Transcript The Role of Creativity and Innovation in an

Centre for Local Economic Strategies
The role of creativity and innovation in an
economic downturn
Neil McInroy, Chief Executive
Natalie Qureshi, Consultant
Kreative Byer & British Council
March 20th 2009
About CLES: Our Mission
“The Centre for Local Economic Strategies is a registered charity which is
committed to places and communities experiencing social and economic
inequality and lack of opportunity. We want to improve the effectiveness of
local groups, agencies and government in addressing these problems, by
informing policy and developing practice.”
About CLES: Services
Around 50 Members (Local Authorities, regeneration
partnerships, third sector organisations, public bodies,
economic partnerships)
Events and Training
Policy Bulletins and briefings
Policy Research
CLES European Research Network (CLES Consulting) –
Our trading arm
About CLES
Today's presentation
1. How we got to where we are and how we need
creativity, innovation and risk
2. The concept of resilience and why it is important
3. New approaches to create resilient places
Challenging times!
Climate change, peak oil, energy insecurity
Economic Downturn
Unemployment, stalled property market, lack of capital for
investment, lack of diversity
Regeneration incomplete – Even the boom times were not
that good! Still work to do….
Inequality
Governance and powers- Rigidity of Local policy instruments
What has come before in terms of
Local economic activity in the UK
WAVE 1. 1960s 1970s: Inward Investment
WAVE 2. 1980s 1990s: Grow the sectors.
business growth as well as investment
Local
WAVE 3. 1990s to....Networks and clusters
Property
and
renaissance…?
land
appreciation.
Productivity and competitive advantage
A
city
What have we created?
‘We are capable of shutting off the sun and the stars
because they do not pay a dividend’
John Maynard Keynes 1933
The next wave: Local Economies in
the future...
New paradigm?...
Increasing recognition that the local matters
Too focused on economic growth (eg GVA, GDP) as a means to local
economic success
Economics is not the end in itself….merely a means
We need to get economics to work for us more
Work for environmental and social priorities
Networks are important
Economic recession partly due to the financial network
New networks of public and private sector, social innovators and
universities needed
Scaring traditional Local Economic
development professionals!
GDP and Life Satisfaction 1973 - 2002
200%
180%
160%
GDP
Life Satisfaction
140%
120%
100%
80%
60%
40%
20%
0%
1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Policy assumptions underlining
current economic policy
The need for creativity,
innovation and risk
“Creativity is a mental and social process involving the
generation of new ideas of concepts, or new associations of
the creative mind between existing ideas or concepts,
creativity is fuelled by the process of conscious or
unconscious insight.”
“creativity as an assumptions breaking process”
“Innovation is the process of both generating and applying
creative ideas in some specific context”
Toward ‘New’ Economic Strategies and
what interests CLES
3 thoughts for the future
The economic resilience model
What do we mean by resilient?
Functional economy
Delivers positive and equitable outcomes
Withstand economic shocks
The economic resilience model
Public economy
Public expenditure on goods and services
Footprint of procurement activity on local supply chains
Public employment
The economic resilience model
Public economy
Public expenditure on goods and services
Footprint of procurement activity on local supply chains
Public employment
Social economy
Contribution of community activities to the local economy
E.g. social enterprises, voluntary organisations, community groups,
community assets such as community centres, youth clubs, halls, etc.
The economic resilience model
Public economy
Public expenditure on goods and services
Footprint of procurement activity on local supply chains
Public employment
Social economy
Contribution of community activities and networks to the
local economy
E.g. social enterprises, voluntary organisations, community groups,
community assets such as community centres, youth clubs, halls, etc.
Commercial economy
Private businesses
Investment into development and new enterprise
Provides the bulk of employment
The economic resilience model
The three spheres of a resilient economy work
within a wider context
Government policy framework
Broader economy
Need to work within environmental limits
Importance of “place”. Link economy to the history and
identity of the place
What are the weaknesses which
make our Localities less resilient?
Low enterprise
Inequality
Poverty
Poor
health
Disempowerment
Scared of risk
Worklessness
No
innovation
Lack of
opportunity
Strengths which increase the
resilience of our localities
Volunteering
Effective
community
infrastructure
Quality
environment
Fairness
Empowered
citizens who
innovate
Creative spirit
Employment
opportunities
Education &
skills
Local businesses
A creative and resilient place
Creative and resilient Place
Place which lacks resilience
Balance between Localised and
globalised economy
Fully globalised and local is weak
Networked business
Individualised and poor supply chain
Innovative business
Business as usual
Progressive public spending
Spending based on efficiency and
the cheapest
Health and wealth generating
Generates wealth
Cross sectoral connections
Sectoral
Bottom up
Hierarchical
Flexible governance
Rigid
What can be done to strengthen the
economic resilience of localities?
Four ideas:
1. Innovation - Creating the conditions to encourage
innovation
2. Valuing “place” and “locality” - Developing and
strengthening networks, social enterprises, understanding
how money flows in your economy
3. Health and wealth - Look to create an economy which
focuses on wealth and health
4. Green new deal - A range of mechanisms to stimulate a
green economy
Innovation
Historic track record
Unique opportunity
Thriving not surviving
Creativity fundamental
Creative Futures: Innovate
Social Innovation. Comes from two sources
1. The Bees
Community groups/social enterprises
Driven by anger, loss or wanting to make things better
2. The Trees
Big public agencies, companies with roots,
power and money
Success needs both!
Creative Futures: Innovate
Innovation – helps us to get to grips with recession
Allows us to adapt and manage change in order to achieve positive
outcomes
Product and process innovation
Networked approaches to innovation
Examples:
Life cycle analysis in low carbon technology, waste from one company
becomes raw materials for another
Wool industry, where wool for textiles becomes wool for insulation
Creative Futures: Innovate
Yokkaichi – Japan
1998 – petro-chemical industry in decline
20,000 jobs lost –A loss
Environmental pollution problems
Shift to high value added production
Companies sharing expertise and knowledge
Mix of sectors
One stop service introduced
Advanced Materials Innovation Centre
Raw materials (Chemists), Ideas, Production all together
Creative Futures: Innovate
Portland – USA
Traditional industry in decline
Built on strong business networks connected insiders
and outsiders
An outward looking network
New regional coalitions
It got the quality of place/life offer right
Sophisticated networks and satellite networks
Creative Futures: Innovate
Coimbatore – India
Traditional textile industry
New technological industries
Fuelled by high levels of individual entreprenerialism
Social consciousness high and high levels of family and
community networks
Knowledge demanded by population
Drives demand
Creative futures:
Go Local
Localism
Supporting local suppliers, businesses, social enterprise
Procurement matters - using the public spend wisely to
support the local economy
Even your breakfast egg
Creative futures: Progressive
procurement
“The process whereby public sector organisations acquire goods,
services and works from third parties”
Making money “sweat”
£160 (1300dkk) billion per year on goods/services by public sector
Not simply a bureaucratic process to be adhered to but…
Significant lever to influence local economies and achieve other policy
objectives – (social and environmental)
CLES work in Swindon
Creative futures: Progressive
procurement
Understanding how Swindon Local Government will spend money?
Use of Local Multiplier tool (LM3 tool)
Public spend as a promoter of ‘local’ supply chains
Explored one service area within the Council services
“Street scene”:
Mapped spend through analysis of invoices
51% of spend with suppliers £1 (8dkk) Million was spent
upon organisations based in Swindon
Re-spend of suppliers in local economy - £250,000
(2,000,000 dkk) through own suppliers and employees
Summary: For every £1 spent by the council, a further 64p respent into the local economy
Creative futures:
Progressive procurement
Consider how procurement strategy enables business to tender
for public services and goods.
Widening access to tender information
Terms and conditions
Scale and size of contracts
Community benefit clauses to support local community outcomes, eg
local labour clauses
Explore the opportunities for both revenue projects but also
larger capital projects (e.g. building schools for the future)
Creative futures: Health and wealth
=
Creative futures: Health and
wealth
Source: European social survey
Creative futures: health and wealth
Economics is not the end in itself….merely a means
We need to get economics to work for us more
Is economic downturn an opportunity or a return to crude economic
growth priorities
A wealth and health producing society
Focus on material and psychological needs and support
Creative futures: Health and
wealth
An emphasis on the core economy
Economy of the home, family, neighbourhood and
community
UK 40% of all economic activity takes place in the core
economy - not currently reflected in GDP
If the core economy fails, burden on public and private
sector grows
Creative futures: Health and wealth
Invisible economy that we take part in every day
The economy of the home, family, neighbourhood and
community
It is an economic system as it involves the goods and services
produced, exchanged and distributed
Like a computer
Operating system: The core economy
Specialised programs: Hospitals, schools, civil society
The programs may be ok, but the operating system is
struggling!
Creative futures: A green new deal
Getting to grips with climate change “A green new
deal”
Development of a low carbon economy through building
efficiency
Development of a “carbon army” – new skills and knowledge
Setting clear targets for carbon reduction at both a local and
national basis
Local energy production
Heightened Global environmental and economic awareness
Final thoughts
Creativity as an assumptions breaking process
New economic model is sought
Current economic situation requires change
Paradigm shift
This is the time to take risks
Emphasis on people, place and balance
Not just growth, but resilience
Final thoughts