By Matthew Bennett, Director
The Government’s promise of good growth in every postcode is powerful because it refuses to write places off. That’s completely the right instinct. But our experience of developing growth strategies around the country makes us question whether growth in every postcode is really the ambition we should be setting.
At ICC, we work in places with profoundly different economies. Some have globally significant sectors and major urban centres. Others are rural or coastal, with dispersed populations and networks of towns. Some need to accommodate extraordinary levels of growth; others need to create much stronger connections between existing economic activity and the people who live alongside it.
They require different approaches. The more places we work with, the more convinced we become that the national challenge is not to make every postcode grow. It is to enable every person and every place to contribute to, and experience, greater prosperity.
There are two key challenges to this that we see again and again. The first challenge is our national inability to back success when we see it. The language of national interventions in growth, ‘Levelling Up’ most obviously, betrayed a belief that one place forging ahead must mean another is being held back. You see it in the way London, and increasingly Manchester, are discussed, as though their success somehow precludes the success of others.
Britain needs its successful economies to succeed. It also needs to get much better at finding and developing the assets, capabilities and opportunities that exist elsewhere. Present productivity, geography or institutional weakness should never become a verdict on the prospects of a place.
The second challenge is what we mean by growth.
Growth is essential. More productive businesses, investment, jobs and output create opportunities and choices. But additional GVA tells us surprisingly little about whether people feel more secure, can earn more, build a business, find a decent home or see a future for themselves and their children. We created our Strategic Place Index precisely for this purpose. To dig deeper into what makes places feel more prosperous and enables people to lead better lives.
What communities and people will feel and recognise is prosperity.
Growth can arrive in a postcode without changing who holds power, who creates value or who can build a future from it. A successful business park beside a struggling neighbourhood may generate welcome employment and revenue while leaving much of the underlying economy untouched. A data centre can produce substantial economic output without necessarily making the place around it more prosperous.
Our perspective on this owes something to ICC’s DNA. We come from delivery on the ground with councils and communities, not just strategy. Economic analysis matters, but so does what happens when it meets the real world: whether institutions can deliver, employers and public services are pulling in the same direction, communities can participate, and capital can reach the businesses and opportunities that will make a difference.
That experience makes it difficult to believe in a standard model for local growth.
Our work with Cornwall, where there is no major urban centre around which to build a conventional agglomeration strategy, required us to think about a dispersed economy with particular strengths in minerals, renewables, space, marine, agri-food and the visitor economy.
When we worked with Liverpool, the economic geography and the possibilities were different: globally significant institutions and cultural assets, investment opportunities and neighbourhood economies. In London, we have seen how major transport investment can improve access to employment without automatically producing wage growth when skills, employer relationships, housing and progression routes do not develop alongside it.
The work is different in each place, but it keeps bringing us back to the relationship between economic activity and the people, businesses and communities around it.
We describe our approach to work on inclusion and growth as Participative Prosperity. We are not entirely sure we have landed on the perfect name, but it captures the type of prosperity we need to build today. We think it’s helpful to set this against two other mainstream approaches to growth that we see in our work.
Generative growth expands the economy: more output, investment, jobs and productivity. All matter. Without growth, choices narrow, public finances weaken and prosperity becomes harder to sustain. But GVA can tell us how an economy is performing without telling us much about the lives and opportunities of the people within it.
Inclusive growth advances the argument by asking who benefits. It brings access to opportunity, the quality of employment and the distribution of growth into the conversation. But too much inclusive growth practice thinks about redistribution rather than actual inclusion: growth is generated by successful firms, sectors and people, with policy then seeking to ensure that others receive some of the benefit even if they never get to participate.
Redistribution remains necessary. But our experience has pushed us towards a more ambitious question: how do more people become participants in creating prosperity in the first place?
Every person has capability and every place contains assets and potential. People should have the opportunity not simply to benefit from growth generated by others, but to contribute to it, shape it and build better lives from it.
That raises some very practical questions. Why can’t a local firm enter a growing supply chain? Why can somebody living close to a major employer not access its jobs? Why does capital fail to reach viable businesses? How do poor health, insecure housing or weak transport constrain participation? Which institutions need to work differently?
Housing, health and transport; care, skills and business networks; capital and capable institutions all influence whether economic potential becomes genuine participation. These are delivery questions as much as economic ones.
Perhaps that is our delivery heritage showing again. We are instinctively suspicious of stargazing. Identifying an exciting cluster and forecasting its future contribution is relatively easy. The harder work is understanding what actually needs to change, who can change it and how a place organises itself to deliver.
Which brings us back to the national ambition.
Prosperity in every postcode does not require growth in every postcode. And growth in every postcode would not, by itself, create prosperity.
Government is right to refuse to write places off. But that requires something more sophisticated than redistributing growth evenly across a map. We need to back success where we find it, develop the distinctive assets and potential of different economies, and build the connections that allow more people, businesses and communities to participate in creating prosperity.
We are calling that Participative Prosperity, at least for now.