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What would a real Enterprise Zone be like?

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So much for innovation in enterprise policy.

The best we seem to be able to do at the moment is rehash 1980s style enterprise zones to distort the market in favour of some places over others through a combination of tax breaks and more relaxed approaches to planning.  An enterprise zone becomes little more than a place where we encourage entrepreneurs to put their businesses because of a few breaks that the state can afford offer.  They are often little more than a business park with flexible planning requirements.  It looks like there will be 20 of them, funded to the tune of £1.25m each per year.  And at that level of funding any tax breaks are likely to be tiny.

But what would a real ‘enterprise zone’ look like?  Not some policy makers confection but a community that really knows how to support enterprise?  A community that does not try to pick winners in the pursuit of GDP but really supports individuals and groups in pursuit of whatever matters most to them?

Well, the first pre-requisite for such an enterprise zone would be that a high percentage of the population really were clear on what mattered most to them.  They would be aware of the current situation (politically, environmentally, financially culturally and socially) what they love about it, what they hate, and what they want to change as a result.  They would be helped and challenged to clarify their self interest.

They would have some kind of idea of what progress looks like to them.  They would have some idea about the direction in which progress lies.  They would be encouraged to reflect on the nature of ‘better’ to produce a creative tension between how things are and how they might be.  This creative tension would drive enterprise.

And they would have some kind of game plan about how they were going to make progress.  They would accept that the responsibility for progress is theirs.  They would know how to deal with both set backs and success and have what psychologists call a high internal locus of control.  In short they would believe that they can influence their future. That it is not essentially down to fate, luck or others.

They would be living and working in a community that recognised enterprising people (NB these may or may not be looking to start a business.  Enterprise in human endeavour comes in many more forms than just entrepreneurship) and individuals and groups in that community would know how to help.  In short a real enterprise zone would be packed full of people who know how to help and are themselves ‘help able’.  In such an enterprise zones we would indeed ‘all be Jim’.

People would feel a sense of belonging because they were part of community that wanted them to succeed and likewise provided opportunities to help others succeed as well.  Success would not be down to fiscal policy but to social policy.  We would succeed in our enterprise because of the people in our community not because of planning or taxation perks.

In short an enterprise zone would be little more than a competent community.  And this has more to do with regeneration ‘between the ears’ than with planning regimes, taxation policy or property development.

Access to Coaching – An Alternative LEP Idea

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First of all we should reject the temptation to be entirely strategic.

Don’t try to analyse the economy like it is a game of monopoly where you can understand the roll of the dice, seeing and preparing for an uncertain future.  Don’t pretend that people and their aspirations count for nothing as you ponder the balance between investing in ports, ring-roads, runways or fibre.

Instead learn to compliment strategic development with a responsive approach.  One that engages residents in their hopes and aspirations for a better life and gives them the power and the responsibility to pursue them.  Put your faith and confidence in people.  Provide them with hope, leadership and support.

Dare to be relevant to people and not just ‘the business community’.

A city region of around 3m people like Leeds would require a network of around 75 coaches to provide access to person centred coaching support for everyone that really wanted it.

  • It would engage about 45 000 people in the process of providing direct hands on assistance to their peers.
  • It would provide direct assistance to about 16500 beneficiaries a year, the vast majority of whom would make significant progress in their personal journeys as a result of benefiting from a coaching rather than a coercive approach.
  • I would anticipate at least 750 sustainable business starts from this cohort every year.  I would envisage business survival rates around the 90% rate after 3 years.
  • It would make a very real difference to the perceptions of some 20 000 people a year about the extent to which they feel that they ‘belong to’ and ‘feel supported’ in their community.
  • In addition to traditional ‘enterprise’ outputs I would expect substantial impacts on health and well-being as well as increases in volunteering, cultural productivity, mental health, fitness and so forth.
  • It would help to integrate the dual priorities of economy and community rather than treating them as separate and often incompatible determinants.
  • Within 3-7 years I would expect it to have made a sustained and measurable difference to the enterprise culture in the city region.

And it would cost about £3.75 million a year.

The price of a very rich wo/man’s house.

NB this piece was prompted by reading ‘The Economic Opportunities and Challenges for the emerging Local Enterprise Partnerships (LEPs) in Yorkshire and Humber – Briefing Paper‘.

As far as it goes this is an ok piece of work. Unremittingly strategic, focussing on communications, infrastructure development and targeting support at key industries – all tried, tested and, at best, partially successful ideas for economic development.  One of the challenges it identified is to develop sufficient ‘low skill jobs’ for our low skill economies.   It talks about the structures required to ensure integration of LEP structures across the region.  One can almost hear the creaking of bureaucracy…

 

A Community Ecology of Enterprise

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Enterprise is not just about ‘entrepreneurial types’ and ‘business ideas’.
It is not just about business and commercial endeavour.
If I want to make something happen to improve things in my community I may start a business, but I may start a campaign, or a festival, or a local action group.  I have worked with many people whose motivation was not to develop a business, but to make a difference, and in some cases setting up a business has been a means to that end.  No more than that.  It is simply a means to an end.
Well managed and run these kinds of community based activity all contribute to a more enterprising community and provide the kind of community ecology and practice ground from which commercial endeavours may spring.  They also help to build the social capital that is essential to building a sustainable and resilient local economy and community.
If LEPs were to think more about the kind of community ecology that supports enterprise and how this can be developed I suspect they would get a much greater ROI than on more traditional approaches of advice, managed workspace (we are awash with these in Leeds, mostly under-used and inappropriate for the communities they were built in) and access to finance.
Yes the web matters.  But it won’t be primarily because either a LEP or the national Business Link site offer generic advice and guidance (which to be frank just replicates what is already out there in most cases) but because local sites and sites of shared interest will provide highly specific and contextual advice – usually in the form of dialogue and conversation rather than factsheet.  The web will provide a platform for conversations that cannot easily take place face to face.
We have to start to think differently.  We have to innovate. We have to be prepared to try new approaches.  I hope LEPs are up to the challenge.
For me this means getting away from thinking about one to one advice for high growth, one to small group for lifestyle and start-up (in deprived areas) and one to many (content led websites) for the rest, and instead seriously building the networks, social capital, self belief and self-reliance that will allow our communities to become much more enterprising.

Dear Lord Young…

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Congratulations on your appointment as the new enterprise csar.  I am sure that the unpaid and part time role will keep you engaged.

I am pleased that you will look at how to ‘encourage people to start businesses rather than find jobs as employees’.  It makes a refreshing change from the usual line of the ‘private sector creating jobs’.  As we know big businesses have, on the whole, been laying people off over recent decades rather than taking them on. And just how long can we keep going with the mentality of ‘gizza job’ and ‘on yer bike/bus’ in a 21st century globalised and localised economy?

Can I suggest you take an early look at the semantics of ‘encouraging people to start businesses‘  and the very practical consequences that are likely to flow from it.  When a figure in authority, never mind Government, sets out to ‘encourage us’ to do something, some of us come over all suspicious.   Are you really interested in our well-being, or is there a more self centred game being played?  There is a good chance that in the very act of ‘encouraging us’ you serve to engender resistance to the very idea you wish us to entertain.  Psychologists call this reactance.

I have not read in detail the guidance on the Regional Growth Fund.  But I understand, from correspondence with someone that has, that it specifically says that self-employment is not something it should be used to promote.  Instead it should be used to encourage jobs created by employers.  There seems to be somewhat of a contradiction here.

But back to the point of encouraging  people to start businesses.  I believe that what you really want to achieve is a society where more people do start businesses that survive and thrive.  This should be the real policy goal.

So how to get there?

I would advocate that you should dissuade as many people as possible from starting new businesses.  Only for those people who insist that this is something that they have to do should we roll up our sleeves and help.  By working in a focussed way with a relatively small number of highly committed people we might have a chance of getting some real success stories.  And as we know, success breeds success.  More positive role models out there leads to more people following in their wake.  This contrasts with the current approach of offering a little support and encouragement to a lot of people, resulting in high business failure and loan default rates and a widespread perception that a journey into enterprise is likely to leave you worse off than when you started.

Can I also suggest that you do not wave money at people, New Enterprise Allowance style,  in a bid to encourage them to start a business?  The reality is that we have armies of advisers out there wading through thousands of appointments with people who are often half-hearted in their aspiration to start a business, but whole hearted in their commitment to securing the money that they see themselves as entitled to.  Instead of offering them a carefully calculated economic incentive (calculated to make things cheaper for the treasury I suspect rather than enabling people to start businesses with a decent level of working capital), offer them nothing, except excellent and committed advice, coaching and support that they need to put together an idea that is worth investing in.   I suspect that almost overnight the numbers of individuals engaged in ‘enterprise development’ would fall dramatically, but those that remained engaged would be there for the right reasons – to develop long term and sustainable strategies for self employment or entrepreneurship – and not just to secure a grant or a loan that they can default on with relative impunity.   NB don’t expect many of the enterprise support agencies to support this idea.  They have developed business models that survive on a mass market for enterprise development.

Of course access to finance matters.  But let others be the gatekeepers to it, not those who are supposed to be coaching clients to develop their enterprising ideas.

Then of course we have the challenge of helping the hundreds of thousands of people who will be faced with redundancy over the next few years.  Can I suggest that we put in place a service that does not ‘encourage them to start a business’, but that does encourage them to fully explore and understand all of their options?  I am sure that many of them have the potential to become successful, if initially reluctant entrepreneurs, if only we can provide them with the right kind of support.

And finally, don’t get all hung up with ‘national voluntary mentoring schemes’ and traditional business support organisations.  Instead get interested in what you can do to encourage communities to provide the support that local people need in pursuing their enterprising ideas (these may be much wider than self employment and business start ups).  Some of the more imaginative enterprise coaching schemes have started to develop community panels to provide practical assistance to local people.  This is an approach that can certainly be developed further.

There is tons of potential out there – and at the moment we are wasting much of it.