Tag Archives: growth

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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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

 

A Certain Uncertainty

16 Jul

Question Marks And Man Showing Confusion Or Unsure

Time and again in recent weeks the pleas from European business leaders (and particularly here in the UK) for an end to uncertainty – or at least less of a policy vacuum – might have seemed quite the opposite of what might have been expected from our supposedly mighty risk-takers.

Any fleeting signs of stability have momentarily bolstered stock markets and smoothed exchange rate readjustments and yet it is ‘disruption’ we are oft told that is the golden characteristic of progressive, thrusting, opportunistic and innovative times.

This apparent contradiction reveals another truth. Businesses like to disrupt others but otherwise dislike being disrupted – and larger business with more at stake like it even less.   Yes, they’ll welcome innovation – but only on their own terms. And that is, of course, why monopoly power is so dangerously regressive.

Even, as in the case of BT’s Openreach, where the threat of regulatory changes looms large, uncertainty can invoke the sort of paralysis that borders on an existential crisis. No wonder, then, that when interviewed CEO Clive Selley is sounding more like Macbeth: “If it were done when ’tis done, then ’twere well it were done quickly.”  There is no standing still in business and confidence is essential fuel.  Do nothing and nothing happens.

But his organisation’s current uncertainty exists only because of the ever-widening gap between national economic imperatives (championed by the regulator in lieu of government) and the resistance of an incumbent determined to extract shareholder value from legacy assets.

Put simply (though to be fair it is far from simple) Openreach can see little investment rationale in providing everyone with future-proofed broadband services. They would much rather stretch the capability of their existing copper assets and hope that demand for capacity can be constrained.

On the other hand, those who argue (in the national interest) for a future-proofed infrastructure (inevitably with vastly greater use of fibre) point to the wider creative constraints of underperforming connectivity. Download speeds are, they’d say, far less important than upload speeds, low latency, minimal packet loss, greater reliability and vastly lower operational costs.

And it is these factors that are now calling time on strategies that were decided well over a decade ago and based on dodgy economics. Fibre was said to be inordinately expensive. It was said many times over and that mantra became embedded in investors’ minds. And it was wrong. And facing up to that truth is awkward. Not perhaps as awkward as Brexit but, like that referendum, the choice has been determined by those whose delusions are most believed.

Now, more than ever, the UK needs to rethink the parameters around digital infrastructure investment. We applaud the creative industries and the clever clogs beavering away developing new services, cutting costs and making lives easier – particularly in the public sector. But all that cleverness is nothing without affordable underlying future-proofed connectivity.

Yes, in some places, gradually, we can find signs of a smarter approach. Yes, we can see that sharp, thoroughly commercial, minds have cracked the challenges of doing what was previously dismissed as not financially viable.   All that remains is for incumbents to recognize the new realities or suffer the consequences.

Meanwhile, leastways until our incoming Digital Minister grasps the issues, the UK will muddle through with a certain uncertainty.

 

 

Letting go of hopes not fully grasped?

5 Mar

Greek FlagIn March 2015 at the height of the Greek financial crisis I wrote of the great brain drain (‘Grexodus’) that would do lasting damage to that country’s future fortunes.  Little did anyone realise that within the year that brain drain would be replaced by a massive potential brain gain as thousands of migrants flock to its shores.

Most of those now escaping from the horrors of war-torn Syria, Afghanistan or North Africa are hoping to make their way beyond Greece to settle in the supposedly stable havens of Northern Europe – but their passage is now blocked as EU States shrug off Schengen and shrink back into populist isolationisms as if folk have forgotten the point of being ‘better together’.

We may despair of the lack of pan-European political mettle, the failure of long-term leadership and the collapse of collective moral decency, but amongst these dark clouds is a potential silver lining for that woefully disregarded Greek State. The question now is whether the Greek government and the people can rise to the opportunity.

Amongst the weary but determined families trekking north are many professional families well qualified to fill the gaps left by the earlier flight of the disenchanted – the loss of thousands of doctors, researchers, students, engineers, entrepreneurs, lawyers, teachers, technicians and nurses.  The lucky recipients of that talented brain drain were Germany, Canada, USA and Australia.  In that 2015 fallout, few came to the UK (further diminishing our global growth prospects) but that was hardly surprising given the prevailing attitudes of extreme right & left-wing politics and media meeting themselves on the far side of the circle.

So, the question is: What is Greece doing to encourage those who could be tempted to stay – to learn Greek – to assimilate into local culture – to rebuild their lives and contribute to economic and societal growth?   Germany, initially at least, set a fine example. But will Greece be able to muster the enterprise?

We must hope so – for surely the rest of Europe must learn, and learn in time, that global mass migrations are the unintended consequences of disastrous failures of political leadership and disunity.

Learn in time’, I wrote. In time to stave of the tide of human misery and suffering that now besets us, or, in time to equip our leaderships with the intellectual and moral strength to deal with the next flood?  How will attitudes change when we Europeans must cope with thousands fleeing the USA in the event of a Trump presidency?

It is surely not beyond the wit of humankind to get a grip – to better imagine and manage the more easily foreseen consequences, particularly as the supposedly unforeseen lessons are being played out before our unastonished, but tearful, eyes.

ICF Global Summit Perspectives: the growth impacts of policy polarisation

15 Jun

TorontoReflecting on a stimulating week of powerfully concentrated insights and great inspirations, delegates at the 2015 Intelligent Community Forum’s annual Global Summit might well have spotted the irony of making hard choices between the competing Urban and Rural study streams.

In this gathering last week in Toronto, Mayors, Civic Leaders, Economic Developers and Policy Influencers from around the world would represent both intensely Urban and some more Rural environments. In plenary ‘Community Accelerator’ sessions these camps would come together – united in their understanding of actionable attitudes to local growth and development – and yet, in choosing to engage in either the Urban or Rural Master Classes, delegates indirectly accepted that supposedly ‘normal’ polarisation.

For sure, there were some crossover delegates but for the most part the Urban stream was the better attended. From way beyond the bigger (supposedly brighter and more-urgent) connectivity conflict zones, delegates were treated to myth-busting moments showing that, even if it is harder to resolve, disregarding 50% of your economy does not add up to a sustainable growth strategy.

The universal over-arching growth perspective is what so often gets lost in the demands for policy attention from increasingly pressured places with claims for ‘economies of scale’ and the massively complex infrastructure needs of metro-dwelling citizens.

Above and beyond urging stronger advocacy from less-favoured places, or even the creation of ‘Virtual Metros’ to notionally level the playing field, surely policies to provide future-proofed digital infrastructures (and the stimulus that they enable) should everywhere be rooted in the drive for the economic and social well-being of local citizens and enterprises.

In the race to be recognised as the Intelligent Community of 2015, the surviving Top 7 communities (whether large, small, urban or rural) understood long ago that long-term (10 – 30 year) commitments to their economic well-being needed a consistent strategic approach with evolving local leadership and attention to local needs. These local issues are largely beyond the macro interventions of national governments and Party politics.

It is ironic that such an approach can be described as ‘Revolutionary’. Surely that tag is an indication of the extent to which folks and their communities now need to reassert control of their local direction.

So much more can be said of this ICF Global Summit, the underlying international quest for community recognition and the intensity of the associated Study Tour experiences.

Horseshoe FallsThe urgent rush for change, the inevitable need to adapt our communities to the utility of a digitally mediated world, was no less impressive than the forces of nature we experienced at the nearby Niagara Falls.

 

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NextGen 15 – the UK’s 8th annual networking event to inform local government policy and provide a platform for the broader broadband sector will be held on November 5th in central London.

NextGen Events (an ICF Partner) and director Marit Hendriks is an international juror for the assessment of the Intelligent Community of the Year – awarded this year to Columbus, Ohio.

David Brunnen’s contribution to the 2015 Global Summit was based on the Groupe Intellex paper ‘Global Trade Development Outwith the Metros: not beyond belief’.

 

The Value of ish

15 Jun

multi-culture

Prompted by debates about British Values and reports of racial intolerance, we have written a reminder of the the significance of ish.

Read the full story – ‘The Joy of ish‘ – and embrace the future whatever.

Growth – Who Needs It?

20 May

Green sprout in an eggAdam Lusby, Founder of CE-optimal, writing as a guest contributor for Groupe Intellex, tackles a common concern – the addiction of our economic systems to growth.

He argues that the debate should not be between a choice of growth or decline but should more about the way we achieve growth.

Very much in line with the thinking behind the Circular Economy he argues for a more ‘restorative’ economy – and cites natural systems as the best guide.

Full Story here