importance of this for the future of Birmingham and Cleveland will become clear. Cleveland: manufacturing

Figure 2. Geographical Cleveland.

position

of

13J.Jacobs, The Economy of Cities, Random House, New York, 1969, p 144. ‘%he quotes Alcaeus, 600 BC: ‘not houses finely roofed nor the stones of wails well built nor canals nor dockyards make the city, but men able to use their opportunities’. “G. Condon, Cleveland: Prodigy of the Western Reserve, Continental Heritage Press, Tulsa, OK, 1978.

392

centre, depot and port

Cleveland, founded in 1796, started out as a tiny frontier village but, like Birmingham, became a great manufacturing city. It also took on the functions of depot and port. Cleveland was where the iron ore of the north met with petroleum and coal from Pennsylvania: ‘The mixture’s effect was a form of spontaneous combustion that fired the industrial development of the city. The stacks of the steelmills and the towers of the oil refineries gave the Cuyahoga Valley “Flats” a new importance’. l5 Cleveland’s location on Lake Erie and the mouth of the Cuyahoga river provided industry with excellent transportation. Like Birmingham, it benefited from canal building and railways, close proximity to (Appalachian) coal and other energy supplies, and a position central to the nation’s major consumer markets (Figure 2). But if an existential explanation is to mean anything, then it is to the nature of men and women and their inventive genius that we have to turn for explanations of city growth. Both cities created or were related to hinterlands made up of industrial villages which became towns in their own right. In the case of Cleveland, the Ohio Canal built during the 1820s brought thousands of immigrants into the city and opened the farmlands of Ohio to the markets of the east coast. It became one of the USA’s great metropolitan cities, a centre of industry and commerce, at its peak an important rail centre. Unlike Birmingham, Cleveland became a port the nation’s largest iron ore-receiving port. John D. Rockefeller began his career here as a Cleveland bookkeeper and by 1870 Standard Oil was born and petroleum refining had arrived. By the 1890s Cleveland had become the nation’s greatest shipbuilding centre. Local entrepreneurs invented everything from chewing gum to the incandescent lamp. Immigrants from Eastern Europe provided the labour for mills and plants and Cleveland companies produced the first automobiles. Euclid Avenue became a ‘Millionaires Row’ of Victorian mansions and conspicuous affluence. By the 193Os, Cleveland ranked fifth in the nation in the value of manufactured goods and was the world’s second largest foundry centre. Birmingham:

workshop of the UK

Birmingham, known as the city of a thousand trades, was similarly the product of invention and industrial processes. James Watt came to the West Midlands to have his steam engine made. This was where things were brought into being. The city’s central position in the national network of canals and railways encouraged population growth from 70000 in 1801 to 840000 in 1911. Today Birmingham is the second CITIES May 1984

Birmingham Parsons per hectare

x

Figure 3. Population

density

of Eng-

land and Wales.

and Cleveland: An Anglo-American

comparison

largest city in the UK and the regional centre of the West Midlands (Figure 3). Although manufacturing industry continues to be the basis of the city’s economy, Birmingham is also a major administrative, shopping and entertainment centre serving a hinterland of over five million people. The West Midlands is often referred to as the workshop of the UK. l6 Birmingham’s early industrial growth was in jewellery, guns and small arms, which provided a supportive environment within which the bicycle, motorcycle and car industries could later flourish. The erstwhile industrial villages of the Black Country, as the area is known, were historically more concerned with metal wares, locks, chains and hollow ware. The two became interdependent creating an industrial complex centred on metal working without equal in the UK. The industrial systems in both cities were built largely, if not wholly, of exported goods and services. The lifeblood of the cities’ and regions’ economies was and largely remains exporting products, both goods and services. If new local industries do not arise as older ones take to exporting their work, the system halts. At best it is an entrepreneural and innovative system and growth probably requires such a system.

Changing economic structures The spatial emphasis on change processes has underlined the shifts in the comparative advantages of regions and central places for growth. The problems of cities and urban regions, especially where urban renewal and environment issues are central, have been concerned with:

16A characteristic was and remains its compact industrial core and extremely high population densities. In 1951 the average density for manufacturing in Birmingham was over 100 workers per acre.

Table 2. Cleveland, OH, and Birmingham,

0 0 0

Decentralization of employment. Decentralization of population. Interaction between the two.

There is mounting evidence which reveals a massive shift from urban to rural locations of both people and jobs (Table 2). This is a common

UK: populatlon changes 1971~90.a

1970/71 (mid-year)

1980181 (mid-year)

Change 1971-81

96 change 1971-81

lss0 population projectlon I 004 1oob

1022300 573622

-74800

-6.8

-176061

-23.5

460000 540000

2792200

2674000

-118200

-4.2

2629200

Metropolitan Core West Midlands Region

3664600

3907900

+23100

+0.6

5121700

5181000

Cuyahoga County

1721300

1498 400

-222900

-12.9

SMSA SCSA

2063729 2999871

1898 625 2834062

-164904

-7.9

1744873d

-165749

-5.5

2682593

+146721 +736500

+1.3 +1.5

10950114

Birmingham City Cleveland City West Midlands Metropolitan County Council (WMCC) West Midlands Middle Ring and

Ohio State England and Wales USA

1097100

750903

10650903

10797624

46854400 203302031

49592000 228504825

+59300

+23202794

lowc high

+1.1 1290608

+8.8

Sources: US Census Of Population and Housing; UK Office of Population and Census Statistics; other sources noted below. aFigures are from UK census years 1971 and 1981 and US census years 1970 and 1980. best Midlands County Council. ‘+tegional Planning Commission, Cleveland, OH. dohio Data Users Center, Population Projections, Ohio and Counties, 1982.

CITIES May 1984

393

and the most convincing explanation is provided by the fundamental changes in economic structures and technology. Three common trends characterize economic conditions in both the Birmingham and Cleveland Metropolitan areas over the last 20 years or more:

phenomenon

Total employment may have increased across the wider region but at a much lower and declining rate than the national average; it is declining absolutely in the central cities. Population has been declining. Employment in many manufacturing industries has decreased: in non-manufacturing it has increased. Cleveland’s decline

17The ‘Cleveland Area’ or ‘Metropolitan Cleveland’ refers to the four-county SMSA which comprises the Counties of Cuyahoga, Lake, Geauga, and Medina (see Figure 2). lEThe West Midlands County area has a population of 2.6 million. It lost 150000 population between 1971 and 1981. The central city, Birmingham, lost about 60000 during the same period. The central issue for the region must be the economy and the high rate of unemployment. From 6% at the beginning of 1979 it had risen to more than 17% by the end of 1982. The national figure was 13%. Unlike the Cleveland area, it had been the most prosperous region during the boom years of the 1960s. Today it is almost at the bottom of the league table. Between January 1980, and January 1981, unemployment in the West Midlands Increased from 80000 to 262000. It is still rising.

394

Cleveland’s economy entered a period of continuous decline with the end of the second world war. As the affluence and industry of many Cleveland residents increased, new neighbourhoods were built further from the central city. Since 1947/48 Cleveland has lost a significant proportion of its residential, commercial and industrial populations to nearby suburbs and adjacent counties, not to mention to the south and south-west of the country. Historically, Cleveland’s inability to annex adjacent jurisdictions has led to a fragmented and disparate local government framework. Since 1950, Cleveland has lost 37% of its residents. Trend extrapolation and other relevant factors suggest it could lose another 2.5% of the present population by the turn of the century. However, the decline is not a recent phenomenon. Between 1947 and 1972. Cleveland suffered a net loss of 122000 jobs. The manufacturing sector - which lost 92000 jobs, a 41% drop-was hit the hardest. During a comparable 25year span over 8000 retail stores followed residents to surrounding areas. Today there are only two department stores of any importance in downtown Cleveland. Like the West Midlands County, the entire Standard Metropolitan Statistical Area (SMSA) has been losing population.” Unlike the West Midlands, total employment in the Cleveland area has continued to grow by slightly less than 1% per year, although the rate of increase is falling. Perhaps the clearest evidence of the changing economic structure of the region is afforded by the fact that, while manufacturing jobs have been declining very rapidly, the creation of new jobs, especially in the service sectors, partly made up for the losses in Cleveland’s traditional economic base. This is again somewhat different from the West Midlands where the service sector is not doing as well. Both city regions appear to have deeply troubled and stagnant economies. but the economic problems of the West Midlands are more deep-rooted. The hope in Cleveland (shared by many in Birmingham): is that the service industries will assume the role of the disappearing manufacturing sector in keeping the local economy on, at best, an even keel. Ix In fact the north-east quadrant of the US still remains the nation’s population and economic heartland. In 1978, more than half the population of the USA lived within 500 miles of Cleveland, and more than 60% of US durable goods manufacturing fell within the same circle. Despite the shift to the sunbelt regions. economic activity in the USA is still heavily concentrated in the industrial north-eastern quadrant. CITIES May 1984

Birmingham

‘gCleveland Tomorrow - A Strategy for Economic Vita#ty, Cleveland Tomorrow Committee, Cleveland, December 1981, mimeo. “‘G. Kingsley, Cleveland Regional Trends: Responses to the Business Cycle, Rand Corporation, Santa Monica, CA, 1982. “AS Gurwitz and G.T. Kingsley, The Cleveland Metropolitan Economy, Rand Corporation, Santa Monica, CA, 1982.

and Cleveland: An Aqlo-American

Decline of the West Midlands and Birmingham In 1977, some 43% of the employment in the West Midlands conurbation was accounted for by metal-working activities of one sort or Table 3. Structure of the Cleveland economy and changes in employment

G. Kingsley, C/eve/and Regional Trends: Responses to the Business Cyc/e, Rand

Corporation,

(SMSA).

Employment 1967 (103)

1981 (103)

% change

Manufacturing Durable goods Non durable goods Total

227.5 79.4 307.0

178.0 67.2 245.2

-1.74 -1.18 -1.59

Non-manufacturing Construction Transportation, communications and utilities Wholesale trade Retail trade Finance, insurance and real estate Services Federal government State and local government Total

36.2 49.1 50.3 120.3 37.5 120.4 23.4 80.9 519.5

31.2 45.6 62.1 145.3 48.7 193.1 19.5 98.6 645.4

-1.06 -0.53 1.52 1.36 1.88 3.43 -1.29 1.42 1.56

Total

826.5

890.6

0.53

Sector/industrial

Source:

comparison

Nevertheless, six of the 28 Fortune 1000 headquarters located in Cleveland have left the area. The 1980s are unlikely to bring any major changes in these trends. The Chase Econometric forecast of job growth in the 1980s ranks the Cleveland SMSA 105th out of 108 major metropolitan areas in the USA.” Between 1979 and 1980 local manufacturing suffered a decline of 10%) recent losses in the motor vehicles sector were as much as 30%. In the same period, electrical industries have grown by 7%. The service sector in Cleveland has grown at an annual rate of 3.4% since 1975; finance, insurance, and real estate at 2.3% in the same period. By late 1981, the Cleveland SMSA accounted for 1% of the total jobs in the USA; 1% of all service employment; 0.9% of all finance, insurance, real estate; but 15% of all national durable goods manufacturing employment (Table 3). The current workforce, like the Cleveland economy as a whole, is very diversified. Employment is not as overwhelmingly dependent on manufacturing as it once was. In 1967, 43.4% of employment was in manufacturing, but the figure had dropped to 35.5% in 1977. By the end of 1981 it stood at a little over 27%. From the end of 1967 to the end of 1981 service sector jobs had a net increase of 72700, 18% greater than the net loss of manufacturing jobs during the same period.20 Though the city of Cleveland has been losing population for some time, it was not until the 1970s that the entire area began to lose population. The Cleveland SMSA dropped from 2.1 million in 1970 to 1.9 million in 1980, which represented only 30% of the rate of population decline in the city.2’ Nevertheless, the Cleveland SMSA has been losing skilled workers and/or professionals at a slower rate than other US metropolitan areas. While there remains an adequate pool of labour to meet employment demands, in Cleveland proper out-migration has resulted in a population which is less skilled and has a high unemployment rate (see Appendixes A and B). Long-term unemployment of a largely black ‘underclass’ is unlikely to improve social cohesion and reduce tension between ethnic groups.

group

Annual

Santa Monica, CA, 1982.

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395

Birmingham

and Cleveland: An Anglo-Ame ‘rican comparison

“Between 1971 and 1976, the region had the lowest growth in gross domestic product per head in the UK. By 1980 growth in GDP was 94.7% of the national average.

another. By 1982 the decline in this sector had become nothing short of catastrophic. The emphasis on the economic factors providing the r&on d’&tre for the region’s emergence and spectacular growth may equally help to explain its apparent decline, measured in terms of manufacturing industries that have gone to the wall and in numbers of unemployed (see Appendixes A and B). The West Midlands figure of 17% unemployment, 262000 people, represents a facet of what a recent West Midlands County Council futures study has described as: ‘an accelerating “spiral of decline” where social and environmental problems undermine economic regeneration’.22 The most significant change within both the West Midlands Region and Birmingham City has been the overall loss of employment opportunities, particularly since 1979 (see Appendixes A and B). There were some 10% less jobs in 1982 in the West Midlands Region than in 1979. Within this overall decline there has been a very marked decline in manufacturing employment (Table 4). This decline has been occurring over a very long period but the rate of losses has increased considerably since 1978. To some extent the loss in manufacturing job opportunities has been offset by employment growth in the service sector although since 1978 there has been relative instability in this sector and very little aggregate growth (Figure 4). Several factors have influenced these changes. First, they are a reflection of national structural employment change. Second, manufacturing sectors that have performed badly in terms of employment during the current recession are strongly represented in the region. Third, the region has not benefited from growth sectors that have helped offset job losses in other areas and regions. In this respect the Cleveland area has been much more fortunate. The effects of these structural changes are not spread evenly throughout the region and Birmingham, the Black Country and Coventry have been worst hit. There has been a marked decentralization of both population and employment opportunities which has contributed to the decline of the economic fabric of the inner areas. The Inner City Partnership Area, the manufacturing and commercial heartland of Birmingham, lost an estimated 110000 manufacturing and construction jobs between 1971 and 1981, compared with 118000 lost from the city as a whole. During the same period there was an average net out-migration of 9700 people per year, including relatively high proportions of managerial and professional workers. Nevertheless, the core and city centre remain important sources of employment, especially in services for both city residents and an estimated net daily inflow of 118000 (1981) workers to the city. There are an estimated 156000 manufacturing and construction and 249000 service sector jobs within the Inner City Partnership Area (1981).

Table 4. Distribution of employment: ICPP Partnership Sources: 1951, 1961: Population Census (excludes Sutton Coldfield and includes selfemployed) 1971, 1978: Annual Census of Employment (includes Sutton Coldfield and excludes self-employed). aBirmingham CB area. bEstimates based on notified redundancies (Core area) and regional trends by industry (city).

396

Manufacturing and construction 1951a 1961a 1971 1978 198lb

na ;:6 210 156

Birmingham,

1951-81

(1O3).

City

Area Service

Total

na na 237 252 249

na Lz3 462 405

Manufacturing and construction

Service

Total

396 399 328 269 212

228 248 283 291 273

624 651 611 560 495

CITIES May 1984

Birmingham I 100,

and Cleveland: An Anglo-American

comparison

-

.~~~~““,,.,,,,,~ “,“,:v,‘~i~~:,“s~~~gion

\_____ 1000

/’ __-*

900

800

/-

5

\ Manufacturing Industry West Midlands County

700

E

Manufocturmg West Midlands

industry Region

Construction West Midlands

Region

600

E 3 E w

Figure 4. Employment change in the West Midlands, Standard Region (1 970-82),a West Midlands County Council (1 970-78)b and Cleveland SMSA (1970-81).” ?97&78 based on Manpower Services Commission data, 1978-82 based on Employment Gazette estimates. bBased on Manpower Services Commission data. “G. Kingsley, Cleveland Regional Trends: Responses to the Business Cycle, Rand Corporation, Santa Monica, CA, 1982.

500

200

100

.-.-~-~-._______.___

_._. -_____ ..

-__---

0

I, 1971 72

I

I

I

I

I

73

74

75

76

77

Construction Cleveland

I

70

I1

79

00

SMSA

I

I

I

81

82

83

The main consequence of these structural employment changes has been the growth in unemployment. However, certain trends are very clear. There has been a growth in registered unemployment among both male and female workers. The incidence and duration of unemployment is highest amongst older workers and those with limited skills. For example, currently there are some 9000 manual construction workers registered as unemployed in Birmingham. There is now a very substantial and growing pool of long-term unemployed whose chances of finding employment decrease the longer they are unemployed (Appendix C).

Combating decline

23J.C.Davis et al, Cleveland Tomorrow-A Strategy for Economic

land Tomorrow

Vitality, The Cleve-

Committee,

1981.

CITIES May 1984

Cleveland,

Figure 5 indicates comparative levels of unemployment in the two cities and their hinterlands, related in both cases to the national picture. The more recent figures (November 1983) suggest that unemployment is falling in the US, but the picture in the UK and West Midlands remains bleak. According to the Cleveland Tomorrow Committee, the main factors contributing to the retardation of economic growth within the City of Cleveland are a fiscally unstable city government, a disorganized and unfocused economic development effort, the disastrous city school system and weak political clout in Washington.23 Another important 397

West Midlands /County

16 15

,

14

,‘.,Wes+Midlands / Region

I .’ I/

13

.UK

Cleveland

Figure 5. Unemployment rates: UK, West Midlands Region and County (1 976-82)a and USA, Cleveland SMSA and city (1972-81).b aDepartment of Employment, UK. bGreater Cleveland Growth Association, Ohio Bureau of Labor Statistics.

Figure 6. Cleveland, Mutual Building.

the

Medical

24/hid. 25P.T. Kilborn, ‘Reordering the economy will be a major challenge for the eighties’, New York Times, 8 May 1983, pp 1, 29. 260p tit, Ref 23.

398

L---3 1972

I 1973

I

Metropollton Area

1974

I

1

I

1

I

I

I

I

1975

1976

1977

1978

1979

1980

1981

1982

factor retarding economic growth in the city is competition for the location of industry with largely undeveloped suburbs within the SMSA which can more readily package large tracts of industrial land. The flight of capital from the city proper has been a significant factor in Cleveland’s decline although there are some signs of a reversal of this trend. The corporate leaders in the area have considerable influence nation-wide as they represent the third largest concentration - 32 of the country’s top 1000 corporations - in the USA. Their company headquarters are downtown (Figure 6). Many of their plants are in the Flats. Their corporate futures are bound up with the fate of the city. Cleveland’s commercial banking establishment is likewise a powerful and increasingly active force in the city. Moreover, subsidising private economic development is federal policy. Richard Celeste, the new Democratic Governor in State House, Colombus, has made ‘Jobs and the Ohio Economy’, the prime political issue. The call for a partnership of local public and private agencies reflects the concern of Cleveland’s top business leaders. There has been a change in understanding and attitude and the need for an improved local government system is now appreciated. Less than 8% of those employed in Cleveland work in the aerospace, telecommunications, software/data processing, chemical or other new growth industries. Most workers (54.2%) are employed in the area’s four anchor industries: primary metals, fabricated metal products, machinery and transportation equipment (mostly motor vehicles).‘” In recent years these anchor industries have greatly declined owing to a lack of the proper levels of investment in capital equipment and strong overseas competition. It has been suggested that the stop/go economic policies of the federal government, along with perverse tax incentives and heavy-handed regulation, have adversely affected US industry.‘5 Other factors affecting the decline of Cleveland’s anchor industries include poor labour relations, which have resulted in high unit labour costs, above average wages and restrictive work rules. Factors cited as contributing to the limited growth of new industries are an uneven technology/knowledge base, a mixed labour pool (with few skilled technicians) and an extremely weak entrepreneural environment.2h The greatest problem with Cleveland’s economy is the lack of

CITIES

May

1984

Birmingham

270p tit, Ref 21. “J.M. Trutko, Economic Briefing on the City of Cleveland for Mayor George V. Voinovich, Greater Cleveland Growth Association, Cleveland, 1983. *%VMCC, County Structure Plan Review, January 1983. 3oOp cit. Ref 20. The Cleveland Clinic complex is indicative of the selective nature of economic growth, both in high technology and skilled human resources. It enjoys considerable investment in both software and hardware.

CITIES May 1984

and Cleveland: An Anglo-American

comparison

investment capital. The Rand Report examined the state of economic multipliers in the Cleveland SMSA for export earnings per $1 million dollars in purchases or capital investment. The findings are that for each $1 million invested, a return of 1.52 to 2.89 times could be realized, resulting in the creation of 19 to 104 new jobs depending upon the capital is tied closely with the lending industry. 27 Lack of investment policies of commercial banking institutions. In 1947 manufacturing accounted for 77% of the jobs in Cleveland, in 1982 about 39%, and by 1985 some 36%.*s Structural change may not be the most important explanation of the present high levels of unemployment and low economic growth. The depressed condition of markets is laid by many at the door of federal economic policies. This view has it that major structural change is hardly a recent phenomenon; that the information based society has already arrived; and that more than 60% of all Americans are employed in jobs involving data collection and distribution. Since 1969 Ohio State has lost some 350000 factory jobs, but they have been replaced by about 680000 new jobs added to the service sector. By 1982, only one in four jobs in Ohio state were in manufacturing. Manufacturing losses in the Cleveland SMSA have been concentrated in automobile production and the older metal, iron, steel and rubber sectors. These comprised 68% of Cleveland’s losses but only 28% of its total 1980 employment. How different this is compared with the West Midlands deserves more detailed analysis than is possible here. Nevertheless, in 1977, almost 40% of total employment in the West Midlands was in metal-based manufacturing compared with 17% in the UK as a whole. Within the metal-based sector, the county’s industry is dominated by motor vehicle manufacturing, with more than 11% of the county’s jobs in the vehicles sector compared with 3.3% nationally.2” It seems that selected components of the local manufacturing base in Cleveland’s SMSA more than held their share of national employment in the 1979-80 recession, most of these were producers of durable goods. The 1982 Rand study of Cleveland’s regional trends suggests a number of important conclusions. It sees a major difference compared with the West Midlands: ‘[a] diversity of the local economy [which] remains an impressive asset, cushioning the Cleveland area’. It sees nothing to suggest that the metropolitan economy is at the edge of precipitous decline.“’ A portfolio of growth activities would comprise producer (rather than consumer) durables, which in turn depend on expanded nation-wide investment in industrial plant and equipment; electrical industrial apparatus; general industrial machinery; metalworking machinery; miscellaneous durable goods manufacturing (largely instrument production); together with service sector activities that strengthen the economy of the city of Cleveland - tourism, health care, finance, insurance and real estate. Rand researchers underline these as categories in which advanced industrial control, fiber optics and robotics are to be found and where further specialization in these fields could benefit the local manufacturing sector. It is clear that this diagnosis and implied policy responses closely parallels views frequently heard in the West Midlands. The emphasis on education, training programmes, and the management of technological change appropriate to this new more diversified

399

Birmingham

and Cleveland: An Anglo-American

comparison

economy is something which Aston University’s Chancellor, Sir Adrian Cadbury, has had on his agenda for many years.“’ It is no accident that Aston’s Science and Technology Park is the first venture of its kind in Birmingham. ‘*

Innovation and policy responses

3’G.A.H. Cadbury, ‘Our technological future’, The 1969 Viscount Nuffield Memorial Paper, Institute of Production Engineers, 1969. 32Historically, adaptability has been one of the chief reasons for Birmingham’s economic survival. The change from iron to steel, radical non-conformity in politics and technological innovation, provided a catalyst which is readily comprehensible in Cleveland. Joseph Chamberlain’s powerful liberal caucus was largely drawn from an industrial/non-conformist elite. Cadbury was and remains one of the leading names in Birmingham’s industry. Other names include Dunlops, Tangye, Kenrick, Nettlefold, Lloyd and Stuge. These were Chamberlain’s supporters, first in Birmingham, and then in the House of Commons. It was an American, J. R8lph, writing in Harpers Month/y magazine In 1980 who described that city as ‘the best governed in the world’. The emergence of town planning as a social movement was pioneered by men such as non-conformist councillor and businessman, J.S. Nettlefold. It was an earlier George Cadbury who appointed W.H. Harvey as architect for his Bournville model industrial village, begun in 1879. Today’s Cadbury wrote in 1968: ‘If the heart of the electronic industry was in the Midlands we would feel the benefit throughout every type of industry in the region . by 2000 AD there will be a massive investment in computers, and their peripheral equipment’. 33Public and private sector initiatives in the context of regional, indeed urban, policies are intended to respond to locationally differentiated conditions of wealth, population, or development. The evidence suggests that in the past such policies have had only limited influence on the reduction of spatial disparities (Malecki, ‘Public and private sector interrelationships, technological change, and regional development’, Papers of RSA, Volume 47). 34Thompson has long maintained, together with many others, that innovation, scientific capability and new firm formation are essential parts of a healthy region. W.R. Thompson, ‘Economic processes and employment problems in declining metropolitan areas’, in G. Sternlieb and J.W. Hughes, eds, Post-Industrial America, Centre for Urban Policy and Research, New Brunswick, NJ, 1975.

400

If local governments and especially private enterprise are to play an increasing role in both countries, it is important to recognize that the economic well-being of the largest national firms (such as British Leyland) is sharply influenced by national and international factors. The evidence suggests that direct local economic policy initiatives are unlikely to have more than marginal, if potentially valuable, effects in the absence of an upturn in world trade and appropriate macroeconomic policies. The US experience suggests that the influence of the private sector on regional development is much more in evidence and perhaps more significant than government activity. Federal R&D is found in only a few of the major industrial cities of the traditional manufacturing belt and Cleveland has little or no federal input for advanced technologies. Malecki argues that the importance of private firms in R&D, and especially of a relatively small number of firms in a few industries, is a fact not fully recognized in US innovation policy.s3 Further, the absence of corporate R&D may be an important reason for decline. Unlike the UK and other European countries, the USA has no explicit policy of funding or otherwise supporting R&D other than defence, space and basic research. Government procurement and incentive policies to stimulate private R&D activity is now widely viewed a highly effective industrial policy initiative. The interventionist role of the Japanese government and Japanese industry’s international competitiveness is well known. It seems that both Cleveland and Birmingham require government policies for industrial development that explicitly include policies regarding innovation. 34 Since 1970, it is estimated that research and development in Cleveland has increased by 14% compared with a national figure of 33%. In Birmingham the rate of increase is no greater and probably even less is spent on R&D.

Conclusions An important conclusion of this Anglo-American comparison is that urban policy, industrial policy, and technology policy need to be viewed as different facets of one policy intended to respond to the same underlying processes. The regional changes we have looked at are similar in that they respond to changes in the world economy and the pressures which this has brought to particular industries and individual firms. This has been our starting point and in a sense this must be our conclusion. Locational shifts are manifestly more dramatic at the scale of Cleveland’s SMSA or indeed across the state of Ohio than in the West Midlands Metropolitan Region or Standard Region. The evidence suggests that the locational shifts away from Cleveland represent in part the relatively successful attempts to develop new technology in the Greater Cleveland Area and beyond (in relatively few locations) together with a more widespread shift to low-wage production. In so far as policy responses are important, those which produce new

CITIES May 1984

Birmingham

35M. Green, Business Organizations and the City: An Anglo-American Comparison, Birmingham, England and Cleveland, Ohio, University of Aston, Unpublished Thesis, 1983.

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and Cleveland: An Anglo-American

comparison

products; new divisions of labour and hence new skills; and effect technological change are likely to be most successful. R&D is likely to be able to both attract and generate new economic activities. The importance of psychological factors, local financing activities and other local characteristics is often underestimated. The evidence suggests that the enabling role of public and private institutions/agencies deserves further study in assisting private firms bent on leading rather than following government technological activity. The spatial division of labour resulting from the effects of policies as well as industrial activity deserves further study. There is a highly developed commitment to intervention by the public sector in the UK at the local level. Efforts to reduce the extent and nature of that commitment and replace it by other priorities and working arrangements are part of the ongoing political process, but it remains easier for governments to propose than dispose. Many UK local authorities have developed and diversified their activities to respond to the challenge of encouraging economic development in their areas. In both countries local government is seen as an appropriate agency for action. In the UK the private sector response to local problems is part of the dialectic which embraces public sector activity. Private sector organizations have in many cases been heavily reliant on the public sector and these relationships have been institutionalized. They are complex and are not readily disentangled at the behest of central governments. The political paradox is that the New Federalism, a Republican virtue, implicitly recognizes this for the USA. An understanding of political cultures is very relevant to understanding public and private sector roles in the two countries: how else may one begin to explain the difference in scale and sophistication of private sector initiatives between a Birmingham and a Cleveland? Detailed comparison of the Birmingham Chamber of Commerce and Industry (BCIC) with the Greater Cleveland Growth Association (originally known as the Chamber) makes this clear.35 There are similarities between the organizations, but to make BCIC or other chambers perform in a similar way to their US counterparts would require not merely fundamental changes in the relationships between the public and private sectors but significant shifts in attitudes and behaviour on the part of principal actors in the policy systems. As Green underlines, the importance of the business leadership concept in US cities must be emphasized. Such leadership is an important part of the tradition of boosterism. Moreover, some US cities are analogous to capital cities in smaller countries. Cleveland is the largest and arguably the most influential city in Ohio. Although there are several internationally important companies in Birmingham with corporate headquarters in the city, most such companies are based in London. The ‘scale cleavage’ is relevant here. The relationship between major corporations and the five local banks (mediated by organizations like the Growth Association of Cleveland) and the economic, political and cultural life of the city is very different to Birmingham (although the differences are less than they were). The question which then arises is whether the political climate of the UK is likely to shift more decisively, resulting in further institutional and attitudinal change? If so then would this imply the growth and proliferation of private organizations discharging an increased range of activities formerly in the province of local government? Perhaps even

401

the metropolitan counties’ putative role in the field of local economic initiatives would become part of a reconstituted chamber of commerce and industry? Problems of accountability immediately arise which advocates of joint venture organizations tend to dismiss. Furthermore, what of the vital interests of the constituent members of such organizations? What of their propensity to innovate? Will they really embrace the technology and information revolution? Or will organizations such as Cleveland Tomorlow provide a less traditional view of tomorrow’s world? Centralized organizational planning will certainly not provide the answers. Nor have joint ventures and public-private partnerships always been successful in the sense of efficient use of resources. Intervention by central government in the urban economy is unlikely to have any greater success than attempts to intervene in the regional spatial economy. The most likely outcome is that such policies would be limited in their effects. This article has five main conclusions: (I)

(2)

(3)

(4)

(5)

The necessity of maintaining an effective highly professional management structure pursuing appropriate city and metropolitan county functions in the public domain. Major revival of economic activity and growth requires considerable public expenditure on capital items in those areas hardest hit by structural change and flight of capital. jobs and people. If there is one lesson from the experiences of both cities that is transferable it is the need to renew the public infrastructure and try to rebuild the cities’ capital expenditure programme. The necessity for cities to help themselves more, for public and private organizations to become more self-reliant. Central government must make this possible by fiscal reform. The necessity to promote development, economic as well as physical, requires major shifts in perception, attitudes and behaviour by organizations and individuals. The promotion of new technology and R&D in both the Birmingham and Cleveland city regions requires new agencies that are most likely to generate new economic activities and new product innovation. Traditional methods protect traditional ways. Corporations, financial organizations and other service organizations should be asked to play a growing role in the resourcing of public and community-oriented activity, particularly if the principle of leverage and subsidy of private sector profit activities becomes the norm.

The most critical common problem facing both cities is long-term unemployment, concentrated in the areas where the poorest sections of the community and ethnic minorities live. Intervention by governments and private agencies is required, providing a coordinated response; training facilities that are ‘tailor made’ for individual needs; policies that are more sensitive to the needs of local labour markets. However, promotional activity and competition between city centre and periphery is often wasteful. Perhaps the most significant common feature is the fiscal crisis facing the cities. Fiscal trends have followed broadly parallel courses. In both countries public sector expenditure on costs has increased at a faster rate than the private economy. The backlash of increased taxation has

402

CITIES May 1984

Birmingham

and Cleveland: An Anglo-American

comparison

been widely noted and is still being felt. In a city with the infrastructure and related problems of a Cleveland the outlook could be bleak. For a Birmingham the loss of local control is traumatic. In effect, if the US local government system is far more accountable than that in the UK, fiscal control from the centre in the UK is almost total. The UK is a ‘unitary state’ and control of public spending and limits placed on the level of property tax (rates) by central government is seen ‘as a matter of balance’ by Environment Secretary Jenkin, who was recently reported as saying: ‘I don’t want to so undermine local authorities that they are meaningless’. It must be concluded, therefore, that if cities seek to exercise a considerable degree of fiscal authority, they must be willing and able to earn a good share of their own keep through their own tax effort. However, the constitutional and institutional framework of the UK limits the extent to which this can be done and makes the attempts of cities to free themselves from central control a focus for both political conflict and administrative frustration.

Appendix A. Unemployment:

1976 1977 1978 1979 1980 1981 1982

USA and Metro Cleveland,

UK and West Midlands Region (numbers unemployed,

10’).

Metro Cleveland (SMSA)

West Midlands Region

USA

UK

West Midlands Met County

Birmingham City

63.3 54.0 43.2 46.7 68.2 78.4 I I I .4a

126.6 127.3 122.5 120.2 170.1 290.6 337.6

7406.0 6991 .O 6202.0 6 137.0 7637.0 8273.0 11600.0

1301.7 1402.7 1382.9 1295.7 1664.9 2520.4 2914.0

78.6 77.1 100.7 197.3 224.8

40.6 39.9 50.9 96.3 113.9

Notes: The figures here are based on the new claimants basis. School leavers are included. Annual averages. Sources: Employment Gazette. December 1982, Tables 2.1 and 2.3; Ohio Bureau of Employment Services; US Bureau of Labor Statistics. aThe latest preliminary figure is 115469 for March 1983.

Appendix B. Unemployment:

USA and Metro Cleveland, UK and West Midlands Region (unemployment

rates, %).

Metro City of Cleveland 1976 1977 1978 1979 1980 1981 1982

10.3 8.7 6.8 7.3 10.1 11.7 15.7

City of Birminghama

Metro Cleveland (SMSA)

West Midlands

USA

5.8 5.7 7.3 13.8 16.3

7.1 5.9 4.7 5.0 7.2b 8.4 11.9

5.5 5.5 5.3 5.2 7.4 12.9 15.3

7.7 7.0 6.0 5.8 7.1 7.6 10.4

UK

as a % of USA

West Midlands Region as a % of UK

West Midlands County

5.5 5.8 5.7 5.4 6.9 10.7 12.5

92 84 78 86 101 110 114

100 95 93 96 107 121 122

5.5 5.6 7.3 14.2 16.2

apercentage of a travel lo work area population not coterminous with city boundaries. bThe city of Cleveland had an estimated 13.8% unemployment rate in 1980; the rate for non-whites was 18.6%; for non-white men 22.5% according lo a sample survey carried out by the Greater Cleveland Growth Association.

Appendix C. Regional distribution of long-term UK unemployment

Region Sources: Regional Stafrsfics, Vol 11, Department of Employment, 1975; Employment Gazette, August 1980, August 1982. aFigures are for July in each case; highest and

West Midlands South East East Anglia Northern Ireland

lowest sets, only, ie four out of eleven regions. bAs a percentage of total unemployment.

UK

CITIES May 1984

1974 103

%b

1980 103

%b

(1974-82).a 1982 103

%b

8.6 15.6 2.5 5.8

21.6 16.6 24.8 24.8

36.8 56.7 7.0 20.6

18.8 15.1 16.8 24.3

142.5 206.8 21.7 47.6

38.6 28.3 28.0 39.4

118.6

23.5

364.2

19.2

1070.5

33.6

403