Richard Holt, Oxford Economics
With Regional Economic Partnerships across Scotland, Scottish Futures Trust recently commissioned Oxford Economics to examine the extent to which regional economic arrangements are used alongside local and national interventions to deliver inclusive growth. Our conclusion from the several case studies that we undertook is that there is no “off-the-shelf” inclusive growth model anywhere that can be simply applied to Scotland. Nevertheless, we think there are lessons to be learnt.
Among the regions we considered, the San Francisco Bay Area is surely the most successful regional economy in the world in terms of wealth creation. But it is poor at transport infrastructure, partly because an absence of regional governance means that local special interests are able to block transport improvement – and also housing – developments. The consequence is an economy that grows rapidly, but with big problems of transport and housing related social exclusion, despite a highly engaged political culture.
Solent in southern England provides a very different example where a regional economic partnership, the Solent Local Enterprise Partnership, is very well established, but struggles in the face of limited resources and a high degree of central government control. Its ability to meet the region’s particular needs is consequently constrained. This impacts on Solent’s overall growth rate, and also on the ability to reduce inequalities between the different local areas within the region.
In Denmark the situation is very different. The concept of inclusive growth is deeply embedded. Denmark is divided into five regions, but the differences between then in economic and social conditions are not great. In part, this reflects the country’s strong commitment to using infrastructure to (literally) unite the nation, and is a deeply rooted part of a national “business model” that tends to reduce inequalities. Denmark has regional councils that bring together local authorities to address economic issues jointly, an arrangement helped by high degrees of consensus within the nation.
Our work also looked at the academic concept of a ‘Functional’ economic region, to see if that provides guidance. The reality is that local and regional economies are far more complex, overlapping, and ever-changing than the academic idea allow for. Our conclusion is therefore, that a degree of pragmatism in selecting regional partners is justified. That seems to accord with the way in which the process is proceeding in Scotland.
Professor Stephen Sinclair, Scottish Poverty and Inequality Research Unit
Inclusive growth is at the top of not only the Scottish Government’s agenda, but that of countries across the developed world. This interest is relatively new and welcome. Recent Economic orthodoxy is summarized by Robert Lucas, the 2004 Nobel Prize winner, who declared that ‘Of the tendencies that are harmful to sound economics, the most seductive, and… the most poisonous, is to focus on questions of distribution’. From this perspective, economic growth is the solution to poverty. However, after 30 years of widening inequality across much of the developed world it is clear that increased productivity and economic growth do not magically ‘trickle down’ and spread prosperity. The question must be asked – cui bono? (who benefits?)
What would ‘inclusive growth’ look like? It is easy to see what it doesn’t look like. Take Qatar, for example, with £12,500 per capita GDP in 2019 – by this measure the 7th richest country in the world, well above the UK in a relatively lowly 23rd. However, the wealth of Qatar is not shared with the 85% of its 2.6 million population who are classified as ‘foreign residents’ – low paid migrant workers from poorer countries.
So far this situation is manageable in Qatar, but social division and economic exclusion are generally not good for social harmony. Besides other objections, divided societies are troubled and inefficient, as resources are devoted to controlling or protecting the casualties of badly managed growth. Economic growth is not the opposite of inclusion. Investing in skills, providing decent social protection and expanding opportunities (human capital and capabilities in the Economic jargon) pays dividends by improving productivity, stimulating demand and liberating people to try new endeavours.
The new Regional Inclusive Growth Research Network (RIGRN) can contribute to this process by generating new knowledge and sharing insights from hard won experience. One obvious lesson is to not repeat failed ideologically-driven initiatives which may have transformed places but not the opportunities of deprived communities who were displaced or excluded from these – London Docklands comes to mind: the UK’s own mini-Qatar. Inclusive growth starts with working with people and communities rather than doing things to them. Progress is achieved by making bad ideas rather than productive people redundant.
Ayrshire Inclusive Growth Action Plan
The £250m Ayrshire Growth Deal (AGD) will provide much-needed momentum to help propel forward economic growth across the area, although this will need to be supported fully by mainstream public sector expenditure and private sector investment if the gap between the Ayrshire economy and Scotland’s is to be significantly reduced. Additionally, however, the AGD deal offers an opportunity to promote inclusive growth, and again Ayrshire performs poorly on many indicators of inclusivity and inequality relative to Scottish averages.
To help the drive towards inclusive growth, Scottish Enterprise and the University of Glasgow have undertaken to work with the 3 Ayrshire local authorities, national agencies and other local players to develop an Inclusive Growth Action Plan. The focus will be on two broad strands.
- Actions to maximise the benefits flowing to more disadvantaged groups and communities of the work involved at the implementation stage of the AGD projects.
- Actions to ensure that, when projects are completed, a significant proportion of the benefits associated with the services or other benefits provided through the projects over the long-term are enjoyed by the more disadvantaged groups and communities.
It is essential that the planning for maximising the benefits in terms of inclusivity is carried out now, and the measures required to bring together any necessary resource to implement that plan are then considered at an early stage.
The preparation of the Action Plan will involve the following steps.
- Extensive work has previously been carried out using the Inclusive Growth Diagnostic, piloted in North Ayrshire then rolled out to Ayrshire as a whole. It is essential that the action plan builds on the results of the diagnostic process.
- Each AGD project will be considered, with a view to identifying their potential for securing significant gains in terms of inclusion benefits for Ayrshire’s priority groups – both at the development and implemtation stage, and over the long term when the projects have been delivered.
- The next stage is to identify any new measures or interventions, or additions to existing relevant services, which will be required in order to unlock the maximum benefits from each project for Ayrshire’s more disadvantaged groups and communities.
- Discussions will then be held in workshop settings with the key stakeholders to generate the detail in the Inclusive Growth Action Plan.
- The plan will cover a period of 3–5 years, but will also identify a series of essential early actions. A process for overseeing and managing the implementation of the Action Plan will be developed.
- The final element will be the specification of an outline monitoring and evaluation plan.
The development of the Plan will be led by Professor Alan McGregor from the Adam Smith Business School at the University of Glasgow, and will be completed by the summer of 2019.
Regional Inclusive Growth Research Network established
Policy Scotland, a research and knowledge exchange centre at the University of Glasgow, is facilitating a new regional inclusive growth research network with support from the Scottish Centre for Regional Inclusive Growth.
The network is being coordinated by Dr Linda Christie, to help bring together researchers with a shared interest to help shape and make progress on an inclusive growth research agenda in Scotland.
The Regional Inclusive Growth Research Network (RIGRN) will meet three times this year, each meeting focusing on a different theme related to policy-making.
1. Inclusive Growth Policy: Understanding the research domains, priorities, and challenges
2. Defining Inclusive Growth Policy: Delivery and measurement of inclusive growth policy
3. Evaluation and Impact of Inclusive Growth Policy Outcomes
At each of the network meetings, guest speakers will set the context followed by facilitated, participatory discussions where members can learn from each other and identify research gaps, opportunities and solutions in a creative and open environment.
The Network aims to make a distinct contribution to shaping the inclusive growth research agenda across Scotland, by informing the evolving public policy landscape surrounding inclusive growth, and supporting independent research and analysis that will have an impact on practice.
It is Policy Scotland’s aim to support the coordination of research across academic, private, public and third sectors, at regional-metropolitan (and Scottish) levels.
The Policy Scotland website has more information about the RIGRN, including how to join.
The first meeting is taking place in mid-March in Glasgow; please get in touch if you’d like to attend or hear more.
Robert Burns and the Scottish economy – Professor Murray Pittock, University of Glasgow
A study of Robert Burns and the Scottish Economy, funded by the Scottish Government (Economic Development directorate) in 2018-19, will assess how much the worldwide fascination with Scotland’s national bard is supporting Scottish business and jobs.
Led by Professor Murray Pittock at the University of Glasgow, the research will also look at the potential for Burns to further support Regional Inclusive Growth.
While there have been studies of the economic impact of cultural industries before, this is believed to be a world first in carrying out a thorough assessment of the economic value of a global icon. An estimated 9.5 million people attend Burns Suppers worldwide every year, and the poet himself is an important component of Scotland’s national brand. An earlier outline study done for the BBC in 2003 indicated that Burns was worth £157M. Since then his brand has been significantly enhanced by an increasing global profile and enhanced visitor facilities, while the market for Scottish produce has substantially expanded in the past fifteen years.
Tourism and food and drink are two of the three largest industries in Scotland, which in their turn reflect a highly visible national Scottish brand in the global marketplace, a brand which owes an enormous debt to Scotland’s 18th and 19th century history. We need to understand the relationship between our culture and our economy more fully in order to maximise our already world-leading position.
Within the UK, culture and heritage tourism in Scotland attracts more visitors than anywhere outside London. Robert Burns Birthplace Museum in Alloway is second only to Shakespeare among UK writers’ museums in its visitor numbers.
But if Burns is a global figure, he is also intensely a local one, a poster boy for Regional Inclusive Growth. Burns has been seen as the no. 1 reason that people visit Ayrshire, and four of the houses he stayed in the Dumfries area are still standing. The project is working with the South of Scotland Economic Partnership (SoSEP), the emerging Ayrshire Regional Partnership and local businesses such as FreshAyr to both measure and maximize the economic impact of Burns in regional terms.
The project submitted its interim report to the Scottish Government on St Andrews Day, which examined the role of Burns in Tourism, Festivals, Food, Drink and Retail, as well as indicators of his value to local house prices and community wellbeing. The preliminary report addressed issues of Regional Inclusive Growth, which ranged from the future profile of Prestwick Airport to the Taste of Arran scheme and the linkage of Burns to food tourism. The final report, due by September 2019, will account for these areas in more depth and will also explore the value of Burns to education, publishing and music as well as providing a model for valuing Burns as a major contributing brand to the Scottish economy in terms of his function in raising the country’s profile overseas.
Pushing the Boundaries of the Possible – Rhetoric or Reality? It’s Our Choice – Robert Pollock, Chair of Economic Development Association of Scotland
Recognising the limitations of the possible is a fact of life for economic development professionals. We operate in a complex web of multi-scalar interdependencies and relations which are economic, political, technological, social and, increasingly, environmental. By way of example, the UK’s model of capitalism is by international standards one of the more liberal forms. In turn, the choices and actions of economic development professionals are circumscribed by this institutional reality. As one wit observed at a recent regional development conference, you may be able to choose the topping of your pizza, even stretch the dough, but at the end of the day it’s still pizza.
However, such limitations are only one side of the coin. Over my two decades of working in economic development, I am amazed at the scope of possibilities to make our communities, our regions, our nation, better places. Economic development professionals have continually proven themselves to be agents of positive change by working with the tools at their disposal, whilst innovating and seeking out new ones.
The economic development process is never a stable one. It is a process contingent on political intent and the fluidity of markets and industries. Recently, policy emphasis has been placed on Regional Economic Partnerships and Inclusive Growth. Co-ordinating economic development at a regional level has many advantages in relation to labour markets, asset utilisation, infrastructure etc. Moreover, the intention of addressing the inequitable social and spatial consequences of the UK’s model of capitalism is welcome. A new organising and conceptual framework is emerging which has evident merits.
As with every new framework, it has to respond to the reality in which it is emerging. All economic scales are important; local, regional, Scottish, UK and international. Therefore, we need to get better at responding to the interplay of these scales in our policy making and delivery. Too many regional development policies are “introverted” (a word used recently in this context by Marc Lemaitre, DG Regio’s Director General) and give insufficient cognisance to linking regional assets to broader industrial, economic and institutional forces and cycles that determine their utilisation. In addition, an increasing focus on Scotland’s regional heterogeneity is notable. This is welcome given that some regions are relatively prosperous and integrated whilst others are markedly more disadvantaged and peripheral. If we aspire to spatial cohesion and equity in Scotland, there is a requirement to transfer resources and capacity and stimulate demand accordingly. Regional diversity necessitates differing responses. In this regard, the formation of the South of Scotland agency represents a welcome development.
Finally, as an economic development community – local and national government, the enterprise and skills agencies, and the third sector – we need to co-evolve. There is a requirement for us to further develop the capacity for transformational change in uncertain times. EDAS is playing its part in this collective task through CPD, conferences, networking events, briefings and a pilot Community of Practice. In a small networked country like ours, we should all push the boundaries of the possible.
Jamie Hepburn MSP, Minister for Business, Fair Work and Skills
The Scottish Government wants to work with local authorities, businesses
and others to grow a network of Regional Economic Partnerships. the Cabinet Secretary for Finance, Economy and Fair Work, Derek Mackay set out the argument for developing strong regional economies in the very first blog on this SCRIG site. There is a clear link between a strong regional distribution of economic activity and positive social impact: something which has informed this government’s fundamental position on using the economy to drive inclusive economic growth.
So, if that is the goal, how can Regional Economic Partnerships help? First, I think we need to look back at the way they have been created. Regional Partnerships draw on the experience of City and Regional growth deals: they see the benefits that can arise when local authorities work together with one another, with our enterprise and skills agencies, universities and colleges, the third sector and the private sector. These deals have already seen the SG commit over £1.125 billion to grow the Scottish economy, enabling creation of over 60,000 jobs, and supporting skills programmes, infrastructure and innovation.
Having been able to achieve such positive progress, it is only logical that we extend that thinking and encourage regional stakeholders to come together and develop regional economic plans, with shared outcomes, responsibilities, and alignment of priorities and resources. To do this we need to listen to the diverse voices partnership working brings. Using the Inclusive Growth Diagnostic, and coupling it with local expertise and knowledge, allows Regional Economic Partnerships to focus on the strengths of their place, their communities, and to plan meaningful change.
Some people view government as being about directing and instructing, but in Regional Economic Partnerships our aim is to enable, be one of the partners: offering support and expertise, but respecting regional skills, knowledge and priorities. Drawing on the strengths and insight of the private sector, along with education and skills providers, our goal is to empower and enable Regional economies to develop their areas of expertise, advantage and skills and use this to drive inclusive economic growth.
We’ve seen great work already in Aberdeen City and Shire, partnering with Opportunity North East to link in to private sector needs – notably on the Oil and Gas Technology Centre. Developing partnerships such as Glasgow City Region and the Tay Cities have looked to forge strong links with the local Chambers of Commerce. However these links are made, they are key to the success of the Regional Partnership approach. I look forward to these partnerships maturing and delivering the sort of collaboration and innovation that I’m sure will accelerate inclusive growth throughout their regions.
Dr Lesley Sawers, Scotland Commissioner for Equalities and Human Rights
The Equality & Human Rights Commission (EHRC) is the statutory regulator for equality in Scotland but our role is about much more than just holding people and organisations to account. We also play a key leadership role in helping to develop socio-economic policies and programmes that will deliver a fairer and more equal Scotland. In this role we passionately believe that inclusive economic growth has the potential to remedy some of Scotland’s most intractable social problems. Today in Scotland disabled people are twice as likely to be unemployed, even in our leading industry sectors women are too often concentrated in junior or middle management posts or low paying roles, and ethnic minorities are twice as like to be unemployed and living in poverty.
Because we see the huge potential of inclusive growth, the EHRC has been working with the Scottish Government and City Deal Partnerships to focus their efforts on economic and social inclusion. Over the last 12 months, working with Johanna Boyd, the ex-leader of Stirling Council, we have been supporting Scotland’s City Regions to develop equality outcomes which will guide their work – for example the Glasgow region deal could create 29, 000 new jobs. Our challenge to the partnerships is for them to state how many of these jobs will go to ethnic minorities, women and disabled people. And to work with them to put in place impact and outcome measures that will monitor progress and change over the lifetime of the capital investment programmes.
Our aim is to make inclusive growth truly inclusive. Scotland has a huge untapped workforce of talented and skilled people, who are currently sitting idle. Discrimination – whether conscious or unconscious – acts as a barrier to their progression. For some disabled people, the issue may not be anything to do with their skills but everything to do with an inaccessible transport system which fails to get them to work, or being trapped in a house which is unsuited to their needs.
We don’t believe that Scottish public bodies or agencies go out of their way to discriminate but we do believe that not enough see social inclusion as a core operating or investment principle.
Procurement is a key example of how in Scotland we can use economic levers to drive social change. The law allows public sector contractors to place equality award criteria and contractual conditions on tenders. Simply asking the question “How many women do you employ now and how many will you be employing at the end of the contract” sets a clear expectation that equality is a key deliverable. But too few currently do it. It’s our ambition to make this common practice. It makes sense for the public purse, for society and for the economy.
By working together we believe we can deliver a fairer and more equitable Scotland, where inclusive growth works for everyone and success is measured in terms of enhanced lifetime opportunities and community transformation.
The EHRC is here to support the mainstreaming of inclusive growth equality practice. You can contact the team – Chris, Helen and Johanna – for further help – at firstname.lastname@example.org
People, Place and Prosperity – Scotland’s Regional Economies
Ross Martin, Regional Economic Advisor, Scottish Government.
Scotland’s Economy is a reflection of its people – increasingly diverse, with strong and proud roots in this place where we choose to live, work and play.
Looked at through the lens of our most prominent people, e.g. our current crop of world class sports stars, it is visibly productive like Andy Murray, but like him, all too often having to bounce back from injury. It’s innovative, just like our national rugby teams, led by the inventive Gregor Townsend and his protégé Shade Munro, both of whom are keenly trying out new ideas, not afraid to fail, at least on occasion.
More and more Scotland’s Economy is also finding international success on the global stage, like the inspirational and grittily determined Laura Muir, and perhaps most characteristically it’s inclusive, and all the more competitive for it, just like our World Cup qualifying Scottish Women’s International Football Team.
These four core characteristics reflect those of Scotland’s Economy – productive capacity, increasing levels of innovation, a more confident internationalisation and of course our long standing, innate sense of inclusivity. These are the hallmarks of inclusive and sustainable growth, they build in resilience as standard, by learning the lessons of the past to better prepare for and shape the future.
Scotland’s Economy is undergoing a long awaited, fundamental shift; from old economy to new, high to low carbon, analogue to digital, driven by data and predictive analytics. But above all, it is recognising the role, power and productive functionality of its regions. Gathering around the infrastructure investment flags of City and other Growth Deals, Scotland’s Economy is shaping up to be more competitive and resilient in an increasingly uncertain context, through the development of its regional economies.
In economic terms this translates into diversity, with a focus on their current, previous and projected performance, with the additionality that their collective efforts can bring, including through the most challenging, but potentially most productive, reform of revenue, on both the income and expenditure sides of the public sector balance sheet.
This is the challenge and the opportunity. SCRIG is here to help you grasp it.
A month since launch
It has been around a month since the launch of SCRIG and we have been busy despite it being the summer. We have made a number of improvements to the IG dashboard and are now up to version 1.11. The main changes have been to add extra equalities data and make the formatting easier and quicker.
We have also had some queries over the SCRIG Logo, specifically what one part in particular is. A full explanation can be found here.
Inclusive Growth Community of Practice launched
EDAS Inclusive Growth Community of Practice launched on 19 June to support public, private and third sector practitioners working to deliver inclusive growth.
The event report is available here.
From Diversity Scotland’s Economy Draws Strength – Derek Mackay, Cabinet Secretary for Finance, Economy and Fair Work.
A common feature of successful economies in Europe and across the world is a strong regional distribution of economic activity and positive social impact. This approach demands more than just an acceptance of difference in relation to the roles which regions play within the national economy, it encourages drawing strength from the diversity between them.
Scotland’s Centre for Regional Inclusive Growth will develop the evidence base for regional economic decision-making, and will support our regional economies within a framework that recognises the respective roles of the Scottish Government and its agencies alongside those of local government, the private sector and the increasingly important social economy too.
Scotland’s economy is fundamentally strong. However, as the uncertainties around Brexit approach it is more important than ever to provide our emerging, locally driven network of Regional Economic Partnerships with the tools to drive Inclusive Growth. The Inclusive Growth Diagnostic will make a wealth of regional level data available, and our National Economic Asset Register will offer the ability to draw upon our existing strengths, and draw upon our huge economic potential.
The analytical tools provided by SCRIG will better enable our regions to collaborate with one another, to compete internationally and will improve our regional and national adaptability and resilience.
The launch of SCRIG is a step towards a Scottish economy which leaves no one – and no place – behind. This is a time for strong regional economies and SCRIG will help regional partners design, develop and deliver the Inclusive Growth which will mark Scotland out as an outstanding place in which to live, work, play and invest.