Utilities to power the economic growth of Scotland’s three largest cities to 2050 – Scottish Business News

Utilities (including electricity, gas, steam, and air) and information and communications industries will dominate the economic growth of Aberdeen, Edinburgh, and Glasgow in the years running up to 2050, buoyed by the transition to net zero and the growth of AI, according to research by Knight Frank.

The independent commercial property consultancy’s UK Cities DNA series of reports found that the utilities sector will see the biggest growth in percentage terms 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 largest growth in the utilities sector at 111%, closely followed by info & comms at 108%. Meanwhile, information and communications is forecast to be the leading growth area in Glasgow at 113%, with utilities the second highest growing economic contributor at 104%.

Figure 1: Highest forecast growth figures, in percentage terms:

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 £2.2 billion – the second largest economic growth in absolute terms, closely behind real estate (£2.3 billion).

The make-up of Glasgow’s economy will see one of the biggest 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 the largest contributor to the city’s economy was human health and social work with 12.1%. By 2050, the info & comms sector is expected to account for 13.0% of GVA, making it Glasgow’s most valuable industry.

Although the utilities and information and communications sectors are predicted to grow most in Aberdeen, health and social work is expected to represent the city’s largest industry on a GVA basis by 2050, accounting for 13.6% and adding £397 million in value over the next quarter-century. Health and social work includes the Granite City’s burgeoning life sciences sector, as well as health and social services provision, which will need to grow to support an ageing population.

Figure 2: Largest sectors, share of GVA, and projected growth in £ terms by 2050:

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 £2.5 billion 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.”