Inclusive growth: The next oxymoron?
From time to time a new phrase is coined. Sometimes the new phrase articulates a new solution, at other times it reinvigorates an old one, or – more cynically – masks it. In economic development we now have the phrase ‘inclusive growth’. Does inclusive growth represent a step change or is it just a new oxymoronic phrase for the failing cycle of growth and exclusion? Maybe it’s just semantics, a new term for the toxic ‘trickle down’?
The Joseph Rowntree Foundation has recently shown that, while employment is growing, wages are not. Economic growth and work used to be a secure way out of poverty. This is no longer the case. We have a growing in-work ‘precariat’, with low wages and insecure work.
Therefore, ‘inclusive growth’ is welcome, as it places attention on a local economic growth agenda that is imperfect and often fails to tackle local social issues. Furthermore, as people in insecure employment tend to demand more from public services, inclusive growth acknowledges that, to have any hope of addressing demand on public services and reducing costs, we need more people in better-paid work.
‘For this new buzzword to be more than warm semantics, we need an economic development step change.’
I suppose at very least ‘inclusive growth’ could offer an accelerated return to some, often neglected, interventionist local economic policies. Place-based investment focussed on getting jobs to poorer places, improving access to employment, intermediate labour markets and the living wage. However, even if inclusive growth means that sort of activity, we cannot merely rely on these uni-directional, often isolated, policies that hone in on local communities and people as downstream recipients of economic success.
If we are genuinely interested in turning inclusive growth from an oxymoron to a tautology, we need to ensure that tackling poverty and disadvantage is not merely a consequence of economic success, but something virtuous and good in is own right.
We must acknowledge that, nationally, our growth is meagre and increasingly fragile. We are in a context of unbalanced economic growth, overly focussed on consumer spending, household debt and financial services. Furthermore, some local places do not have any growth. What does inclusive growth offer us in turbulent economic times or in local places where the economy is weak or not growing? Inclusive growth cannot be the start of excuses such as ‘sorry, we can’t tackle poverty and exclusion because there is no growth!’
If we are passionate about inclusion, we must recognise that in many places there is no growth. Those places need a different approach. If we are serious about inclusion, we must affect change in the type of growth we seek, where it goes and who benefits. In this we need to question contemporary orthodoxies around agglomeration economics, city centre growth and investment approaches.
We need progressive local economic strategies and practical action. Work by CLES, New Start and the New Economics Foundation to map ‘good’ local economics across our core cities has showcased various activity that is ripe for acceleration. CLES work on anchors institutions and resilience and a double dividend show what an inclusive local economy can look like.
At the heart of all this is our work around community wealth. This includes:
- Making local place-based assets including community, individual and ecological wealth a priority alongside spend on attracting inward investment
- Encourage local ownership of economic activity including cooperatives, community shares etc. alongside global/national ownership
- Encouraging public sector purchasing and commissioning of local goods and services that enhance local multipliers
- Creating inclusive and wide democratic local economic strategies and policies that straddle public, social and commercial sectors and enhance collaboration
- Investing more into social inputs for economic success and productivity, such as education and social capital rather than always favouring hard infrastructure
- Creating bespoke training which links directly into and with real employment
Above all we need active plans and a context that will help rebalance the national economy. The ongoing absence of any type of national economic plan, national industrial strategy, or dedicated regional investment vehicles are glaring omissions.
Inclusive growth could be a handy phrase for some to have their cake and continue to eat it. For this new buzzword to be more than warm semantics, we need an economic development step change. I hope inclusive growth is the next big thing. However, for it to be so, there is some rather serious work to do!
The original article can be read on the NewStart website here.