glasgow-commonwealth-investment
The hosting of events such as the Commonwealth Games has sent out a message to investors about Glasgow’s confidence and ambition. (Photo by Andy Buchanan/AFP via Getty Images)

Glasgow may be Scotland’s most populous city – with almost 1.7 million residents – but historically it has struggled to match the profile of capital city Edinburgh. Since the turn of the century, however, Glasgow has been turning the tide and garnering a reputation as a good place to live, work and invest in. For foreign direct investment (FDI) specifically, Glasgow was the fourth most popular city in the UK for project numbers in 2019, behind London, Birmingham and Manchester, with 23, according to the EY Attractiveness Survey Scotland 2020. This was one more than Edinburgh.

The city was also ranked as one of the top 100 worldwide, rising more than 20 places into 96th position, in Resonance’s World’s Best Cities ranking for 2020. Reasons for this included its high income equality levels, low unemployment, impressive nightlife and its reputation as a “working-class city with working-class values”.

Glasgow’s rise to become a global player

Glasgow City Council leader Susan Aitken agrees that Glasgow’s star has been on the rise. “Over the past decade, Glasgow has become more prominent on the world stage and has cemented itself as a welcoming and open international city,” she says.

Aitken credits the people of Glasgow for making an impression. “We are not a cut-out-and-paste city; Glasgow is very distinctive,” she adds. “It has a very strong character and the people of Glasgow have a very strong character.”

It is perhaps a combination of this strong Glaswegian attitude and an ambitious city strategy that has seen its economic gains far outweigh its losses, which have particularly affected the manufacturing industry.

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Aitken credits Glasgow’s ability to host large events – such as the Commonwealth Games in 2014 – with giving a reputational boost to the city. It was named as a Unesco ‘City of Music’ in 2008, and is known for having a lively cultural pulse. Glasgow is also home to the SSE Hydro, which was named the second-busiest arena venue in the world in 2019.

Aitken expands on this: “[Glasgow has] a very high reputation for a kind of urban vibrancy – a place that people want to be part of the culture – and it is all incredibly accessible. Alongside the city, the Highlands are on the doorstep, so all of that comes together to create a unique set of circumstances in a city. This is something more and more investors are discovering – making Glasgow a real global player.”

How thinking big and clever has boosted Glasgow

Glasgow is home to some of Scotland’s largest and most prestigious universities, including the University of Glasgow, the University of Strathclyde and Glasgow Caledonian University. The city also holds the highest rate in the UK for retaining its graduates (jointly with Edinburgh) at 51%. For comparison, London is in third place with 47% and Birmingham is in fourth with 41%.

Aitken states that this gives Glasgow a very skilled pool of workers for foreign investors to use. “The percentage of Glasgow’s population that have degree-level education sits in the high forties, so we have this incredible knowledge base. The city and its residents are very highly qualified.”

While Aitken is quick to praise the city’s impressive student base, she also highlights the obstacles still to overcome. “We don’t make any secret of Glasgow’s challenges, we are open about them,” she says. “More importantly, we are open about the fact that our economic strategies are designed to address the challenges we face around inequality and the social legacies Glasgow has as part of being a post-industrial city.”

Glasgow did indeed suffer an enormous decline in the post-war years, particularly within its shipbuilding, iron furnace and coal mining industries. Aitken is keen to use the city’s resurgence as part of its overall investment strategy.

“We are looking for a particular type of investment,” she says. “[Investments have to] match the social justice values of the city, and it has to be something that will add value and bring benefits to our citizens.”

Aitken cites the city’s partnership with Barclays as a good example of this ethos. Barclays invested £400m to create a campus on the south bank of the Clyde in Tradeston. The project is also backed by Scottish Enterprise, which has invested a further £12.75m. The site is located in an area that has seen little investment and suffered from high levels of unemployment, so the 2,500 jobs the project will create will be particularly welcomed.

Furthermore, 42% of the new jobs will be high-value positions with some specially ringfenced for disadvantaged workers. Aitken says: “Barclays is a good example of a joint partnership between the council, Scottish Enterprise and businesses. Crucially with Barclays, these are exactly the kind of jobs that we want – they are high-value, high-skill jobs. We have also worked with Barclays to ring-fence jobs for citizens from the most deprived areas of the Glasgow city region.”

A champion of innovation

When comparing the gross value added (GVA) contribution by the top sectors in Glasgow, telecommunications and information technology emerges as a success story for the city. In recent years, Glasgow has established a strong reputation for its tech capabilities and was named the second-best UK tech city in CBRE’s 2019 Tech Cities report.

The report cited Glasgow’s digital strategy and its success in supporting initiatives such as its accelerator programme for design, creative and high-growth technology businesses.

Glasgow City Council has a heightened focus on innovation having created an innovation districts model. The city has three separate innovation districts – Glasgow City, Riverside and Advanced Manufacturing.

Aitken says: “The city innovation district is structured around the University of Strathclyde. There are a number of companies locating there and drawing directly on the research and development that is taking place in the university. They are looking at tech, digital engineering, advanced manufacturing and nanotech, to name a few.

“The Riverside district works with the University of Glasgow and is based around the West End and Govan. As a city we are building infrastructure to physically connect the innovation district. This one will focus on life sciences, but also nanotech and precision medicine, including medical lasers.

“Just outside the city will be the Advanced Manufacturing district, which will be located near the airport. So in quite a compact space we have got these three innovation districts that will be connecting with each other and creating an ecosystem around the universities. These will utilise both our indigenous business base and new foreign investment coming in, and all of this will be connected.”

When considering the Advanced Manufacturing district, there appears to be an opportunity for the city to re-emerge in an area that was behind its slump in the second half of the 20th century. The GVA chart hints at the beginnings of a recovery for the manufacturing sector in Glasgow starting in 2016, notably after the Brexit vote.

Aitken is conscious of the impact the impending EU exit will have, saying: “[Two-thirds] of Glasgow voted to remain. We consider ourselves a European city and we will continue to consider ourselves that way. It is a big focus of ours and we are talking to our European partners as much as possible. We are clearly saying that we are open for business to Europe.”

Glasgow is also keen to hit its ambitious net-zero carbon targets by 2030 and has been a prominent force for delivering this in the Scottish parliament. There is talk in the city of building a metro rail network and bringing in more electric car charging points.

Aitken is realistic about the work that needs to happen to make a meaningful impact.

“After January 2021, we will have a very clear investment prospectus for how we will get Glasgow to net-zero carbon by 2030,” she says. “It is the kind of thing that the UK government needs to get behind cities to do. There needs to be a low-carbon focus for investment, and I don’t think the UK government has clarity about what that investment needs to look like. The Scottish government is way ahead of the UK government, [though it could do to] go a bit faster too.”

Glasgow’s investment message

When asked what message Glasgow would want to convey to would-be investors, Aitken stresses that the city is a committed and motivated partner.

“We are a city that is known for talking,” she says. “If you like the look of Glasgow, you like what we are doing and you want to talk with us, we will be delighted to work with you and we will be a real partner to you as a city,” she says.

Aitken admits that Glasgow is strategic when accepting investors in order to ensure that everyone is striving to reach the same goals.

“We ask that little bit extra of investors,” she says. “In return, we are saying that we are not just here to get what we can out of you. We want to support you and we want to be a really constructive partner as a city.”

For more of Investment Monitor’s coverage of the UK’s cities, read through our Future of British Cities series: