Tag Archives: economy

Enough is Enough: Being Growth Agnostic is not an Extremist Position

6 Jun

[Why I took Doughnut Economics[1] to the 2017 ICF Global Summit]

The time for tolerance of misguided creeds is over. That’s an existential issue for politicians searching for economic growth.   The relentless pursuit of progress has not suddenly vapourised but its measurement is, at last, being sidelined.

Economists and politicians have known since the 1930’s that GDP is a poor proxy for progress. The conventional metrics do not come anywhere near measuring the value of real activities. But even if GPD was better formulated it misses the point. The purpose of policy should not be some slavish devotion to a metric and particularly not to one so unfit. But arguing for some higher purpose begs the question: without growth are we doomed to decline? Nobody surely votes for making things worse?

Dissatisfaction with GDP growth addiction is deeply rooted. For decades economists have tried different rationales. Could we, please, have Green Growth (more sustainable) or Inclusive Growth (more equitable) or even Humanistic Growth – presumably less inhuman? The rationales for policies to be regenerative (less wasteful) and redistributive (fairer) are well argued and sometimes non-contentious – leastways, perhaps, at some future ‘transitional’ time if not inconveniently right now. These growth-variants may not immediately upset the supposedly free market dogma. But they are still argued in the context of never-ending growth that will somehow ease the pain of eventual readjustment – really?

Take away that prop – declare that we need not overly care about economic growth – and the well-established response is that the sky will fall down. This growth detox is one of the central tenets of Kate Raworth’s unexpected best-seller ‘Doughnut Economics’.  Kate is the latest in a long and fine tradition of economic re-thinkers starting in the 1930’s with Simon Kuznets who first defined what was then called Gross National Product. He well understood its shortcomings and mourned its excessively ill-informed but widespread application.

Being Growth Agnostic, as much as it may offend all right thinking dogma-driven hard-liners, is not some denial of economic variability – the course of life rarely runs smooth (in sickness and in health) – but is simply a matter of therapy for the growth-addicted and a reminder that true leadership should aim for some deeper (or higher) purpose like societal safety and wellbeing.  And whilst we are in brain reboot mode, can you please stop calling all those investments that happen not to be to your liking, by the derogatory label ‘subsidies’?

There are many reasons for reading Kate Raworth and her illustrious forbears such as Donella Meadows and Manfred Max-Neef (and more recently Lorenzo Fioramonti) but expecting her book to somehow magically reprogramme the deeply embedded dinosaurs of national politics is not one of them; far better to take her inspiration and apply it locally within your own community.

Mayors and civic leaders are desperate for direction every bit as much as they are constrained by top-down austerity. In the search for ‘taking back control’ these community champions can use the doughnut (and other frames) to spark imaginative and enterprising routes to greater public, private and environmental wellbeing. Low flying demands great skill and is risky but it gets stuff done under the radar of the high flyers.

Enough is enough. It really is time to shake off our tolerance of dented and dodgy rulers. We must not rest until we’ve rebuilt our local communities. If that reconstruction of better places turns out to be Growth Agnostic, well so be it.

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[1] Kate Raworth, ‘Doughnut Economics‘: ISBN 9 781847 941374

Reviewing the situation . . . .

19 May

Ofcom’s recent ‘separation’ stricture has ensured that BT Group’s annual results presentation to the city gave greater airtime to the leadership of its now semi-detached property, Openreach.

Investors need to understand past performance and assess the forward risks and opportunities.  The bigger picture – mighty ships battling against headwinds – was roundly ridiculed as thin cover for self-induced blunders rather than unknowable forces of nature.   Could that overall decline, investors might ask, be offset by Openreach’s discovery and ultrafast colonisation of new Gigabit lands?

Last week, the captain of BT’s Openreach gave his crew early warning of a new direction. But his ship’s crew comprises far more than loyal employees – it’s a complex weave of stakeholders including investors and wholesale customers (Communications Providers – the ‘CPs’) – so the occasion provided anxious risk-takers with opportunities to read the runes.

Openreach chief exec Clive Selley was reported as saying; “So it is my job to collaborate closely with all the other CPs to figure out at what pace we roll out the ultrafast platforms. And we are going to do that hand in glove with the CPs, because ultimately they are the ones that are going to have to compete and beat the alt-nets in the market place.”

Inevitably the tech-media headlines shouted ‘Fibre Rethink‘. But the espousal of an enhanced collaborative credo suggests more than relationship counseling. Was this a concern to nip in the bud any hint of a wholesale mutiny or jumping ship? Why so? It’s a reflection of finding a radically different market situation to that for which the CP crew had first been recruited. They signed up to flog phone-lines and ‘leased lines’.   Now they need to shift to new services that need far greater reliability and capacity and have little in common with the old voice telephony. The CPs have laboured long with short-term fixes and unlikely performance claims. Now they are increasingly attracted to work with those alternative network pioneers and are held back only by the rate of pure fibre deployments.  Meanwhile Openreach still holds to seeing those very different, vastly superior and ‘fit for future’ networks as direct competitors rather than contributors to the greater good.

Other (imaginary) voyages of discovery

Imagine if you will, dear readers, that this is the year 1500.

The good ship Openseas is sailing nervously towards the previously presumed precipitous edge of a flat world – and the crew are mightily troubled by the rumoured fate of earlier voyagers who did not return. On the bridge the captain anxiously scans the horizon but he and his crew are alone. Their resolve to push on can only come from an inner determination. These are complex and confusing seas with shifting currents and a need for confident navigation. With no hope of external assistance they must overcome fears or resign to their fate but they will earn (eventually) the accolade, ‘pioneer’.

And now, friends, imagine that we are in the year 1839.

In the latest episode Dickens’ Fagin is casting around for a way out of social storms on all sides to secure his survival. Desperately he considers the alternatives:

“This rotten life is not for me.

It’s getting far too hot for me.

Don’t want no one to rob for me.

But who will find a job for me,

There is no in between for me

But who will change the scene for me?

…I think I’d better think it out again!

Hey!”

There is, of course, no one to ‘change the scene’ – he alone must choose a new path. To survive, his enterprise must think again to find a new re-formed direction that rejects all previous convictions and missteps along the way. That resolve may be prove to be beyond his reach.

And so, back now to 2017.

Is it any wonder that Openreach is ‘Reviewing the Situation’? Is this the end of ‘the line’ or is this, beamed through pure fibre, a new, low energy, low maintenance, high performance, enlightenment that costs far less and shines far brighter for his enterprise and for the for the entire economy?

So, let’s wrap up this reflection with the answer to a light-bulb joke. It takes only one psychotherapist to change a light-bulb but that light-bulb must really want to change.

 

___________

 

Blessed are the Place-Makers

2 Apr

To cynics the notion of changing what counts, and what is counted, is a classic goalpost-shifting exercise. From the top-down perspectives of macro-economists, barring a few definitional disputes, the numbers revealed by, say, VAT returns are solid. On the other hand, anyone rooted in the economic and social behaviors of local communities observes an extensive colour-chart of micro-shades. Both, however, would agree that, whilst artistically fashionable, citizens and their clustered communities could do without those distressed finishes.

As searchers for new growth strategies loudly sing cuckoo, Whitehall’s acknowledgement of the shortcomings of sectoral economics has been a long time a-coming in.

Call it devolution, call it empowerment, call it subsidiarity, call it place-making, call it Inclusive Growth, Municipal Enterprise or Regionomics, but whatever way you call it there’s no denying that economic growth and social development cannot be commanded from on high but must be created through local leadership.

That much, of course, was foretold by Lord Heseltine and his LEPs, The RSA’s City Growth Commission, the champions of Metro-Mayors, endless analysis by the Centre for Cities and myriad reports that sit uncomfortably with deep-set post-80’s dismissal of Local Authority competencies. And austerity certainly didn’t help the Northern Poorhouse.

But this new place-based impetus is not now an optional ‘nice to have’. The Brexit notion of tearing up the book, throwing the pages in the air and seeing what could be done with the pieces heralds a remarkable opportunity to do things differently and to do different things. Whitehall may not yet be entirely convinced and parliament may resist a more federal diminution of their imagined importance but, glory be, the people have spoken.

What is needed now is a clear understanding of how to better nurture place-making, local economic growth and community development. There’s no shortage of ideas that are soundly based on experiences from around the world.

Of course there’s a shortage of local data evidence – but no shortage of imagination.   Some cities and communities prosper whilst others decay. It’s not difficult to understand why. Assessing the fabric of local economies means taking account of cross-cutting programmes that bind those vertical economic sector silos together. The priorities may vary to match local needs but local leadership needs a plan.

So, as summer is a-coming in, we say ‘blessed are the place makers’ for they are inheriting the opportunity to build a better future.

 

So squeezed they stopped squeaking to each other

22 Feb

Oft-lamented short-term pressures drive the search for ‘asset efficiencies’.   With the benefit of hindsight, the making of unforeseen consequences seems to be rooted in a disregard for fairly obvious but difficult-to-measure policy impacts.

In corporate careers, management brownie points seem often to be awarded for displays of macho discipline encouraged by ‘perverse incentives’. Whatever the motivations, it is surely a matter of good governance that that short-term wreckers are not allowed to destroy values that underpin future sustainability.

Question Marks And Man Showing Confusion Or Unsure

But still it happens. Whatever presentational flavor of austerity or efficiency or asset utilization is used to justify the squeeze, the consequences are inherited by the next generation – or at least the next elected set of policy makers.

Or is that really so?

A recent article in The Economist takes issue with the conventional theories around short-termism.  A McKinsey study had argued that 73% of firms were short-termist and the ‘elite’ 27% actually performed better. However, the Schumpeter columnist begged to differ; questioning the evidence and doubting both the causality and relevance of labelling firms as short-term or long-term actors in our very dynamic market environments.

The Economist writer does, however, point out that many big firms ‘wallow in lucrative stagnation’ where profits are high but investment seems not to be boosted by the currently low cost of capital. Rather than label them short-termist and urging them to invest, the real need is for more rigorous competition policy to target ‘fat’ incumbents and boost new market entrants.

Such competition policy rigour might not be immediately popular amongst the self-regarded leaders but it is evident, in one sector at least, that this strand of policy imagination has already taken root. Hence the Chancellor’s autumn statement to inject funding into new entrants deploying ‘full fibre’ networks and also the recent indications coming from Ofcom of an urgent need to deliver ‘at scale’ the sort of infrastructure required to sustain a post-Brexit economy and enable (beyond 2020) an entirely future-proof collaborative architecture to support 5G Mobile.

So despite the common interpretations of austerity, efficiency, cuts, the general woe around short-term follies, narrowband thinking, or ‘squeezing until the pips squeak’, the more mature lesson seems to have been learned that those who are ‘too big to fail’ probably should.

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We were ‘Sixteen, going on seventeen’: growing through turbulent times

2 Jan

hi=-tech buildingAs 2016 fades away and we embrace the New Year, we take a moment to reflect on the seismic shifts that make any predictions seem hazardous.   Some of those upheavals arrived packaged with polarized opinions and dubious evidential credibility. Other shifts gained far less media attention because they do not yet lend themselves to snappy headlines or slogans. These ‘straws in the wind’ are however just as real and may well have far reaching impacts – not least in the management and wellbeing of local communities.

To capture the uncertainty of what community leaders are heading into, lyrics from the Sound of Music may seem a very unlikely text. In the musical, young Leisl places her trust in someone just a year ahead – not much older, certainly no wiser and about to betray her trust.  Convenient calendar coincidence aside, the sense that we are now sailing into the latter stages of ‘troublesome teens’ is a handy metaphor for anyone concerned with the local development and wellbeing of communities. And in these turbulent times, those UK readers who are concerned will find it challenging to fathom the realities, see bigger pictures or plan for longer-term futures.

You might imagine that vast years of experience would suggest otherwise. Our diverse UK communities are, however, more Unique than United and, when academics study community wellbeing, the current research papers might sometimes seem to have been written on (or of) a different planet.

Take, for example, John Lauermann’s Municipal Statecraft: revisiting the geographies of the entrepreneurial city. It is, undeniably, a splendid work with many interesting insights.   But many UK readers will find his observations on post-growth diversification of entrepreneurial policy impacts to be several light years ahead of prevailing realities in our over-centralised State.

He contends that the search for economic growth is no longer the primary or dominant rationale for local initiatives.   Narrowly-defined growth goals, he argues, have become just one of many local policy objectives across a wider societal spectrum.   In truth there may well be far greater Municipal Enterprise being practiced across the UK but, with few exceptions, local leaders dare not highlight these efforts for fear of (a) harsh media scorn, (b) an irrational blame culture and (c) central financial penalties for daring to find creative alternatives to austerity cuts. Look no further than the momentary media outrage about hospital car-parking charges.

Lauermann’s acute observation that the historic rationale for municipal enterprise (boosting economic growth) has evolved into a more diverse and imaginative focus across multiple aspects of public/social policy will, however, mean little to those who have yet to fully embrace Heseltine’s (‘No Stone Unturned’) 2012 notion of Local Enterprise Partnerships. Being this far behind the curve might, however, provide scope to leapfrog the learning process but only if local leaders adopt a less insular perspective – a notion that, with few exceptions, runs counter to prevailing politics.

The theme of an evolution in economic thinking is also evident in Erik Beinhocker’s ‘Evonomics’.   His Oxford-based New Economics programme has a mission to identify and address the large gaps between prevailing economic theory and reality. He does not underestimate the scale of the challenge. So an explicit, widespread use of new economic approaches to policymaking may require some education of citizens, the media and politicians themselves on the risks of overconfident top-down solutions, and the importance of small-scale failure as a way to learn and prevent large-scale disasters.” His theme of multiple and local small-scale experimentation (inevitably with some failures) is, he would contend, vastly more likely to induce success.

There is no shortage of instructive reading for the UK’s local leaderships. The RSA’s Inclusive Growth Commission, led by Stephanie Flanders, still bangs the drum for local economic growth but sees that ‘place-based’ growth as moderated in ways that would counter run-away social inequalities. Inclusive growth is about living standards and earnings, as well as in-work progression and tackling long term unemployment. It offers a social return in helping more people participate meaningfully in the economy, but it also has an economic rationale, with the potential to address some of the key drivers of the UK’s productivity puzzle.”

The Inclusive Growth Commission’s final report in March may be a useful stepping stone but no-one should underestimate the scale of political and public education that will be needed to counter four or five decades of ill-informed governance.

Similarly Mariana Mazzucato’s work is gaining traction but the fact that her ideas are often described as radical is a sure indicator of the depths to which economic and regulatory management has sunk in the hands of unconstrained admiration of over-simplistic, supposedly ‘free’, market mechanics.

In the old musical we may have pitied teenage Leisl’s naivety, but we should now also feel for city and community leaders, who must cast around for clues in these uncertain times. Who can they trust? What are the local priorities?   A recent discussion note written in preparation for the 2018 Global Summit pointed out that in the last six decades the meaning of the phrase knowing your place has shifted from an admonishment (not speaking out of turn) to an empowerment enabled by the advent of access to Open Data and better visualization tools.

Fortunately for the UK, a few sharper minds are becoming focused on the need for renewed effort to stave off what many see as an evolutionary crisis – a crisis for which the populism of the Brexit and Trump votes are just symptomatic.   Perhaps one of the best (and most readable) starting points would be Rick Robinson’s ‘Three Step Manifesto for a smarter fairer economy’.

In this summary of the state we are in, he finds little reason to blame our ills on ‘other’ (external) presumed malevolent forces but understands our own home-grown failures. “The failure to invest in local services and infrastructure . . . . is caused by . . . the failure of national government to devolve spending power to the local authorities that understand local needs.”  Dr. Robinson is very much aligned with the RSA’s Inclusive Growth work when he calls for legislation ‘to encourage and support business models with a positive social outcome’. His perspectives are informed by his work in the ‘smart city’ arena but he has grasped that those inspiring innovations should be driven by a far higher purpose than mere technological novelty – and in this he sees Open Data as making vital contributions to local leadership priorities. He is not alone – as the unusually articulate and constructive post-blog comments testify.

All of these references point towards something that has been happening for decades but has been largely ignored by dominant central governments. Central policy development deals in averages. Local needs and impacts are lost in ‘rounding errors’.  Is it any surprise that the effectiveness of top down directives is so often far less than their instigators hoped? What, however, has been going on are remarkable but largely unsung local heroic efforts to cope with those top-down determinants.   And those local inspirations can be observed in communities the world over and, more frequently than they might admit, within in many very large companies: progress despite the senior management.

 This local experimentation, this inventiveness, this local understanding of needs and priorities is in some countries constrained by central authority and a general lack of leaders who dare to be different. Many brave experiments may fail but really great local leaders do not buckle under the barrage of ignorant media bullies. That is why the creation of metro mayors and increased devolution of powers to local communities will be both significant and challenging.

For the last few years the charge into local projects has been led by technologists keen to create a market for their ‘smart’ systems and devices. Their enthusiasms have not been misplaced – great benefits are evident – but, as local leaders gain strength, as economists gain greater insights and as citizens begin to speak up, there is a renewed interest in learning from others.

For the past two decades the Intelligent Community Forum has researched these issues. Every year a few hundred communities from around the world volunteer their experiences for assessment in the hope that their efforts will be recognised and honoured. Through that evaluation process the contenders themselves gain great insights and understanding.  From those that apply, the selection of the Top 21 and then Top 7 provides a vast archive of evidence of the characteristics that, in aggregate, indicate the emergence of truly intelligent communities.  The indicators gleaned over the years have six or seven dimensions – the themes today being much broader than in the earliest research.

The underlying focus in on the quality of locally managed programmes for Connectivity (the extent to which digital broadband infrastructure is fit for future purpose) is now joined by assessments of local programmes for:

Digital Inclusion (or Equity) – the great effort of bringing the whole of society into a digitally-enabled world without creating yet further divisions and inequalities.   In the UK the work of many charities (such as Good Things Foundation) and housing associations are delivering brilliant programmes.

The generation of a Knowledge Workforce – has impacts encouraging inward investment/employment and discouraging migration of young people. This is becoming a major focus for Local FE Colleges and partnerships with enterprise and public service agencies.

The extent of Innovation Capacity – particularly in the local provision of low-cost workspaces, mentoring facilities and investment finance to enable locally-grown new business ventures.

Local programmes for Sustainability and Resilience – whether designed to counter environmental threats or to ensure rapid responses to disasters, these local initiatives have become a key leadership priority.

The visibility of local needs as revealed by Open Data – particularly in (but not limited to) the public realm – has been hugely boosted by (a) improved visualization tools and (b) a massive growth in Data Journalism expertise.

And finally, Local Advocacy –championing pride in the local community and not shrinking from the reality that it sometimes needs more than the local football team to establish credentials on the world stage. Some might regard this ‘showing off’ as a most un-British and immodest capacity but leaders are defined by their leadership – and that often demands that they cross the boundaries of departmental silos that leave universities, hospitals, schools and energy companies to survive in separate boxes.

These primary indications of ‘Intelligent Communities’ may not exactly align with John Lauermann’s ‘Municipal Statecraft’, but they do provide a framework for local priorities – a policy mix that rises above many well-meaning but merely average national initiatives.  Local priorities must inevitably adapt to meet local needs but, when the mayors, civic and communities leaders come together to share their experiences, the common ground is extensive and is dominated by that theme of developing and experimenting with imaginative local ideas and initiatives that would never occur to any centralised authority.

So, as we contemplate an uncertain 2017, we can at least be sure that the opportunity to bring the Intelligent Community Forum’s Annual Global Summit from its home in New York to the UK in 2018 will provide a great spur for many community leaders the world over.  We are now ‘seventeen, going on eighteen’ but hopefully just enough older and wiser to cope with the year ahead!

 

London’s post-Brexit Futures

16 Nov

WestminsterAlexandra Jones (Chief Executive at Centre for Cities) is right to point out the strengths of London’s enviable standing as a European economic leader.

In terms of scale the capital’s economic output has a 12.5% lead over second-placed Paris. Scale garners great advantages – like availability of diverse skills – but also creates challenges that eat away at economic and societal sustainability.

Brexit may have induced the summer’s existential crisis amongst London citizens but more recent events have confirmed that uncertainty is the new certainty. Clearly, comforting as recitations of strengths may be, we should avoid complacency and focus more attention on bolstering longer-term directions. So Alexandra is also right to warn of the danger signs signaled by productivity and innovation data that place London in a less-enviable position – even if Brexiteers question the veracity of variables used in economic models.

In matters socioeconomic, like brushing your teeth, we have choices that must be exercised if default decay is to be avoided. It might well be useful and timely to remind leaders that the entire country will suffer if London loses its edge but, more significantly, future fortunes will be decided by the individual decisions of thousands of enterprise leaders – and the speed of those decisions. ‘Muddling through’ seems not to be high on the curricula of MBA courses.

It is therefore entirely sound that the capital, its employers, citizens and leaders of the entire eco-system of stakeholders, should identify weaknesses and not be brow-beaten into silence by ‘patriots’ who would cry ‘talking down’ at any honest self-assessment. . . . and not merely kvetching over the state of the kitchen but cracking on with remedial resourcefulness.

Cracking on with future sustainability has two very obvious themes – investments in infrastructure and in advocacy. The former is an urgent response to the woeful state of London’s digital connectivity – trailing far behind the sort of facilities that villagers in remote parts of Lancashire now regard as commonplace.  The latter, investment in advocacy, demands an attitudinal change in the way London projects itself to the world at large and needs fully to co-opt London’s digitalized diaspora.

Earlier this year (prior to the mayoral election) FISP championed the creation of DfL as a platform for accelerating future-proofed digital connectivity. The underlying principles remain valid and recent reconsiderations of the role of passive infrastructures have exposed the urgency. Now, in advance of the 2018 Global Summit, a small coordinating body is preparing an advanced understanding of what previously may have been called ‘Smart City’ but is now becoming a stronger ‘Intelligent Community’ theme – a shift above and beyond the cleverness of technology towards deeper understanding of the myriad ways in which society can enable greater economic and community wellbeing.

London’s future sustainability as a place to live, work, and dream is dependent on both of these themes – unconstrained connectedness and a deeper mission – with recharged resourcefulness in the way those themes are articulated to Europe and the world at large.

(Written as a response to observations by Centre for Cities – 14th November 2016)

The State of our Digital Nation

31 Jul

2016 O2 NextGen Digital Challenge Awards

This is not scientific.

Its academic rigour may be some distance south of a tabloid’s opinion poll – but the final contenders in this year’s Digital Challenge Awards are instructive.

This is the 6th year of the Digital Challenge – an awards programme unlike any other. The categories and trophies are not set before nominations commence.

Every year the ‘Open Call’ simply asks for projects that exemplify great digital endeavour.   When the Call ends we review and define the Awards Categories and then create a shortlist for each. Every year that project shortlist reflects what is going on – real insights that might otherwise be overlooked.

Back in 2011 the focus was primarily on delivering better urban and rural broadband networks. That Rural Connectivity category remains, but elsewhere the attention has shifted beyond deployment to Network Innovations; their resilience, flexibility, performance and capacity.

Digital Inclusion projects have also been a constant category but they have evolved in so many different and imaginative ways – and some are now better aligned with an Economic Development agenda.

Projects devoted to boosting Digital Skills are far more evident (and delivering great achievements) but perhaps the brightest new category is for Digital Healthcare.   Some healthcare projects are contenders for the Digital Innovation Award and the willingness of NHS project leaders to transform their practice is evident in a flurry of very welcome initiatives in the mental health arena.

Meanwhile the Open Data category has lost its 2014 and 2015 prominence – now more business as normal rather than surprising breakthroughs.

  • Who in Westminster would have understood that Scotland is so digitally progressive?
  • Who would appreciate the educational/healthcare brilliance of body worn sensors embedded in fabrics?
  • How many Local Authorities understand the value of drones in combatting floods and other environmental risks?
  • How many judges (and jurors) know the value of Virtual Reality for visits to crime scenes?
  • How else would we be made aware of new care technologies for the elderly or the brilliantly imaginative Librarians whose services are so often under siege?

Many would decry the digital state of the nation – and sure there’s much more to be done – but the Digital Champions that step up to collect trophies in the House of Lords next October are leading indicators of massive transformations in the way we all work, live and serve.