We're Scotland’s economic powerhouse. Why doesn’t it feel like it?

Dear readers — gird your loins, we’re tackling a big question today: where is Glasgow’s wealth going? 

There’s a bit of a perception around the city that Glasgow has no cash — especially not compared to wealthy Edinburgh next door. But the data shows Glasgow is the economic powerhouse of Scotland — and productivity is growing faster than the rate of many cities south of the border too. 

So where’s all the spoils? Last year, we published Dani Garavelli’s great piece, which examined the argument that Glasgow’s affluent suburbs were reaping a lot of the benefits — without making a comparable financial contribution back to the city. Would crunching the numbers back up this perspective? We asked expert James Gilmour to dive into the spreadsheets and come up with some answers. 

This piece is for paying members but you can very easily read it — and for a bargain. We’re running our earlybird 20% discount until 15 March i.e. this Saturday. Join The Bell now and get more great data journalism in your inbox, for less than £1.80 a week. Just click that lovely button below.

Glasgow's missing cash

For most people inside and outside of the city boundaries, the name ‘Glasgow’ isn’t exactly synonymous with wealth. This hasn’t always been the case; periods of immense prosperity have left the city with an arguably unrivalled architectural and cultural legacy — albeit with the accompanying baggage of its historic role in the slave trade and British Empire.

But after subtle and gradual economic stagnation post-1945, followed by the cataclysmic deindustrialisation of the 1970s and 1980s, the local economy suffered immensely. Glasgow acquired a reputation that landed somewhere between a great city down on its luck and a post-industrial wasteland.

Even during the city’s most challenging economic era, this perception was always painting with a very broad brush. But where does Glasgow stand today? How prosperous is the city? And who — or perhaps just as importantly, where — benefits from that prosperity? 

The engine of Scotland’s economy

At first glance, economic data seems to be telling a very different story about the wealth of Glasgow. The map below shows the real distribution of Scotland’s economy in terms of value generated (technically this is called Gross Value Added, a local equivalent to GDP). And Glasgow dwarfs other economic clusters, including Aberdeen and Edinburgh, in the scale and intensity of economic activity.

What this makes clear is that Glasgow is the heart of Scotland’s economy; the city boasts the densest concentration of jobs and economic production in the entire nation. In particular, the city centre district bounded by the Cylde, the M8 and the Necropolis alone generates £11.4bn in GVA — or 7% of the entire Scottish economy — an outsized importance which has only grown in recent decades, up from 5% in the late 1990s.

Why is this the case? Part of this is the overall and decade-long shift across the UK to a service based economy — think lawyers, media and finance professionals etc — which puts a premium on access to workers. (Older, industrial economic structures tended to require both space and access to raw materials for production, favouring suburban and town-based locations). Like other major cities, Glasgow has a large pool of people, which makes it a compelling place to set up shop for a services firm.