10. A broad set of measurements of a successful economy; social and economic policies aligned:
Our understanding and use of the word economy has narrowed over time and is now almost synonymous with business and with GDP and GVA growth. Measuring an economy by the amount of wealth it creates over short periods of time has led to economic strategies focused on rapid wealth and job creation, no matter the quality of the jobs created, who fills those jobs, whether that wealth is distributed equally or indeed whether that wealth stays in an area’s economy at all. A more accurate analysis of our economies would take into consideration people’s wellbeing, environmental impacts, the quality of jobs, and how wealth flows around a place. It would assess how far an economy supports the needs of people and communities, rather than creating growth for growth’s sake. Yet despite the highly developed work on ‘beyond GDP’, measures of wellbeing that are available to local economic practitioners and policymakers, the argument for a more people- and planet- focused approach to economic development and investment still appears to be extremely difficult to win on a practical, day-to-day level. Repeatedly, local economic practitioners shared their frustration with us about a perceived fundamental gap between the holistic outcomes they are trying to achieve (economic, wellbeing, environmental, social justice) and the ultimate objectives of those who determine how funding, strategy, priorities and day- to-day decisions are managed.
What it needs:
A broad set of measurements of a ‘good’ local economy, to include wellbeing, individual and collective agency, financial ‘leaks’ and flows in the local economy. The focus of regional and city economic strategies should be community economic development, social innovation and improving conditions in the less glamorous ‘foundational economy’12. Such an approach would include developing an economy made up of smaller enterprises and a variety of ownership models that are designed to deliver on a range of broader socio-economic outcomes beyond increased GVA. Local economic progress should be judged by whether:
- people in this local economy are doing well, either through the incomes they earn, the kinds of jobs they access, or the amount of profit they are getting from the economic activity and the assets in their own local
- the make-up of local businesses, and non-profit organisations, is resilient, diverse and well-connected – businesses buying from each other, a range of different sectors, and a range of different scales of businesses, for example, rather than a big mono-culture that makes the community vulnerable to external economic
- money invested locally circulates round as many businesses and people in the local area as possible, and does not flow straight out of the local economy
- resources are being used sustainably – not only protecting the environment locally but also making good use of environmental assets within the local economy in a sustainable way, for example through building sustainable tourism opportunities from geographical assets, or maximising opportunities to build complementary sectors in an area that make use of others’ waste or by-products.
Clare Goff is former Editor of New Start magazine