Inclusive growth: fairy tale or the start of systemic transformation?

To create an inclusive economy we need to challenge trickle-down innovation and democratise the tools needed to create prosperity, says Indy Johar

Inclusive growth feels like an easy set of words; a comforting blanket in an age of anxiety, almost a childhood fairy tale told to calm nightmares. But manifesting inclusive growth requires the systematic transformation of an increasingly power law economy – in which the few take all. It means attacking the 20th century Holy Grail illusion of meritocracy, which has consumed our rational mind to pamper our ego and ignore our invisible privileges. It’s the hidden fact under the black swan hero’s tale.

Systemic transformation requires us to unlock a new model of growth and democratic wealth and value creation, in times where austerity no longer merely applies to public services but equally to the palliative state of the current model of growth we see around the world. This change also requires us to democratise the creation of growth, and thereby its benefits, and not merely through redistribution (although this will no doubt make a large contribution in kickstarting the process).

The RSA’s inclusive growth commission, of which I have been a part, has sought to challenge the doctrine of trickle-down economics. But we also have to challenge the doctrine of trickle-down innovation, recognising the necessity to drive innovation in the everyday and everywhere; it cannot be the reserve and the deserve of the start-up few, but an invitation for all to transform and drive progress in every aspect of society.

The transformation required is a ‘full stack’ transformation. Inclusive growth needs to both address the geographic spread of growth and the demographic spread of growth.

In terms of the geographic distribution of growth, devolution, and, perhaps more importantly, the local empowerment of economic leadership is critical, but it also requires us to –

1. Build equitable connectivity infrastructure: both physical and digital – in which London has had a significant advantage and leadership;
2. Build institutional infrastructure: particularly the innovation and invention capacity of city regions. This could include, for example, a federated Nesta network across city regions, along with their own Catapult Centres, research councils and regional banking infrastructure;
3. Increase investment in democratic culture and arts: Turning back from the high culture narrative we have adopted over the last seven years to empower creatively and expression of all. This is fundamental to growing the deep cultural permissiveness, agency and democratisation of creativity – essential for the democratisation of innovation.
4. Enhance the economic development capacity of city regions: This means more than start-up funds, co-working spaces and building business development and marketing capacity. It includes capacity to invest strategically in radically new institutional infrastructure, regulatory technologies and leadership of local economic growth.
5. Use public investment and the procurement capacity of city regions to intentionally drive the democratisation of innovation and act as a local innovation multiplier. This may need the legislative support of a ‘local value’ act to accompany the social value act, enabling public bodies to procure on the basis of a local innovation multiplier.
6. Creating networks of city regions, within the UK and globally: Brexit will give us the capacity to radically re-imagine the nature of global flows, and this could include: city region visas, corporate visa exemptions, parametric trade agreements which would enable us to accommodate divergences within nation states as opposed to just between them.

In terms of addressing the demographic spread of inclusive growth, we need to look more fundamentally into our means for driving innovation. How do we democratise the capacity to innovate? This means addressing the following:

1. The nature of our current models of business management across large sections of our economy is focused on control and compliance as opposed to democratising invention, improvement and innovation. Fundamentally rebooting our conceptions and practices of management across large swathes of our economy is central to unlocking our productivity and engagement puzzle.
2. Re-imagining our further education colleges not as sub-universities but as specialists in vocational education and tacit learning – focused on being lifelong institutions for continuous up-skilling for all sectors of the ‘tacit knowledge’ economy – from data science to 3D manufacturing.
3. Refocusing our 5-18 year old educational infrastructure from skills to the development of capabilities – the capability to learn and unlearn, to be discursive and resilient, to lead, to be multi-lingual (by which I mean maths, arts, English, Chinese, physics, chemistry). Fundamentally we need to see our 5-18 year old educational infrastructure as creating the foundational capacity for all citizens to continuously learn and unlearn, as opposed to hoping we can predict and teach a skill or vocation which prepare people for the rest of their lives .
4. Researching and experimenting with the role of radical policy interventions such as Universal Basic Income and a local value act to start to unpick the multi-generational effects of inequality.
5. Finally, there is no doubt we need to drive transparency of pay rewards in organisations to ‘incentivise’ an inclusive wage economy. For example, imagine a national obligation for all UK institutions to visually benchmark all employment-related payments relative to the rest of the organisation (including suppliers and investors).

The above list is by no means exhaustive, but what’s becomes very clear is that this future will demand and drive a massive transformation of city regions. The inclusive growth commission has been a brilliant platform for discussing these and many other ideas and the need and means to create the new institutional infrastructure to support the democratisation of our economy.

The inclusive growth commission is an essential first step in building the case for a generational transformation. The commission’s final report in many ways seeks to frame a policy keystone, while recognising this scale of change required will never be achieved as a ‘one step wonder’ and will inevitably take time and collective effort of many.

This is a beginning of making an economy focused on unlocking the brilliance of all and I would like to thank the RSA for taking this important foundational step.

• Read more about the RSA Inclusive Growth Commission here.