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The Alternative LEP Enterprise Zone

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Enterprise Zones are places where a different set of rules apply to business.  Inside the Enterprise Zone businesses get:

  • business discount rate worth up to £275,000 over five years for firms that move into the area over the course of this parliament
  • a more relaxed, flexible and ‘radically simplified’ planning regime
  • access to ‘superfast’ broadband.*

Enterprise zones will be pockets of the country where the usual rules that govern the relationships between business and society are bent to the advantage of business.  Business will get enhanced public services in the area, and they will pay less for them. Their operating costs will be reduced.  It will be those of us who neither live nor work in an enterprise zone who will pay.  We will be relying on the ‘trickle down fairy’,  trickle down economics to ensure that we all share the success of those who can afford to invest in an enterprise zone.

Enterprise zones ‘work’ (on their own purely economic terms) when they are able to attract more investment.  They attract more investment by reducing the risks and  increasing the rewards for the investors.  We subsidise those investments.

Interestingly the Government is reported to have said that it does not want Enterprise Zones to be about remedying local dereliction but about economic growth.  This is about making public investment where the return on that investment, measured in economic terms, are likely to be greatest.  This means that it is likely to be an investment in already strong economies, helping them to become stronger.

So how might things be different with some #altlep thinking?

In an alternative LEP I think the logic may run a little differently. I think we may question the wisdom of zoning, and instead prefer to think about how we can improve the preconditions of enterprise for all.

We would also make sure that we did nothing that was going to further benefit big business while doing little to help the small businesses that are increasingly the mainstay of our economy.

I think we would think twice before easing planning requirements in certain zones.  Either we have got the planning process right in holding the balance between environment and business or we haven’t.  Or perhaps we should devolve more powers of planning and taxation to the local level so that those who will really be impacted can have a say?

We would recognise that enterprise is expressed in many different voices, not just the voice of business.  We might be interested in setting up a ‘social enterprise zone’.  An area where enterprise is encouraged because of its positive impact on society, not just on the economy.  The mantra might be, ‘yes please make some money if you wish, but make something much more interesting as well, please….’

I think we might question trickle down theory that says ‘a strong economy produces strong public services which in turn produce a strong society’.  While it is true that ‘a rising tide lifts all ships’, in a ‘rising’ economy some people rise much further and much faster than others.  And when the economy sinks, well not all hands sailors share the same risk.

I suspect we would think much more deeply about the psychology of enterprise, the mental barriers to acting boldly in pursuit of dreams, rather than how we can change fiscal and planning policy to encourage those who are already doing it to do it more profitably.  How do we change the psychological landscape so that many more individuals take responsibility for their own lives?  That they feel that it is possible for them to make progress, without waiting for a benevolent employer to come along and offer them a job.

I suspect we would seriously consider the impact of a traditional enterprise zone on its neighbours.  Displacing jobs is not the same as creating as them after all.

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.

A Future with HEART?

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Yesterday I went to the official opening of HEART – Headingley Enterprise and Arts Centre, an old Primary School, in a vibrant Leeds suburb which has been converted to a high standard by the Headingley Development Trust to provide:

  • 13 meeting rooms of various shapes and sizes
  • Exhibition space which local artists can use to hang their work
  • The Pulse Enterprise Space – shared workspace available on a membership basis
  • A Cafe, run by an independent operator, with 45 indoor covers and outside, off street, seating for 30 more

With, what seems to the untrained eye, excellent green credentials (solar panels, photovoltaic cells, grey water collection etc) the HEART Centre is a great new facility.  And with an eye to keeping costs down, using teams of volunteers wherever possible to run the building (very ‘big society’) and keeping debt as low as possible, the centre, with a lot of hard work, may just pay its way commercially and fulfil its vision – to create a vibrant and welcoming space for a wide range of people to meet, mix, work and play.

Similar in look and feel to both Hillside and Shine, I think there are several reasons why HEART has a chance of succeeding in the pursuit of its vision.

Firstly it is situated in a relatively prosperous part of the city, there are plenty of bright, young, and not so young things, with Mac Books, notebooks and iPads running small businesses who will almost immediately recognise the value of the Pulse Enterprise Space and find the £25 per month entry point both affordable and cost-effective.

It enjoys a wonderful location, with excellent footfall, and provides great spaces which fit well with the expectations and aspirations of many local people.

It really has been a carefully researched labour of love – the culmination of a 5 year project, led by local people, to keep the school in community use.

But perhaps most importantly I think it stands a chance of success because it is the flagship project of an established Development Trust led by local people who generally live in, and share insights into, the community that they exist to serve.  The Trust has developed over several years and those involved have already more than cut their teeth on a number of other projects including the Headingley Farmers Market, a Housing Project, a Community Orchard and even a Pig and Fowl Coop.  So the building is in the hands of a well established group of people committed to Headingley who have shared experiences over a number of years that have developed a real competence in their work.

Some Challenges to Be Met

Doing what pays – rather than doing what is wanted.  On my tour of the centre I was told about a significant demand from local people to have somewhere to practice their art, painting, drawing and so on – a community studio of some type.    However the centre was unable to respond to this demand because it is not commercially viable.  Local people want to develop their passion and skill and come together communally but this desire, at the moment at least cannot be catered for.  Perhaps in future surpluses from commercial activities could be used to cross subsidise such a resource?

We have to understand that financial viability follows on from the development of real craft.  It is not its pre-cursor.  If we could build a community of artists doing outstanding work then the revenues might start to flow.  Building skills and relationships lies at the heart of effective community development.  If we simply provide a home for those who are already economically viable perhaps we are missing a trick?

Displacement – There is a danger that money that gets pulled into the HEART Centre may be money that is pulled away from other local businesses and community groups offering similar services.   Of course competition is a good thing, as long as the playing fields are kept level between the private sector and community groups.  But if community groups are able to leverage volunteers, grants and subsidises not available to the private sector to compete with them then the results will not always be what we might hope.

Further Driving Inequality in the City? – Headingley, although not without the problems that come from a high population density including lots of students and ‘young professionals’, is not a deprived area.  Indeed it is the only part of the ‘Leeds Rim’ not to be amongst the most deprived wards in the country.   So we have a ‘successful community’ learning how to make itself more successful.  Which is to be applauded.

But can we do more to ensure that gaps between the rich and the poor do not further open up in the city?  How do we work successfully in more deprived areas to ensure that they too share in successful economic and social development.  I am not sure that similar buildings in more deprived parts of the city will have the same chance of really making a difference.

Keeping the Doors Open and On Mission

Buildings, especially ones that are open long hours, cost a lot of money.  Centre managers, caretakers, security, insurances, rates, utility bills and servicing debts all add to the overheads.  It is easy for the imperative to generate income to over-ride the social mission of such spaces.  Bills have to be paid.  But sometimes the desire to pay the bills takes the building away from what it was intended to be.  So, instead of being a place for the local community more of it is made available to affluent outsiders.

Hopeful…

But I am hopeful for HEART.  I think it has an excellent chance of doing great work in Headingley.  The host development trust seems well run.  It is embedded in the local community.  It will be hard work, and I suspect not without real scares along the way.  But I have a suspicion that HEART and the Headingley Development Trust will be a part of the Leeds infrastructure for some time to come.  It may be hard to make the managed workspace/meeting room combination work in more deprived areas of the city – but with a bit of tweaking it may be just right for Headingley.

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…

 

Some More Provocations on Enterprise

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  • Poverty is not about scarcity – it is not that there is not enough – but that it is not shared
  • The challenge is to give more people the power that they need to play a positive and powerful role in markets; This means accessible and relevant processes to develop individual capabilities and power
  • Development is a measure of the extent to which individuals have the capabilities to live the life that they choose.  It has little to do with standard economic measures such as GDP.
  • Helping people to recognise choices and increase the breadth of choices available to them should be a key objective of development.
  • Developing the capability and power of individuals provides a key to both development and freedom
  • Development must be relevant to lives, contexts, and aspirations
  • Development is about more than the alleviation of problems – stamping out anti social behaviour, teenage pregnancies, poor housing and so on.
  • It is about helping people to become effective architects in shaping their own lives
  • We need practices that value individual identity; avoid lumping people into “communities” they may not want to be part of, and promote a person’s freedom to make her own choices.  Promoting identification with ‘community’ risks segregation and violence between communities
  • Society must take a serious interest in the overall capabilities that someone has to lead the sort of life they want to lead, and organise itself to support the development and practice of those capabilities
  • We should primarily develop an emphasis on individuals as members of the human race rather than as members of ethnic groups, religions or other ‘communities’.  Humanity matters.
  • We need to make the delivery of public education, more equitable, more efficient and more accessible

If we took this stuff seriously what kind of enterprise development activities would a LEP commission?