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Recipes for success?

4 Dec

In the unlikely event that fans of chef Marcus Waring stumbled across my blog (Vectors of Prosperity) published yesterday on the Medium platform they might inadvertently imagine that I’d confused fine dining with economic policy – Place three ways!

But that accidental analogy (and terrible pun) has some depth.  Without care in balancing ingredients, even the most creative cooks will fail to satisfy.  Today’s Irish Stew (unlikely contender for the lunch menu in Brussels) was enriched by weekend observations of the strong correlation between the lower half of the Social Mobility Index and votes for Brexit.

One of the ingredients for economic success is a metric that is closely observed and oft celebrated –  the number of new business start-ups.  But, as Sherry Coutu reminds us, that emphasis on new enterprise distracts attention from a deeper need – nurturing growth by ‘scaling up’ enterprises that have survived those early steps.  “Increasing the number of scale-up businesses in a country boosts job creation and the economy as a whole to a greater extent than increasing the number of startups.

That distinction between Start-Ups and Scales-Ups is a critical issue. ‘The UK is ranked as third in the world by the Organisation for Economic Cooperation and Development (OECD) for the amount of startups created although sits at thirteenth for scaleups.’  The 2017 annual ScaleUp review once again enters a plea for better metrics – particularly for the benefit of ‘local community developers.

ScaleupRec1

As chef Marcus would observe, getting the balance of flavours right requires careful selection of ingredients and experience.  The local leaders best placed to succeed are those who recognise the need for learning – which is why the Bloomberg-backed school for mayors (particularly for those transitioning from the National to Local) is more than seasoning.

Summit18LogoJune4-6

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On the move – fresh impetus for local leadership

30 Nov

Sometimes repetition works. It’s brilliant for children’s stories.

Sometimes – particularly in politics – reinforcement is needed for messages to penetrate.

Sometimes audience boredom blunts the impact.

But then, amazingly, the message arrives on a different train – a fresh perspective – and the audience is shaken from slumber.

That is why this Social Mobility report is required reading.

I have lost track of the number of times I’ve written of the UK’s economic diversity and the inadequacy of over-centralised policy responses.  Despite the daily evidence the march of the macros remains the average response.

Teasing apart the policy knots (treating causes rather than symptoms) does not come easily to the average big number addict.

At the heart of the Social Mobility Commission’s report the challenge of reconciling the National with the Local is exposed. Umpteen flavours of economic and demographic analysis may have said all this before but now . . .

‘There is enough evidence from around the world, in our country’s own history and, contemporaneously, in local areas to know that, with the right approach, the transmission of disadvantage from one generation to the next can be broken.

‘There is, however, a mind-blowing inconsistency of practice. It is the breeding ground for the local lottery in life chances that exists today. It is, of course, a matter for local decision-makers to attune their policies and priorities to the needs of their local communities. In a heavily resource-constrained climate, local councils are continually having to make difficult choices about where to allocate resources and focus efforts in order to get the biggest bang for their buck. But all too often schemes start up and then wither away. Initiatives often lack scale. Experience is usually not pooled. Most worryingly of all, evidence about what works to improve social mobility is, at best, not properly embedded in local policies and programmes. At worst, it is ignored. When that happens, precious public resources are wasted and the potential for social progress is lost.’

Despite the pleas for consistency – the outrage against ‘postcode lotteries’ – there is also recognition of the need for local leaders ‘to attune their policies and priorities to the needs of their local communities’. That required flexibility is certainly not lost on the recently appointed Metro Mayors and has been a consistent refrain from many city leaders. But after years of denigration (and austerity budgets) Local Governments have lost much of their authority. It’s a rare and brave soul who has leadership strength to develop local economic and community development policies that really meet the needs of their people.

And yet, despite constraints (real or imagined), it does happen. The report cites evidence of places where fortune has changed through dint of local effort. But the report also highlights how those flashes of brilliance are rarely shared.

Perhaps more than the myriad metrics around economic performance and evolving demographics, this Social Mobility study underscores that need for local collaboration and inspired leadership.

This is precisely the agenda planned for a unique 3-day conference in June 2018.

‘Intelligent Communities’ are places that may have the benefit of smart technology and future-proofed infrastructure, but they also prosper under the guidance of gifted local leadership.

This is not new – they’ve been studied in depth by the Intelligent Community Forum for the best part of two decades.

Next June such places from around the world will send their delegates to meet and mingle with local leaders from the UK, share their ideas and successes, form new bonds, learn of new opportunities and celebrate their delight in a renaissance of the places they call ‘home’.

 

Cross-Party consensus and other ‘escape hatches’

27 Nov

It may not have been the first such example but the pre-2015 election consensus around long-term infrastructure planning was certainly a ‘learning moment’ for Westminster. The lessons have not been lost – despite the divisiveness of ongoing policy power struggles.

The case for removing infrastructure from knockabout political games was, eventually, grasped by Party leaders despite their decades of devotion to partisan debate. Endless arguments and prevarications get in the way of well-considered solution investment whilst the people, emulating Doogle, shake their heads sorrowfully and mutter ‘What a way to run a railway’.

Even building that infrastructure consensus was hard fought. Never mind that the life cycle of governments was far too short for serious investment. Never mind that the lobbyists were routinely exposed as short-term market manipulators. Never mind that the complexities of major projects didn’t fit into 78pt tabloid headlines. It was no small wonder that anything was ever achieved in the febrile atmosphere of Westminster party politics.

But opening an escape hatch requires broad recognition of some impending disaster.

With today’s launch of the White Paper on Industrial Strategy it is timely to review the Green paper comments from industry and academia. The Policy Lab led by Kings College London (KCL) observed, ‘It is difficult to sell a big change to the entire country without a sense of crisis’ and went on to ask whether ‘a burning platform exists to launch the industrial strategy from?’

Last week’s budget scene-setter strived to embed ‘productivity’ as a central motivating focus but was that sufficient to establish a ‘war footing’?   The KCL input was as positive as possible – suggesting unity around securing a ‘peace dividend’ ‘as the country moves through this time of profound change and heightened disruption’.   They didn’t dare suggest that Brexit was itself a sufficiently severe and imminent unifying threat – a diplomatic caution that serves to underline the long road between rhetoric and reality.

Getting consensus around infrastructure planning set the scene for further calls to remove contentious arenas from everyday politics.  Writing in the December issue of Prospect magazine, Diane Coyle’s candidate for cross-party consensus is Economic Strategy.

Writing as a member of the independent Industrial Strategy Commission, Diane concludes that, There must be a commitment, across party lines, to strategic management of the economy, monitored by an independent body analogous to the OBR. The strategy must go far beyond a few eye-catching sector deals and be aimed at long-term challenges, such as decarbonising the economy and delivering health and social care for an ageing population’.

That plea for cross-party consensus was echoed again last week when 90 MPs repeated calls for removal of the Social Care/NHS policy complex from the political maelstrom. The BBC reported, The letter argued that only a cross-party NHS and social care convention – a forum for non-partisan debate – could deliver a sustainable settlement for these services where conventional politics had failed to do so.’

What may have started with independence for the Bank of England and the creation of the Office for Budgetary Responsibilities and a seemingly endless list of ‘arms-length’/independent regulators seems now to have become the model for a new hands-off school of government.

That withdrawal, however, is a prospect that now seems far more likely to succeed at a local level closer to the people and their communities. An alternative ‘escape hatch’ for conflicted macro-managers is to back-off and devolve issues to regional/metro and local governments where attending to the great diversity of needs can help untangle the centrally knotted issues. The other great advantage of letting go is that local political discourse is far more inclined towards the consensual and the emergent White Paper is certainly not short of placed-based aspirations.

The UK is, arguably, the most centralised of all advanced economies. Sadly, subsidiarity is often and erroneously painted as some dark and suspect EU concept but as any parent with teenagers will know, there comes a time when youngsters must be let go. So it is with Mrs and Mr Whitehall – the offspring must be trusted to provide the energy for the entire family’s next generation.

And I wrote all that without using the F word.

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Communities and their place-makers: the roots of the UK economy

20 Oct

The London-based Centre for Cities does exactly what it says on the tin. They advocate for better recognition of the economic and societal strengths of the UK’s major conurbations.

‘Cities’ according the Centre for Cities, ‘do not follow the national economy – they ARE the national economy’ – and their diversity demands that each of them have different priorities to meet the needs of their citizen and business communities.

This diversity of needs and priorities stands in sharp contrast to Whitehall’s grasp of the economy. The UK is, measurably, the most centralised of all developed nations.

Even with limited sub-national devolutions beyond England and the cautious local empowerment of Metro Mayors and City Deals within, it is clear that in so many spheres of our regulated regime, we have a complex challenge – an inability to align centrally planned resources with local needs.

None of that is news. The debate, like some slow-brewing tropical storm, has been building over the last three decades – centrally evidenced by the RSA’s City Growth Commission and today (rather more locally) illustrated by the energy around Bristol’s brilliant ‘Festival of Ideas’.   And this locally-driven rebalancing energy is also evident across many UK cities – at a pace, intensity, creativity and engagement that leaves Whitehall Departments in the shade.

This renaissance – the emergence of inspired local leadership and willing communities – is also a cultural expression that positions exponents at some distance from the tired dogmas of national political parties across the spectrum.

Critical impatience is, for example, articulated by Metro Mayors, regardless of Party affiliations. The Centre for Cities noted the marginalisation of these local champions at recent Party conferences and, this week, the C4C lead story is a repeat of a powerful post-election view of paralysis in parliament with a call for MP’s to support local initiatives.

I’m not a disinterested observer. I’ve written previously about Municipal Enterprise and the need to translate and apply the work of fresh economic thinkers like Kate Raworth and Mariana Mazzucato from national to more local perspectives.   I’ve watched the brilliantly creative work of Knowle West Media Centre building community cohesion in part of Bristol and for several years I’ve contributed to the work of the US-based Intelligent Community Forum with its global network of around 160 cities.

Whilst our national politicians are looking elsewhere, the new localism is an unstoppable force. This is an energy that is likely be further bolstered by the Intelligent Community Forum’s 2018 Global Summit when civic leaders, CIOs and community developers from many of the world’s leading cities come to London next June to share their experiences.   The current holder of the title ‘Intelligent Community of 2017’ is Melbourne, Australia. In recent years UK cities have rarely featured in the rankings but this year Knowle West was assessed as being amongst the Global Top 21 – a huge accolade for their imaginative creativity.

Let’s be clear (as politicians are fond of saying) communities are both economic and societal constructs – they embrace both the places where we work and where we live – and those of us who commute may belong to two or more.

In the gradual evolution of local empowerment, the creation of Local Enterprise Partnerships was supposed to have been a step along the way. No doubt they can claim some economic impact but for their wider communities these efforts pass largely unnoticed and, as noted in this week’s Economist, the divergences of well-being means that many feel they are being left behind.  Rather than celebrate diversities the good citizens of less-prosperous places are more likely to fret about ‘post-code lotteries’ when austerity drives down public service standards. Fortunate indeed are those places that rise above party politics to embrace inspired local leadership. But this is a balancing act – local threads woven into wider regional fabrics.

What marks out the new New Localism are signs of vastly greater local engagement – and with that higher-octane fuel the drivers of the UK economic performance and our social and cultural developments are very firmly in the hands of local communities and their place-makers.

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The NEW New Localism

19 Sep

According to Bruce Katz and Jeremy Nowak (Brookings Institute) “Power is shifting in the world: downward from national governments and states to cities and metropolitan communities; horizontally from the public sector to networks of public, private and civic actors; and globally along circuits of capital, trade, and innovation.”

It’s not surprising that much of their evidence for this stems from the USA. More recently they have written (p22, Prospect, October 2017) “The emergence of ‘New Localism’ is partly due to the abdication of higher levels of government“.

Search on Google, however, for ‘New Localism’ and the top hit (Wikipedia) roots the term in the early part of the UK’s Blair government and the realisation of an increasing understanding of the limitations of centrally-driven policy implementation’.

Cautious devolution and local empowerment has since featured Gordon Brown’s ‘Sub-National Economic Growth’ plans, Regional Development Agencies replaced by Lord Heseltine’s Local Enterprise Partnerships, George Osborne’s Northern Powerhouse, the RSA’s City Growth Commission, a variety of City Deals, half dozen new Metro Mayors and a new national industrial strategy that has space for Place-Making.

And yet, the UK remains one of the most centralised of all developed nations.

Even now, with a hint that Local Governments might once again be allowed to retain revenues from business property taxation (‘Business Rates’), there’s debate over the potential for relative inequities of city honey-pots and their less well-endowed commuter hinterlands – not to mention the latent heat of ‘post-code lottery’ outrage if any place dares to fare better than any another.

But we know that there is no national economy – only the aggregation of many local economies each with different demographics, different cultures, different business interests, different leaderships and different needs calling out for different priorities.  More significantly, as the UK tumbles towards Brexit, cities and their communities have diverse cultural and commercial international linkages that impact on future prosperity here at home.  Should we need to ask why some local economies and their communities prosper whilst others seem to wither? How can we have more prospering and less withering?

Central policy makers may desire national economic growth but that can only happen with the success of diverse local economies. So it’s not surprising that the Department for Business (BEIS) has strategically enshrined Place-Making, but as yet there’s very little flesh on those bones.

With the benefit of an 18-year world-wide study of what makes communities prosper, there are, it seems, some fundamental indicators but even these are evolving as we adapt to a more digitally-enabled era. Just as in business, enterprises that have not adapted find themselves in treacherous trading waters: communities, their citizens, employers and local leaders need to adapt. Sometimes it takes a crisis to spur action. Perhaps a more-mature approach lies in planning futures than reach beyond short-term electoral cycles.

To find the new New Localism – to flesh out the bones of Place Making and local economic/community development – Leaders, civic and commercial, should study the outcomes of on-going research.

In late October, the world’s Top 21 in the 2017/18 research cycle led by the Intelligent Community Forum (ICF) will be announced. By early next year those 21 communities will have been whittled down to just the Top 7. Then it will take a few more months of patient investigation and assessment to declare a worthy successor to Melbourne – the current holder of the title ‘Intelligent Community of the Year’. That announcement will take place next June in London in the company of mayors, CIOs, enterprise and civic leaders from communities around the world.

Between now and next June all the participating cities/communities will learn much about themselves and be readied to share their successes, to network their ideas, to inspire others, to find new opportunities, but also to learn how they might further adapt in this fast-moving world.

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See also http://www.gs-sg18.co.uk/about/www.gs-sg18.co.uk/about/smart-smarter-smartest and associated links.

 

 

 

 

 

 

Can Blockchain really save the Brexit Bacon?

15 Aug

[Editorial co-authored by Susie McAleer of 21c Consultancy & David Brunnen, Groupe Intellex]

Brexit=uncertainty.   Business leaders have no idea how government negotiations with the European Commission will evolve. The likelihood that nothing will change is at, or very close to, absolute zero.

What is certain is that cross-border transactions will be different in at least two ways – pricing and regulation. The consequences (even if the UK moves to WTO tariffs) will probably involve potentially costly administrative adjustments to the way we all do business in any transnational flow whether import or export, inward investment, overseas acquisition, emigration or immigration.

Anyone already immersed in overseas trade will know the current complexities. In recent times it has been useful to (a) simplify the process and/or (b) outsource the hassle. Wholesale elimination of tariffs and trade barriers within the EU expanded the scale of accessible markets on our doorstep. But old customs die hard, so a new industry has emerged – an army of specialist intermediaries to handle the ‘red tape’ and logistical complexities that add extra costs but very little extra value.

Conventional analysis would see easy/local market access shrinking and also increased regulatory red tape, but could Brexit have an unforeseen silver lining? Some enthusiastic Brexiteers have suggested that technology can somehow bridge new borders.

  • Is it possible that we now have the will to design transnational transaction systems sans rubber stamps in triplicate?
  • Is it plausible that the UK could find competitive advantage through some new global protocol to make trading easier?
  • What is the chance that all other countries would agree and fall into line?
  • And could all this be designed and implemented before the guillotine falls?

It may sound unlikely but the underlying spirit of our digital times – disintermediation – should, in theory, sweep away the old (or new) roadblocks.

Consider, for example, the vexed question of a land border between Northern Ireland and the rest of that island. Their border had lost much of its polarising significance but may now return to regulate the flow of people, goods and services. Can technology save everyone the hassle of stopping, searching and rubber-stamping?

Well, in theory, yes. Adopting blockchain technology has the potential to create simple, fast and efficient systems for organisations on both sides of the border enabling them to trade using a robust, secure platform and network with automatically pre-assured customs clearances, dues paid and all boxes ticked.

The chain itself is simply an electronic document ledger that enables people and businesses to share information – financial, legal, electronic or physical asset description – securely across a network of computers without the need for a central authority, be it a bank or government department. No one member of the chain has the power or authority to change or tamper with the records, and the blockchain algorithms keep everyone honest by ensuring data integrity and authentication of the transactions. This transference of governance from centralized institutions to a system of distributed networks of peer-to-peer collaborators ensures a trust protocol is created and managed by the members of the chain, the ones who create and drive value, not by a third-party middleman.

So, that’s the theory, but what would the blockchain mean in real life?

In the Northern Ireland Brexit case blockchain could provide complete trade transparency enabling borders to be kept open without hindrance. For example, supply blockchain’s would ensure the provenance of food (the titular brexit bacon) and of goods that cross the border, ensuring they are transported at the right temperature, in the right volumes, keeping quality from source to destination without the need for overwhelming volumes of paperwork and ‘red tape’.

Selling high value assets, such as property and enterprises between those from Northern Ireland and the Republic could be made faster with automatic and immutable historic ownership data, from copies of deeds to due diligence information, thereby removing fraud and reducing bureaucracy.

The use of faster, secure payments means local businesses could rival bigger companies. Imagine if a local mini-cab firm could take on Uber by placing transactions on the blockchain, thereby removing the centralized organistation taking a 30% cut from fees. The idea of blockchain is to give better value/more money to those in the network, rather than large corporates based in, say, China or the USA.

Whilst the potential of blockchain is still largely theoretical, advances in its use for trade are being made. At the start of 2017 seven European banks (Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Société Générale and UniCredit) created the Digital Trade Chain (DTC) consortium in order to collaborate on the design, development and commercialisation of a shared supply chain management and trade finance platform for small and medium-sized companies (SMEs) using blockchain technology. In addition, a new initiative called BlockchainCITIES provides an EU membership platform of local authorities in BlockChain transition. Could we be on the cusp of reinventing the trusted city trading partnerships of the Hanseatic League in the 15th Century?

Perhaps a good UK starting point would focus on trade between cities within Commonwealth countries where we have a shared heritage of law and commercial frameworks.

However, it remains to be seen if the traditionally bureaucratic institutions such as banks and government can actually drive an innovation of this nature and overcome a range of deterrents from high initial capital costs to large computing power consumption. The new energy for development of blockchain-enabled cross-border trading will almost certainly come from major cities where inward investors could be attracted by frictionless trading environments.

BUT, all this hope (and hype) for an easier trading life requires massive concerted effort.

In the US-State of Illinois, for example, 107 students have been immersed in a month-long ‘hackathon’ to explore the possibilities.  Five pilot projects undertaken by the state include the areas of land title registry, academic credentials, health provider registries, energy credit marketplaces and vital records.

‘The state’s idea is that if it can figure out blockchain, there are a lot of record keeping and transaction processes that can be made more secure and more reliable.‘ – statescoop.com  But none of these pilots have yet tackled International Trade Transactions – most probably because they live in a giant single market where import/export rules are a minority sport.

As yet there is little sign that here in the UK we are assembling any similarly scaled collaborative efforts – and time to organise these before Brexit is slipping away.

Does the UK government have any clear idea of the investment required for such innovation?

And if the Department for International Trade is not on top of this, will some of our leading Cities take the lead?

Will we let go of something that we’ve not yet fully grasped?

One thing is certain; we have a golden opportunity now to transform digital platforms for the borders of tomorrow with Blockchain forming the central nervous system of trade.  Surely, regardless of Brexit outcomes, it’s time to start a chain reaction!

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(C) (2017) 21c Consultancy & Groupe Intellex

Smart, Smarter, Smartest – Cities Seeking Superlatives

9 Aug

We all know – or think we know – that Smart Cities are driven by Smart Technologies, but what about the people?

In much the same way as industries hype their products (Broadband, Superfast Broadband, Ultrafast . . .) so it is with entire cities.

Beyond Smart Cities we have Social Smart Cities (tackling poverty), Green Cities (very Circular), Resilient Cities (prepared for the unexpected) and even Compassionate Cities – caring about digital inequity and boosting Inclusion. And whilst the ‘smart tech’ systems and infrastructures are key to enabling all these variants there is still the human element – the citizens and their business that must live work and play in these communities.

All the place-based systems in the world still need to serve the citizen – not the other way around.

So enter, stage left, the ‘Intelligent Community’ with its fabric woven from all the usual economic sector metrics and demographics plus the threads of social wellbeing policies.

The question is: Is your city ready? You may be contemplating an impressive array of investment proposals to deal with Transport, Air Quality, Housing, Social Care – the list goes on – but will all those plans knit together to match your citizens’ and community needs?

One way of finding out – free of charge – is to nominate your community for assessment by the Intelligent Community Forum.  Who knows, you may even be selected as one of the world’s Top 21 or Top 7 Intelligent Communities.  Melbourne, Australia, went on this year to be acclaimed as the Intelligent City of the Year.

That achievement was announced in New York at the ICF Global Summit last June. Next year’s great event (with mayors, civic leaders and community developers from across the world) will be in June, in London – the first time in two decades that this very special occasion will be held outside of North America.

You could be there – and your community could find its place on the global stage.

Nominations before 13th 21st September via http://www.intelligentcommunity.org/nominations

 

DEADLINE FOR NOMINATION EXTENDED – now 21st September

For more information please contact David Brunnen or call 07714 325 657