1. Economy
October 3, 2016

Beyond boomgoggling: Five steps to a good city economy

By Clare Goff

A year ago, we at New Start magazine set out to tour the UK’s major cities, mapping “alternative” approaches to local economics. We knew that mainstream local economic development was not doing what it should do, despite glowing reports of growth from cities themselves – so we wanted to find out if other approaches were working better.

Our first stop was Manchester, where the problem was summed up in one phrase: “doughnuts of deprivation”. This phrase was used to describe the inner city areas that had been left behind by the boosterist, agglomeration model of local economics that dominates our cities.

In each of the ten cities we visited we found such places, areas that decades of investment, new infrastructure and economic growth in cities had yet to reach. And yet “boomgoogling” – expecting that an enterprise zone or infrastructure project will solve a city’s poverty – remains the mainstream approach to city economies.

We quickly ditched the word “alternative”, as the limitations and outdatedness of the traditional local economic approach became apparent. The “good” city economic models we found – from hospitals creating local and social supply chains, to digital factories based on estates, co-working spaces for the growing number of self-employed people and community land trusts building affordable housing – are not alternatives. Rather, they’re approaches that work.

We came up with 10 steps to a good city economy. Here are five:

A revolution in grassroots enterprise: At a time when the vast majority of people work in businesses employing fewer than 10 people, why do our city’s economic policies focus so heavily on luring big business to invest in them?

While the mainstream model chases and incentivises the big, a revolution is happening among the small. Co-working spaces are popping up in the valleys of south Wales and in empty buildings in Scotland, and “soup” events are helping kickstart small business ideas.

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In Liverpool a markerspace, set up using funds from a community-run car park, is based next to the city’s so-called “enterprise zone”. But while small enterprises are being created at the makerspace, just outside of the zone, huge swathes of former dockland owned by corporate Peel Holdings and inside the “enterprise zone”, have been derelict for years.

Anchor institutions embedded in and working for the local economy: With little public sector funding around, each penny of the public purse should be spent, not only efficiently, but it such a way that it does multiple things.

Sandwell Council and the Sandwell & West Birmingham Hospitals NHS trust are building a new hospital across two of the UK’s most deprived areas. When that hospital opens in 2018, it will be embedded within those communities as Cadbury’s was in Bourneville. Its food supplies and other products will be procured locally, and those living on its doorstep will become its employees.

Local leadership that is enabling and empathic: Austerity has hit our cities hard and councils can no longer do the things they used to do. A new style of municipal leader is emerging, one that stewards and enables.

Birmingham council has shifted to listening mode, and is intent on devolving power to its local communities. Bristol and Nottingham councils have set up energy companies to make inroads into fuel poverty in the city.

True corporate responsibility: Big business is disconnected from the places in which it is based and the needs of its workers, as the rise of zero hour contracts and low wages attest.

But mainstream economics still heavily supports it and in particular those businesses that are seen as high-growth. Places like Enfield are holding their big businesses to account, and working in particular with “mundane” employers that create the jobs that most people work in – the supermarkets, care homes and utilities.

Co-produced local economic development: Our idea of what an economy is has narrowed over time and is now more or less synonymous with big business and the corporate private sector.

But an economy would not work without the myriad of social connections and transactions that go on in a place. Why are the few making economic decisions for the many? A People’s Plan for Manchester is bringing communities and social sector organisations into the devolution process.

We finished our tour one day before the vote for Brexit, seen by many as a protest and cry for help from those marginalised places still waiting to benefit from the mainstream economic growth strategy.

Perhaps if those making national and local economic decisions take off their boomgoogles, understand the reality of the needs of their people and places, and work with local partners to address them, this “good” approach to local economics can move into the mainstream.

To read all ten steps to a good city economy and the “Creating Good City Economies in the UK” report, click here.

Clare Goff is editor of New Start magazine. She tweets as @claregoff.

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