UTILITIES and information and communication will be the leading industries driving economic growth in Scotland’s three main cities.
Aberdeen, Glasgow, and Edinburgh will see these industries dominate their economic growth in the years before 2050.
According to research by Knight Frank, this is expected to result from the transition to net zero and AI’s growth.
Despite the rapid growth of the information and communications sector, the finance and insurance industry will remain the bedrock of Edinburgh’s economy, a status it has retained since 1991.
While the sector’s share of local GVA is expected to fall from 24.1% to 21.5%, it will remain the UK’s largest financial centre outside of London and grow by £2.2bn, the second-largest economic growth in absolute terms, closely behind real estate (£2.3bn).
The make-up of Glasgow’s economy will see one of the most significant shifts of any city in the UK.
While construction was the biggest sector in 1991, accounting for 17.1% of the city’s economy, last year, human health and social work contributed the most to the economy, with 12.1%.
The information and communications sector is expected to account for 13.0% of Glasgow’s GVA by 2050, making it the city’s most valuable industry.
Although the utilities, information, and communications sectors are predicted to grow most in Aberdeen, health and social work, based on GVA, are expected to represent the city’s largest industry by 2050.
Accounting for 13.6% and adding £397m in value over the next quarter-century. Health and social work include the Granite City’s burgeoning life sciences sector and health and social services provision, which will need to grow to support an ageing population.
Alasdair Steele, head of Scotland commercial at Knight Frank, said: “There are likely to be some surprises for Scotland’s three largest cities in the economic forecasts set out in our UK Cities DNA reports.
“While there is some change, there are important constants, too, all of which should be reflected in long-term decisions made about the three unique cities in question.
“Edinburgh has become known as a tech hub, but the finance and insurance sector is predicted to remain the foundation of the city’s economy over the next 25 years – even though the info & comms industry will deliver substantial growth.
“By contrast, the sector is expected to be the biggest in Glasgow, adding £2.5bn of GVA in that time, and Aberdeen will see significant growth in its health and social work industry.
“To support and deliver the opportunities each of these industries represents for each city, their respective property stock needs to reflect their individual requirements.
“Within that, there will be opportunities to add new types of space and repurpose existing buildings to nurture the DNA of Aberdeen, Edinburgh, and Glasgow as their economies evolve over the next quarter century.”
The independent commercial property consultancy’s UK Cities DNA series of reports found that the utilities sector will see the biggest percentage growth from 2024 to 2050 in Aberdeen—second across the UK behind only Manchester, at 126%. Information and communications is predicted to be the second highest growth area in the city, at 87%.
Edinburgh will also see the most considerable growth in the utilities sector, at 111%, closely followed by information and communications, at 108%.
Meanwhile, information and communications is forecast to be the leading growth area in Glasgow, with a growth rate of 113%, and utilities will be the second highest-growing economic contributor, with a growth rate of 104%.
