We must accelerate the alternatives

The economic crisis has turned into a social crisis and local economic policy is failing.  Poverty, inequality, affordability of housing, low wages, insecure work are now ingrained in our cities.  We need a new radical urbanism so that we address these issues and deliver better social outcomes at scale.

However, there is an irony.  There is no shortage of wealth in our cities.  Whilst a few people and areas enjoy the huge benefits of economic success, many people and areas do not. Take a walk from any city centre.  Once you leave the global chain stores, buzzy restaurants, glorious public spaces, new urban living and high end retail, you will get to the district centres.  In these places, there is a different story.  You cannot always see the poverty and despair, as many areas have undergone a physical regeneration, but the signs are there.  Speak to people or an NGO and the daily hardship of surviving on low wages, youth unemployment and increasing housing costs, become evident.  This is not acceptable.  The future has to be about making existing and new wealth work better for local people and communities.

A progressive local economic development would deliver good jobs, better pay, more wealth and better health, fulfilled lives and hope.  People would be enabled and encouraged to create their own jobs.  Wealth would flow not stick with the richest, leaving a trickle to the poorest.  To achieve this, we need local economic policy which is more active, more socially caring, more innovative and experimental in the face of poverty and inequality.

Radical social innovation is growing

But things are changing.  Across the world, a movement toward a better economy is growing.  Driven by the lack of social justice many organisations, citizens and social movements are building an alternative.  The task for all of us today is to grow, accelerate and scale this movement up it.

Roberto Unger, the philosopher, politician and leading thinker, writes about the reinvention of economic development and the potential of social innovation[i].  Social innovation is about people, communities and citizens organising themselves to meet unmet needs such as poverty, and creating a democracy and economy which works for the many, not just the few.

In seeking to advance social innovation, Unger highlights the need for the ‘enhancement of agency’, across the public, social and commercial sectors, beckoning a progressive radical movement, where a range of small-scale innovations ‘foreshadow’ the possibilities of larger-scale shift in society and economic practice.  In this, citizens animate the change, but it’s also us –  as citizens, as workers, as business owners and as public officials to drive the change, creating an acceleration within social, commercial and public institutions.  This is a people centred revolution.

The future is here

Across all cities we are starting to see these small scale innovations and alternatives.  They may be small, but they are growing.  This has certain features.

Decentralised Governance

Traditional local economic development relies on top-down government.  The future is about more devolution where decisions are made closer to the people and needs of the poorest.  In this local economic development will be made by and for people, not big government and elites of big business.  In this, we need new experiments in participative democracy, with citizens forums, and more co-produced solutions.

Better use of our public assets

Traditional local economic development often sees our public services as a cost and their economic role is underplayed.  We need local large public institutions to think about their own direct local economic role.  Institutions like hospitals and universities have huge spending power.  We should harness their spending power in terms of buying goods and services from local and/or socially progressive businesses. They should look to employ people from poorer areas, and they should make sure their land and property assets, benefit local people and economy.  They should act as beacons of progressive social and economic activity. Advancing local economies and assisting those most distant from the labour market.

Businesses as citizens

Traditional local economic development sees business as only wealth creators.  However, many businesses play a social role, beyond the provision of jobs and wealth. This includes, local small businesses who support local voluntary and civic activity like sponsoring a local kids football team.  This role should be celebrated and developed.  This is about growing traditional corporate social responsibility (CSR), moving toward ingrained behavioural change, where the social is not perceived as a mere ‘add on’, but about deep and caring business attitudes to wider society. This extends to supporting social entrepreneurship and intrapreneurship

Citizens and social capital

Traditional Local economic development sees citizens and communities as just recipients of wealth.  However, they should be seen much more as active players in wealth creation, with social capital linked to economic prosperity.  The ties between people, groups and local organisations create confidence and allow knowledge transfer. Furthermore, happiness, health and prosperity all grow when communities and organisations collaborate to support and celebrate each other, form relationships and work together towards shared goals. These social networks can act as the basis to a good economy.

Digital maturity

Tradition economic development sees the digital era as a sector.  However, it should be seen as a means to democratise the economy.  Smart technologies herald a new open source collaborative economy, where and peer to peer activities take economic wealth production away from the few within a vertical hierarchy, to many within horizontal systems.  Creating deep relationship between producers and consumers, creating more sensitivity to social concerns and unmet social needs.

Workplace protection

Tradition local economic development too often sees the workforces as a cost, which can be sacrificed on basis of competitiveness.  However, a labour market is something which needs to be nurtured.  We need an acceleration of place-based employment charters, with commensurate protection of employees terms and conditions.

Social growth is as important as economic growth

Traditional economic development tends to see investment in social lives as a cost. However, investing in the social welfare of people is an economic investment in the future productivity of people, communities and place.  Civil society, social action and democracy are the basis to a productive, inclusive economy and society.

Moving forward

Moving forward, Local Authorities and Cities must rethink the system, by developing a more integrated social, economic and environmental narrative and looking deeper into and accelerate the good things which are already happening.  We must harness existing wealth better and work toward a new wave of radical urban innovation to develop new wealth.

The work of CLES, on building a good local society, community wealth building, anchor institutions and good city economy shows what is and can be done. Above all, the future will be less global investment and more local.  It won’t just incentivise big business, it will look at new community cooperatives and ownership.  It won’t be top down leadership, it will be collaboration.  It’s not just GVA growth – it’s wellbeing.  It’s about focusing more of what we have, not just what we can attract. Above all its about reconnecting economic activity with social progress and unleashing the energy of citizens.

The solutions are there.  We no longer just link city economies to the global economy, and hope.  We must  link city economies to the needs of its poorest citizens.

The next step for city economic strategy and is to articulate and pursue the aim of an economy and society which is successful, resilient and socially just.  We must build on creative energy and practical grass roots activity – harnessing and accelerating the abundance of progressive alternatives within our cities.  Rethinking the local economic system to be more socially and environmentally just is no longer a question of ‘nice to have’ alternative or an ‘add on’ to the mainstream – it should be the mainstream!

[i] Unger, R (2007) The Self Awakened: Pragmatism Unbound.  Cambridge, Mass: Harvard University Press

The original article appeared in Alternativas Económicas, read it here.