Voodoo economic development


I have written elsewhere that within local government, there is an emerging crisis in local economic thinking, policy and strategy. I believe, the government has some fragments of great ideas, and is straining to be radical, but its shrouded in austerity, there is slow progress and a disjuncture in logic. It’s voodoo economic development!

There should be no mystery to economic development. The answers are tried and tested and we do need any more reviews to tell us.  To improve the ability of local areas to economically compete, we need resources for infrastructure, a plan (and a sound planning base) and effective collaboration and connectivity. However, the prevailing voodoo economic development suggests you can do local economic development, with inadequate resources, fragmented plans and patchy connectivity and collaboration.

Our competitors are using tried and tested economic development to win the growth game.  They mobilise private and public resource on a huge scale.  They make better inputs which set better conditions for growth.  You cannot attempt to rebalance the English economy, grow skills and create the conditions for innovation and creativity, without significant public and private capital.

For instance, we need to invest in transport (and not just high speed rail, but regional and city region transport hubs too) and fibre broadband infrastructure, so we can compete. We need education and skills investments, which creates a new labour force for the digital economy of the future. It is chimeric and a charade to think we can economically develop more disadvantaged areas England, with long standing skills and infrastructure problems, without unleashing a new flood of infrastructure capital and resources.

We also need a national local economic plan. In particular, the north, the south west and the midlands, as well as part of the south and east, require a focused method by which plans for the national economy of England are drawn up with a consideration of what is happening in these poorer regions and areas. The decentralisation and localism bill for instance, despite being all about a rescaling of England’s economic and public service geography, is silent about planning as well as the key signature and big ticket elements of England’s economic geography. For instance, London gets 37% of investment moneys into infrastructure for just 15% of the population, and 22% of the economy!

Furthermore, collaboration and cooperation is the key to growth. I have written previously about my unrealised optimism that LEPS could be ‘turbo charged’ chambers of commerce, creative partnerships for growth and a means by which policy becomes porous to business and vice versa. However, they seem to be taking time to develop and government is sending out confusing messages, as to their purpose and role. Growth hates uncertainty.

Furthermore, there are also big ticket infrastructural considerations as well as investment prioritisation and overseas marketing which require a spatial scale which is greater than the LEPs. We need a vehicle for pan LEP negotiations. In the north, this might be a ‘council for the north’ but probably best to be a flexible political body made up of elected leaders of northern authorities. But above all, we need something now. Growth hates unclear governance.

All of this, is a way of doing traditional economic development properly. However, if the government or local areas want to choose another path altogether, then there is a more radical alternative.  This approach recognises the need for areas of growth, but accepts and plans for areas with no growth and decline. Policy would intervene to make the market run freer and break up public and private monopolies thus decentralising and relocalising the economy.

This alternative economic development would accentuate social growth, place resilience, well being and health, sustainable living and reduce our dependency on carbon. Let’s face it, many places have never had economic growth for a long time. This is a distributed, bottom up, organic and a plural approach to economic and place development.

This is neither voodoo economic development or orthodox economic development done well. This would be radical economic development and creates a pathway to enduring outcomes.

The original article can be read on the NewStart website here