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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.

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’?