Inclusive Growth – an economy working for everyone

By | March 8, 2017

For an Observatory whose perspective is coloured by tech-tinted spectacles, detailed comments on the work of economists are relatively infrequent. FISP does however routinely highlight the economic impacts of digital infrastructure provisions – or lack thereof.

Our comments on the recent RSA report ‘Inclusive Growth Commission’ arise from a less-technological and more societal viewpoint. Our core ‘Information Society’ remit provides huge scope for exploring both the deployment of digital infrastructures and what transformations in businesses and communities are consequently enabled.

We recommend close reading of the report; it is classically well written and informed by a full year’s work stretching across the UK. In that coverage respect it is certainly ‘inclusive’. The inclusivity of the title, however tackles two related priorities: conventional economists’ concern for stimulating economic growth and the much wider concern that we should ‘enable as many people as possible to contribute to and benefit from that growth’. That a great many folk felt excluded from those benefits was clearly expressed in the Brexit referendum and subsequently captured in the phrase ‘making our economy work for everyone’.

The recommendations are admirably brief and we would highlight three aspects of the work.

Firstly there is a clear need for vastly better regional and local data.

The approximations of macroeconomics too often do little to counter embedded ideological addictions. The national economy is merely the aggregation of many and diverse local economies. The need however is not simply for greater granularity but to explore areas of social interactivity that have previously been beyond economic brains. What may, ‘top down’, look like an evidence-lacking ‘subsidy’ is often viewed, ‘bottom up’, as a blindingly obvious investment.

Secondly the report highlights the nonsense of silo thinking.

Drawing a strict line between economic and social policy is ‘increasingly counterproductive’. The challenge here is in part a criticism of the economics profession but also reflects the great difficulties faced by local leaders – as highlighted in a recent note on the creation of Intelligent Communities . The implications for application of technological innovations are clear. Assessing Community ‘health and well-being’ cannot be divorced from the conventional concerns for jobs and inward investment.

Thirdly we should note the report’s language.

Words inevitably must be carefully chosen – not least to avoid knee-jerk reactions for or (more often) against the ideas proposed. That may well explain why we end up with ‘entrepreneurial place-based leadership’ but not ‘municipal enterprise’ – the latter provoking one end of the political spectrum to shout ‘oxymoron’ and the other to decry ‘neo-liberalism’.   The report steers a sensible line on the ‘false choice’ between devolution and central control – and fires a warning shot across the bows of those ‘focussed only on our major cities’.

From the FISP perspective the development of economic thinking can benefit from far greater technological (and particularly connectivity) investment. Chair of the Inclusive Growth Commission, Stephanie Flanders, is a great communicator. She observes, “If we cannot deliver a more inclusive vision of prosperity there is a real risk that the country will become more divided outside the EU than it ever was within it.”