New Report Reveals Extent of Economic Polarisation Across England and Wales

Study exposes stark regional divide with London dominating while post-industrial areas trapped in ‘innovation deserts’

A new study has revealed extreme polarisation in economic possibilities across England and Wales, with the City of London achieving the highest score while post-industrial towns like Merthyr Tydfil, Blackpool, and Blaenau Gwent rank among the worst performers in an analysis of local and regional capacity for economic transformation.

The NICE Index, developed by Professor Robert Huggins of Cardiff University’s School of Geography and Planning and Professor Piers Thompson of Nottingham Business School at Nottingham Trent University, measures Networks, Innovation, Creativity, and Entrepreneurship across all local authority areas, revealing that only 35.2% of areas achieve positive scores while nearly two-thirds score negatively.

London’s Dominance and the ‘Golden Triangle’ Effect

The research confirms London’s overwhelming economic advantage, with the City of London recording the highest NICE score with nine of the top 15 areas being London boroughs. The capital accounts for 29% of all positive-scoring areas despite representing a fraction of total localities, demonstrating a huge concentration of economic possibilities.

‘The analysis confirms the existence of the UK’s ‘golden triangle’ of London, Cambridge, and Oxford as the primary innovation corridor,’ said Professor Huggins. ‘University cities often outperform other areas, with significant knowledge spillover effects driving regional prosperity.’

Regional Hierarchy Emerges

The study reveals a clear regional hierarchy with London leading, followed by the South East and East of England . In stark contrast, Wales ranks bottom, with the North East close behind.

London demonstrates particular strength across all four NICE domains, excelling in Creativity and Entrepreneurship. The West Midlands shows a distinctive profile, ranking second on Innovation despite weaker performance in Networks and Creativity.

Post-Industrial Towns Face Severe Challenges

The research identifies widespread ‘innovation deserts’ across post-industrial and peripheral areas. Bottom performers include Merthyr Tydfil (the lowest-scoring area), Blackpool, Blaenau Gwent, North East Lincolnshire, and Carlisle, reflecting what the researchers describe as ‘persistent structural and behavioural barriers to economic renewal.’

Areas requiring urgent intervention include Hartlepool, Middlesbrough, North Lincolnshire, Stoke-on-Trent, Kingston upon Hull, Isle of Wight, and County Durham, alongside many Welsh communities, which exhibit severe deficits across different NICE dimensions.

Wales presents particular challenges, ranking lowest across Networks, Innovation, and Entrepreneurship dimensions, with only marginally better Creativity performance. Sixteen of Wales’s 22 local authority areas rank in the bottom half nationally.

Strong Link Between NICE Scores and Economic Performance

The analysis reveals a strong positive relationship between NICE Index scores and Gross Value Added per capita, confirming that networks, innovation, creativity, and entrepreneurship serve as foundational conditions for wealth generation. This relationship demonstrates that behavioural attributes are crucial drivers of regional prosperity.

Brain Drain Threatens Regional Balance

The concentration of economic possibilities in Southern England, particularly London and the South East, suggests an accelerated brain drain as entrepreneurs and creatives migrate from low-NICE to high-NICE regions, potentially reinforcing existing disparities.

Policy Implications and Recommendations

The findings challenge current policy approaches, with the authors warning that the UK Government’s 2025 Industrial Strategy risks reinforcing disparities in localities lacking foundational economic capacities.

‘The UK requires a fundamental shift from traditional infrastructure-focused approaches to one that prioritises Networks, Creativity, Innovation, and Entrepreneurship as a foundation for inclusive growth,’ said Professor Thompson. ‘Behavioural barriers rather than physical constraints are often the primary obstacles to regional prosperity.’

Call for Behavioural Interventions

The researchers emphasise that post-industrial and rural areas have developed self-limiting mindsets rooted in narratives of decline that must be actively countered through behavioural interventions, choice architecture redesign, and forward-looking narrative building.

Key recommendations include:

  • Integration of creative and entrepreneurial curricula in schools and lifelong learning institutions.
  • Coordination of investment through the Council of the Nations and Regions to address specific component deficits.
  • National campaigns to elevate local innovators and creatives from low-NICE places.

‘Without urgent action to address these foundational deficits, large areas of England and Wales risk becoming permanently economically isolated from UK prosperity, with potentially devastating consequences for communities and national economic performance,’ Professor Huggins concluded.

ENDS

Notes to Editors:

  • The NICE Index covers all local authority areas across England and Wales.
  • Scotland and Northern Ireland are not included due to a lack of comparative data.
  • Only 35.2% of areas achieve positive NICE scores.
  • Full research report title: ‘Economic Possibilities Across England and Wales: The NICE Index of Localities and Regions’
  • The report can be freely downloaded here: https://cforic.org/nice-index-report/
  • To discuss the report contact: Professor Robert Huggins (hugginsr@cardiff.ac.uk)