All posts from: August 2010
Local Enterprise Partnerships, in the very near future are going to have to stop thinking about structure and geographies and start thinking about what they are going to actually do. They will need to start thinking about how they are going to rebalance local economies, develop business and new local economic futures.
For a starter, if they are to work, they will need to acknowledge and appreciate that the economy is a system and a network and that unpredictability and complexity is the norm. The economic fortunes of a locality (as in any system) do not alter in a linear way. In the same way as we cannot understand and nurture an ecosystem by just looking at the soil conditions, we cannot get to grips with rebalancing local economies toward private sector growth and commercial employment by just isolating single aspects such inward investment. There is no single silver bullet. This is the economics of the past.
The successful LEPs - the ones that will make a real economic difference - will be the ones who understand that the economy, like an ecosystem, functions through the interaction of many elements operating at different scales and timescales.
There are no set geographic scales (despite all the ongoing debate about adminstrative boundaries) - business operates at various scales appropriate to where their markets are. There is no fixed operating environment fixed in perpetuity - events, such as floods throw economic strategies and policies. There is no single timeframe or speed of operation - the tube breaks down and in minutes the important business meeting is missed; stock markets crash over days and weeks, housing markets change over months, and long term structural economic change can take decades.
LEPs, must not view the economy as some efficient, deterministic, running on automatic machine. Successful LEPs will know and will create an operation which appreciates that the components of a local economy are in constant flux and are unpredictable and that adaptability and flexibility in planning a local economy is key. In this they will need to major on four key things, which are key to this flexibility and adaptability. - Good economic intelligence and knowledge; effective connections between and within ALL elements of the economy (public, social and commercial economies); Market relationships within and outwith the LEP geography and innovative and creative business networks.
LEPs must nurture adaptable local economies.
When I first read/heard about Local Enterprise Partnerships (LEPs), I thought yippee! Here we go - a cultural shift in local economic thinking, a special purpose body, like I have seen in the US or Japan, designed to ‘turbo-charge’ enterprise and serve as a means of rebalancing local economies.
A bit less about form, less about process and more about the fundamental economic conditions. However, as the weeks have passed, I’ve grown uncertain, the old culture of partnership is slipping in. LGC and Allister Hayman have been taking the lead in documenting this debate around structure, form, geographies and which area is joining with whom.
Some LEP thinking would appear to be less about challenging the fundamental conditions to success and rebalancing economies, and more about being all things to all people.
There is a danger, that they become wish lists and we end up with another nebulous economic development partnership and ‘talking shop’ - however, this time with less money!
Fair play to Eric Pickles though! He has thrown down a challenge, and is quite clear in saying to local government that LEPs are ‘…up to you. Be as ambitious as you can. Be as radical as you like. Be as bold as you want’.
This challenge is energising.
However, as I have previously argued we are in danger of getting carried away with being bold about form without truly considering function.
It is great to be energised, but boldness is not about doing whatever you want and just claiming power for powers sake, we need boldness which is grounded in local need and context and is new power with purpose.
Radical is not about ripping up the past and filling it with some dreamy economic future, it is about creative and focussed action. Ambition is not about statements, its about achieving realistic goals. We need to be bold, however, LEPS need to make a fundamental difference.
There has to be many different types of LEPs. Local economies are not the same. The LEPs in core cities and city regions, and in areas where we have Multi Area Agreements, have some of their own resources and capacity.
They can create LEPs which are successors to existing LSP economic partnerships. They should gain RDA power and be enabled and emboldened to join up all the sectors and be the integrated body, covering the multifarious streams of ‘the economy’. However, this cannot and perhaps should not be the model for all.Many locations will have very little economic resources or capacity.
In these locations, there is a crying need to go back to first principles, unpick the problems through good evidence, focus on the key barriers and impediments to growth and rebalancing economies and create LEPs with tight remits.
How to do we create LEPs that make a difference? The Centre for Local Economic Strategies (CLES) ‘resilient economies’ work, tells us, that we need to look at the basic relational elements within the economy which lead to growth conditions and economic rebalancing.
LEPs could be akin to best practice in public/business alliances, which are common in many parts of the world. They would both challenge the practice of economic development in local government and confront private business and chambers of commerce to rethink how they operate, whilst at the same time allowing them to nurture innovation and a new context to doing business.
This means honing in on rebalancing the relationship between the social, commercial and public economies.
In practical terms, this means a relationship which forges a new way to harness wealth creation locally and adopts new ways of funding and de-risking investment. It is about obvious things like procurement, local buyer networks and supply chains.
We also need a new culture between commerce and the social economy. This is not just about simple corporate social responsibility, instead it is about new forms of philanthro-capitalism, and a build-up of innovative capital, accelerating social entrepreneurship and developing social businesses.
As a profession, economic development does not lack ambition. We know what the ultimate goal is. Speak to any economic development professional anywhere in the world and the holy grail is a successful economy(not necessarily growing!) which is integrated and connected up to high levels of well-being, inclusive social outcomes and the nurtures and protects the environment.
This is the radical and ambitious goal. However let’s be honest, many places are starting with deep seated conditions - structural economic and social problems which have been around in some instances for over 30 years.
LEPs need to recognise this, get down to the basic foundations, look at the relationships and start to make the changes which will reap rewards in the long term.