More people live in urban areas than they do rural, and that trend will continue for as long as they offer workers the economic prosperity they crave. But as the world’s capitals reach saturation point, second-tier cities are becoming new magnets for talent. Chris Beanland made a pilgrimage back to Birmingham, his old stamping ground as a local newspaper journalist, to explore how England’s second city is benefiting from this trend and asks what it means for business
A bright sunrise bathes Birmingham in a warm glow. From my window, high up in the Rotunda skyscraper, cars the size of pixels make their way along one of the Midlands’ many motorways in the hazy distance. Down on the ground, commuters and shoppers swarm along New Street. The huge plate-glass window glides open and I lean precariously over a safety rail, looking down. Blood rushes to my head. The window is slightly curved, designed to fit snugly into Birmingham’s most iconic building.
The Rotunda is perhaps the symbol of the Second City. This skinny skyscraper — built in 1965 and shaped like a bin, or perhaps a beer can if we’re being kinder — became shorthand for the redevelopment of Birmingham (more commonly known as Brum) in the 60s.
Business embraced it. Lloyds Bank had faith in the work of local architect Jim Roberts and opened a branch at its base. All its floors were hired out as offices — Roberts’ barnstorming architectural practice occupied the top two floors and Coca-Cola had a huge illuminated advert on top.
The Rotunda is Birmingham in a microcosm. It shows how cities are changing, how they constantly evolve and innovate. Because today it’s still making money, but in more modern ways.
At its base is the new Bullring, one of Britain’s premier retail destinations. It’s fashioned, if you’ll pardon the pun, from the previous 1960s version, which had rather more concrete and somewhat fewer mobile phone shops. That old Lloyds Bank is now a Zara, although the wonderful murals from 1965 are still there. You can see them behind the men’s tailoring section on the first floor.
Most of the tower has been redeveloped as flats by Urban Splash, the hipster property development group that has been at the forefront of the seismic shift we’ve seen during this third millennium. It has seen people moving back to city centres from the suburbs en masse, and businesses have been coming back from anodyne out-of-town business parks too.
‘People have been moving back to city centres from the suburbs en masse’
The city’s appeal
Cities are appealing. We used to flee from them but now we cherish them. We want to visit them for weekend breaks. And this is happening worldwide. Cities are growing, especially in the second tier of places away from capitals and star-spangled metropolises. Businesses looking for future expansion opportunities will be relocating to Shenzhen, Sacramento, San Sebastian, Santa Cruz, Semarang and Southend-on-Sea.
These are all urban areas that are showing high growth. Why? In US cities such as Sacramento and San Diego, high-tech industries are growing — overspilling from their traditional homes near San Francisco. In Indonesian cities like Semarang and Yogyakarta, business is flourishing — experts consistently pinpoint Indonesia as being ‘the next China’. In European secondary cities like Southend, Lyon or San Sebastian, young people are setting up their lives and raising families. It’s their escape route from the crippling costs and lack of space and opportunities in cramped capitals. Businesses are moving there too. In fact, it’s becoming a virtuous circle of businesses following people and people following businesses, all in search of a better quality of life.
Birmingham is a great example of this trend; the most recent figures show why. Birmingham welcomed more than 18,000 start-ups in 2014, more than any other UK city. It’s the youngest major city in Europe — under-25s account for nearly 40% of its population — and in 2013 more people in their 30s relocated from London to Birmingham than Bristol or Manchester. Indeed, Grant Thornton’s own Where Growth Happens report places Birmingham second in a league table of the fastest-growing cities (excluding London) in the UK, with a growth index of 165 — just behind Manchester’s 205.
UN-Habitat, the UN human settlements programme, is particularly optimistic about the growth of cities. In its State of the World’s Cities report, it says: “A critical mass of people, ideas, infrastructure and resources acts as a magnet for development, attracting migrants, private firms, investors and developers. All of this enhances the prospects for more employment opportunities, wealth creation, innovation and knowledge, which are all major factors of prosperity.”
But with growth comes challenges. Public policy will need to adapt — we’ll need school places and hospitals in urban areas. The environment will be affected: how will we manage air quality and water provision in growing urban areas? And housing is key. How can we keep up with housing demand; will we build on brownfield sites; and will we have to build higher? Cities present challenges that must be addressed in the coming decades.
UN-Habitat acknowledges, and even warns, that financial prosperity shouldn’t be the sole objective of urban growth. That can and does, it says, lead to problems of wealth inequality, poor functioning of cities and environmental damage. It recommends that urban planners monitor five key indicators: productivity, infrastructure, quality of life, equity and environmental sustainability — to spot potential problems early on.
‘Financial prosperity shouldn’t be the sole objective of urban growth’
For everyone to benefit from urbanisation, everyone must tackle the challenges together — businesses, charities, citizens and policymakers. One group of people who are ideally placed to lead that charge is the growing generation of city mayors, who are often highly skilled in using connections, communication and collaboration to tackle pressing issues.
“Mayors have always been very important in local politics, but they are not alone there,” says Albert Schröter, mayor of Jena in Germany, ranked sixth in the 2014 top 10 table of world mayors. “They have to have the ability to listen to the people, to recognise what is needed and to translate it into action. But they only can do it with their councils and the local players that are needed. As a mayor I have to be a team player.” (See What CEOs can learn from city mayors)
Redefining city living
Today’s city-dwellers are ambitious, talented and discerning. The cities that succeed in attracting and keeping them will be those that can offer a compelling experience of work, play and rest. The ‘iconic’ apartment block has become a visible symbol of how welcoming city centres are to trendy new residents.
From New York’s new generation of super-tall skinny-scrapers like 111 West 57th (due to open as the skinniest building on the planet in 2017), and 432 Park Avenue (the world’s tallest residential building), to Dubai’s Burj Khalifa (the world’s tallest tower; housing homes, offices and the luxury Armani Hotel) to Milan’s tree-clad Bosco Verticale (pictured), these residences are redefining city centre living.
And so back to the Rotunda, the top of it in fact, where I’ve just spent a very comfortable night in Staying Cool — it’s sort of a hotel, but sort of not. Staying Cool taps into the trend for unique stays; that ephemeral Airbnb ideology of individuality. You get a studio flat rather than a room, with pared-down services. They provide you with freebies like oranges, cereals, teas, freshly ground coffee and even olive oil and balsamic vinegar. I whip up a bacon butty and an orange juice I made in the conveniently provided juicer, and put some coffee in the cafetiere. It seems to embody everything we want from urban life, and an urban morning in today’s world.
‘There’s a feeling that the worst of the recession is over and that is great for business and consumer confidence’
“Staying Cool is a city centre business and, yes, we are absolutely benefiting from the recovery of Britain’s city centres. There’s a feeling that the worst of the recession is over, and that is great for business and consumer confidence. In fact, Birmingham is buzzing.” This comes from Tracey Stephenson, Managing Director of Staying Cool. “We’re seeing more businesses and more shoppers coming back to the centre of town. There’s only so much you can do online and in out-of-town retail parks and hotels. Nothing beats the buzz of working, shopping or living in the heart of an exciting city.” Stephenson lives in London with her two daughters and tells me she spends a lot of time commuting between Staying Cool’s properties in central Manchester, Barcelona and the original launchpad in Birmingham.
Work hard, play hard
Food is one attraction of lively city centres, with their cornucopia of markets and restaurants. We love delis, cafés and street food; life without a flat white is unthinkable for many people. “Major British cities are more alive than ever, particularly Birmingham, which is the best it has ever been. It’s the beginning of an exciting time for the city, with major infrastructure investment,” reckons Jabbar Khan (pictured). “It’s a good time for business growth, particularly for successful restaurants, as the economy improves.”
I pop my head into Khan’s first restaurant, Lasan, in the rarefied surroundings of the Jewellery Quarter. As a young journalist in Birmingham I remember coming to review this restaurant. I remember the flavours of Indian food elevated into the sublime by chef Akthar Islam. Bradford-born and Birmingham-bred, I’d always loved a bhuna. Here, the curry was treated with an uncommon degree of love.
But Khan is at his new venture today, an Argentinian steakhouse called Fiesta Del Asado in Edgbaston, a central district of office skyscrapers and branded hotels. I find him by the bar and we both pull up a stool and reminisce. Khan is smartly dressed and enthusiastic. I remember him proactively seeking out our newspaper, promoting his fledgling business. Now it’s the real deal.
‘Major British cities are more alive than ever’
“I set up Lasan in 2002, with limited funds, in a location that was less than ideal. In spite of this, Lasan has been a real success. It has shown profitable growth because of its consistently high standards and a great reputation for food.” Khan smiles. Now there are new flats going up all over Brum’s former jewellery-making district and plenty more people living near Lasan, many with a high disposable income.
Khan is expanding again. “Our new restaurant, Nosh & Quaff, will open in July. This will be a flagship restaurant for the group — and the city.” Nosh & Quaff will be located in an old bank looking out onto Victoria Square and Birmingham City Council’s HQ. “We could have put half a million into opening it, but we wanted it to be something really special so we’re investing £1.2 million.” Fortune favours the bold.
Like Stephenson, Khan is one of many Birmingham-based entrepreneurs who have tapped in to the mindset of new, young urbanites. They work hard and don’t want to miss out on fun. For them, living in a city centre means eating out and socialising.
Perfect business base
Round the corner from the building that Khan has already covered in banners, advertising its transformation into Nosh & Quaff, is Temple Street Social. Hi-tech entrepreneur and innovator David Roberts (pictured) is waiting. We meet in an understated bar. Roberts is another Birmingham stalwart. When we last met he was managing a band and I was working on the local paper. Three kids have changed the equation somewhat, as has Roberts’ move into tech, although his extravagant sideburns look exactly the same.
I ask him: “Do you think — specifically — ‘second’ cities like Birmingham are on the rise?” He replies: “That’s a tough one to answer. I know that Birmingham serves us extremely well as a business but I’m sure anyone in other ‘second’ cities will say the same thing about theirs.” Roberts adds: “For us, Birmingham is the perfect place to base our type of business and it’s more alive than ever. It has a massive and diverse population — perfect for testing new products and services; as well as diverse industry sectors that need to embrace technology and digital media — so markets can be found quite easily. I find that it is big enough to unearth a serendipitous and coincidental moment every week, while small enough to know exactly who to talk to regarding almost any aspect of running your business.”
Roberts (2013 Birmingham Young Professional of the Year in the financial services sector) was an investor and key player at a company developing the Droplet mobile phone app, which was designed to load money onto mobiles and send payments for free. Before that he was a director at Tribal Group, where he was instrumental in achieving a £14 million turnover. He now looks after the business side of another enterprise he co-founded — software development and internet company Action Starter. But he still helps out with other projects at the Innovation Birmingham Campus, which is a community of like-minded souls.
Roberts talks about the opportunities of devolved government, how more regional power could help cities like Birmingham. But as we stroll through the grounds of St Philip’s Cathedral, he also cautions against too much media cheerleading; too much trumpet-blowing that ignores the realities on the ground.
It’s a wise point. Roberts has always cared about more than just the bottom line and perhaps outside New York, London and Frankfurt this altruistic viewpoint is more common. Roberts talks fondly of the app he developed for the NHS that helps young fathers-to-be feel more connected to the birth of their children, and I feel this is the proudest moment in his young company’s growth.
‘[Birmingham] is big enough to unearth a serendipitous and coincidental moment every week’
You might have expected someone like Roberts to quit Brum for London, but he fell in love at Birmingham University and his wife is now a cancer nurse at the city’s nationally renowned Queen Elizabeth Hospital (QEH), so the pair stayed.
On a sunny day, Brum’s highly rated uni (2014 University of the Year in The Times and Sunday Times) is a paradise. Its unique terracotta campus was the original ‘red brick’ — a term adopted by other universities around Britain. At the centre of the striking Chancellor’s Court, built from Accrington red brick, the largest freestanding clock tower in the world soars 325ft high. Students eat ice creams and sip beers on the campus lawns. Life seems simple and full of promise.
Indeed, Birmingham was the first to build a campus like this, the first to create a purpose-built student union (or Guild) building, the first university to incorporate a medical school and the first to open female halls of residence. It’s also one of the few universities in the UK with its own train station — University Station. Innovation is key to the University of Birmingham. And that innovation spills out into the city.
‘Innovation is key to the University of Birmingham and that innovation spills out into the city’
The universities (there’s also Birmingham City and Aston), plus the low rents, have led to a mini tech boom in the past few years. Second cities are tech’s first choices. Why? They are places that are open to new ideas, as well as being nimble, cheap and willing to try things.
There’s a reason why Silicon Valley is as far from the USA’s East Coast as it’s possible to be. And Birmingham — like Barcelona, Bangalore, Munich, Austin and St Louis — is in the midst of a nascent tech boom. The BBC has a new tech innovation centre here and ASOS recently opened an office.
Innovation Birmingham Campus, the incubator of new ideas where Roberts’ company is based, is next to Aston University.
Owned by Birmingham council, Innovation Birmingham is tasked with creating the right physical space and community to help technology companies thrive, diversifying the city’s economy in the process. A 15-minute walk from Birmingham New Street — the city’s mainline train station — puts the incubator and innovation centre right at the heart of the city. When David Hardman was appointed CEO in 2008, the occupancy rate was 45%. Today it’s 100% and the incubator has a growing waiting list.
There are other signs of success. Innovation Birmingham incubator is nurturing 15-20 start-ups a year and has helped to set up 110 technology businesses to date, half of which are still there. Some have moved on while others, at a failure rate of around 20%, have gone to the wall.
Within the innovation centre, other successes include Majestic-12 — a B2B search engine provider that came to Innovation Birmingham as a two to three person start-up and now employs around 25-30 staff. Cloud computing firm Synapse Information is a younger company that has quickly reached a similar scale.
Next March, Innovation Birmingham will open its new £8 million iCentrum building that will increase capacity by 40,000 sq ft; almost double the current capacity of the campus. Filling the building should be relatively easy. Low staff costs, affordable business rents and a better quality of life in Birmingham are all strong draws for entrepreneurs.
Despite these successes, Hardman is only cautiously optimistic. Having held a similar role in Cambridge before joining Innovation Birmingham, he says there is still a long way to go before Brum is seen as a ‘knowledge city’ in the same way that places like Cambridge, London, Manchester, Leeds and Brighton are. Despite hosting 6,000 technology firms that employ 38,000 people, Birmingham’s tech sector is still not joined up enough. In particular, Hardman wants to see more CEOs of large tech firms acting as ambassadors and advocates of Birmingham as a knowledge economy. Until there is more collaboration, the city will fail to demonstrate the critical mass of tech firms needed to attract significant funding, be it from government or equity investors.
That would be a great shame, as so much latent potential among the citizens of Birmingham has yet to be harnessed, says Hardman. Only 40% of school-leavers go to university. So how can the city tap into the entrepreneurial potential of the remaining 60%? Innovation Birmingham can play its part, but it needs greater support to help engage that younger community.
‘Until there is more collaboration across the tech community, [Birmingham] will continue to fail to attract significant funding’
“Birmingham has got a real economic opportunity for a variety of reasons: its geographic location, the prospect of a new high-speed rail network, a new New Street, a nearby international airport and a huge population, but it’s got to become joined up,” says Hardman. “All participants need to be part of an additive, not a parallel dance, as too much of it is at the moment.”
I stroll down Bennetts Hill, past the buildings where both Lloyd’s and Midland (in pre-HSBC days) both humbly began. Go-getting company Class Creative is right here.
Up on the sixth floor of an Edwardian office building, I’m here to meet its co-founder, Chris Pyatt (pictured, left). Pyatt wears a blue shirt with rolled-up sleeves, just like me, and reminds me of the kind of mates I drank pints with in pub gardens at my own university, Leeds. He went there too but now lives bang in the centre of Brum, in the Jewellery Quarter. In fact his flat is on St Paul’s Square, almost next door to Jabbar Khan’s Lasan. Pyatt says: “It’s no trouble getting my mates up to see me from London as they love the location in the centre of the city.” Pyatt chose to locate here because of “major markets within a short distance”. We sit in the boardroom and I can see the Rotunda poking up above the jagged skyline of office blocks.
Pyatt’s company creates websites and he turns his laptop around to show me a video they’ve produced for a graduate recruiter. Warwickshire’s T20 team and their online presence have been rebranded by Pyatt and his team. He shows me graphics and images and tells me they’ve got some tickets to go to Edgbaston out of it as well. I might join them.
Pyatt points me into the main part of the office where four young lads are busy on their computer screens, wearing headphones. “We recruited all the guys locally — all of them went to Birmingham universities and came here on internships, then we hired them.”
People come to cities to learn, yes; to work, of course; but also to play. The countryside is beautiful but boring. Cities are centres of culture and hedonism. Adam Regan knows about both. As a DJ, festival booker, music promoter, record label honcho and now CEO of Leftfoot Venues, he’s directed the musical renaissance of Birmingham. I take the number 50 bus to Birmingham’s two most desirable inner-city ‘villages’ — Moseley and Kings Heath.
I stop to look at my own former house in thriving Moseley, passing Regan’s pub, the Bull’s Head, en route. Then I stick my head inside the Hare & Hounds in Kings Heath, Regan’s other hostelry. This is a prime live music venue in the city now, yet preserves its Victorian gin palace interiors. I’m out of luck. Regan’s off at meetings. But we catch up later and he tells me: “Cities tend to have the best and worst elements of society, but I like feeling part of a community, so Birmingham, and especially Kings Heath, is a good place to be. There are loads of great people around here and a strong creative community.”
Looking back, he says: “I bought the Bull’s Head in 2006 after becoming a father of three kids in the space of a couple of years. I needed a more reliable income and it seemed like the natural route for me to go down. The Hare & Hounds followed a year later and I’ve never looked back.” Could this dad ever see himself leaving the city for the country? “I’m a city boy through and through. I love visiting remote places by the sea but I’d go mad if I had to live too far away from a big city. I love the buzz and the choices so I don’t think a country life would be for me for anything more than a holiday.”
Dave Munton, Managing Partner of Grant Thornton Birmingham, says: “Having lived and worked in and around Birmingham for most of my life, it’s incredible to witness the pace of change the city is embracing at first-hand. From the redevelopment of business, cultural and retail quarters to the city becoming a leading entertainment and conferencing centre, the global attraction of Birmingham seems to be continually increasing.”
The facts support Munton’s observation. In 2014 the Greater Birmingham and Solihull Local Enterprise Partnership attracted 77 foreign direct investment projects, more than any other English region, representing a 57% increase on the year. And it saw the highest take-up levels in office space since before the recession, with £630 million worth of property deals done in the city centre alone — a massive 794% increase on the year. So many businesses are flocking to the city that plans are in place to build more than one million sq ft of office space in the next few years. In 2015 the Mercer Quality of Living Report said Birmingham had the highest quality of life of any UK city outside of London, ranking it jointly with Rome at 52nd out of 230 cities globally.
“What’s clear is the appetite and passion that those living and working in the city have for further change and I think it’s this ambition that has been fundamental in attracting talent and businesses to Birmingham,” Munton says. “Coupled with Birmingham’s strength in supporting and celebrating those who want to make a difference and the simple fact that the city is a great place to live and work, Birmingham will continue to prosper and grow.”
‘What’s clear is the appetite and passion those living and working in [Birmingham] have for change’
Transport is one example of the further change and ambition that Munton talks about. A world-class transport system sits at the heart of the UK government’s desire to create a ‘northern powerhouse’. Designed to rebalance the UK economy more equally between the north and south, the powerhouse aims to encourage individual northern towns and cities to work together as a single economy, becoming stronger than the sum of its parts. The grand ambition is for northern England to compete with the best-performing economic regions in Europe, attracting overseas investment and stamping its mark on the world as a global centre of innovation and trade.
To achieve that vision, plans are in place for HS2, a Y-shaped high-speed rail network that would link London to Birmingham before branching northwest to Liverpool and Manchester, then northeast to Leeds.
Work on the multi-billion-pound infrastructure project is due to start in 2017, with an estimated completion date of 2033. HS2 will bring Birmingham within spitting distance of central London and increase growth markedly. Birmingham council cites independent research, conducted in 2013, which estimates that HS2 will create an additional 50,000 jobs for the West Midlands metropolitan area, which the second city calls home. An average GVA increase of £680 per worker and a £4 billion increase in annual economic output are also predicted.
Public transport investment is always a good thing for cities. Once renowned as a city of cars, Birmingham was in thrall to the internal combustion engine and the vehicles it made at plants around the city. But cars aren’t today’s future — trains and trams are.
‘Empowering local regions to take responsibility for policy is important in helping mid-sized businesses to grow’
Cities across the globe, from Portland to Pune, are installing mass transit systems. Right in Brum’s heart, a new New Street Station is rising, with a John Lewis store on top. And tram tracks are being laid for the city centre extension of the Midland Metro, which links Birmingham with Wolverhampton.
My final journey is going to take me to that misunderstood Midlands hinterland known as the Black Country, an industrial and mining area made up of large towns that blur into each other. I dodge the tramline construction and catch a train at Birmingham’s other main station, Moor Street. Half an hour later I’m in Stourbridge, a former glass-making town on the edge of the West Midlands conurbation. I’m here to meet John Parry MBE, an inventor who could revolutionise the way cities around the world work, but could also provide the answer for rural areas, which are lagging behind in connectivity terms as cities steam ahead of them.
We’ve concentrated on growth in cities, but the rise of the city corresponds with problems for many rural towns and villages that can’t share in the boom because they don’t have the same access to railways or broadband, or are unable to attract the best talent and businesses.
A friendly-looking chap in his 70s, wearing a shirt and tie, smiles at me. It’s Parry, and he’s carrying two orange hi-vis jackets. A tiny, slightly comical-looking mini-train pulls up at platform one of Stourbridge Junction Station and we board it. The vehicle can carry up to 60 people and hit 40mph. It is known as the Parry People Mover (PPM) and this is the first place in the world where it’s in active service. I sit up the front with driver Darren. Parry and Darren explain to me how the vehicle has a flywheel which harnesses braking energy. It also has a liquid natural gas engine. It’s cheap and efficient, and could be the answer to bringing mothballed rural branch lines back into use or providing low-cost tram travel in cities in developing countries that can’t afford a full overhead electric service.
The PPM chunters for four minutes north from Stourbridge Junction to Stourbridge Town. When we’re there Parry tells me: “City centres are resuming their traditional role as places to go because they are more interesting than a shopping mall, and residential accommodation keeps the city centre alive outside normal business hours.” What can the PPM offer growing cities? “The old-fashioned trams enhanced town centre life. In places such as Freiburg in Germany they produce a delightful combination of quiet, generally traffic-free, city centre streets and quick and easy transit to suburbs on all sides. Modern supertram systems require the equivalent of a heart, lung and liver transplant, which causes much disruption and pain.”
Parry, who is 77, adds: “Places as small as, say, Hereford, Wakefield, Watford, Winchester and Brighton, would all be transformed by the traffic reduction that a small PPM transit system could bring about.” Parry’s business is based up the road in Cradley Heath, where they’re developing the next generation of longer, bigger PPM vehicles for a clean, green, connected future.
While we’re talking about this on the platform at Stourbridge Town Station, and about his fondness for “karaoke singing Dean Martin songs and walking Scruffy, my Belgian Shepherd”, Parry breaks off. He’s seen someone he wants to speak to. He starts speaking Malay, then Indonesian, to a woman with her child who’s walking along the platform. At the Indonesian greeting, her eyes light up: “I’m from Indonesia!”
Parry tells me he said: “Hello, do you speak Indonesian?” to her. How does he know this little titbit? Parry then reveals that his earliest job was as a colonial administrator in the Far East. That was a different age, but this new age is about globalisation and the serendipity that cities provide, not just in business but in life.
‘This new age is about globalisation and the serendipity that cities provide, not just in business but in life’
The chance meeting in Stourbridge is a perfect example of this. Cities attract us. And while it’s not going to be easy to manage all the challenges for cities, millions of people are making the most of the opportunities they give us. I’ve just scratched the surface of a city and its hinterland, told a story that could have been told in Asia, the US, South America or Europe.
On my return train journey from Stourbridge to Birmingham, I look hard from the window — at the factories, the workshops, the supermarkets, the schools, the flats, the semis — thinking about all the new people who’ve moved here; wondering what people are up to; how they link to each other. Connections are the thing, I think — whether it’s the tech community’s proactive networking, music-lovers bonding in pubs, adding transport connections, building friendship networks, learning and exploring new cultures.
Cities are growing — they are where the talent is. And if you want to understand this new world, these new people, you need to make connections at many levels — physical, social, online. Cities are defined by connections. And I’ve got a connection of my own to make — another train back to my current home in London.
Images: Gallery Stock; Getty Images; Rama Knight; Plain Picture; Paolo Rosselli