LEP Strategic Plans for Local Growth
Smart Growth Analytics specialises in the provision of economic intelligence to inform higher levels of economic growth through the successful development of a competitive higher value added economy. In order to demonstrate our 'competence' in this area, it is worthwhile to say a few words with respect to our 'strategic understanding' of local economies across the country, and their future growth paths.
Perhaps the starting point in our work in supporting the development of LEP Strategic Plans for Local Growth lies in the answer to the basic question as to 'why do we need local economic growth'?
The main answer - growth is required to ensure that we can support an increasingly dependent ageing population profile (which is also being supported and encouraged to live independently for as long as possible). Without economic growth (especially in the sectors which suit the workforce), additional young people in an area are forced to commute outwards to find work and / or to leave the area. The latter exacerbates the problem over an ageing population profile of dependents. Over the longer term, local Council Tax revenues fall and Welfare Benefits bills rise. Growth in productivity is also required to ensure businesses remain competitive, particularly in an increasingly global environment (and can continue to pay local Business Rates).
In summary, a lack of absolute economic growth and/or productivity growth, over the longer term at least, sees a local economy stagnate and struggle to remain competitive and to support its own population.
Our approach avoids putting pressure on housing and transport and other resources, whilst also ensuring the maximum local level of economic / wealth growth is achieved with the resources available (i.e. with the emphasis on productivity growth as opposed to employment growth).
Overall, and in the main, 'smart growth' / a 'smart economy' along these lines requires smart people, the right accommodation (for both people and businesses), and a smart transport & communications infrastructure. This is particularly relevant in local areas where the resources used in the creation of economic output are limited (limited by way of one or more of: labour supply / skills, land and premises, investment & entrepreneurship, underpinning transport & communications infrastructure, soft infrastructure). In these areas the output / wealth growth policy focus is very much on making the most of the factors you do have (and the growth in those factors, however marginal).
This is achieved by improving each of the factors of production / output (including entrepreneurship skills and innovation skills), but also ensuring that they work together as efficiently as possible (ideally with policy documents for each which set out how they will be improved but also the complementarity with the other factors and how they are mutually supportive).
This approach enables the local economy to move up the value chain as much as possible, through the development and production of higher value added goods and services, and / or being able to produce more goods and services through better skills, equipment / kit and / or more time spent on output delivery in the 'working week'.
We undertake research and analysis of economic data and information to inform the development of economic / business strategies and action plans. We undertake primary survey research, and secondary research, and provide sound analysis and practical interpretation of the results. We consult with clients, and advise clients on their intelligence requirements, and the most efficient mechanisms of obtaining the intelligence.
Local Area Skills Clusters
Local Area Skills Clusters are one of the main elements of our approach to driving forward local growth in the local growth plan. Skills Clusters are those local economic sectors which contain clusters of the three essential and mutually reinforcing elements required for higher growth and/or higher value added growth:
- Local business / workplace skills clusters
- Local resident skills clusters
- Higher education and vocational education skills development clusters (combined ideally with a supportive business support infrastructure)
Local Area Skills Cluster analytics and action planning are Smart Growth Analytics' most important research service specialism. This is because Local Area Skills Clusters are the local sectors / clusters which have the potential for higher employment growth, and/or higher value added growth. They are the business sectors which, through support, can drive forward local economic growth and wealth and help local areas to achieve ambitious targets for employment, output and wealth.
Our research services here include the identification of Local Area Skills Clusters, and the development of Skills Cluster Support Strategies and Action Plans. These strategies and action plans are an essential element of our support for LEP local growth plans.
Balance and inclusiveness
The need for the right type of 'balance' of local jobs growth is also essential. Local growth in key commercial sectors of tourism and retail are often relatively assured (as they are driven by consumer demand and are less restricted by way of growth constraints). However, jobs in these sectors are relatively lower-skilled. On the other hand, growth in key commercial employment sectors with higher growth potential (such as Creative, ICT, Professional business services, Design etc) is often not so well-assured due to more severe growth constraints. These sectors have much in common with the higher-skilled nature of the existing and future resident skills profile. They are higher value added and often have the opportunity for internationalisation, which supports higher levels of economic / wealth growth and productivity growth. A policy balance between support for different sectors is therefore crucial in order to avoid future labour market gaps at the local level.
The need for 'inclusiveness' across the whole of a local area in the above growth pattern is obviously essential to ensure that all areas and communities and individuals benefit, as far as is possible. A move up the value chain will raise wealth and household incomes, but only for those that are in work. Inclusiveness is also important to maximise economic growth with limited growth in people.
In a digital age, there is clearly an increasing trade-off opportunity between the growth in the use of the transport infrastructure and the growth in the use of the communications infrastructure. (So plan and invest in the communications infrastructure as well as the transport infrastructure, and support and encourage people and businesses to work remotely / at home).
State Pensionable Age
Finally, a further 'strategic' issue concerns the local economic impact of the proposed changes to the State Pensionable Age (SPA). The ageing population profile problem outlined earlier could easily be exacerbated by the SPA changes unless the local economy manages to create appropriate numbers of 'entry-level' opportunities, particularly for younger people (as the older workers will simply stay on in their jobs as a result of the changes). SPA changes could cause a structural shift from a rise in older workers at the expense of a reduction in the employment of younger people.
There is obviously a risk of higher local levels of unemployment and youth unemployment, or the exodus of younger people from the local area as they go in search of employment opportunities elsewhere. All in all, great care needs to be taken at the local level, through job creation and support for enterprise and investment, focused on young people, to ensure that the SPA changes do not seek to widen the poverty gap and/or the problems associated with an ageing workforce profile.
If you would like to discuss an LEP strategic planning project with us, please contact us on 0845 601 8880 or send us an email through our Contact page.
A list of our recent projects is available on our Sectors page.