Economy of Edinburgh
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Edinburgh, as the capital of Scotland, is usually regarded as one of the twin engines of the Scottish Economy alongside Glasgow. Edinburgh has been consistently one of the most prosperous parts of the country and has the strongest economy of any city in the UK outside London[1]. The economy of Edinburgh and its hinterland (which includes areas such as the Forth Valley, Fife and the municipal authorities of Midlothian, East Lothian and West Lothian) has recently been announced as one of the fastest growing city regions in Europe[2], with strong rates of growth in banking, financial services and hi tech research and development.
The economy of Edinburgh is largely based around the service sector, with tourism, financial services and banking being particularly important as well as education and high tech research. The city has been in good economic health since the arrival in 1999 of the Scottish Parliament, which had a so-called "headquarters effect", with many government departments being set up in the city, resulting in an increase in recruitment and employment. On March 12, 2004, Edinburgh was granted Fairtrade City status.
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[edit] Economic Profile
- In 2005 the population of the city was estimated by the General Register Office for Scotland to be 457,830, an increase of 1% on the previous year, making Edinburgh the second fastest growing Scottish city (in terms of population) after Inverness[3]. Edinburgh's population is growing significantly, mainly through inward migration from overseas and, particularly the rest of the United Kingdom. This strong growth is, however, leading to pressure on the green belt, particularly in the west of the city as office and housing developments compete for space.
- Edinburgh has a large metropolitan travel to work area which provides a pool of workers from as far afield as the likes of Glasgow, much of Fife, Stirling, Falkirk and towns in the Scottish Borders such as Galashiels and Peebles.
- Unemployment rates are at 2.2%[5] which amongst the lowest in the country with job creation rates some of the highest.
- Employment in Edinburgh has grown at 1.4% annually over the period 1995 - 2004, which job vacancies comfortably outstripping job seekers over that same period[6].
- In 2001, the Gross Domestic Product of the city was £8,655m, or 13% of total Scottish GDP[7].
- There are pockets of deprivation, social exclusion, poor quality housing and pockets of unemployment particularly in peripheral areas of the city, but also in some inner city areas.
[edit] Manufacturing
Manufacturing has never had as big a presence in Edinburgh compared to Glasgow and thus the city's growth was not underpinned by the manufacturing industry. Shipbuilding at Leith Docks was important in the 19th and early 20th centuries, however. Two manufacturing industries which were prominent in Edinburgh were brewing and printing.
Brewing is a traditional industry, and while the closure of the Fountainbridge brewery in 2005 leaves Caledonian Brewery as the largest brewery in the city, Scottish & Newcastle still retain their headquarters in the city.
[edit] Services
[edit] Banking and Insurance
- See also: Royal Bank of Scotland, Bank of Scotland, Clydesdale Bank, and Scottish Widows
Edinburgh is the second largest financial centre in the United Kingdom after the City of London and the fifth largest in Europe.[8], and is at the centre of a financial services in industry, which in Scotland has achieved a growth rate of over 30% over the period 2000 to 2005[9].
Edinburgh has been a centre of banking for over 300 years, the Bank of Scotland was founded in 1695, by an act of the original Parliament of Scotland, and is now part of the HBOS group, who have kept their headquarters in Edinburgh. The Royal Bank of Scotland also has its global headquarters in Edinburgh, operating from a new complex at Gogarburn and opened in October 2005. The bank was founded in 1727 by Royal Charter and is now the fifth largest in the world by market capitalisation. In 2000, the Royal Bank of Scotland acquired the National Westminster Bank in the biggest banking takeover in British history, to create a huge group with an expanded portfolio and a global outreach. Ulster Bank, Tesco Personal Finance, Direct Line and Coutts constitute some of the other operations that are part of the RBS group.
In insurance terms, indigenous Edinburgh companies such as Standard Life and Scottish Widows form a large part of the European insurance sector as well as being major employers in the city. Scottish Widows was founded in 1815, managing £82.8bn worth of funds at March 2005[10] with a workforce of around 4000.
The New Town and city centre has traditionally been home to many companies, in the banking, finance and legal professions, but modern needs have caused many to relocate. Immediately to the west of the city centre is the Terry Farrell master-planned Exchange business district, which now houses major employers such as Scottish Widows, Standard Life, the Clydesdale Bank and Baillie Gifford.
Edinburgh Park is one of the largest business parks in the UK[11] and is located on the western periphery of city, near Edinburgh Airport. The park was opened in 1992 alongside the large out-of-town shopping development at South Gyle and is close to major routes such as the A8, the M8 motorway and the A720 Edinburgh City Bypass and now has its own railway station. Close to Edinburgh Park at Gogarburn, the Royal Bank of Scotland have opened their global headquarters. HSBC, Royal Bank, Diageo, JP Morgan, Telewest, BT, Fujitsu and HBOS have all established large offices in this park. Following the opening of the Royal Bank's new headquarters, there will be around 20,000 people working in the western outskirts of the city.
[edit] Retail
Edinburgh has not had as large or as significant a retail sector compared to Glasgow, however large out-of-town shopping developments have taken place in recent years, such as the Gyle development in 1993 and the Fort Kinnaird shopping complex located to the east of the city. The St James Centre and Princes Mall (formerly the Waverley Market, named for its position atop Waverley Station) started in the 1970s, then Cameron Toll in the 1980s. More recent developments are the Gyle centre next to Edinburgh Park, Ocean Terminal in Leith and the retail parks at Hermiston Gait, Straiton and Fort Kinnaird which are all next to the Edinburgh City Bypass. Edinburgh has many modern supermarkets in its suburbs which offer a more day-to-day type of shopping. As a shopping centre, particularly Princes Street, Edinburgh has been in serious decline for many years and is now at the bottom of the list of top UK shopping centres. Recent attempts to encourage shoppers back into the city centre have included, the development of top brand department stores on George Street and St Andrews Square and plans to redevelop Princes Street in the future.
[edit] Tourism
Tourism is another important mainstay of the economy of Edinburgh, supporting 30,000 jobs in the city worth £1.6bn to the city economy[12]. Edinburgh is Scotland's most popular tourist destination in terms of visitor numbers, Glasgow is the second most important, with numbers growing substantially each year, particularly in the budget travel and backpacking sector, assisted by the growth of Edinburgh Airport and direct rail links to the rest of the country. The annual Edinburgh Festival attracts record numbers, as does the Hogmanay street party each New Year. The Edinburgh Festivals in August alone generate in excess of £100 million for the Edinburgh economy. Another component of Edinburgh's tourist industry is business and conference tourism, which generates in excess of £125m for the local economy, annually. Edinburgh is the UK's most popular conference destination, ahead of both London and Glasgow[13]. Visitors are attracted by the UNESCO World Heritage Sites of the Old Town and the New Town as well as the history and culture of the city most visible in tourist attractions such as Edinburgh Castle and the Palace of Holyroodhouse.
| Tourist Attraction | Number of Visitors | ||||||
|---|---|---|---|---|---|---|---|
| Edinburgh Castle | 1,172,534 | ||||||
| Royal Botanic Garden | 706,601 | ||||||
| Museum of Scotland | 686,531 | ||||||
| Edinburgh Zoo | 614,571 | ||||||
| National Gallery of Scotland | 434,429 | ||||||
| St Giles Cathedral | 402,550 | ||||||
| Royal Yacht Britannia | 310,697 | ||||||
| Scotch Whisky Heritage Centre | 241,428 | ||||||
| Museum of Childhood | 231,885 | ||||||
| Royal Scottish Academy Building | 203,327 | ||||||
| Source: Visit Scotland Statistics 2005 | |||||||
[edit] Public Sector
Edinburgh is the centre of Scotland's government and legal system. As a consequence many government departments and public sector agencies are headquartered in the city as well as the High Court of Justiciary and the centres of Scotland's legal establishment. As a centre of Scots Law, the legal profession has had a long presence in Edinburgh, with many premises in the New Town belonging to legal practices and firms. Many ancillary economic undertakings and political pressure groups have thus set up around this new seat of government leading to a boom in the recruitment and employment of public sector officials. However, the Scottish Executive has instituted a policy of relocating some of its departments from the city to other parts of Scotland such as sportscotland and Scottish Natural Heritage. Edinburgh City Council and the National Health Service are also major employers in Edinburgh.
[edit] Education
- See also: University of Edinburgh, Heriot-Watt University, Napier University, Queen Margaret University College, and List of schools in Edinburgh
Edinburgh is a major centre of education in the United Kingdom, and has been since the establishment of the University of Edinburgh in 1583, with another 3 major higher education institutions in the city developing later. Education and academic research (including medical research) plays a significant role in the economy of the city. The presence of these educational institutions also attracts many overseas students and those from the rest of the UK. Life Sciences and microelectronics in particular and have grown in prominence in recent years. The University of Edinburgh is a leader in the fields of medicine and law, and was a pioneer in British artificial intelligence teaching. Heriot-Watt University specialises in science and engineering and Napier University in the fields of computing and business, as well as creative fields.
The city is also home to a number of prestigious independent schools.
[edit] Infrastructure
The city is linked internationally by Edinburgh Airport (EDI) which in 2005 had a passenger throughput of 8.4m per year, with 50 airlines serving 85 domestic and international destinations[14]. In terms of rail connections Edinburgh Waverley rail station is the principal mainline station in the city serving over 14 million passenger journeys per year[15].
[edit] Other Issues
[edit] Property Prices
Like much of the rest of Scotland, property prices have been rising in recent times. As of May 2006, the average house in Edinburgh was valued at £176,526, which represents a 1.1% increase over the previous quarter, or a 4.7% increase over the preceding year[16]
[edit] Regeneration
Derelict land and areas on the waterfront of Edinburgh at places like Granton and Leith are in the process of being regenerated to make way for mixed commercial, residential and industrial developments to further provide for the forecasted growth of the city.
[edit] Urban Growth
It has been recognised that in an economic sense Edinburgh is constrained by its relatively small size[17], and that there are economic benefits to be had with greater collaboration with surrounding areas such as Glasgow[18]. Edinburgh itself is ringed by Greenbelt land, which has seen developments such as the offices at Edinburgh Park and housing and commercial developments to the south of Edinburgh spring up on it.
[edit] References
- ^ Major Development Projects 2006 [1] Edinburgh City Council Capital Review
- ^ The Scotsman, 2006 [2] Edinburgh's business focus proves a world beater for economic growth
- ^ General Register Office for Scotland, April 2006 [3] Registrar General's Annual Return (Population Statistics)
- ^ UK National Statistics [4] Local Gross Value Added
- ^ Scottish Enterprise Edinburgh and Lothian [5] Edinburgh and Lothian Industrial Profile
- ^ Scottish Enterprise [6] Capital catching up with International competitors
- ^ Edinburgh City Council - Capitalreview [7] Edinburgh Economic Statistics
- ^ University of Edinburgh, 2006 [8] Graduate Programme in Economics
- ^ Scottish Financial Services Enterprise, 2006 [9] Financial Services Overview
- ^ Scottish Widows Partnership About Scottish Widows - Company Information
- ^ Edinburgh Park Edinburgh Park Overview
- ^ Edinburgh Convention Bureau [10] Edinburgh Convention Bureau - Fast Facts
- ^ Edinburgh Convention Bureau [11] Edinburgh Convention Bureau - Fast Facts
- ^ Edinburgh Airport Airport At-A-Glance
- ^ Network Rail [12] Edinburgh Waverley
- ^ BBC Mortgages and Housing, 2006 - sourced at the Registers of Scotland Executive Agency [13], UK House Prices, 2006
- ^ Scottish Enterprise, 2006 [14] Capital Catching up with International Competitors
- ^ Glasgow Economic Facts 2005 [http://www.glasgoweconomicfacts.com/documents/Glasgow%20Report%20BAK%20-%20Executive%20Summary%20Des%204.pdf Glasgow Economic Analysis and Benchmark Report
