Latest Rail News

19.05.17

HS2 likely to create polarisation of high-skill jobs in London, LSE finds

Better high-speed rail (HSR) links could lead to highly skilled managerial jobs being “geographically polarised” in London, research conducted by the London School of Economics (LSE) has found.

The university looked at the effect that the implementation of high-speed routes had had in France and used the findings to outline what lessons could be taken in the UK as high-speed rail routes are expanded.  

LSE researchers found that the easier and faster distribution of managers across different sites of a business allowed by HSR had increased profit margins by 0.6 to 0.8 percentage points for many businesses.

However, they also discovered that HSR led to increases in production jobs being “almost compensated” by the transfer of managerial jobs from affiliates to headquarters.

“This contributes to geographical job polarisation and the clustering of high-skill (managerial) jobs in the largest cities, in particular in the capital city (Paris) where a large fraction (35%) of headquarters are located,” the report said. “The same phenomenon would most likely occur if London, in the UK, became connected via high-speed rail to the northern part of the country.”

The LSE also estimated the overall cost of geographical dispersion for multi-site businesses. It was found that when distances between the sites of businesses were cut down by HSR, production capacity went up by 4% in service and transport, and around 2% in manufacturing, retail and trade.

Today’s report trails yesterday’s commitments from Theresa May to drive forward with plans for HS2 during the unveiling of her party’s manifesto.

HS2 is expected to transform the infrastructure and economies of many regions in the UK. Last week, RTM reported that its technical director Andrew McNaughton had refuted reports that the project was lagging behind schedule and over budget as he told an audience at Railtex that the project had not gone off the rails.

This was despite claims from some, including Lord Berkeley, that HS2 was sure to run out of money before it was finished.

And ongoing issues with procurement for the project, including CH2M withdrawing from the phase 2b civils contract, led many to believe that the planned project would struggle to be finished by its original deadline of 2033.

Nevertheless, in April high-speed rail leaders stated that HS2 should be viewed as not only a national asset, but something that could be a global export for the UK.

Top Image: Ewan Munro

Have you got a story to tell? Would you like to become an RTM columnist? If so, click here 

Comments

Andyb   19/05/2017 at 12:07

France is a much bigger country where high speed rail saves much greater travel time vs conventional rail. Most Northern Cities serviced by HS2 will only see small journey time reductions and so the skills polarisation is likely to be much less noticeable (especially due to the cost of travel in the UK and cost headquartering in London)

Jbzoom   19/05/2017 at 12:53

Paris has always been the commercial centre for French business. The growth in high skill jobs in Paris and the decline in some TGV destinations come from the growth in commerce and decline in manufacturing in the French economy. There is little evidence to suggest French companies deliberately shifted jobs to Paris.

Lutz   20/05/2017 at 11:37

This is nothing new; this has been highlighted right from the start and is a well understood impact of enhanced connectivity between asymmetric economic centres. It is all a bit out of date though: Many businesses have been moving to video-conferencing etc to cut costs, with lower margin businesses now enforcing it via cost controls for meetings with customers as well.

Michael Wand   20/05/2017 at 11:57

HS2 will bring central Birmingham inside an hour's commute of central London. Someone explain how this will grow Birmingham.

Graham Nalty   20/05/2017 at 19:07

This perhaps reinforces the argument of those who say that rail investment should now be concentrated in the Midlands and North. The massive increase in estimated costs of HS2 Phase one, coupled with its propensity to benefit London more than the north as shown by this report, demonstrates quite clearly that HS2 Phase one should be very critically examined and funding held back in favour of making sure that transport is improved not only between the major cities of the North, but also within those cities. Those who suggest that HS2 should be a global export for the UK need to clarify in much greater details how hat might happen. How many of the companies contracting for HS2 are going to put all the work to UK employees? We hear of companies who build trains in the UK with high tech parts being shipped from their factories in other countries. Can they clarify exactly how the expertise of UK people can be sold overseas when we buy in that expertise from other countries.

John Burns   21/05/2017 at 08:54

`Nevertheless, in April high-speed rail leaders stated that HS2 should be viewed as not only a national asset, but something that could be a global export for the UK.` Whatever that BS means. HS2 will be 70 year old French technology when completed, while Japan, China, etc are doing, and looking at improving, linear monorail. Other countries wanting HS2 will look `not` to the British to design and engineer it. Others are far more experienced at HSR than the British. Would an merging nation chose HSR when the energy costs skyrocket over 155mph?

John Burns   21/05/2017 at 09:07

@Jbzoom TGV in France has overtly displayed that being connected fast does not spread the wealth around the country. It does the reverse. Wealth moves to the centre. I think it was the old economist Ricardo who highlighted this. There is evidence to suggest French companies expanded in Paris while the branches in the provinces contracted. The only HSR that makes sense in the UK is from Liverpool to Hull (HS3), extended at each end to North Wales and Newcastle. It also acts as a linear hub for the whole UK network and releases capacity for the Port of Liverpool. HS2 is a waste of resources. Capacity on the WCML south of Rugby I hear them shout. The London-Birmingham train can be diverted back onto a modernised Chiltern line - where it once was.

David   22/05/2017 at 17:12

Err, John, the Chiltern line is pretty full now. And even more so when EWR finally comes around.

Add your comment

 

related

rail technology magazine tv

more videos >

latest rail news

Northern leaders warn Treasury against scrapping under-fire HS2

23/05/2019Northern leaders warn Treasury against scrapping under-fire HS2

Scrapping HS2 would be a “disaster” and would undermine Britain’s “national prosperity for decades to come,” more t... more >
Network Rail unveils new regional managing directors

23/05/2019Network Rail unveils new regional managing directors

Network Rail has announced five new regional managing directors as part of its “evolution” towards a more passenger-focused approach.... more >
£800m worth of rail haulage contracts awarded by Network Rail

22/05/2019£800m worth of rail haulage contracts awarded by Network Rail

Network Rail has awarded contracts for rail haulage and the operations of its engineering trains and seasonal treatment services for Control Peri... more >

editor's comment

23/01/2018Out with the old...

Despite a few disappointing policy announcements, especially for the electrification aficionados amongst us, 2017 was, like Darren Caplan writes on page 20, a year generally marked by positive news for the rail industry. We polished off the iconic Ordsall Chord (p32), hit some solid milestones on Thameslink (p40), progressed on ambitious rolling stock orders (p16), and finally started moving forward on HS2 (p14) ‒ paving the way for a New Ye... read more >

rail industry focus

View all News

interviews

Advancing the rail industry with management degree apprenticeships

08/05/2019Advancing the rail industry with management degree apprenticeships

In answering the pressing questions of how current and future generations of managers can provide solutions to high-profile infrastructure projec... more >
Women in rail - is the industry on the right track?

12/03/2019Women in rail - is the industry on the right track?

RTM sits down with Samantha Smith, sole female member of the TransPennine Route Upgrade Alliance Leadership Team, to find out more about encourag... more >
TfN Strategic Transport Plan: not just for transport's sake

22/01/2019TfN Strategic Transport Plan: not just for transport's sake

Peter Molyneux, Transport for the North’s (TfN’s) strategic roads director, has been leading on the development of the seven economic... more >

last word

Encouraging youngsters to be safe on the railway

Encouraging youngsters to be safe on the railway

This summer, Arriva Group's CrossCountry and the Scout Association joined to launch a new partnership to promote rail safety among young people. ... more > more last word articles >

'the sleepers' daily blog

Meeting clients, suppliers and stepping forward

23/05/2019Meeting clients, suppliers and stepping forward

The Midlands 30-year plan will deliver many economic benefits and will need a wide and diverse supply chain to deliver some of the key projects. ... more >
read more blog posts from 'the sleeper' >

comment

The railway franchising model is broken, and passengers are paying the price

13/05/2019The railway franchising model is broken, and passengers are paying the price

Meg Hillier, MP for Hackney South and Shoreditch and chair of the Public Accounts Committee (PAC), gives her view on the state of the UK’s ... more >
NSAR: Tackling the digital skills shortage

13/05/2019NSAR: Tackling the digital skills shortage

The National Skills Academy for Rail (NSAR) chief executive Neil Robertson returns to write for RTM, this time, to assess the digital skills shor... more >
Delivering cost-effective electrification

13/05/2019Delivering cost-effective electrification

David Clarke, technical director of the Railway Industry Association (RIA), sets out the findings of a new report on how rail electrification can... more >
5G: An opportunity to revolutionise on-train connectivity

13/05/20195G: An opportunity to revolutionise on-train connectivity

Simon Holmes, group head of digital (engineering) at FirstGroup, introduces us to the 5G solution being delivered for the rail sector.  ... more >