On Monday we launched our 10 Principles for developing effective Local Industrial Strategies. We developed our principles by working with ten cities to understand their challenges; talking to central government; drawing on (and translating into English) academic work on economic policy development; and taking the lessons from the evidence base. In many ways, it summarises much of our advice on how to make better policy.
Here are the key points I talked about in my introduction to the event.
A common question from places has been: ‘How do the Local Industrial Strategies (LIS) relate to the Strategic Economic Plans (SEPs)?' Our discussions suggest that the approach to LIS being adopted by places and promoted by the government is much more collaborative than with the SEPs. It includes co-design with the Cities and Local Growth Team, who are already working very closely with the trailblazer cities. Funding will be made available for some new programmes. The evidence-based approach also offers an opportunity to improve on the analysis that underpins SEPs. All of this means that LIS offers an opportunity to add teeth to and implement elements of the SEPs.
LIS will likely involve an increased emphasis on specific sectors. Sector-based approaches offer both an opportunity and a threat. The increased emphasis on sectors can help places to better understand the dynamics of their economies and identify potentials for intervention. However, it is crucial not to lose sight of opportunities to improve horizontal factors – i.e. those that cut across sectors - which will benefit the local economy overall. The evidence and economic theory suggest that these horizontal approaches are more likely to yield results.
The evidence base (and economic theory) also suggest that investment in skills – a key horizontal approach – is the most effective way to help the people in your place. If you want growth to be inclusive don't rely on the trickle-down fairy to magically spread the benefits from high tech, high-income jobs to struggling households (long-term unemployment persists in Barking and Dagenham, and many other places with lots of dynamic employers).
The evidence is clear that getting employers on board is key for successful implementation, particularly for skills. But this needs to be balanced with making sure that they do not skew the analysis of what needs to be done in their own favour. The second half of our report considers some of these issues in detail.
We still need to do a lot more to understand what works to improve firm productivity - both in the long tail and in fast-growing firms. LIS should offer an opportunity to pilot, test, and evaluate new approaches.
Infrastructure investment will be important, but we still need to improve scheme prioritisation approaches.
The government has committed to experimentation – Lord Henley reiterated this in his comments at the event. We'll be making sure that this is translated in to practice. As always, contact us if you are interested in piloting and testing innovative approaches locally.
I think LIS offers a good opportunity to strengthen our understanding of what works and to embed this understanding into the strategies that underpin key local economic development policies. Our principles represent one step in helping places deliver on this difficult, but crucial, challenge.
Thanks to everyone who helped in developing the project and who came along to the launch on Monday.