King’s Cross and A City of Two Tales

In a look around King’s Cross we saw the remarkable transformation that is going on in this area. We are not the only ones to have observed this. Evan Davis, the BBC broadcaster, used the area as an example of one of the economic forces that is changing London. We now take one step back and looking at why we bother providing transport connections and why good public transport is vital for the economy – a topic that is arguably well overdue looking at on London Reconnections.

Mind The Gap

In early March 2014 Davis presented two programmes explaining why, despite a recession, London appeared to be booming whilst the rest of the country experienced an economic downturn. Much of this he explained by conventional agglomeration theory which basically states that the more people can interact the more economies benefit – as people work to their common advantage. The interaction in agglomeration theory is largely brought about by good transport links and he wittily entitled his programme “Mind The Gap” – John Bull would have been proud of that title.

Agglomeration – it is as old as the hills

The theory of people clustering together for common economic benefit is nothing new and of course, in practice, the implementation is centuries old. It can be argued that London has been unintentionally built on agglomeration economics ever since the Romans founded a small compact settlement on the slightly higher land of Ludgate Hill and Cornhill. It can also be argued that the creation of Lloyd’s coffee house provided what may be the earliest ever example of coming together for the purposes of networking and that this was the true start of London’s world dominance due to agglomeration.

And Agglomeration relies on transport

Transport is an important part of a city’s fabric. If the people who potentially create the wealth of the city cannot communicate with their peers then much of this potential is lost – and whatever is said about the internet society there are always times when people want to meet up in person. It is also the case that by having good transport more people are effectively linked together. So anyone who needs specialists in other areas to help them create wealth wants as large a people pool as possible to draw upon in order to find the most appropriate match for their needs.

Transport must be scaleable

Taking agglomeration theory at simplistic face value, it would appear that all you have to do is build a lot of roads linking as many people as possible and wealth will result. Instead of having to bother to provide public transport one could achieve the desired result by having good roads and giving everyone the opportunity to drive to work in their comfortable cars.

Clearly there are obvious weaknesses in the above argument. Having arrived at their destination people then have to park somewhere and that means large car parks which prevents the high density clustering. Of course many successful companies do have the majority of employees coming to work by car. That can work fine but generally these firms cannot benefit from clustering. These standalone companies tend to fall into certain relatively standalone economic groups e.g. manufacturers.

But transport (and the city) must be more than that

If clustering is good, at least from an economic point of view, and size is everything then it is clear that London’s rivals are not Birmingham or Manchester but places like Tokyo, New York and Paris. It is also obvious that there has to be more than this, otherwise Cairo and Mexico City would be super rich. And whilst Singapore City and Hong Kong are both prosperous within their own region they never really get considered as true “World Cities” – whatever that may mean.

The neglected ingredient

There have been many television programmes before on the theme of agglomeration, but in his two-part series Evan Davis concentrated on a crucial, but generally never stated, part of agglomeration theory. The perhaps obvious (but oft neglected) idea that cities work best when people want to live in them. To put it another way, improving people’s quality of life has an economic value.

The obvious reason to improve qualify of life is that most people work better when happy and relaxed and with much of the mundane aspects of work taken over by technology one wants people to be in a creative mood. A stress-free journey to work and a welcoming environment would help create that.

This was not the reason that Evan Davis dwelt on. His argument was that you generate wealth in a high-tech society when you bring the best people together. To do this you have to attract people to work in London as opposed to Paris, Berlin, New York or a host of other places. This, particularly for family men and women, can be more important than salary or even job opportunities. Developing this theme he emphasised how institutions that don’t make an obvious financial contribution to the economy – museums, the Royal Opera House and art galleries – could actually be playing a crucial role in the success of London. In the same way, but not mentioned, one could think of other things such as a the planned 24 hour weekend tube as a contributor.

So, according to Evan Davis, the reason London is so successful is that people want to come to London and that companies or other institutions can locate their brightest and best people in London to work together. From that it follows that within London you will have clusters where these people will work. What is going to make that cluster a success is good public transport and a desirable local area. The good public transport links don’t stop at the commuting area for the city involved. They need to be national and even international.

Back to King’s Cross

It is not hard to see why the area around King’s Cross and St Pancras is now looking like a very attractive area indeed. It also starts to become obvious why the Chancellor of the Exchequer is anxious to spend much more money redeveloping Euston. And this in turn shows a potential weakness of transport planning. HS2 Ltd probably sees the Euston issue as one of providing sufficient capacity for the trains terminating at Euston and being able to disperse passengers to where they want to go. But transport is only ever a means to an end. It serves no purpose on its own. Obviously one comes to different conclusions as to how or whether HS2, and Euston in particular, should be developed depending on what you are trying to achieve.

The lesson seems to be that if you want to attract the brightest and best people to London it helps if you have clean welcoming stations that people want to visit. And, despite it being next to impossible to measure the economic benefit, it is really important to design stations, above and below ground, to be as pleasant as possible. It is also important that pedestrians can get about and are not in conflict with busy traffic. So if you can’t make the transport infrastructure attractive and pleasant to use then you have already lost the battle for the cream of the talent before the people that matter have even arrived at their destination.

King’s Cross and St Pancras are, arguably, currently the two best stations in London for being welcoming and lifting the spirits. Better still they are next to each other. The management of St Pancras in particular are crucially aware of the importance of this and go to great trouble to make the place somewhere where people want to visit. Yes, it is all about retail to some extent, but it has to have something to distinguish it from the multitude of retail outlets in stations. That is why there is an obsession at St Pancras with maintaining high standards and introducing variety such as various permanent and temporary works of art to the station.

St Pancras v Gare du Nord

One only has make comparisons between he various Eurostar termini and the surrounding areas to see the importance this can have. Comparisons between St Pancras and Gare du Nord have been made many times – such as this BBC website magazine article. It is difficult to find any criteria where Gare du Nord comes out better.

What appears to be the case is that the station sets the tone for the area. Make the station welcoming and accessible and business will want to locate nearby – or even inside. Conversely if the station is run down then this becomes a precursor for the area becoming run down.

A plan or a free-for-all?

A common theme in the comments at London Reconnections is a bemoaning of our ability to plan in Britain. We had the Great Fire of London but couldn’t take advantage of the situation to sweep away the narrow streets and build wide straight boulevards. In total contrast Baron Haussmann practically rebuilt Paris. Whilst we struggle to rebuild a London terminus, in Berlin they have a new principal station on various levels well served on its through tracks by domestic and international trains and additionally further underground lines below.

Life is what happens while you are busy making other plans.
John Lennon

No battleplan survives contact with the enemy.
Popular soldiers’ aphorism

London is a muddle that works.
Professor Roy Porter, social historian

The trouble is that you can plan so far but you can’t make people come. You also cannot predict what companies will ultimately be attracted to a new development. Evan Davis argues that you can put the basic infrastructure in place but in the end you can’t control exactly they way things will turn out.

We will look at the institution and the company that Evan Davis focused on – both in their own way would have probably been thought of as very unlikely candidates for wanting to move to King’s Cross but that is what is happening.

Are research centres in a city’s DNA?

On the northern half of the former St Pancras goods yard site a huge building is being constructed. One end is opposite the western entrance to St Pancras (by the Thameslink station) and it continues at least a third of the way to Euston. One would expect this to eventually be occupied by one or more huge multi-national corporations. In fact in 2015 the building is going to be the Francis Crick Institute for inter-disciplinary medical research. Now research centres are not the sort of thing one traditionally builds at one of the most attractive and accessible sites in one of the worlds most important cities. These and similar establishments, whether commercial or not, are institutes that are generally located far away from London or are at least banished to the suburbs.

Cutting edge research is something that is more and more regarded as a collaboration of the the best people in a particular field. Sir Paul Nurse and others go further and emphasise the need for inter-disciplinary skills. If you want to develop new biological products it is no good just assembling the best biologists you can attract and leaving them to do their own research. The way things have changed can be seen in the fact that single winners of Nobel prizes for science are becoming a rarity. So modern theory is that you want to attract the best people and you want to attract lots of people and put them all together. It follows from this that you want to locate them in a city that people will want to work in and also either live in it or be able to commute to. When that is the criteria then one can see why St Pancras is so attractive.

(Almost) all rails lead to King’s Cross and St Pancras

The catchment area for commuting to King’s Cross is absolutely enormous. HS1 means that much of Kent is accessible and this could possibly extend one day to parts of Sussex. Sussex will be very accessible in any case thanks to Thameslink. Crossrail and a simple change will mean many other journeys will be realistically possible from the east and west and of course there are numerous lines heading north as well as the multitude of Underground lines. On top of that there will soon be good rail links not only to France and Belgium but also to the Netherlands and possibly Germany. One does not seriously expect much regular international commuting, but it does make it easier for exchanges with other European Institutes.

For those travelling from further afield King’s Cross has a good connection direct to Gatwick Airport. Of course it will also have links to Heathrow via Crossrail or alternatively using Heathrow Express from Paddington and even the option of a long slow journey by the Piccadilly Line – but at least the latter does not involve a change of train. Even City Airport can be reached without too much difficulty.

The Cambridge Connection

At the same time one must not forget that King’s Cross is well located to make the Cambridge Science Park relatively accessible – the park is currently served by two guided bus routes which also serve Cambridge station and it is planned that it would have its own station by 2016. Not only does this link encourage interaction it also provides an alternative place of employment – another important aspect of agglomeration theory as people don’t want to be tied down to one employer. So a scientist living at Hitchin or Royston can easily get to King’s Cross whilst being aware of the multiple alternative research and employment opportunities at Cambridge, either in an academic or commercial world. As Evan Davis pointed out, this tendency of specialist interests to cluster is being replicated in Cambridge where the commercial drugs company AstraZeneca is proposing to relocate nearby (and Pfizer has stated that this would be unaffected by any proposed takeover – now considered unlikely to happen).

And Oxford too

In order to maintain some level of balance one must also point out that, although Oxford will not be quite so convenient as Cambridge for travel to and from King’s Cross, by 2016 there will be a choice of routes to Oxford. Not only will there be a frequent electric service to Oxford from Paddington, there will also be a service from Marylebone. Oxford does at least have the advantage that the station is far closer to the city centre and the university than Cambridge.

King’s Cross? – Google IT

The other significant organisation that plans to move to King’s Cross is Google, who propose to locate their European headquarters right next to the station. What is especially significant about Google is that they are the type of company that places great emphasis on making the workplace a pleasant and stimulating environment whilst at the same time giving their staff facilities to relax. Evan Davis claimed that a further attraction for them is that the Central St Martins University of the Arts is nearby and they will be near the designers with the ideas that will provide the artistic input for some of the Google products. Again this would appear to be contrary to traditional agglomeration theory which emphasises the importance of having access to financial, legal and business institutions.

Not mentioned by Evan Davis, but also relevant, is the importance of language. Professional people (especially young professional people) worldwide can generally speak English well and would feel comfortable moving to London. Conversely for a European Headquarters, London might not be at the heart of Europe but an employer can be fairly confident in London of attracting staff who are proficient in both English and a specific foreign language and also have the relevant skills for the job in question.

It seems that Google really are determined to make the most of their location and the latest news is that they have almost literally gone back to drawing board. They now plan to build something that is even more ambitious than the one originally planned. Their new £1bn, million square feet office is not now expected to be ready before 2017.

Two tales that can be replicated

Although the two examples cited by Evan Davis are significant they will not make that much difference on their own. In both cases though they will attract others who will want to be around them. They don’t have to be next door – just easily accessible. Silicon Roundabout, just two stops away on the Northern Line from Google, will be conveniently accessible whilst offering much lower rents. So any company in a related field will probably want good accessibility to King’s Cross and Old Street station which may mean locating in London, or at least the South East.

The additional business that the Francis Crick Institute and Google will attract will not make much difference to the success of London but these are just two examples in just one location within London. With the possible exception of media, which seems to have successfully clustered in the Salford and Manchester area, there seem to be no serious rivals to London within Britain. Davis argues that Britain as a country is exceptional because, unusually, we don’t have a second city with at least half the population of the largest one. It would seem to him that a tendency for businesses and other institutions to move to London is thus an almost inevitable trend.

Transport Matters

If Evan Davis is to be believed, transport – not just its functionality but its aesthetic contribution to the urban environment – really matters. It is certainly the case that he seems incapable of presenting a TV programme on economics without referring to Crossrail at some point. Talking of which, one of the many ways in which Crossrail sees its responsibility beyond that of building a railway line is their commitment to the urban realm. We have already seen at Paddington the entrance to the rebuilt Hammersmith & City Line station being enhanced. Those who believe that quality matters will be looking to see this in future schemes including the London terminus of HS2.

The unsung heroine who made Crossrail happen?

We have perhaps paid too much attention to Evan Davis. He is just one of many economists and he in reality is an economic historian. He describes what has happened and gives his view on the economic factors that caused this to happen. We could look to other economists – after all London isn’t exactly short of them – but we will concentrate on one who, just perhaps, really ought to be better known. Bridget Rosewell has had a decade of experience advising the GLA. It is her approach to looking at the potential impact of Crossrail that some believe made the crucial difference between the treasury wanting to avoid spending on it to one where the treasury could see that in the long term it would generate far more tax revenue than it would cost due to the creation of wealth that would follow. Putting it bluntly, some believe that, if it wasn’t for Bridget Rosewell, Crossrail would never have been built.

If one were to listen to Bridget Rosewell, and one can on various topics such as HS2 or London reinventing itself, one can see that she comes up with very similar ideas to Evan. This is probably as good as it can get with economists. The well-known joke is that if you ask six economists an opinion on an aspect of economics you will get seven different answers.

London Sucks

A man with a clock knows the time.
A man with two clocks is not so sure.
Chinese proverb, allegedly. Very appropriate in the context of King’s Cross and St Pancras – and economists.

Inevitably once you have two economists there will be areas where they see differently. It is outside London that the gulf appears between Evan and Bridget. Evan argues, as he puts it, London sucks. Basically he sees London as a large black hole that will inevitably drag more and more people into it at the expense of the regions. He is a bit vague on what is the best strategy for the regions, but he would appear to be arguing that by acknowledging London’s supremacy in many areas they are free to specialise in others – such as manufacturing, order fulfillment, call centres, back office functions and a host other activities. It would appear though that good access to London would be essential for these places to fulfill their subordinate role.

Evan Davis also points out that London is a large city full of wealthy consumers. Another reason, he argues, why businesses cannot ignore the importance of London.

Bridget Rosewell is much more upbeat on the prospects for other major cities and is convinced that they have future of their own. This would appear to be as regional hubs. Interestingly she sees HS2 as being an important means of providing growth for cities such as Leeds and Manchester. So for her it is very much an attitude of “everybody wins” or at least “every major city wins”.

Transport won’t cure Cancer

In the 1960s Beeching era public transport was almost seen as something to be pitied. For many the perception was that public transport was a drain on public resources and development was primarily about reducing the burden, as it was seen, that public transport has on the public purse. Thanks to Bridget Rosewell and many others, Britain as last seems to have partially grasped the fact that good public transport is a precursor and major ingredient for economic success – and the Kings Cross area now stands tall as an example of this happening in the real world. Transport won’t cure cancer but maybe by helping bring the best scientists together in the Crick Institute it may play an indirect part in doing so, one of many unexpected ways in which London’s transport networks can have an impact on the economy.