Tag Archives: economic

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.

 

 

 

 

 

 

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Growth Myth-Takes

16 Jul

Some notions are so firmly embedded in mainstream minds that they seem impossible to debate.  They might once have been classed as ‘truths we hold to be self-evident’, ‘rocks to which we cling’, or ‘life’s firm foundations’.

If not learned at our mothers’ knee, some notions are dinned into us through school, college and both corporate and political manifestos.  These notions are not just deeply embedded but often, it seems, beyond questioning – sacrosanct.

Politics, commonly regarded as the ‘art of the possible’, is more often the graveyard of ‘supposedly impossible’ concepts that may not, should not, WILL not be uttered, or considered.  They are thoroughly ‘beyond the pail’ as might once have been said in ring-fenced Dublin.

In February, college sophomore Trevor Hill stood up during a televised town hall meeting in New York and posed a simple question to Nancy Pelosi, the leader of the Democrats in the House of Representatives. He cited a study by Harvard University showing that 51% of Americans between the ages of 18 and 29 no longer support the system of capitalism, and asked whether the Democrats could embrace this fast-changing reality and stake out a clearer contrast to right-wing economics.

Pelosi was visibly taken aback. “I thank you for your question,” she said, “but I’m sorry to say we’re capitalists, and that’s just the way it is.”

The footage went viral. It was powerful because of the clear contrast it set up. Trevor Hill is no hardened left-winger. He’s just your average millennial—bright, informed, curious about the world, and eager to imagine a better one. But Pelosi, a figurehead of establishment politics, refused to – or was just unable to – entertain his challenge to the status quo.

Sources: Fast Company newsletter – 11th July 2017 and Washington Post

Capitalism aside, the centrality of ‘economic growth’ in most mainstream debate is another sacred cow. It is not just that, in pursuit of growth goals, the way we measure our success is deeply flawed and massively misleading. It’s as if we have collectively forgotten the distance between crude approximations represented by economic models and reality.

GDP, the primary measure of economic activity, “does not allow for the health of our children, the quality of their education, or the joy of their play . . . it measures everything, in short, except that which makes life worthwhile.” Robert Kennedy

But even if some can acknowledge the definitional downsides, the centrality of the drive for growth is assumed to be one of those tenets that cannot, should not, WILL not, be shaken – or even lightly stirred. Fortunately, despite the suppressive weight of custom and practice, some economic re-thinkers are, very gradually, gaining greater airtime and setting the myth-takes in their original context.

“And so, over half a century, GDP growth shifted from being a policy option to a political necessity and the de facto policy goal. To enquire whether further growth was always desirable, necessary, or indeed possible, became irrelevant or political suicide.”

Kate Raworth, Doughnut Economics, Chap.1 p40

But the show rolls on. Rebellious economists may pour scorn on economic myths. Satirists can stretch popular imaginations to sow seeds of doubt. Cartoonists can seize upon contemporary comedic contradictions. Film-makers and writers can expose deficiencies and ‘events’ can throw a spotlight on issues that have escaped serious attention. But despite all these angry shouts from the sidelines, the players on the field carry on within the established rules of the game.

Following years of great effort, two of Kate Raworth’s central themes have shifted towards wider acceptance. Folks may not yet picture a ring doughnut whenever they hear a Treasury Minister, economic correspondent or Bank Governor, speak of economic imperatives, but these speakers do seem (subject to delivery) to have grasped the need for redistributive and regenerative economic policies: Redistributive to tackle gross societal inequalities and Regenerative to avoid trashing the planet.

But the 3rd of Kate’s principles still sticks in the throat and, if uttered at all, is in a thin voice as if from the back of the class, hiding from attention. The idea that infinite growth is not central to survival is, for many, problematic.  Kate’s approach is not, as the alarmist popular press might presume, a denial of the search for economic growth.  Rather, this enlightened economist argues, growth (devoid of objective purpose) should not be central or mandatory.  We can, Kate argues, be Growth Agnostic.

And in that drawing back from directional determination, we have another touching contrast between Economics (as pseudo science) and the reality of everyday life.  For many of us have, sometimes permanently and at other times ephemerally, created our own economic and societal unions – commitments that do not have growth as the central, essential, exclusive objective: ‘for better, for worse, richer or poorer, in sickness and in health’. Whatever.

Central government will inevitably continue to depend on the economic approximations of models and metrics that are ill-defined and adrift from reality.  That is all they have to go on.  They depend on averages, and, on average, their conclusions are pretty average.

The UK economy is the aggregate of many diverse local economies each with its very own needs and priorities.  If some forms of positive growth occur (whether it’s new ventures or improved citizen wellbeing) they will reflect local activities engendered by investments and creative endeavours within those communities of citizens, businesses and shared services.

This will not happen merely because Growth has been mandated from on high. Nor will it happen if (for the bottom-protecting-avoidance of any risk) it is forbidden to engage in local endeavours for which short-term cast-iron profit-certainty is not assured.   This is something well understood within far less centralised, more federal, more locally empowered, continental communities.

Dogma-driven theorists still know little of locally nuanced needs.  Local leaders, on the other hand, are better placed to understand the complex warp and weft of their economic fabrics and societal priorities. Local leaders should be committed, as in marriage, to ‘honour and comfort’ their communities.

Set aside the myths. Blow away the fog.

Move on from the growth myth-takes of past regimes.

The place-making re-enlightenment of local leadership is underway.

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Knowing Your Place – part two

5 May

Knowing Your Place was originally written to support a proposed event in 2018. In that brief note I reflected on the new meaning of the phrase. Once it was just a parental demand for subservience and ‘not speaking out of turn’.   Now it’s a Place-Maker’s celebration of Open Data and a vastly greater understanding of the local economy and community needs.

In Part two my attention turns to the wealth of fresh economic thinking. I say ‘fresh’ but it’s evident that ideas currently regarded as radical or outside of mainstream conventions have been around for decades. The puzzle is to understand why these commonsense ideas have struggled to be accepted.

This resistance to fresh thinking is not uniquely British. Deeply embedded but demonstrably errant economic dogma is a global concern. That in large part reflects an intellectual legacy underpinning the formative education of folk who now govern or influence policy. The re-education process will take a fair few generations to resolve.

In the UK, however, we have a particularly virulent strand of dodgy economic dogma that thrives largely because we have a very very centralised economy. In other countries with a more federal approach there is greater scope for economic diversity and experimentation amongst regions or municipalities. But before that thought distracts you, let’s review a few of these ‘fresh’ thinkers.

Throughout the profession there are economists who understand that things are not quite right. Not surprisingly these thinkers often try to differentiate their ideas. Those alarmed by widening inequalities – for example Stephanie Flanders – would prefer Inclusive Growth.   Similarly we’ve had mechanistic approaches, Economic Sciences, Positive Economics, Humanistic, Social, Monetary and umpteen other variants. All these attest to the diversity of thought and their advocates’ desire to avoid (or downplay) addictions to never-ending growth, over-simplistic price/demand graphs, supposedly free & efficient markets or fully informed rational actors.

Others come to the field with environmental and sustainability perspectives. The Circular Economy notion – regenerative to minimise waste of natural resources – has given rise to ‘systems thinking’ as expressed in Ken Webster’s ‘A Wealth of Flows’. This exposes the complexities of our interconnected world and takes on board the feedback loops that old-school economists might too easily dismiss as irrelevant externalities – leastways until they show up during investigation of ‘unforeseen consequences’.

Yet others take exception to simplistic political notions that government is bad and only private enterprise is to be valued. Leader of that rebel pack is, without doubt, Mariana Mazzucato and her work on The Entrepreneurial State where she lays bare the vital contributions of state-led investments subsequently exploited by the private sector with insufficient returns to the public purse.

And then we come to Kate Raworth’s ‘Doughnut Economics’.   Kate’s economic map is not of the sugar-coated variety with jam in the middle. This doughnut looks to lift folk from social deprivations (visualised in the central hole) whilst curbing the tendencies to reach beyond the outer edge of the ring where collectively we might threaten the ecology. Far from ‘deregulation’, Kate speaks of ‘re-regulation’ to better align policy with purpose and operate within the ring. Here’s an attempt to marry ‘redistributive’ and ‘regenerative’ policies – tackling both inequalities and wasted resources.

Kate’s work is hailed as ‘fresh’ but it takes years to be recognised as an ‘overnight star’.   Her ideas have been articulated for nearly two decades. Much of her research highlights the way that in recent times mainstream economists have been highly selective in their references to early thinkers such as Adam Smith. Understanding those dogmatic distortions is helpful but what is new is the power of visualisation. The ring doughnut provides a handy graphic that helps frame policy debates but is not pretending to be a pseudo-science.

The common theme amongst all these works is that they are directed towards the State – national governments and the establishment. They come across as grand top-down ideas; yet more supermodels. Not surprisingly it is painful to bang heads on brick walls that are reinforced by decades of dogma and where radical change seems unimaginably complex without some miraculously orchestrated global enlightenment.   The exception to that general top-down prescription is, perhaps, amongst advocates of the Circular Economy where some demonstrable progress has been made by careful evangelisation amongst a few global enterprises.

So perhaps an alternative approach to implementing these ideas is to take a leaf out of Ellen MacArthur’s Circular Economy Foundation. They have identified large enterprises (like Phillips or B&Q) as business communities where ideas can be worked out. Why not then start by applying the ideas, not at central state (national) level, but in cities and communities where local needs are diverse and the appetite for fresh thinking is strong? Do not imagine that there is some perfect model – a panacea – but understand that these works provide great scope for stimulating local leaders, communities and citizens to envision a brighter future with all manner of local enhancements to wellbeing – be they economic, social or environmental – in this era of rapid digitalisation.

Which thought brings me back to ‘Knowing Your Place’. Only by understanding the real needs – the locally diverse requirements that fall outside of standard economic models – are we able to address the ‘real’ economy and leave behind the rough average approximations of theoretical economists in high (and often distant) places.

There’s a time (which is now) and a place (near you) for every purpose. Let’s not delay and let’s not direct our efforts towards the centre when all about us can be transformed. These are ideas that need to find their place.

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References:

Inclusive Growth Commission – RSA Report:

https://www.thersa.org/discover/publications-and-articles/reports/final-report-of-the-inclusive-growth-commission

Ken Webster, ‘A Wealth of Flows‘: ISBN 9 78099 27784

Mariana Mazzucato, ‘The Entrepreneurial State‘: ISBN 9 780857 282521

Kate Raworth, ‘Doughnut Economics‘: ISBN 9 781847 941374

 

Unleashing Municipal Enterprise: stimulating economic growth in the digital era

4 Nov

helix websizeA new Groupe Intellex paper urges greater empowerment of UK municipalities to take a stronger role in developing their local digital infrastructures as a foundation for future economic growth and community development.

The graphic selected for the front of this paper shows the double helix representation of DNA – the stuff of life.

The shot was taken from the chapel of the research institute of the hospital of San Raffaele in Milan.

The message is that digitalisation is now deeply embedded in the DNA of modern economies.  The Digital Economy is a term that is now almost redundant; what part of economic activity is not in some way facilitated or enabled by digital networks and technologies?

The paper draws together several threads – calls for devolution, new insights into the efficacy of public investment and demands for smarter attention to local needs – and contrasts the centralised state supervision of the UK with progressive communities across the world.

The topic will be discussed at NextGen 14 Fast Track to the Future conference in Derby (November 11th & 12th).

Unleashing Municipal Enterprise  (3MB PDF download).

Video interview from NextGenTV

Unintended Consequences – and U-turn challenges

18 Nov

Thinking back to the summer of 2012, Michael Heseltine and his team made many good decisions. With an ear for political consensus he crafted a way to get things done – and made 89 recommendations.

It may now be increasingly beyond doubt that those right decisions were made for some of the wrong reasons – but does it really matter that some stones remained unturned?

Full story here.

Digital Challenge Awards 2013 – record entry shows sources of economic growth

6 Aug

The UK’s Next Generation Digital Challenge is an annual awards programme that culminates in an award ceremony in October – this year at Wembley during the NextGen conference.

The entries this year are interesting for at least three reasons.  Firstly the Open Nomination phase resulted in more than three times previous entry levels.  Secondly analysis of the entries showed that there were now sufficient entries to justify support for three new categories – in Open Data, Digital Skills and Digital Innovation – in addition to the traditional categories for digital network developments.  Thirdly the entries show an increasing awareness of the value for local communities and the economy of long-term investment in digital infrastructure.

With this higher level of entries, up to six nominations in each category have now been selected  to go forward as Finalists for assessment by an independent judging panel and all of those short-listed will be invited to make brief presentations at NextGen13.

Full story including the short-listed Finalists here

The Digital Economy: there’s no going back

28 May

In our strongest editorial to date on the so-called Digital Economy  we assert that, in the same way that people say ‘the real economy’ without explaining what an un-real economy might be, there is no non-digital economy of any great substance.

Across every sector of the economy the qualifier ‘digital’ is redundant.  The digital infrastructure is as important to sustainable green policies for energy and transport as it is for Finance, Health and Manufacturing.   Fixing the ‘digital deficit’ is the first step towards economic recovery.

We suggest that to track the nation’s digital maturity we need to measure four things:  Fitness for Purpose, Balance, Hassle and Disruption.

Full story here.

See also previous editorial: Finding Nemode