Building a New Economy – from rhetoric to reality

Chris Johnes and Neil McInroy set out the rationale for a conference held today exploring different way of running local economies

Last month we wrote about how the economic changes wrought by the financial crash and the dubious nature of the subsequent recovery had created a need for a new look at how economies and communities co-exist. And of course we were hardly the first to talk about this: alternative economic models, rediscovering localities, foundational economics and other approaches have become a virtual intellectual cottage industry.

But it hasn’t been a cottage industry without point or purpose. It has not only imagined a different way of running economies it has increasingly described one, and in the conference we host today we shall spend most of our time looking at what it means.

For the Building a New Local Economy in Wales isn’t a rallying call for a different Wales, it’s a recognition of change that is already happening and an attempt to examine, clearly and simply, how we can have more of it.

At the conference we will hear about how communities are doing more to harness the benefits from natural resources, making money for community organisations in doing so and reinvesting that money for activities that benefit health and wellbeing or stimulate small business start-ups. We’ll hear about community organisations that have linked up with bigger private investors to ensure that there is more tourist spend in their locality (aided by small local investors providing new entertainment facilities to keep tourists staying for longer) and those which are renting out town centre units as business incubators – and because they don’t need to make a quick profit – letting those businesses grow slowly.

And of course we will hear about the contribution of local businesses to their local communities and economies. That is not a new story but it is too often forgotten that the contribution of locally owned, locally rooted companies is both to their economies and their communities, and when community organisations seek to foster local business development they are not just investing in an individual’s profits but in wider community benefits that go beyond employment.

We’ll also hear how community organisations are keeping services and social activities local, making them widely accessible and responsive to local demands through the work of “local anchor organisations” and generating resources to ensure their sustainability. And this increasingly includes local provision of various forms of social care, allowing people to remain in their homes for longer and reducing isolation and the risks of depression.

Mobilising the willingness of people to give their time for activities that benefit them, their families and their neighbours brings massive benefits but can only be done through organisations that people trust are going to work in their interests – hence the critical importance of locally accountable and flexible bodies.

And more widely we’ll hear how large organisations are increasingly using their economic powers to benefit localities. Through who they employ, how they purchase and where they invest bodies such as local authorities, hospitals and housing associations have a critical role to play in strengthening local economies.

But this hasn’t been an easy road and a key part of what we will discuss is the lessons people have learned. Lessons about how organisations work, the relationships and skills they have developed. There will also be lessons in how the state, local and national, has participated in, facilitated or hindered local developments. In some cases we will see the state, especially locally, as an active player as a key agent of change and in others struggling with its regulatory role to cope with rapid change and different priorities.

However the key message is that people in local communities are already playing a major role in enhancing wellbeing, providing key services and creating jobs and that these initiatives are growing be they led by community organisations or by private businesses. And they can grow further with the right kind of state support which recognises their potential and that promoting economic and community wellbeing involves playing a key enabling role that trusts local people.

These kind of developments are not a magic bullet or a high profile economic “flagship” project and they are unlikely to excite politicians or journalists. And of course the nature and scale of these initiatives varies from area to area but are increasingly sustainable and bring widespread benefits, covering employment, health, better social contacts and skills to localities that need them very much.

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Chris Johnes is Chief Executive at Building Communities Trust (BCT). Neil McInroy is Chief Executive at the Centre for Local Economic Strategies (CLES).

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