Inclusive growth: The next oxymoron?

neil-strelka-photo-2From time to time a new phrase is coined. Sometimes the new phrase articulates a new solution, at other times it reinvigorates an old one, or – more cynically – masks it. In economic development we now have the phrase ‘inclusive growth’. Does inclusive growth represent a step change or is it just a new oxymoronic phrase for the failing cycle of growth and exclusion? Maybe it’s just semantics, a new term for the toxic ‘trickle down’?

The Joseph Rowntree Foundation has recently shown that, while employment is growing, wages are not. Economic growth and work used to be a secure way out of poverty. This is no longer the case. We have a growing in-work ‘precariat’, with low wages and insecure work.

Therefore, ‘inclusive growth’ is welcome, as it places attention on a local economic growth agenda that is imperfect and often fails to tackle local social issues. Furthermore, as people in insecure employment tend to demand more from public services, inclusive growth acknowledges that, to have any hope of addressing demand on public services and reducing costs, we need more people in better-paid work.

‘For this new buzzword to be more than warm semantics,

we need an economic development step change.’

I suppose at very least ‘inclusive growth’ could offer an accelerated return to some, often neglected, interventionist local economic policies. Place-based investment focussed on getting jobs to poorer places, improving access to employment, intermediate labour markets and the living wage. However, even if inclusive growth means that sort of activity, we cannot merely rely on these uni-directional, often isolated, policies that hone in on local communities and people as downstream recipients of economic success.

If we are genuinely interested in turning inclusive growth from an oxymoron to a tautology, we need to ensure that tackling poverty and disadvantage is not merely a consequence of economic success, but something virtuous and good in is own right.

We must acknowledge that, nationally, our growth is meagre and increasingly fragile. We are in a context of unbalanced economic growth, overly focussed on consumer spending, household debt and financial services. Furthermore, some local places do not have any growth. What does inclusive growth offer us in turbulent economic times or in local places where the economy is weak or not growing? Inclusive growth cannot be the start of excuses such as ‘sorry, we can’t tackle poverty and exclusion because there is no growth!’

If we are passionate about inclusion, we must recognise that in many places there is no growth. Those places need a different approach. If we are serious about inclusion, we must affect change in the type of growth we seek, where it goes and who benefits. In this we need to question contemporary orthodoxies around agglomeration economics, city centre growth and investment approaches.

We need progressive local economic strategies and practical action. Work by CLES, New Start and the New Economics Foundation to map ‘good’ local economics across our core cities has showcased various activity that is ripe for acceleration. CLES work on anchors institutions and resilience and a double dividend show what an inclusive local economy can look like.

At the heart of all this is our work around community wealth. This includes:

  • Making local place-based assets including community, individual and ecological  wealth a priority alongside spend on attracting inward investment
  • Encourage local ownership of economic activity including cooperatives, community shares etc. alongside global/national ownership
  • Encouraging public sector purchasing and commissioning of local goods and services that enhance local multipliers
  • Creating inclusive and wide democratic local economic strategies and policies that straddle public, social and commercial sectors and enhance collaboration
  • Investing more into social inputs for economic success and productivity, such as education and social capital rather than always favouring hard infrastructure
  • Creating bespoke training which links directly into and with real employment

Above all we need active plans and a context that will help rebalance the national economy. The ongoing absence of any type of national economic plan, national industrial strategy, or dedicated regional investment vehicles are glaring omissions.

Inclusive growth could be a handy phrase for some to have their cake and continue to eat it. For this new buzzword to be more than warm semantics, we need an economic development step change. I hope inclusive growth is the next big thing. However, for it to be so, there is some rather serious work to do!

Neil Mclnroy
Neil McInroy is chief executive of the Centre for Local Economic Strategies (CLES)


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8 years ago

I don’t think it’s co-incidence that the demise of union bargaining power and membership has led to poor gains for workers versus the gains to owners of capital and assets. In many ways the third sector has been complicit in this, eager as it is to take the governments “Big Society” agenda at face and remove the local state actors from service provision.

“Making local place-based assets a priority alongside spend on attracting inward investment” – I’m not aware that there’s relatively great spend on inward investment in marketing terms. Even if this is supposed to say something like “spend on local public assets rather than infrastructure to attract footloose firms” which local authority is going to do that? As always the author thinks everything can be a priority.
“Equally promoting local ownership of economic activity alongside global/national ownership” – well, fine, if the private citizen actors / third sector organisations are there and if the local authority is willing. You can’t magick this into existence and if only global / national capital has the resource to undertake major intervention ‘we are where we are”
“Encouraging public sector purchasing and commissioning of local goods and services that enhance local multipliers” fine – if it’s within the law to do so. It’s possible to bend tenders to ensure local economic and social impacts but care needs to be taken and many small local authority procurement teams are not resourced to impose standard purchasing across council departments. Again, the author assumes local authorities have idle resources sitting around.
“Creating inclusive and wide democratic local economic strategies and policies that straddle public, social and commercial sectors and enhance collaboration” I have no idea what this means. Sounds nice but is effectively meaningless.
“Investing more into social inputs for economic success and productivity, such as education and social capital rather than always favouring hard infrastructure” again kind of an easy thing to say. The way decisions are made at strategic level are very rarely either/or. Generally infrastructure decisions are based on sustaining impact of housing and major industrial developments. So is the author saying we should not invest to secure housing and major industrial development? Education spend decisions are usually outwith of local control these days. The author probably means ‘more money required’ – great! Go to Osborne see what he says.
“Creating bespoke training for real employment” – what on earth does this mean? What is ‘real’ employment?

Stumped by all this really. In the face of the challenges face by local government in delivering it’s basic commitments this stuff really is the worst intellectual navel gazing.

8 years ago

I’m with sceptic I’m afraid. I’ve got degrees in economics and planning, nearly 25 years of experience in economic development (as was) and regeneration and I haven’t got a clue what this article is on about.

It might have escaped the authors attention (although to be fair most of the media is complicit in this) that the UK’s economic model is of the turbo charged, unfettered rampant free market variety. It is shaped, and driven by billions of decision made by micro economic actors over which we, the state, and regeneration practioners, or even the media, have very little, if any, control.

As such, it is incredibly difficult to exert any meaningful influence, and one that would discernibly improve the lives of our least well off citizens. However, we still need to try, and even the smallest achievement is better than doing nothing. So let’s keep on trying, making a difference where can, rather than hiding behind vacuous, pseudo intellectual phrases and abstract concepts such as ‘agglomeration’, ‘double dividends’, ‘inclusive growth’, ‘rebalancing economies’, and ‘economic development step changes’, in a vainglorious attempt to kids to kid ourselves we are the masters of our economic destiny. Sadly, we ain’t.


Neil McInroy
Neil McInroy
8 years ago

Thanks for taking the time to comment.

Sceptic, I think you are right in picking me up on the vagueness. Hopefully the hyperlinked articles may go some way putting some meaningful depth to things we need to do. I work everyday on practical/workable solutions, and this blog did not really convey them.

I am more than aware of the cuts to Local Government and it is for this very reason that I feel we need to change tack and choose differing priorities for the resources we do have. And act different in enabling progressive economic development.

Tony, I share your understanding as to the nature of the UK economic model. However, I am more optimistic. the work that New start, NEF and ourselves have been doing on Activating local economies, shows what great stuff is being done all over the country.

Also, maybe this will help as to what this article is on about.

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