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It’s NOT all about the economy, STUPID!

September 1, 2010

So the coalition has major plans to re-balance the economy.

It seems that as far as the UK is concerned this re-balancing means shifting from being paid to move money around (financial services) to the production of wealth through the creation of value by manufacturing and value adding services.  It also seems to imply shifting the economic engine away from the South East…getting the rest of us to pull our weight.

Local Economic Partnerships and a £500bn regional growth fund (a fraction of the budgets available to the Regional Development Agencies when they led this work) are being set up to make it happen.

This sort of re-structuring of the quangos in pursuit of the holy grail of economic growth has been going on for decades.  And I am sceptical about what it achieves.

It configures largely the same people, sitting around largely the same tables having largely the same conversations (skill needs, infrastructure development, investment readiness etc), pulling on the same ‘economic’ levers (vocational training schemes, growth investment funds, business support, enterprise zones) and getting pretty much the same, generally disappointing, results – just under a different brand.

The majority of people are not engaged, leadership is weak and one dimensional (economic growth is king) and the whole shooting match leaves most of us as passive recipients of whatever the  invariably private sector led quangos decide to do.  Perhaps invest in the waterfront, or build a new relief road, or a large mixed use development, you know, flats and shops and workspaces and all….

Why?

Well I believe at the root of the problem is the misguided believe that it is all about the economy.  That the economy is a puzzle to be solved that is disconnected from other aspects of how we choose to live.  If we can just get the economy right – then the rest will surely fall into place.  I think that even if we did ‘just get the economy right’ we might be in no danger of approaching utopia any time soon.    A growing economy seems at least as much progress trap as progress.   Even if we could run ‘the economy’ in a way that delivered ‘no more boom and bust’ I really don’t believe that it would alone help us to achieve the ‘better’ communities that we crave.  We have been throwing cash at our most deprives communities for decades and progress remains slow.

When we treat the economy as a closed system, as some kind of sacred cow two inter-related problems occur.

Firstly we start to treat human beings as ‘factors of production’ that we can manipulate and influence for the good of the economy.  The anointed can encourage us onto our bikes, into big society, or to look at ‘opportunities’ in construction, retail, call centres etc, all in the name of ‘the economy’.  Volition, aspiration and enterprise are dulled at the service of the economy.  Just keep your heads down, do as your told and we will deliver stable economic growth is the message.  Hardly the recipe for an enterprise culture.

The second thing that happens by treating ‘the economy’ as a sacred cow is that the creative tension that lies at the heart of truly inspiring innovation is lost.  The one-dimensional focus on GVA stops us from pondering the really big questions such as:

  • How do we create sustainable economic growth and build communities in which we are proud to live?
  • How do we design work so that it is productive and promotes well-being and happiness?
  • How do we create wealth and manage the transition to a sustainable steady state economy?
  • How do we build an economy that includes all of those who want to find meaningful work?

Instead by making the economy the holy grail we get a society that on the one hand pursues economic growth (anyone for Going Up a League) while on the other hand provides crumbs from the table to ameliorate the negative social impacts that presumably are seen as just the price that we have to pay for a great economy (How about we Narrow the Gap too).  Cultural and creative activities are judged merely by their impact on the economy rather than the soul.

One of the real pleasures, and lessons I learned, from working with Danone at their social innovation lab was the way that they knew that it was these creative tensions that held the key to breakthrough innovation.  By choosing to split out the economy from wider questions of community, sustainability and well-being I believe we trap ourselves in the same old sterile debates amongst the same old business voices.

It is not just Local Enterprise Partnerships and their various fore-runners that do this.  Councils do it too (Leeds Council is based on four directorates, Adult Social Services, Children’s Services, City Development and Neighbourhoods and Environment).

The Leeds MPs, who I am delighted to see have pledged to overcome party differences to advocate for the benefit of the City in their Team Leeds endeavours, have agreed that each MP will have an individual policy portfolio.  This is sure once again to separate ‘the economy’ from other aspects of community development.  In the competition for resources that is bound to ensue I am sure it will be the ‘all about the economy’ mantra that will carry the day.  No surprise to that  Leeds Chamber of Commerce played a key part in the Team Leeds initiative.

Now of course we have to organise somehow.

Specialisation and the division of labour make sense.  But let’s make sure that the way to choose to slice things up does not ignore vital interconnections and does not allow us to consistently put the cart before the horse.  To allow one part of the whole system to dominate the conversation and allow the benefits of development to accrue to the few.  For the business interests to accrue too much power.

  • Anyone for a whole systems perspective?
  • Understanding the city as a complex adaptive system rather than as a reducible puzzle to be solved?
  • Time for innovation?
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2 Comments
  1. Love this post Mike. I agree with what you are saying here. We talk a lot about economies and brands here but then fail to show the kind of guts needed to do something really special. To do something special we must look at more then just the immediate measurable, we have to look at long term impact, not just on the economy but on things that are difficult to measure such as ambition in our younger generation, social interaction and (speaking with my Leeds hat on) the retention of talent.

    It will be all the same people talking, deciding and then patting each other on the back in the new structure. If we truly are to ‘move up a league’ the powers that be need to start listening to people like you.

    • Cheers Lee. But as James Reed from the Business Desk said on twitter yesterday:

      Whatever merits can’t see LEPs going for a grassroots approach with long term outcomes. Will want quick wins to show worth.

      Much easier to do what everyone else does and commission some more concrete, steel and glass than to figure out some new ideas. Political favour is all. As one of the politicians said at the launch of Leeds City Region – the big challenge is ‘how to foist our plans on a sceptical public’

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