So I’m writing this in the shadow of the announcement of the general election, which has led to a flurry of activity in our office and no doubt that of advocacy organisations and trade associations across the land. It seems like just yesterday that our focus was responding to the industrial strategy…oh, it was just yesterday, that’s why.
I’m intrigued by the industrial strategy – it’s centralist at a time of devolution; it’s old school meets new tech; it’s long been called for, but thin on detail; it’s wide-reaching but curiously unambitious. It’s a bizarre mix, as things stand – a sort of hodge-podge of manufacturing call-backs, classic routes to innovation (universities, industry sectors), the perpetual cry for a better-skilled workforce, and an attempt to meld it with existing devolution and city-deal work. As you might expect, we’ve been making the case for a more inclusive strategy – rather than the same old established approach and old thinking, what about a strategy that actually puts the government’s stated ambition for an inclusive economy at its heart? And, by association from our perspective, social enterprise being given a more important role in creating that economy.
What would that kind of bold strategy look like?- one that doesn’t say growth is always necessary everywhere- one that focuses on value in the broadest sense, not productivity in the narrowest sense- one that actually confronts the challenges of automation, globalisation and resource-reduction- one that seeks to maximise the value we create from the resources we currently have and spend
To expand on these, the eternal quest for eternal growth looks increasingly like a pointless one – aside from the fact that growth is barely there (many think we are entering a long period of Japan-like stagnation), the resources and energy we use are not similarly eternal, and the proceeds from that growth are not being, by any measure, shared in any way equitably. So what is the point? We’re struggling to grow, our natural environment can’t support it, and it’s not helping the vast majority anyway. Prosperity with more equality built into it will achieve more than more growth with more inequality built into it. At the very least, it is certainly time to move, as Kate Raworth puts it, from growth addicted to growth agnostic.
On productivity, I’m increasingly bemused by our view of what it is and should be. Viewing it in a narrow number of human hours-to-units made type of ratio seems radically out of date with our times and our needs. To give a simple example, many social enterprises will deliberately employ more people than are ‘needed’ to perform a work task or operation: this is sometimes because those people need more support than others, sometimes because they need some additional training (for example, coming out of homelessness or prison), and sometimes because they have a physical or learning disability. Overall, the social enterprise is trying to create as many opportunities as it can per widget or unit made, not the fewest. And a broader view of the value (even just the pure economic value) created would recognise that this is actually more productive – if one took into account the costs of those people not being involved in that activity: healthcare, housing, benefits, and so on. Never mind the positive social and economic value being created.
[just to be clear, I’m not advocating for ‘inefficiency’ here – most of these enterprises still have to compete in markets; but recognition of the wider value they create is not arguing for poorly run, ineffective organisations; it’s arguing for that value to be taken properly into account when business is being won]
This is connected to taking on the challenges we know we face: how to create the means of opportunity and the foresight to create new industries, new businesses and new opportunities in the face of automation (which thrives on a narrow definition of productivity, of course) and an unequal use of existing resources and unequal distribution of wealth and power. How can the inclusive growth commission and others genuinely talk about creating inclusive growth without talking about ownership? Local economies need to own their assets, build their resilience, and create the opportunities that are most fit and most relevant to their needs. Genuine inclusion won’t happen if the money and power, ultimately, flows out of those communities back to the big cities, especially London. Local social enterprises and community businesses won’t solve this on their own, but they can be a key part of the solution for exactly this reason: they address ownership, and they seek actively to include. At the moment, government policies work against, for example, community energy ownership; commissioning works, still, in favour of the largest, not the best; investment too often still goes into buildings, not building opportunities for people.
This is in turn connected to the fourth element: maximising our use of what we already spend. We are, as we are constantly told, in the midst of austerity. Yes, we are, and I don’t underestimate the impact of the relentless belt-tightening at local level – but we still spend a load of money: £300bn-odd on public services, never mind the amount we all spend within our own organisations. What if we used this procurement spend to achieve our policy objectives? Again, this isn’t asking for inefficiency or special pleading: take all the value into account, and judge on that. Buy based on everything organisations do, not the cheapest price. There are lots of obvious things here: account for social value, don’t consider it; extend the Social Value Act to goods, works, assets, planning; ramp up SME spend (and include a specific social enterprise target percentage); look for minority-owned, women-led and disability-led businesses; favour those who are reinvesting profits locally and paying taxes properly…and so on. Not rocket science, nor brain surgery – but quite openly using procurement for policy ends: mobilising the money we all spend to change things for the better. Imagine if the roads and bridges we built also improved health outcomes and created opportunities for those who need it most – it can happen; it is happening in some parts of the country already.
There is more than this, clearly – in our formal response to the industrial strategy consultation, we cover in more depth careers and skills, devolution and LEPs, investment and much more; we could write a whole post on the potential of social enterprises with employee ownership alone; or what the social economy answers to health and social care look like. What is undoubtedly present is a real opportunity to create an economy that works differently for all. Whether the government after June 8th sees fit to try and create it is up to them. Our job is to keep amassing the evidence and building the case for what works – and how it can work best; and, along with all our members, communicate that to as many as possible. So we need to campaign and advocate in the run-up to the election and beyond – for a post-Brexit future that everyone has a stake in.
>> For other interesting views on the industrial strategy, read:
– Tom Fox from UnLtd on putting social entrepreneurs in the industrial strategy
– Neil McInroy from CLES on Inclusive growth: making an economy work for a few more?
– Stian Westlake et al from NESTA with Four ideas for a better industrial strategy