Productivity and patrie.
First some facts. The French economy is almost exactly the same size as the UK economy. It has been for decades. Populations change, who’s in the lead switches, and we bicker. But we share much more than separates us.
Two countries, with both pride and shame in their past, with recent flirtations with both republics and monarchies (both absolute and constitutional), with great scientists, philosophers, and culture spanning the world. On a formé le monde.
But the question that matters for this blog post is why France is so much more productive than the UK. Our economies are equal in size and yet the English have to work an extra day a week to produce as much value. Value that pays for education, hospitals, holidays, and housing.
For many the answer is clear,
- French unemployment is higher, 10% vs. 5%. The French let those that would produce less stay at home.
- The French have natural advantages; more land, better weather, connections to the continent.
- The British have such great culture that they are distracted.
I’ve heard all of these reasons, and many more. I am British and live in Britain. But I have also lived in France, and heard the other side,
- UK high-skilled immigration is higher, you are lucky that you speak the USA's language.
- You have natural advantages; density, ample water supply, access to the sea from everywhere, oil, and coal.
- You can sell your films and music all over the world, mais personne ne parle notre langue.
So what’s the truth? How can we explain the productivity gap between France and the UK?
I don’t know, no-one does, but here’s my guess.
Look at the cities.
So many Britons get distracted by cheese. I understand of course, I love cheese too, but agriculture in France is just 1.7% of their economy. Agriculture is an even smaller 0.6% of the UK economy. Both numbers are so small that they don’t matter much.
So let’s forget about Brie and Bordeaux. Let’s ignore Champagne and Cantal. France is not more productive because of terroir. And I want to convince you also that France is not more productive because of territory.
France’s cities are dense, not sprawling. Compared to the UK, they are separated by huge distances. They require expensive motorways or high-speed trains to span. We may be tempted to envy their TGVs and autoroutes, but these are costs not benefits of France’s size.
It is in France’s cities that their productivity advantage starts.
Most Britons would immediately look to Paris. That would be a mistake. Yes, it’s more productive than London, but not by much, and not by every measure. A big part of the gap is elsewhere.
It is in the mid-size cities that France’s productivity advantage over the UK extends.
Compare Manchester, Leeds, Lyon, and Toulouse. Or if you think I’ve made a biased choice, pick some others (Bristol, Edinburgh, Lille and Marseille if you want to prove me wrong and delude yourself). You can do it easily using Centre for Cities’ city profiler tool. The gap is clear.
On productivity, France wins by a huge amount. On innovation (measured by patents) it wins by even more. On skills, France wins. And even on employment, the measure on which Britain clearly outperforms our nearest large neighbour, France wins.
It’s only when we move down to even smaller scales that the UK catches up with France enough to make up its production and productivity gap with France. France has nothing like The Home Counties, Cheshire, and North Yorkshire. Its countryside is too detached from its cities to be highly productive like our commuter towns. The physical distinction between city and country is harder in France, and its low rural productivity stems from that.
So what?
So what does this all mean?
I think it means that we need to look beyond natural advantages or disadvantages when it comes to productivity. Few countries are as disadvantaged as Ireland or Finland, and yet they succeed. The list of underachieving countries with great natural advantages is long.
We should investigate instead why France’s mid-size cities outperform the UK’s.
The answer to me is simple. Lyon and Toulouse have strong local governments, extensive metros and trams, and significant regional, national and international institutions backed by local taxes and national money. By comparison Manchester and Birmingham have weak (but improving) local governments, basic public transport, and few institutions.
Lyon and Toulouse further benefit from state research & development investment, spent via universities and industries, that Manchester and Birmingham have long missed out on.
There’s much more to the success of a city than state interventions. In my experience, Toulouse, Manchester, Lyon, and Leeds all value the private sector as the primary generators of wealth. I believe that the private sector, entrepreneurs, and industry will ultimately generate the resources that we need to create better cities for every resident. But perhaps the UK state at all levels could learn from France’s example and invest more, value more, and trust more in its cities. If we do that then I think that British cities could host businesses just as productive as French cities. We'd all be better off if they did.
