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Recovering the Economy

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Listening to the various party conferences you would think that the politicians THIS time have learned the lessons of boom and bust and are now going to revamp macro-economic policy, remake the relationship between state and citizen, write off large chunks of eurozone debt and lead us into a brave new world of social justice and prosperity.

Yeah! Right!

Because the truth is that any levers that the politicians have in a modern market based economy are generally pretty ineffective.  They may pontificate about grand capital projects like high speed trains, tramways, arenas, flood defences and so on, but this is pretty much a combination of political posturing and feeding the professional and financial beast which we call the ‘regeneration industry’.  I sometimes think that ‘Degeneration Industry’ would be a more accurate moniker.  As this refreshingly honest trader put it, ‘Governments don’t rule the world: Goldman Sachs do‘.

Recovering the economy is not primarily a function of politics, but a function of enterprise.  About people using their skills and knowledge to provide products and services that people want, marketing and selling them effectively at a price that adds value to the customer and makes a profit.  Transactions in which all parties gain. Good business if the methods of production and distribution are environmentally sustainable and neither harm nor exploit.

But, improving the economy through enterprise is not the only thing that matters.  We also need to improve our communities, making them better places for as many people as possible to live full and rewarding lives in which everyone who wants to is supported to explore their potential and express it to the full.  And, these are not 2 distinct activities but 2 facets of the same process of development.

The challenge is not to find the right ‘macro-economic policy’ but to engage large numbers of people in living their lives to the full and doing what they can to help others looking to do the same.  It is about mass engagement, facilitation of ideas, and support.

You see the politicians can’t build good communities and sustainable economies.  We get these things as by-products of large numbers of people pursuing the projects that they believe in and helping each other wherever they can.  And occasionally falling out.  Great communities and their economies spring from people living their lives to the full and making the best of their potential.

It’s about time we recognised that and helped to make it happen.

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…

 

Gardening or Hunting in Pursuit of an Enterprise Culture?

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Gardening and Hunting are two very different approaches to developing an enterprise culture.

A gardening approach sets out to create jobs and entrepreneurial activity by investing in local people and their talents, cultures, passions and skills.  It as an endogenous “arising from within” approach to community and economic development.  The starting point for economic gardening says that ‘in this community we have all that we need to build a vibrant and sustainable future’.  It may need careful nurturing to help it thrive but the seeds of our future success are already sown.

The key tools of economic gardening include:

  • building open and accessible networks for potential and current entrepreneurs that foster the exchange of ideas and collaboration
  • signposting to existing and continually improving support  services that help local people on their enterprise journey
  • locally available, convivial and very low (preferably no) cost coaching support to help local people to nurture their dreams and aspirations and to believe in their ability to develop them
  • access to commercial finance for local people with investment ready business ideas
  • support services that recognise that everyone has the potential to become more enterprising and don’t just work with those that are already entrepreneurial.

This contrasts with economic hunting which sets to create jobs and entrepreneurial activity by attracting investment and employment into a community from outside.  The starting point here is one that says ‘our community is deficient.  We lack the entrepreneurs to create employment so we have to attract them from elsewhere.  Then perhaps some of the entrepreneurial pixie dust will rub of onto local people.  And if it doesn’t, well at least we will have attracted entrepreneurs who will provide them with jobs.’  This is an exogeneous approach to community and economic development.

The key tools of economic hunting include:

  • the creation of facilities and resources to attract companies or ‘creative class’ members to set up their homes and businesses in our community (NB usually these resources are beyond the means of many local people to access).  If you are in a facility that serves a ‘much better cup of coffee at a higher price’ than anywhere else in the neighbourhood, or if many local people are priced out of your facility, then there is a strong chance that it is the product of economic hunting rather than gardening.
  • the development of inward investment teams and budgets to enable local authorities and regional development agencies to negotiate ‘sweetened’ deals for employers to locate in their communities
  • support services that focus almost exclusively on the ‘already entrepreneurial’ as those who have the potential to create wealth and employment for the rest of us.

Historically most of the investment has gone into economic hunting strategies.

There has been a rise in interest (if not yet investment) in economic gardening.  I see no fundamental reason why the two can’t co-exist in the same community, but they are not always comfortable bed fellows.  Economic hunting usually means changing things to make them convivial to outsiders (better coffee, better carpets and sexy furniture).  Economic gardening means making things really convivial to local people; affordable, local and accessible.

Often community based enterprise development programmes struggle to help local people to access the business support infrastructure that was designed as an economic hunting tool.  It is not designed to be convivial to local people, but to that special breed of entrepreneur from out of town who will pay £3.40 for a posh coffee and £20 an hour to hire a meeting room.  More often than not such facilities fail to win in either of these two market places.

So which tribe do you belong to?  The hunters or the gardeners?

What would happen if we took some of the budget for ‘inward investment’ and put it into the hands of ‘community development’?