The Liverpool economy: Challenges of the new decade

Archontis L. Pantsios, Associate Professor of Economics, reflects on the evolving Liverpool economy and what the future holds.

With the dawn of a new decade, and Brexit already a reality that is taking shape, regional economic development is expected to take centre stage in the public debate.

In the past 20 years, Liverpool’s economy has experienced growth rates similar to London’s, and rivalling fast-growing government-centre cities like Cardiff and Edinburgh. In 2017, the Liverpool City Region boasted a real annual growth rate of 3.3%, the highest in the UK, while in 2019 Liverpool’s economy continued to be strong, with a year-on-year rise of around £1.6 billion and a forecasted annual growth into 2021 of 1.5%.

A number of explanations account for these apparently surprising growth statistics, including the fact that Liverpool had reached a very low baseline after becoming Europe’s fastest declining city – in terms of population losses, gross value-added productivity and industrial decline – for much of the 70s and 80s. While the beginnings of cultural tourism and knowledge economy regeneration meant that Liverpool’s economic fortunes improved dramatically.

Perhaps the most important factor in turning Merseyside’s economic tide was EU investment. The so-called ‘Option 1’ terms in the mid-90s transformed the city’s status and prospects. This led to very significant inward investment, towards the development of a new Superport (Liverpool 2), and the redevelopment of the Paradise Street area into the 42-acre Liverpool ONE retail shopping centre.

With an expected slowdown in retail, manufacturing and public sector employment, the business service sector is projected to be in the forefront of any future growth potential, with the information and communication sectors expected to be significant drivers.

Nowhere is this manifested more emphatically than the development of the Knowledge Economy within the city’s Knowledge Quarter. This hub of education, knowledge and research generates £1 billion in annual income. Moreover, in the Baltic Triangle, close to £130 million has been invested to transform a district of dilapidated warehouses into a digital, cultural and creative business community of innovation and enterprise. It becomes apparent, therefore, that what needs to be prioritised is investment in education and skills.

It is against this backdrop that Liverpool Hope Business School offers a new Economics degree starting in October 2020. This degree will not only expose students to current national and international issues, but will also use case studies from Liverpool’s economic past to educate the minds of tomorrow.