Birmingham vs. Munich: Four Take-Aways From The Race For International Talent And Capital

So now we know. Research from Colliers International, published Monday at the MIPIM property convention in Cannes, reveals which of 50 European cities is the most attractive to office occupiers.

Birmingham came in at No. 5 overall, behind London, Paris, Moscow and Madrid. But it topped the list for mid-sized cities, just ahead of Munich.

What did the research tell us about what makes Birmingham appealing — and where must it improve? Ahead of the Birmingham State of the Market event on 26 April which includes a focus on how to retain international talent, here are four key take-aways.

1. Give Young People Something To Cheer

Being popular with young people makes a world of difference.

According to the Colliers' Cities of Influence report, Birmingham scored most favourably in the category for ‘Fresh Talent’, where a strong talent pool, mainly because of the future talent base offered by its top tier universities, saw the city placed second only to London.

Because Munich and Birmingham came out so close in the final rankings — Birmingham in fifth place, Munich in sixth, separated by a hairs-breadth in Collier's analysis — comparing the two can be instructive.

Colliers compared the "latent talent" available, including short-term unemployed, young starters to the labour force and skilled older people who could be drawn back into the labour market. Birmingham was 13th, scoring very modestly compared to London, Paris, Moscow or Milan, but leading the closely packed group of cities said to have limited latent talent.

Munich, on the other hand, was at the end of the list: 20th placed.

Munich and Birmingham were neck-and-neck on a second measure — retaining young people. Both did well by North European standards with high student populations.

2. Beer Is Not A Bad Thing

Beer, baroque architecture and a stable economy make for happiness, it seems. Munich massively outpaced Birmingham on quality of life.

Colliers tried to provide an objective summary of a range of ‘quality of life factors’ including crime and safety, access to health care, climate, traffic commute and pollution. They also added  an analysis of cost of living factors, property prices to income ratios and the ability to save in each city, based on household consumption versus income levels.

German and Dutch cities came top, with Madrid and Lisbon well placed. Munich topped the list, narrowly ahead of Zurich and Stutgart.

Edinburgh was the only U.K. representative in the top 20. Birmingham was in  distant 25th spot.

3. Make Employers Feel Comfortable

Colliers' data showed that although individual employees would prefer Munich over Birmingham, their bosses take a different view.

Employer-friendly factors like market risk, operating conditions, labour law flexibility and corporate tax levels all stacked up points for Birmingham and the other U.K. cities. Nordic and Swiss cities also scored well.

Munich did not feature in the top 20. The only German-speaking city to appear was Vienna, where business costs were among the highest of the rated cities.

However, Munich easily trounced Birmingham when Colliers dug deeper into the structure of the workforce of each city, to see how close they are to having the right balance of workers in value-add modern professions including information and communications technology, financial business services and those in
professional, technical and scientific roles.

Munich came out a respectable sixth, a shade behind London, Dublin, Edinburgh, Warsaw and Zurich.

This echoes research by the Centre for Cities that showed that Birmingham has the highest number of adults with no formal qualifications of any U.K. city, and that urgent action is needed to address skills gaps at all levels in the city.

The consolation for Birmingham might be that Manchester did not make a good show, either. Only Bristol (of the U.K. cities) featured lower down the table.

4. Learn To Be Productive

All the U.K. cities suffered from poor productivity — with large populations but low economic outputs (Dublin, in contrast, was among the strongest on productivity). Munich made it into the top 10 for productivity and workforce catchment, Birmingham did not make it into the top 20.

At the heart of the U.K. Midlands engine, Birmingham does offer significant scale, growth and higher productivity potential which saw it top the FDI rankings for the UK in 2017. The ongoing ‘place-making’ regeneration of the city should play a strong role in helping drive both occupier and investment activity in future. Munich will continue to be a very steady performer at the top of the rankings.

“Birmingham benefits from an expansive and evolving talent pool, supported by a strong university base," Colliers International's Head of Birmingham James Cubitt said.

"This has attracted increasing levels of corporate foreign direct investment, with the greater Birmingham area receiving the highest level of FDI in the U.K. in 2017, to the benefit of jobs growth in advanced manufacturing, IT and digital media," he added.

“This is serving to attract greater levels of real estate investment, placing it 14th overall as a European investment destination in 2017.”