Economics is changing.
A decade has passed since the financial crisis, which sent shockwaves through the global economy. The crash is now a lesson of history: the consequences of wild speculation, frenetic accumulation of wealth and indifference to human outcomes.
A handful of people doing very well obscured the fact that millions were not doing very well. It was not sustainable or inclusive, and it collapsed.
But is this a lesson we have learned? No matter where we live, we still default to the traditional methods of determining a healthy economy: growth, employment and trade. On those measures, things are fine.
But we know that things are not fine.
The West Midlands economy is growing, but people have seen their pay stagnate. For many of them, work is no longer a route out of poverty, but something that is draining, insecure, and lacking in purpose and progression.
They are creating wealth that they do not benefit from. Consequently, they cannot build a healthy, contented life around it. The economy is happening to them, but it is not theirs, and does not value or safeguard the things that matter to them.
We have made it our mission to change that.
It is why West Midlands CA mayor Andy Street (Con) and our leaders of place from across the region are pushing for inclusive growth. In this model of growth work pays and care is valued. People develop skills and connections they can use to participate and shape their local economy, and the way that they work, learn and live helps them to stay healthy.
In this economy, leadership is collaborative, the environment matters and power is distributed between people of all types.
We will judge economic success in the same way as citizens do. As such, we must shift the way we measure our progress. And inclusive growth is not just about getting better at investing the spoils of growth as measured by gross value added.
The West Midlands CA is in the early stages of building the architecture of inclusive growth. In June, we formed the inclusive growth unit – diverse, expert organisations who can create space for our citizens and institutions of place adept at reshaping and strengthening their economies.
Our inclusive growth framework is being built to model the future West Midlands economy, inspired by Kate Raworth’s Doughnut Economics book, which shows how social needs can be met and the environment nurtured through economic activity. Crucially, an investment and commissioning toolkit will follow.
This is an important shift in understanding, but one that needs to occur. If devolution achieves anything, it should be the end of artificial separation between economic activity and services to the public. They both exist for the same end: enabling all people to thrive, today and in the decades to come.
Only by building an economy that is fit for the future can we say that we have learned the lessons from the past.
Claire Spencer, senior policy advisor, public services and inclusive growth, West Midlands CA