The Geography of Gross Employment Flows in British Manufacturing

Abstract

This article offers a first attempt to examine subnational differences in the determinants of gross employment flows in the British manufacturing sector utilizing the Annual Respondents Dataset (ARD) of the Office of National Statistics. The article has four broad aims. First, it examines how the job creation and destruction process in British manufacturing compares with the processes in other countries. Second, it examines how much job creation and destruction is the result of employment shifts from declining industries and post-code areas to growing industries and areas relative to employment turnover that occurs among plants within industries and areas.The results indicate that high rates of job creation and destruction occur simultaneously in contracting as well as expanding industries and areas, suggesting that differences in net employment change can only be considered as a first step to understanding employment turnover. Third, the article investigates differences in the driving forces of job creation and destruction for British postcode areas and uncovers pronounced variation in the forces generating and destroying employment. Fourth, the article examines how much of these subnational differences can be attributed to industrial structure and reveals that industry-mix accounts for a large part of employment turnover in postcode areas.The large variation in the driving forces of job creation and destruction leads to important consequences for employment policy.Policies which focus too narrowly on new-firm start-ups and small firms are likely to be insufficient in generating employment in all areas.