A Treasure Trove of Economic Data on European Metro Areas
We have heard, ad nauseum, about Germany, Greece, Latvia, and the other national economic narratives of Europe. But even as the names of these countries have become abstractions, well-known keywords for policy, few apart from eagle-eyed urban economists can boast the same familiarity with Europe's metro areas. On a continent where international borders have grown softer than anywhere else on earth, the success (or failure) of cities in navigating the recession has remained largely unexamined.
A comprehensive new mapping tool from LSE Cities, an urban studies project of the London School of Economics, makes the varying fortunes of Europe's urban areas clear. Using Oxford Economics’ European Cities and Regional Forecasts database, the Metromonitor measures the employment and economic growth of 150 of the continent's largest metro areas against metrics like national growth, population size, and urban typology.
As you can see from the chart below, only a few cities have exceeded their pre-recession GVA (gross value added, think regional GDP without taxes and subsidies). But there have been many shades of disappointment, and little relation between how well a city has recovered (on the x-axis) and how its recovery compares to the national picture (the y-axis).
Only at the extremes does a correlation become apparent: fast-recovering metros like Hamburg and Berlin (the green dots on the upper right) are doing better than Germany as a whole. Stalled, shrinking regional economies (red dots on the lower left), like those of Riga, Thessaloniki, and Valencia, are doing worse than Latvia, Greece and Spain, respectively.
Coaxing patterns and trends from this data could help solve the problem of why some European metros are doing so much better than others. But what factors are most significant?
As might be expected, the fortunes of metros rise and fall along with national growth rates, driving or drafting in a country's greater economic path. In the graph below, metros are represented by dots, sorted on the y-axis by the average annual growth rate between 2002 and 2007, and on the x-axis by national GVA over the same period. The verticals on the lower left represent Portugal and Italy, while those on the right side of the graph show Russia and the Baltic countries.
The relationship between city and state is clear in the general upward drift of the points. But there's still a good degree of variance within the national context. Before the recession in particular, as might be expected, a handful of metros were growing twice as fast as their countries. Within countries, some metros grew at two or three times the rate of others.
The post-recession iteration of that graph is tighter, but it doesn't eliminate these differences. France's average growth has been near-nil since 2008, while Russia is chugging along with an average GVA growth over 2 percent. Yet France's best-performing metro, Toulouse, is still growing faster than Russia's Nizhny Novgorod.
There is nothing surprising about this: the diversity of cities is much greater than countries, and it's obviously possible for a metro area to succeed despite a national slowdown or fall by the wayside during a boom. Just look at Aberdeen (the pink dot hovering alone in the upper left quadrant above), whose oil industry has made it one of the U.K.'s few metro successes.
But what conclusions can be drawn? Applying the system of typology developed in the 2010 State of European Cities report [PDF], the Metromonitor shows that Regional Innovation Centers -- mid-size cities "characterized by a particularly dynamic and entrepreneurial research activity" -- were nearly the only group that stood out from the crowd, with more positive employment growth than most cities. Those are shown in orange on the chart below.
Population was also a factor. Of the survey's five most populous metros -- Paris, London, Istanbul, Moscow and the Cologne-Dusseldorf-Dortmund area -- four fall in the graph's upper right quadrant, with Paris right at the origin. Other measurements yielded fewer conclusions: you might have thought that government work would have weathered the recession better than the private sector, but capital cities fared no better than non-capitals.
Not surprisingly, comparatively wealthy cities -- where GVA per capita is higher than the national GVA per capita -- have recovered faster. Here are European countries' wealthier metros:
And poorer metros:
But to really see why one metro prospers while another perishes, you have to look at Metromonitor's breakdown of growth and employment in 18 different industries. You can click on a particular metro and view, say, the evolution of Mining and Quarrying -- a boom in Riga; a bust in Athens -- or Construction, Real Estate, Administration, and so on, over the last 17 years.
Because of the design of the site, it is hard to do metro v. metro comparisons here, but the quantity of information is staggering and surprising. If you're wondering why Warsaw has been so successful, you need to look at this graph of its exploding finance and insurance sector. Construction in Paris has been falling since 1997. Manufacturing in Prague is on the rise. And so on.
There's a lot of information out there for someone to develop a unified theory of why European metros succeed or fail -- often in defiance of state-level indicators. If you figure it out, let us know.