THE A1(M) GROWTH AREA ECONOMY. 04 November 2015

Transcription

1 THE A1(M) GROWTH AREA ECONOMY 04 November 2015

2 EXECUTIVE SUMMARY AN ANALYSIS OF THE A1(M) GROWTH AREA ECONOMY The A1(M) Growth Area includes the districts of Welwyn Hatfield, Stevenage and North Hertfordshire; it follows the route of the railway line from King s Cross towards Cambridge; and the A1(M) motorway runs through it. The area is 53,100 hectares with a population of 333,100. The Growth Area comprises several mediumsized towns as well as a significant rural area. ECONOMIC OUTPUT AND GROWTH The value of the A1(M) economy was 8.2 billion in Rates of economic growth in Welwyn Hatfield and Stevenage over the past decade have been substantially higher than in North Hertfordshire. In 2012, the value of economic output from the A1(M) Growth area was 8.2 billion, representing 31 per cent of Hertfordshire s GVA. As indicated in Figure A, at district level, North Hertfordshire produced 2.6 billion of GVA, while Stevenage produced 2.1 billion and Welwyn Hatfield produced 3.5 billion. Economic output declined in the A1(M) Growth Area by 3.7 per cent between 2007 and By 2010, economic output had recovered to pre-recession levels. Between 2005 and 2012, the main sectors experiencing GVA growth included Manufacture of transport equipment (+ 97 million); General manufacturing (+ 93 million); Retail (+ 73 million); and Health and social care (+ 68 million). JOBS AND EMPLOYMENT The A1(M) Growth Area is a significant source of jobs, with recent recovery in jobs growth evident. In 2013, there were 184,000 jobs in the A1(M) Growth Area, representing 29 per cent of all jobs in Hertfordshire. Between 2003 and 2013, jobs in the A1(M) Growth Area rose by 9,000, or 5 per cent, compared to growth of 5 per cent and 6 per cent across Hertfordshire and England respectively. The increase in jobs between 2003 and 2013 was concentrated in Welwyn Hatfield (+18,000 or +28 per cent) with a decline occurring in North Hertfordshire (- 4,000 or -7 per cent) and Stevenage (-5,000 or -10 per cent). More recent evidence suggests a recent recovery in labour demand. Although 8,000 jobs were lost in the A1(M) Growth area between 2008 and 2010, there were jobs gains of +11,000 between 2010 and Since 2009, the balance between full-time and part-time jobs has hardly changed per cent of employees worked full time in 2009 compared to 69.2 per cent in KEY FACTS: ECONOMY 8.2 billion worth of economic output in 2012 Contributing 31 per cent of Hertfordshire s GVA 184,000 jobs in 2012 Total jobs increased by 5 per cent between 2002 and 2012 (England = +6 per cent) 10-year jobs growth of +18,000 in Welwyn Hatfield Recent recovery in employee jobs of +11,000 in A1(M) area between 2010 and 2013 FORECAST ECONOMIC GROWTH Economic growth is projected to continue Between 2012 and 2022, the Hertfordshire and UK economies are expected to grow by 31 per cent and 29 per cent respectively. Growth is expected to be slightly below average in the A1(M) Growth Area (28 per cent). Both North Hertfordshire (30 per cent) and Stevenage (30 per cent) have growth rates near the national average, whereas Welwyn Hatfield s forecast rate of growth is below average, at 26 per cent. FIGURE A: TOTAL VALUE OF ECONOMIC OUTPUT ( MILLIONS), ACTUAL AND FORECAST 2002 TO ,000 5,000 4,000 3,000 2,000 1,000 0 North Hertfordshire Stevenage Welwyn Hatfield North Hertfordshire Forecast Stevenage Forecast Welwyn Hatfield Forecast Source: East of England Forecasting Model, autumn 2014 baseline forecasts. Hertfordshire A1(M) Growth Corridor PAGE 1

3 AVERAGE RATES OF ENTREPRENEURSHIP The A1(M) Growth Area has average rates of entrepreneurship, with growth in the business population consistent with the national average. Business Survival rates are similar to the national average. The business structure of individual districts differs due to the presence of a large number of multinational firm in Stevenage and Welwyn Hatfield, compared to the more rural and SME based economy of North Hertfordshire. In 2013, there were 13,885 active enterprises in the A1(M) Growth Area. These represented 23.9 per cent of all businesses in Hertfordshire. 45 per cent of the A1(M) Growth Area s businesses were located in North Hertfordshire (6,365). The number of businesses per 1,000 working age people is only slightly higher than the national average, although there is significant local variation. In 2013, there were 66 businesses per 1,000 people living in the A1(M) Growth Area this was lower than the Hertfordshire average (80) and slightly higher than across England (62). The number of businesses was particularly high in North Hertfordshire (79 per 1,000 working age people), and lower than average in Stevenage (49). This reflects the fact that Stevenage has a significant presence of large multinational businesses, and that North Hertfordshire is more rural in nature (rural areas tend to have a large number of small enterprises than average). The enterprise base in the area has grown at a similar rate to the national average over the past nine years. Between 2004 and 2013, the number of enterprises grew by 13.7 per cent. This was weaker than growth across Hertfordshire (20.8 per cent) and similar to the England average (13.6 per cent). Growth was stronger in Stevenage (19.0 per cent) and Welwyn Hatfield (18.4 per cent). In 2013, almost four out of five businesses (77.1 per cent) were micro businesses, employing 0-4 people. This was similar to the Hertfordshire average and higher than the England average (75.8 per cent). In 2013, 14 new businesses started per 100 active enterprises in the Growth Area. This was the same as the Hertfordshire and England averages. In 2013, 14 new businesses started per 100 active enterprises in the Growth Area. This was the same as the Hertfordshire and England averages, as Figure B suggests. Business start-up rates fell during and following recession, mirroring national trends, but returned to pre-recession levels in Of those businesses starting in 2012, 91.1 per cent survived their first year slightly lower than the Hertfordshire (91.4 per cent) and the same as the England average (91.1 per cent) as shown in Figure C. KEY FACTS: ENTERPRISE 13,885 active enterprises in the A1(M) Growth Area in per cent of Hertfordshire s active enterprises 66 businesses per 1,000 people (England = 62) Four out of five (77.1 per cent) businesses are microbusinesses (employing less than 5 people) (England = 75.8 per cent) 14 new business starts per 100 active enterprises in 2013 (England = 14). FIGURE B: BUSINESS START UP RATES 2004 TO ENGLAND Hertfordshire County A1(M) Growth Area Source: Business Demography, Office for National Statistics. FIGURE C: BUSINESS ONE-YEAR SURVIVAL RATES 2008 TO A1(M) Growth Area Hertfordshire England Source: Business Demography, Office for National Statistics. Hertfordshire A1(M) Growth Corridor PAGE 2

4 THE CHANGING INDUSTRIAL STRUCTURE The industrial structure of the A1(M) Growth Area has changed over the past 20 years, with knowledge-based industries such as Telecommunications, and Computer related activities becoming more significant. Manufacturing remains a significant contributor to GVA in the Growth Area. Although employment has declined in Public Administration and Retail industries, they remain important employers. Tourism-related employment is lower than average. Over the past 20 years, Public Administration, Construction and Finance have become less significant contributors to the A1(M) economy. In terms of employment, the largest industries are Wholesale & retail (35,500 employees); Human health & social work activities (17,300 employees); Education (15,100 employees); Professional, scientific and technical activities (14,400 employees); and Administrative and support service activities (14,300 employees). GROWTH INDUSTRIES Between 2009 and 2014, employment grew at the highest rate in Construction (+3,200, +45 per cent); Professional, Scientific & Technical Activities (+2,700, +23 per cent); Human health and social work activities (+2,400, +16 per cent); and Other service activities (+2,300, +70 per cent). Over the same period (2009 to 2014), employment declined significantly in Administrative and support service activities (-3,300, -19 per cent); Public administration (-2,600, -32 per cent); and Education (- 1,000, -6 per cent). Major industrial specialisms include Other service activities, which are 1.7 times more important for employment than nationally; and Construction which is 1.4 times more important (includes firms such as Wilmott Dixon Group, and Morrison Utility Services Group). Tourism-related employment is less significant in the A1(M) growth area. The Accommodation and food service industry accounted for 9,000 employees in 2013, or 5.4 per cent of total employment in the A1(M) Growth Area lower than the County (5.5 per cent) and national (6.9 per cent) averages. KEY FACTS: INDUSTRIES In 2014, the largest industries in terms of employment were Wholesale & retail (35,500 employees) Human health & social work activities (17,300 employees) Education (15,100 employees) Professional, scientific and technical activities (14,400 employees) Administrative and support service activities (14,300 employees) Between 2009 and 2014, employment increased significantly in the following sectors: Construction (+3,200, +45 per cent) Professional, Scientific & Technical Activities (+2,700, +23 per cent) Human health and social work activities (+2,400, +16 per cent) Other service activities (+2,300, +70 per cent). The A1(M) Growth Area has significant industrial specialisms in: Other service activities: 1.7 times more important than nationally for employment Construction: 1.4 times more important Hertfordshire A1(M) Growth Corridor PAGE 3

5 A1(M) Growth Area North Hertfordshire Stevenage Welwyn Hatfield Hertfordshire England KEY FIRMS The A1(M) Growth Area has a number of significant headquarters and major subsidiaries and branches. The presence of foreign-owned businesses is notably high. The growth area is the location for a number of notable life sciences firms, including GlaxoSmithKline (GSK) (Stevenage); Roche (Welwyn); Eisai (Hatfield) and Schering-Plough (Welwyn). The area also has a significant presence in aerospace / engineering activities, and is the location for MBDA Limited (Stevenage); Astrium Limited (Stevenage); MERL (Materials Engineering Research Laboratory) Ltd (Hitchin); and Mitsubishi Electric Europe Ltd (Hatfield). The growth area also has a leading chemicals industry firm, Johnson Matthey, whose principal operating facility in the UK is in Royston in Hertfordshire. There are a significant number of ICT and Electronics firms in the A1(M) corridor, involved in a range of activities from mobile phone service operators to electronics design and manufacture. Notable firms include: AVC Wireless Networks Ltd (Stevenage); Computacenter PLC (Hatfield); Deutsche Telekom (UK) Ltd (Hatfield); T-MOBILE UK (Hatfield); SOPRA Group (Stevenage); and Mitsubishi Electric Europe Ltd (Hitchin). Within the A1(M) corridor there are also a number of firms in the Security industry such as Dorma UK Limited (Hitchin); and Defence Support International Ltd (Hitchin). The online retail firm OCADO Group PLC also has its headquarters and operations based in Hatfield. PEOPLE AND SKILLS There is a growing population and a growing workforce with higher rates of economic participation and very low rates of unemployment. The local economy supports highly-skilled jobs. Skills attainments vary markedly between North Hertfordshire (high rate of qualifications attainment) and Stevenage (lower rates). The A1(M) Growth Area has experienced a high rate of population growth (10.8 per cent over the past 10 years 2004 to 2014), and this is expected to continue (projected 9.9 per cent growth 2014 to 2024). The Growth Area has high rates of economic participation and low rates of unemployment. In particular, the working age population has grown by 10.7 per cent over the past decade (2004 to 2014) a higher rate than for Hertfordshire (8.0 per cent) and England (6.9 per cent). Overall qualification rates for the Growth Area are similar to the national average 333,100, with 32 per cent of working age residents holding their highest qualification at degree level or above. Qualifications attainment varies markedly between the three districts, as Figure D shows. North Hertfordshire ranked within the top 50 of 326 English local authority districts with regards the percentage of people qualified to at least Level 4 while Stevenage ranked in the bottom 100. Stevenage also had the second lowest NVQ4+ qualification rates in Hertfordshire. FIGURE D: SHARE OF WORKING AGE RESIDENTS BY HIGHEST QUALIFICATION ATTAINED, Level 4+ Level 2+ No qualifications Source: 2011 Census, Office for National Statistics. SKILL LEVELS OF JOBS In 2011, 54.2 per cent of people working in the A1(M) Growth Area were employed in the most highly-skilled Level 3 and Level 4 professions (managers & senior officials, professional occupations, associate professional & technical professions, and skilled trades) slightly higher than the national average (52.5 per cent). On balance there is no loss of managers and highly skilled workers to out-commuting. The Growth Area does not lose or gain a proportion of its managers, senior officials and professionals to outcommuting with 30.7 per cent of employed residents working in these Level 4 occupations compared to 30.8 per cent of people working in the area. At district level, the picture is mixed with North Hertfordshire experiencing a net out-commuting of highly skilled workers (comprising 28.3 per cent of workers compared to 35.0 per cent of residents); and Stevenage experiencing net in-commuting of highly skilled workers (31.1 per cent compared to 25.1 per cent of residents). In Welwyn Hatfield, the share of workers that are highlight skilled (32.2 per cent) is only marginally higher than the share of residents (30.1 per cent). Hertfordshire A1(M) Growth Corridor PAGE 4

6 The average hourly earnings in 2014 for full time jobs in the growth were in North Hertfordshire, in Stevenage, and in Welwyn Hatfield - compared to the average of for England. KEY FACTS: PEOPLE AND SKILLS Population of 333,100 in 2014 Population grew by 10.8 per cent, or +32,500 over 10 years from 2004 to 2014 (England = 8.2 per cent) Projected 9.9 per cent increase in population to 364,800 between 2014 and per cent of working age people were economically active in 2014 (England = 77.7 per cent) 73.9 per cent of working age people were in employment in 2014 (England = 72.5 per cent) A claimant count of 1.3 per cent (the share of workingage adults claiming unemployment related welfare benefits) (England = 1.9 per cent) 32 per cent of working-age residents qualified to at least degree-level (England = 30 per cent) In 2011, 54.2 per cent of people worked in the most highly-skilled Level 3 and Level 4 professions (England = 52.5 per cent) The average earnings in 2014 for full time jobs in the growth were in North Hertfordshire, in Stevenage, and in Welwyn Hatfield (England = 13.28). ANALYSIS The main strengths of the A1(M) Growth Area s economy are: Strong rates of economic growth High rates of growth in population and the workforce Strong advanced manufacturing presence and growth Significant presence and growth in knowledge-based industries such as Professional, scientific and technical activities. High productivity rates Overall strength in tradeables i.e. industries that are knowledge based or export- competitive; higher share of businesses are foreign-owned Diversity of knowledge-based industries High rates of economic participation and very low rates of unemployment The main challenges include: Uneven growth: Welwyn Hatfield s rate of historic economic growth is over double that of North Hertfordshire The population of enterprises has grown at an average rate and long-term business survival rates are slightly lower in the A1(M) Growth Area The high rates of economic participation may mean that the labour market is tight and this will bring workforce recruitment and retention challenges for employers in the future THE A1(M) GROWTH AREA AS A FUNCTIONAL ECONOMY The A1(M) Growth Area shows patterns of travel to work both within the area, and to centres outside of the A1(M) Growth area such as Cambridge and London, as shown in Figure E. Hertfordshire A1(M) Growth Corridor PAGE 5

7 FIGURE E: COMMUTING FLOWS INTO THE A1(M) GROWTH AREA NUMBER OF PEOPLE COMMUTING TO AND FROM MIDDLE LAYER SUPER OUTPUT AREAS IN THE A1(M) GROWTH AREA BY ALL MODES OF TRAVEL Hertfordshire A1(M) Growth Corridor PAGE 6

8 THE A1(M) GROWTH AREA ECONOMY MAIN REPORT Hertfordshire A1(M) Growth Corridor PAGE 7

9 ABOUT THE A1(M) GROWTH AREA ABOUT THIS REPORT This report presents a brief analysis of the main economic, social and business characteristics of the A1(M) Growth Area in Hertfordshire, and analyses the main challenges and opportunities facing it. INTRODUCING THE A1(M) GROWTH AREA The A1(M) Growth Area includes the districts of Welwyn Hatfield, Stevenage and North Hertfordshire; it follows the route of the railway line from King s Cross towards Cambridge; and it is defined in relation to the A1(M). The A1(M) Growth Area has enormous assets and potential, and this is reflected in significant private sector investment. It is located at the geographical core of the UK s pharmaceutical and bioscience sector (such as GSK, Stevenage Bioscience Catalyst, BioPark, Eisai) and it also has significant credentials in advanced engineering (where it can boast the likes of MBDA, Airbus and Johnson Matthey). It has good connectivity: all of the major towns are on the King s Cross to Cambridge railway line. It is also home to the University of Hertfordshire which is strongly business-facing and is investing significantly in the heart of the area. Some of its towns are in need of regeneration and investment, such as Stevenage and Hatfield. In both cases, major employment sites are disconnected from the town centres. DEFINING THE GROWTH AREA The A1(M) Growth Area consists of the local authority districts Welwyn Hatfield, Stevenage and North Hertfordshire, as outlined on the map in Figure 1 below. Together they comprise an area of 53,100 hectares with a population of 333,100 (in 2014). FIGURE 1: MAP OF A1(M) GROWTH AREA (RED LINE MARKS THE BOUNDARY) AND HERTFORDSHIRE (BLACK LINE) Hertfordshire A1(M) Growth Corridor PAGE 8

10 A1(M) North Hertfordshire Stevenage Welwyn Hatfield Hertfordshire UK RECENT TRENDS IN ECONOMIC PERFORMANCE ECONOMIC OUTPUT (GVA) THE A1(M) GROWTH AREA S ECONOMY PRODUCED 8.2 BILLION WORTH OF ECONOMIC OUTPUT IN 2012 In 2012, the value of economic output in the A1(M) Growth Area was 8.2 billion of Gross Value Added (GVA) representing 30.6 per cent of Hertfordshire s GVA. As indicated in Figure 2, in 2012 district level economic output was valued at 2.6 billion in North Hertfordshire, 2.1 billion in Stevenage, and 3.5 billion in Welwyn Hatfield. In the 20 years to 2012, GVA in the A1(M) Growth Area grew by a total of 74.8 per cent higher than across Hertfordshire (59.0 per cent) and the UK (62.4 per cent). Growth was much higher than average in Welwyn Hatfield (107.0 per cent) but lower than the national average in North Hertfordshire (51.5 per cent). ALL DISTRICTS WITHIN THE A1(M) GROWTH AREA HAVE RECOVERED STRONGLY FROM RECESSION All of the districts in the A1(M) area experienced a decline in economic output between 2007 and Decline continued in 2009 in North Hertfordshire and Welwyn Hatfield, but was reversed in Stevenage in this year. Overall in the A1(M) Growth Area, economic output declined by 3.7 per cent between 2007 and By 2010, economic output had recovered to pre-recession levels. As Figure 4 shows, the fall in GVA in the A1(M) Growth Area between 2005 and 2012 occurred across a number of sectors, most notably: Waste and remediation (- 270 million) Land Transport (- 186 million) Finance (- 175 million) Computer related activity (- 103 million) FIGURE 2: TOTAL VALUE OF ECONOMIC OUTPUT ( MILLIONS), ACTUAL AND FORECAST 2002 TO ,000 5,000 4,000 3,000 2,000 1,000 0 North Hertfordshire Stevenage Welwyn Hatfield North Hertfordshire Forecast Stevenage Forecast Welwyn Hatfield Forecast Source: East of England Forecasting Model, Autumn 2014 baseline forecasts. FIGURE 3: ECONOMIC GROWTH RATES 1992 TO Source: East of England Forecasting Model, Autumn 2014 baseline forecasts. FORECAST GROWTH IS HIGHEST IN NORTH HERTFORDSHIRE AND STEVENAGE Between 2012 and 2022, the Hertfordshire and UK economies are expected to grow by 31 per cent and 29 per cent respectively. Growth is expected to be slightly below average in the A1(M) Growth Area (28 per cent). Both North Hertfordshire (30 per cent) and Stevenage (30 per cent) have growth rates near the national average, whereas Welwyn Hatfield s forecast rate of growth is below average, at 26 per cent. In terms of industries, Welwyn Hatfield s lower rate of growth could be explained by lower growth in construction and real estate sectors A number of sectors experienced growth in GVA in this period, particularly Manufacturing Transport Equipment (+ 97 million); General Manufacturing (+ 93 million); Retail (+ 73 million); and Health and Social Care (+ 68 million). Hertfordshire A1(M) Growth Corridor PAGE 9

11 FIGURE 4: PERCENTAGE CHANGE IN VALUE OF ECONOMIC OUTPUT BY SECTOR 2005 TO 2012 IN A1(M) GROWTH AREA AGRICULTURE MINING & QUARRYING MANUFACTURING - FOOD MANUFACTURING MANUFACTURING - GENERAL MANUFACTURING MANUFACTURING - CHEMICALS MANUFACTURING - PHARMACEUTICALS MANUFACTURING - METALS MANUFACTURING MANUFACTURING - TRANSPORT EQUIPMENT MANUFACTURING - ELECTRONICS UTILITIES WASTE & REMEDIATION CONSTRUCTION WHOLESALE RETAIL LAND TRANSPORT WATER & AIR TRANSPORT ACCOMMODATION & FOOD SERVICES PUBLISHING & BROADCASTING TELECOMS COMPUTER RELATED ACTIVITY FINANCE REAL ESTATE PROFESSIONAL SERVICES RESEARCH & DEVELOPMENT BUSINESS SERVICES EMPLOYMENT ACTIVITIES PUBLIC ADMINISTRATION EDUCATION HEALTH & CARE ARTS & ENTERTAINMENT OTHER SERVICES TOTAL Source: East of England Forecasting Model, Autumn 2014 baseline forecasts. JOBS THE TOTAL NUMBER OF JOBS IN THE A1(M) GROWTH AREA HAS RISEN OVER THE PAST DECADE In 2013, there were 184,000 jobs in the A1(M) Growth Area, representing 29 per cent of all jobs in Hertfordshire. Between 2003 and 2013, jobs in the A1(M) Growth Area rose by 9,000, or 5 per cent, compared to growth of 8 per cent and 7 per cent across Hertfordshire and England respectively. Total jobs rose strongly over the decade in Welwyn Hatfield, and declined in the other districts. Total jobs increased by +18,000 between 2003 and 2013 in Welwyn Hatfield, compared to a 4,000 and 5,000 decrease in North Hertfordshire and Stevenage respectively. In terms of recent recovery from the recession, the loss of jobs during has more than been offset by recovery during 2011 to ,000 jobs were lost in the A1(M) Growth area between 2008 and 2010, which was more than offset by jobs gains of 11,000 between 2010 and Since 2009, the balance between full-time and part-time jobs has hardly changed per cent of employees worked full-time in 2009 compared to 69.2 per cent in PRODUCTIVITY PRODUCTIVITY IS SLIGHTLY HIGHER THAN THE NATIONAL AVERAGE IN THE A1(M) GROWTH AREA Productivity (the average amount of GVA produced by each job) is higher than the national average in the A1(M) Growth Area. In 2012, each job in the A1(M) Growth Area produced an average of 45,300 of GVA. This was higher than the Hertfordshire average ( 43,500) and the UK ( 41,800). Hertfordshire A1(M) Growth Corridor PAGE 10

12 ENTERPRISE AND INDUSTRY ENTERPRISE AND BUSINESSES THE A1(M) GROWTH AREA HAS A STRONG BUSINESS BASE The number of businesses per 1,000 working age people is high in the A1(M) Growth Area, compared to the England average. In 2013, there were 66 businesses per 1,000 working age residents in the A1(M) Growth Area this was lower than the Hertfordshire average (80) and higher than across England (62). The number of businesses was FIGURE 5: BUSINESS DENSITY particularly high in North Hertfordshire (79 per 1,000 working age people), and lower than average in Stevenage (49). This reflects the fact that Stevenage has a significant presence of large multinational businesses, and that North Hertfordshire is more rural in nature (rural areas tend to have a large number of small enterprises than average). In 2013, there were 13,885 active enterprises in the A1(M) Growth Area. These represented 23.9 per cent of all businesses in Hertfordshire. 45 per cent of the A1(M) Growth Area s businesses were located in North Hertfordshire (6,365). As indicated in Figure 5 below, there are concentrations of businesses in Royston, Hitchin, Stevenage, Welwyn and Hatfield. Hertfordshire A1(M) Growth Corridor PAGE 11

13 THE NUMBER OF BUSINESSES ACROSS THE AREA HAS GROWN AT A RATE SIMILAR TO THE NATIONAL AVERAGE Between 2004 and 2013, the number of enterprises grew by 13.7 per cent. This was weaker than growth across Hertfordshire (20.8 per cent) and similar to the England average (13.6 per cent). Growth was stronger in Stevenage (19.0 per cent) and Welwyn Hatfield (18.4 per cent). Following recession, the number of businesses fell in the A1(M) Growth Area in 2009 and The enterprise stock had recovered to 2009 levels by THE GROWTH AREA HAS A GREATER SHARE OF MICRO- BUSINESSES THAN THE NATIONAL AVERAGE In 2013, almost four out of five businesses (77.1 per cent) were micro businesses, employing 0-4 people. This was similar to the Hertfordshire average and higher than the England average (75.8 per cent). The area had a greater share (22.3 per cent) of businesses employing between 5 and 249 people compared to Hertfordshire (20.5 per cent). The share (0.5 per cent) of very large businesses, employing 250 or more people is similar to the county and national share. The A1(M) Growth Area has a lower-than-average share of working age employed people in self-employment. In 2011, 13.9 per cent of employed working-age people were selfemployed higher than the national average (14.7 per cent). THE A1(M) GROWTH AREA RATE OF BUSINESS START- UPS IS SIMILAR TO THE NATIONAL AVERAGE In 2013, 14 new businesses started per 100 active enterprises in the Growth Area. This was the same as the Hertfordshire and England averages, as Figure 6 suggests. Business start-up rates fell during and following recession, mirroring national trends, but returned to pre-recession levels in FIGURE 6: BUSINESS START UP RATES 2004 TO ENGLAND Hertfordshire County A1(M) Growth Area BUSINESS SURVIVAL RATES ARE IN THE A1(M) GROWTH AREA ARE SIMILAR TO THE COUNT AND NATIONAL AVERAGES Between 2009 and 2011 the proportion of businesses in the A1(M) Growth Area surviving their first year was ahead of the national average. By 2012, one year survival rates had converged towards the national rate. Of those businesses starting in 2012, 91.1 per cent survived their first year slightly lower than the Hertfordshire (91.4 per cent) and the same as the England average (91.1 per cent) as shown in Figure 7. FIGURE 7: BUSINESS ONE-YEAR SURVIVAL RATES 2008 TO A1(M) Growth Area Hertfordshire England Source: Business Demography, Office for National Statistics. LONGER-TERM BUSINESS SURVIVAL RATES ARE LOWER IN THE A1(M) GROWTH AREA The share of businesses in the A1(M) Growth Area born in 2008 that survive for 5 years is lower than the county and national survival rate. As indicated in Figure 8, 38.2 per cent of businesses born in 2008 had survived for 5 years (by 2013) compared to 41.3 per cent in Hertfordshire and 41.2 per cent in England. The five-year survival rate was highest in North Hertfordshire (40.8 per cent) and lower in Welwyn Hatfield (36.3 per cent) and Stevenage (36.0 per cent). FIGURE 8: FIVE YEAR SURVIVAL RATES OF BUSINESSES BORN IN A1(M) Growth Area Hertfordshire England Source: Business Demography, Office for National Statistics. Source: Business Demography, Office for National Statistics. Hertfordshire A1(M) Growth Corridor PAGE 12

14 THE PRESENCE OF FOREIGN-OWNED BUSINESSES IS HIGH IN THE GROWTH AREA In 2010, 1.7 per cent of all businesses in the A1(M) Growth Area were known to be foreign-owned higher than across Hertfordshire (1.5 per cent) and England (1.3 per cent). The percentage of foreign-owned businesses was higher in Stevenage (2.3 per cent) and Welwyn Hatfield (2.2 per cent) compared to North Hertfordshire (1.2 per cent). Almost one-quarter of employees work for foreign-owned businesses. In the A1(M) Growth Area, 24.2 per cent of people working in there were employed by foreign-owned businesses much higher than across Hertfordshire (17.2 per cent) and England (14.3 per cent). EMPLOYMENT BY INDUSTRY In 2014, the largest employment sectors in the A1(M) Growth Area (Figure 9) were: Wholesale and retail (35,500 employees, or 21.3 per cent of all employees) Human health & social work activities (17,300 employees, 10.4 per cent) Education (15,100 employees, 9.1 per cent) Professional, scientific and technical activities (14,400 employees, 8.6 per cent) Administrative and support service activities (14,300 employees, 8.6 per cent) EMPLOYMENT DECLINED SIGNIFICANTLY IN ADMINISTRATIVE AND SUPPORT SERVICE ACTIVITIES AND PUBLIC ADMINISTRATION In the same period, employment declined significantly in three broad sectors: Administrative and support service activities (-3,300, - 19 per cent), particularly Security and investigation activities (-1,500) and Services to buildings and landscape activities (-2,000) Public administration (-2,600, -32 per cent) Education (-1,000, -6 per cent) TOURISM-RELATED EMPLOYMENT IS LESS SIGNIFICANT IN THE A1(M) GROWTH AREA The Accommodation and Food Service industry accounted for 9,000 employees in 2013, or 5.4 per cent of total employment in the A1(M) Growth Area as detailed in Figure 10. As a share of total employment, this industry employed a lower share than found in Hertfordshire (6.0 per cent) and the average for England (7.0 per cent). This indicates that tourism-related activities are less significant than average in the A1(M) Growth Area. Between 2009 and 2014, employment increased significantly in the following sectors: Construction (+3,200, +45 per cent), particularly driven by Civil Engineering (+2,000) Professional, Scientific & Technical Activities (+2,700, +23 per cent), particularly driven by Legal and accounting activities (+1,300) Human health and social work activities (+2,400, +16 per cent), driven partly by the increase in Social work activities (+1,100) Other service activities (+2,300, +70 per cent), particularly the Repair of computers and personal and household goods (+2,700) 1. 1 Note that within Other service activities the various subsectors have experienced increases and decreases in employment. For example, Other personal services witnessed a decline of 600 employees. Hertfordshire A1(M) Growth Corridor PAGE 13

15 Agriculture, forestry & fishing Mining, quarrying & utilities Manufacturing Electricity and gas Water and waste Construction Wholesale and retail Transport & storage Accommodation & food services Information & communication Financial & insurance Property Professional, scientific & technical Business administration & support service Public administration & defence Education Health Arts, entertainment & recreation Other service activities FIGURE 9: TOTAL EMPLOYMENT BY INDUSTRY IN THE A1(M) GROWTH AREA IN ,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Source: Business Register and Employment Survey, Office for National Statistics. FIGURE 10: TOTAL EMPLOYMENT SHARES AND CHANGE BY INDUSTRY IN 2014 Share of total employment (per cent), 2014 Industry A1(M) Growth Area England Change in employment 2009 to 2014 (per cent) A1(M) Growth Area Hertfordshire Hertfordshire England Manufacturing Electricity and gas Water and waste Construction Wholesale and retail Transport & storage Accommodation & food services Information & communication Financial & insurance Property Professional, scientific & technical Business administration & support service Public administration & defence Education Health Arts, entertainment & recreation Other service activities Total employment Source: Business Register and Employment Survey, Office for National Statistics. Hertfordshire A1(M) Growth Corridor PAGE 14

16 Agriculture, forestry & fishing Mining, quarrying & utilities Manufacturing Electricity and gas Water and waste Construction Wholesale and retail Transport & storage Accommodation & food services Information & communication Financial & insurance Real estate activities Professional, scientific & technical Business administration & support service Public administration & defence Education Health Arts, entertainment & recreation Other service activities BUSINESSES BY INDUSTRY PROFESSIONAL, SCIENTIFIC & TECHNICAL AND WHOLESALE AND RETAIL SECTORS HAD THE LARGEST BUSINESS POPULATIONS In 2015, the sectors with the largest numbers of businesses in the A1(M) Growth Area were the Professional, Scientific & Technical sector (2,735, or 20.3 per cent of all enterprises in the area) and Wholesale and retail (1,870, or 13.9 per cent). Construction (1,695, or 12.6 per cent) also accounted for a significant share of enterprises as indicated in Figure 11. Figure 12 shows areas where businesses in these sector are geographically clustered. The Professional, Scientific & Technical sector had a high share of enterprises compared to the England average of 18.3 per cent. in the Growth Area (+620). Although at per cent growth, this was lower than across England (+33.9 per cent). There was also a significant rise in the numbers of Information & Communication enterprises (+315). Again, growth of per cent was lower than the England average (+33.2 per cent). With growth in the number of enterprises of per cent (+150), Financial and insurance industries experienced a higher rate of growth than nationally (+17.2 per cent). The number of enterprises fell in one sector: Manufacturing which fell by 3.8 per cent or 30 enterprises. This contrasted the England average of +1.8 per cent growth. PROFESSIONAL, SCIENTIFIC & TECHNICAL AND INFORMATION AND COMUNICATION SECTORS HAD THE HIGHEST GROWTH IN BUSINESS POPULATION Between 2010 and 2015, there was a large increase in the number of Professional, Scientific & Technical enterprises FIGURE 11: SHARE OF BUSINESSES BY INDUSTRY IN England A1(M) Growth Area Source: Business Counts, Office for National Statistics. Hertfordshire A1(M) Growth Corridor PAGE 15

17 FIGURE 12: NUMBER OF BUSINESSES PER SQ KM IN THE PROFESSIONAL, SCIENTIFIC AND TECHNICAL SECTOR, IN 2015 FIGURE 13: NUMBER OF BUSINESSES PER SQ KM IN THE CONSTRUCTION SECTOR, IN 2014 Hertfordshire A1(M) Growth Corridor PAGE 16

18 INDUSTRIAL SPECIALISMS Broad industries that have a greater share of local employment than the national average include: times more important than nationally and employs 3,000. Construction: 1.4 times more important particularly Other civil engineering projects Other service activities: 1.7 times more important than nationally for employment particularly Repair of computers and peripheral equipment which is 15.4 More detailed categories of industry reveal other important specialisations, as presented in Figure 14 below. FIGURE 14: DETAILED EMPLOYMENT QUOTIENTS FOR THE A1(M) GROWTH AREA, SHOWING WHERE THERE ARE DETAILED INDUSTRY SPECIALISATIONS Detailed industrial sector Total employment Employment quotient 2540 : Manufacture of weapons and ammunition 1, : Repair of computers and peripheral equipment 3, : Manufacture of other chemical products n.e.c. 1, : Manufacture of loaded electronic boards : Retail sale via mail order houses or via Internet 3, : Water collection, treatment and supply 1, : Other research and experimental development on natural sciences and engineering 3, : Activities of collection agencies and credit bureaus : Wholesale of electronic and telecommunications equipment and parts 1, : Construction of other civil engineering projects n.e.c. 2, : Manufacture of instruments and appliances for measuring, testing and navigation 1, : Manufacture of air and spacecraft and related machinery 1, : Activities of professional membership organisations : Wholesale of pharmaceutical goods 1, : Manufacture of builders ware of plastic : Landscape service activities : Wholesale of other machinery and equipment 1, : Other telecommunications activities 2, : Retail sale in non-specialised stores with food, beverages or tobacco predominating 11, : General cleaning of buildings 4, : Regulation of the activities of providing health care, education, cultural services and other social services, excluding social security 1071 : Manufacture of bread; manufacture of fresh pastry goods and cakes : Joinery installation : Other information technology and computer service activities 1, : Wholesale trade of motor vehicle parts and accessories : Public order and safety activities 2, : Computer consultancy activities 3, : Tertiary education 3, : Other printing : Construction of residential and non-residential buildings 2, Source: Business Register and Employment Survey, Office for National Statistics. Note that 4-digit standard industrial classifications have been included where the employment quotient is 1.5 or higher, and total employment is at or exceeds 500. Employment Quotients indicate how far the local share of total employment in an industry is greater or smaller than the national share. For example, if a local industry employed 10 per cent of local workers compared to 5 per cent nationally, then the Employment Quotient would be 2.0 the industry is twice as important for employment locally compared to nationally. Hertfordshire A1(M) Growth Corridor PAGE 17

19 KEY FIRMS AND INSTITUTIONS There are several notable large firms within the A1(M) Growth Corridor. Whilst not exhaustive, the following list serves to highlight these. Life sciences Notable firms include GlaxoSmithKline (GSK) (Stevenage); Roche (Welwyn); Eisai (Hatfield) and Schering-Plough (Welwyn). The success of the Life sciences industry is underpinned by a number of supporting institutions, including Stevenage Bioscience Catalyst (Stevenage), and Biopark (Welwyn). Aerospace / Engineering There are a number of significant firms and operations in the A1(M) Corridor, including Airbus (Stevenage); MBDA Limited (Stevenage); Astrium Limited (Stevenage); MERL (Materials Engineering Research Laboratory) Ltd (Hitchin); and Mitsubishi Electric Europe Ltd (Hatfield). Supporting institutions include the Institute of Engineering and Technology (Stevenage), and the University of Hertfordshire s Science and Technology Research Institute. Chemicals Johnson Matthey is a British multinational speciality chemicals and sustainable technologies company headquartered in the United Kingdom. The principal operating facility in the UK is in Royston in Hertfordshire. ICT/ Electronics There are a number of significant ICT and Electronics firms in the A1(M) corridor, involved in a range of activities from mobile phone service operators to electronics design and manufacture. Notable firms include: AVC Wireless Networks Ltd (Stevenage); Computacenter PLC (Hatfield); Deutsche Telekom (UK) Ltd (Hatfield); T-MOBILE UK (Hatfield); SOPRA Group (Stevenage); and Mitsubishi Electric Europe Ltd (Hitchin). Within the A1(M) corridor there are also notable firms in the Security industry such as Dorma UK Limited (Hitchin); and Defence Support International Ltd (Hitchin). The online retail firm OCADO Group PLC also has its headquarters and operations based in Hatfield. BUSINESS AND ECONOMIC ASSETS There are a number of significant assets in and adjacent to the A1(M) Growth area in terms of business functions, infrastructure, development sites and institutional support. Infrastructure The A1(M) Growth area has the A1(M) and East Coast Main Line running through it. The M25 London Orbital Motorway lies to the south; and the M1 is nearby in the West. Within the Growth Area, the main road routes are the A505, which runs east-west through the north of the Growth Area; and the A414 in the south, running in an east-west direction connecting Hatfield to St Albans and Hertford. The Growth Area is served by rail links to London Kings Cross. Stansted and Luton Airports are nearby, along with good accessibility to Heathrow Airport. Surrounding local economies and assets The A1(M) Growth Area is heavily influenced by the presence of major settlements beyond its borders. The Towns of Luton and St Albans lie in close proximity. There are also substantial cross-boundary influences from Cambridgeshire to the north-east and Bedfordshire to the north-west. University of Hertfordshire The University of Hertfordshire is based in Hatfield in the A1(M) Growth area, and is a winner of the prestigious Times Higher Education Entrepreneurial University of the Year award. The University is already interacting extensively with commercial partners and SMEs. This is leading to the delivery of strong ground-up, basic research and subsequently to the commercialisation of innovative ideas. The University is also the majority shareholder in Exemplas Holdings which is one of the UK s foremost business support companies. Exemplas delivers a wide range of generic and specialist support services on behalf of national and local government. Hertfordshire A1(M) Growth Corridor PAGE 18

20 A1(M) Growth Area Broxbourne Dacorum East Hertfordshire Hertsmere North Hertfordshire St Albans Stevenage Three Rivers Watford Welwyn Hatfield Hertfordshire England PEOPLE AND SKILLS POPULATION STRONG POPULATION GROWTH The A1(M) Growth Area has experienced a high rate of population growth over the past 10 years, and this is set to accelerate over the next two decades to The population of the A1(M) Growth Area has been growing at a higher rate than nationally. In 2014, 333,100 people were living in the area, compared to 300,600 a decade previously in Over the 10 years, its population had grown by 10.8 per cent (Figure 15) faster than the England average of 8.2 per cent and the Hertfordshire average of 10.3 per cent. Between 2014 and 2024, population growth in the A1(M) growth area is expected to continue at high rates, with a 9.9 per cent increase in population to 364,800 by Growth is then expected to slow slightly, with an 8.3 per cent increase in population to 395,200 by FIGURE 15: PERCENTAGE GROWTH IN POPULATION IN THE 10 YEARS FROM 2004 TO Source: Mid-year Population Estimates, Office for National Statistics THE POPULATION IS AGEING AT A SLOWER RATE THAN THAT EXPERIENCED NATIONALLY 60.4 per cent by Again, this is a slightly lower rate of decline than for national projections. The Growth Area has some significantly rural local areas. Altogether, it has a population density of 6.06 residents per hectare higher than the national average of There is a marked difference when comparing the population density of Stevenage (32.34 residents per hectare) compared to North Hertfordshire (3.39 residents per hectare). WORKFORCE (WORKING-AGE POPULATION) HIGH RATE OF GROWTH IN THE WORKING-AGE POPULATION The working age population has grown at a faster rate than the county and national averages over the past decade. In 2014, the A1(M) Growth Area had a working age population (and potential workforce) of 213,300. Between 2004 and 2014, the number of people aged years increased by 10.7 per cent higher than across Hertfordshire (8.0 per cent) and England (6.9 per cent). Between 2014 and 2024, growth in the numbers of working age people living in the area is expected to slow to 5.9 per cent, and then to 4.3 per cent between 2024 and Projected growth is stronger than national trends. Because of population growth, the workforce has grown and will continue to grow despite an increasing share of residents being 65 years of age and over. In 2014, there were 213,300 residents of working-age compared to 192,700 in The working-age population is projected to continue to grow to 228,700 in 2024 and 238,600 in Over the past decade, strong growth in the retirement age population has meant that the share of total population aged 65 and over increased (15.7 per cent in 2004 to 16.6 per cent in 2014) while the shares of population aged 0-15 declined (from 20.2 per cent to 19.4 per cent) and the share aged remained the same. The increase in share of population aged 65 and over was lower than nationally. Further population ageing is expected between 2014 and when the share of total population aged 65 and over is projected to continue to increase (from 16.6 per cent to 22.0 per cent). The working age population is forecast to decline as share of total population. The working age population is projected to fall from 65.1 per cent of the total population in 2014 to Hertfordshire A1(M) Growth Corridor PAGE 19

21 FIGURE 16: SHARE OF WORKING-AGE RESIDENTS IN EMPLOYMENT North Hertfordshire Stevenage Welwyn Hatfield England A1(M) Growth Area Source: Annual Population Survey, Office for National Statistics. LABOUR MARKET HIGH RATES OF ECONOMIC PARTICIPATION A similar proportion of the A1(M) Growth Area s working age population are economically active and employed as compared to nationally. Economic activity measures the percentage of people that are either in work (employed) or actively looking for work (unemployed). In April March 2015, 78.5 per cent of working age people living in the A1(M) Growth Area were economically active below the Hertfordshire (81.5 per cent) average, but above the England average (77.6 per cent). Rates were high in both North Hertfordshire (81.9 per cent) and Stevenage (80.4 per cent), but lower in Welwyn Hatfield (71.7 per cent). Employment rates in the area similar to the national average. At 73.9 per cent in April March 2015, employment in the A1 (M) Growth Area was only slightly higher than across England (72.9 per cent). Again, rates were high in North Hertfordshire (74.8 per cent) and Stevenage (77.3 per cent), but lower in Welwyn Hatfield (70.2 per cent). In all three districts, employment rates have recovered to pre-recession levels. VERY LOW AVERAGE RATE OF UNEMPLOYMENT The A1(M) Growth Area has a low percentage of Jobseekers Allowance claimants (the welfare benefit for adults aged between 18 and 64 who are actively seeking work). Like other labour market indicators, the A1(M) Growth Area fares better than the national average with a claimant count rate of 1.3 per cent in August 2015 below the England rate of 1.6 per cent. The claimant count rate is the percentage of people aged years claiming Jobseekers Allowance. It is lower in North Hertfordshire (1.2 per cent) and Welwyn Hatfield (1.2 per cent) than in Stevenage (1.8 per cent). The claimant rate in the area rose sharply during and following recession but is now back to its pre-recession level. Jobseekers Allowance claimant levels are high among sales and customer service workers. Following recession, numbers of Jobseekers Allowance claimants remain high among people previously working in sales and customer service occupations and elementary occupations. In August 2015, the claimant count for sales and customer service workers was 211 per cent higher than in August In August 2015, sales and customer service workers also represented 43 per cent of all claimants living in the area compared to just 18 per cent in August This is similar to national trends.. Hertfordshire A1(M) Growth Corridor PAGE 20

22 A1(M) Growth Area North Hertfordshire Stevenage Welwyn Hatfield Hertfordshire England QUALIFICATIONS AND SKILLS QUALIFICATION RATES IN THE AREA ARE SIMILAR TO THE NATIONAL AVERAGE At the time of the 2011 Census, 32 per cent of working age residents in the A1(M) Growth Area were qualified to at least Level 4 (degree level) similar to the England average. 18 per cent were qualified to Level 2 (GCSE level) at their highest level of qualification slightly higher than the national average (17 per cent). 11 per cent of the working age population had no qualifications lower than the England average of 15 per cent. Skills attainment varies markedly between the three districts with high qualification rates in North Hertfordshire and lower-than-average qualification rates in Stevenage (Figure 17). North Hertfordshire ranked within the top 50 of 326 English local authority districts with regards the percentage of people qualified to at least Level 4 while Stevenage ranked in the bottom 100. Stevenage also had the second lowest NVQ4+ qualification rates in Hertfordshire (Figure 18). NORTH HERTFORDSHIRE LOSES A SMALL PROPORTION OF ITS HIGHLY QUALIFIED RESIDENTS THROUGH OUT- COMMUTING Comparing the qualifications of workers versus residents reveals differences in commuting patterns. Comparing the resident population aged 16 and over and the workday population aged 16 and over (Figure 18), the resident population has slightly higher qualification rates, suggesting that the Growth Area loses a small share of its most highly qualified people through out-commuting and/or in-commuters are more poorly qualified. The difference is more exaggerated in North Hertfordshire. In Stevenage and Welwyn Hatfield, a higher percentage of people working in the area are qualified to Level 4+ than employed people living in the area. FIGURE 17: SHARE OF WORKING AGE RESIDENTS BY HIGHEST QUALIFICATION ATTAINED, Level 4+ Level 2+ No qualifications Source: 2011 Census, Office for National Statistics. Hertfordshire A1(M) Growth Corridor PAGE 21

23 FIGURE 18: QUALIFICATIONS ATTAINED BY RESIDENTS AND THE WORKFORCE IN EACH DISTRICT, 2011 A1(M) GROWTH AREA (SHARE OF RESIDENTS AGED 16+ WITH EACH LEVEL OF QUALIFICATION) 70.0 Resident population aged 16+ Workday population aged 16+ NORTH HERTFORDSHIRE (SHARE OF RESIDENTS AGED 16+ WITH EACH LEVEL OF QUALIFICATION) 70.0 Resident population aged 16+ Workday population aged Level 4+ Level 2+ No quals 0.0 Level 4+ Level 2+ No quals STEVENAGE (SHARE OF RESIDENTS AGED 16+ WITH EACH LEVEL OF QUALIFICATION) Resident population aged 16+ Workday population aged WELWYN HATFIELD (SHARE OF RESIDENTS AGED 16+ WITH EACH LEVEL OF QUALIFICATION) Resident population aged 16+ Workday population aged Level 4+ Level 2+ No quals 0.0 Level 4+ Level 2+ No quals Source: 2011 Census, Office for National Statistics. Hertfordshire A1(M) Growth Corridor PAGE 22

24 FIGURE 19: SHARE OF WORKERS IN LEVEL 4 (THE MOST HIGHLY SKILLED) OCCUPATIONS IN 2011 BY LOCAL AUTHORITY DISTRICT OCCUPATIONS A SLIGHTLY HIGHER SHARE OF JOBS IN THE A1(M) GROWTH AREA ARE HIGHLY SKILLED COMPARED TO THE NATIONAL AVERAGE In 2011, 54.2 per cent of people (89,900) working in the A1(M) Growth Area worked in the most highly-skilled Level 3 and Level 4 professions (managers & senior officials, professional occupations, associate professional & technical professions, and skilled trades) slightly higher than the national average (52.5 per cent). A slightly higher share of jobs undertaken by people working in Welwyn Hatfield are highly skilled compared to North Hertfordshire and Stevenage per cent (37,900) of workers in Welwyn Hatfield are highly skilled compared to North Hertfordshire (53.4 per cent; 28,000 workers) and Stevenage (53.5 per cent; 24,000 workers). ON BALANCE THERE IS NO LOSS OF MANAGERS AND HIGHLY SKILLED WORKERS TO OUT-COMMUTING In net terms, the Growth Area does not lose or gain a proportion of its managers, senior officials and professionals to out-commuting with 30.8 per cent (49,400) of employed residents working in these Level 4 occupations compared to 30.7 per cent (50,800) of people working in the area. Both the percentages and numbers are very similar. At district level, the picture is mixed with North Hertfordshire experiencing a net out-commuting of highly skilled workers (comprising 28.3 per cent, or 14,800 of workers compared to 35.0 per cent, or 22,700 of residents); and Stevenage experiencing net in-commuting of highly skilled workers (31.1 per cent, or 14,000 compared to 25.1 per cent, or 10,700 of residents). In Welwyn Hatfield, the share of workers that are highlight skilled (32.2 per cent; 22,000) is only marginally higher than the share of residents (30.1 per cent, 16,000). Hertfordshire A1(M) Growth Corridor PAGE 23

25 FIGURE 20: SHARE OF WORKERS IN LEVEL 4 (THE MOST HIGHLY SKILLED) OCCUPATIONS IN 2011 BY MID-LAYER SUPER OUTPUT AREA EARNINGS As can be seen in Figure 21, the average earnings in 2014 for full time jobs in the growth area were in North Hertfordshire, in Stevenage, and in Welwyn Hatfield - compared to the average of for England. Figure 22 shows that average workplace earnings in Stevenage consistently increased between 2007 and In North Hertfordshire and Stevenage, hourly full-time earnings had only begun to recover to pre-recession levels by 2013 and In all local authority areas in the A1(M) Growth Area, residents earnings (for the residents living in each area, who work either within the district or out-commute to other areas) were higher than workplace earnings. This suggests that highly skilled residents out-commute to work in jobs located outside of their home district. In the case of North Hertfordshire, residence-based earnings at per hour are much higher than workplace-based earnings at per hour. Hertfordshire A1(M) Growth Corridor PAGE 24

26 Residents Workplace Residents Workplace FIGURE 21: AVERAGE (MEDIAN) HOURLY WORKPLACE- AND RESIDENCE- BASED EARNINGS IN 2004 AND North Hertfordshire Stevenage Welwyn Hatfield England Source: Annual Survey of Hours and Earnings, Office for National Statistics. FIGURE 22: AVERAGE (MEDIAN) HOURLY WORKPLACE-BASED EARNINGS FROM 2004 TO 2014 England North Hertfordshire Welwyn Hatfield Stevenage Source: Annual Survey of Hours and Earnings, Office for National Statistics. Hertfordshire A1(M) Growth Corridor PAGE 25

27 ANALYSIS The main strengths of the A1(M) Growth Area s economy are: Strong rates of economic growth High rates of population and workforce growth Strong advanced manufacturing presence and growth Significant presence and growth in knowledge-based industries such as Professional, Scientific and Technical activities. High productivity rates Overall strength in tradeables i.e. industries that are knowledge based or export- competitive; higher share of businesses are foreign-owned Diversity of knowledge-based industries High rates of economic participation and very low rates of unemployment The main challenges include: Uneven growth: Welwyn Hatfield s rate of historic economic growth are more than double that of North Hertfordshire The population of enterprises has grown at an average rate and long-term business survival rates are slightly lower in the A1(M) Growth Area The high rates of economic participation may mean that the labour market is tight and this will bring workforce recruitment and retention challenges for employers in the future THE A1(M) GROWTH AREA AS A FUNCTIONAL ECONOMY The A1(M) Growth Area shows patterns of travel to work both within the area, and to centres outside of the A1(M) Growth area such as Cambridge and London. Figure 23 shows commuting flows into the A1(M) Growth Area, from a small area classification (MSOAs = Mid-Layer Super Output Areas). The map shows a line from centre of MSOA of residence to centre of MSOA of workplace with volume of flow for each mode of transport. The majority of the MSOAs supplying a large amount (100+) of workers to the growth area are within the growth area, with the exception of supply from Luton, St Albans, and parts of Central Bedfordshire. Commuting from Luton to the Growth area is more significant than Commuting into Luton FIGURE 23: COMMUTING FLOWS INTO THE A1(M) GROWTH AREA THE NUMBER OF PEOPLE COMMUTING TO AND FROM MIDDLE LAYER SUPER OUTPUT AREAS IN THE A1(M) GROWTH AREA BY ALL MODES OF TRAVEL Hertfordshire A1(M) Growth Corridor PAGE 26

28 FIGURE 24: QUALIFICATIONS ATTAINED BY RESIDENTS AND THE WORKFORCE IN EACH DISTRICT, 2011 SKILLS IMBALANCE FOR LOCAL AUTHORITY DISTRICTS RATION FOR LEVEL 4 OCCUPATIONS SKILLS IMBALANCE FOR MID-LAYER SUPER OUTPUT AREAS FOR LEVEL 4 OCCUPATIONS Hertfordshire A1(M) Growth Corridor PAGE 27

29 Athey Consulting Limited 38A Rustat Road Cambridge CB1 3QT, UK UK company no tel