Inward investment – the short cut to a prosperous and fair city where all of our communities\u00a0can flourish?<\/p>\n
But, what exactly is it?<\/p>\n
It is the process where an investor\u00a0believes\u00a0that this is the\u00a0best\u00a0place to put their money to get a secure and sufficient return. \u00a0They may invest by setting up a factory or, more\u00a0likely\u00a0these days, an office or call centre. \u00a0And most cities employ\u00a0specialist\u00a0teams to attract inward investment – to\u00a0present\u00a0the best case for their city or region as an investment proposition.<\/p>\n
But it can go further than this.<\/p>\n
We may be able to offer specific incentives to investors to bring their money and their jobs to our city. \u00a0We may provide them with low or no-cost infrastructure, or other benefits such as an enterprise zone where they may enjoy high speed broadband, simplified planning\u00a0requirements\u00a0 and reduced business rates.<\/p>\n
So inward investment becomes a highly competitive, and sometimes very expensive process to get those scarce investors to being\u00a0their\u00a0money to our city. \u00a0Inward investment teams are under pressure to deliver, and the dynamic gets interesting as sassy ‘investors’ play country off against country, region against region, city\u00a0against\u00a0city and even neighbourhood against neighbourhood. \u00a0But just look at the prize for the winners. \u00a0They get ‘investment<\/strong>‘ and even better ‘jobs<\/strong>‘.<\/p>\n But, we must remember the investment comes because there is an expectation of a return. \u00a0And it has to be a good return. \u00a0The net flow of cash over time will be out of the local economy and into the pocket of the inward investor and their shareholders.<\/p>\n But, inward investment brings many gifts…<\/p>\n Inward Investment brings Wealth to the City<\/strong><\/p>\n This of course is true. \u00a0But it does little to distribute wealth. \u00a0It concentrates it with the lucky few. \u00a0Inequalities of wealth and\u00a0health\u00a0are, in my opinion, increased by inward investment rather than decreased. \u00a0It drives social stratification and is\u00a0unlikely\u00a0to be a great policy for a city that wants all its communities to thrive.<\/p>\n Inward Investment Brings Jobs to the City<\/strong><\/p>\n This too is true. \u00a0But usually the jobs that go to local people are largely low skill, low wage. Often inward investment can increase\u00a0local\u00a0unemployment rather than decrease it as\u00a0investment\u00a0tends to create relatively few jobs and automates as much as possible. \u00a0Lets face it if employment costs are a large part of your\u00a0business and you require large volumes of low skill workers then\u00a0you are not going to be looking at the UK. \u00a0And if you do create high wage, high skills jobs what are the chances of\u00a0local\u00a0people being able to take them up? \u00a0It is likely that these jobs\u00a0will\u00a0go to incomers too.<\/p>\n Inward Investment Builds Houses<\/strong><\/p>\n Very true. \u00a0Inward investors may take over a problem community – demolish or refurbish it and turn it into an aspirational address. \u00a0House prices are\u00a0driven\u00a0up and often beyond the\u00a0reach\u00a0of many\u00a0local\u00a0people<\/p>\n Inward Investment Creates\u00a0Dependency<\/strong><\/p>\n We become a blue collar community reliant on employers and investors. \u00a0They become powerful influence on the politics, economics and education in our communities as they demand more and more ’employability’, better and better conditions for business. \u00a0We end up with much time and energy being put\u00a0into\u00a0retaining our 100 largest employers and continually tipping the\u00a0playing\u00a0field in favour of ‘business’…. Becoming a\u00a0dependent\u00a0client\u00a0class I believe has negative impacts on the wellbeing of community and acts as a significant barrier to the development of innate potential as we are shaped to meet the demands of employers.<\/p>\n Loss of\u00a0Local\u00a0Control<\/strong><\/p>\n Not only are we\u00a0dependent\u00a0on the presence of inward investors in our communities but we cede control to them. \u00a0They manage their investments on the ground and if they choose to create redundancies in our communities there is\u00a0precious\u00a0little we can do about it.<\/p>\n Inward Investment is Fickle<\/strong><\/p>\n The mobility of much modern business\u00a0means\u00a0that inward investors can go\u00a0almost\u00a0as easily as they come. \u00a0You might have to have very deep pockets to\u00a0retain\u00a0them in the face of all that\u00a0competition\u00a0for their ‘jobs’.<\/p>\n Inward Investment can Undermine Local Business<\/strong><\/p>\n By competing for talent and skills and by driving up land values and costs beyond the reach of\u00a0local\u00a0independents.<\/p>\n It Plays a Zero Sum Game<\/strong><\/p>\n If an inward investor moves from one part of the county to another there is not net gain in jobs.<\/p>\n Put More Strain on Local Services<\/strong><\/p>\n Schools, hospitals, roads and other infrastructure may all face increasing demand as a result of inward investment. These costs are seldom met by the inward investor but is funded from other budgets. \u00a0Meanwhile in the community that the investor has just left services may lose viability and be forced to close.<\/p>\n It is Resource Hungry<\/strong><\/p>\n Playing the inward investment game is a high stakes, high cost business. Renting a yacht at MIPIM and taking a high powered delegation there does not come cheap. \u00a0But that is just surface. \u00a0Someone has to pay for the business rate subsidies and the infrastructure demanded. \u00a0And every pound spent on helping an inward investor to\u00a0realise\u00a0a profit is a pound that is not spent elsewhere in supporting the local community and its economy.<\/p>\n But I am not Against Inward Investment…<\/strong><\/p>\n It has a role to play in bringing ideas, innovation and fresh blood to our city. \u00a0What I am against is a political and\u00a0business\u00a0narrative that says it is really the only game in town, and one that says it is the only strategy worthy of real investment. \u00a0 Instead of economic hunting perhaps we need to look at nurturing the potential our own communities <\/a>a little more, and\u00a0recognising\u00a0that there\u00a0is much\u00a0more to creating sustainable and fulfilling lives than the ever increasing growth of GDP and a touching faith in the trickle down fairy.<\/p>\n <\/p>\n <\/p>\n