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Municipal Enterprise: renaissance in an Information Society PDF Print E-mail
Written by David Brunnen   
Friday, 04 April 2014 08:32

Some may argue that it would always be best if governments did far less and ‘let nature take its course’.  There is never any shortage of reasons for doing nothing but that doesn’t stop politicians demanding that something be done whenever some crisis appears. 

City GrowthThe seemingly relentless growth of major cities, the pressures on their local infrastructures and services, the migration of talented people, the employment futures for those who stay and the housing, health and education for their children – all these pressures demand that ‘something be done’.  The challenge is to work out what can be done – or maybe undone.

Macro-economic policy tools are not renowned for precision and efficacy but the tendencies to over-steer and embarrassing evidence of unintended consequences are often masked by scale, variable impact delays, the strengths of advocacy or misrepresentation in ideological battles and countless opportunities to simply blame some previous government.  It is only now, for example, that researchers can begin to unpick, understand and debate the impacts of shifts in1980’s housing policy.

Worse still, when considering the more-fragile micro-economics of city or metro-regional economies, Whitehall perceives the scope for local mismanagement to be high and fears that the impacts of unintended consequences will be more damaging.  Provincial cities may insist that their priorities demand local nurturing but national governments will always worry about ‘scale’ whenever devolution of fiscal responsibilities is mooted.

Now that the inequalities of UK economic growth and societal development are ever more apparent there is a widespread view that ‘something must be done’. This is not simply North versus South, London versus Anywhere Else, or Services versus Manufacturing sectors.  As young and talented people drift towards the UK’s South East they leave behind communities that are more likely to stagnate and be seen by central government as ‘a burden’ with low productivity, fewer new jobs, greater calls on the safety-net of public sector services or needing ‘bribes’ to aid survival. 

Such is the structural log-jam of ‘the state we are in’ that, from a Whitehall perspective, ‘the art of the possible’ is nigh on impossible to discern.  Beyond Whitehall, with their hands tied and resources cut, city or community managers are reduced, Doogle-like, to head-shaking despair about the way to run a railway. 

Working together?

From a central policy perspective, life (and possibly trust in local community competence) would be so much easier if only near neighbours were better able to work together but, from a local viewpoint, the odds on meaningful marriages between Manchester and Liverpool, Leeds and Bradford, Southampton and Portsmouth or any other candidate couplings do not look great.  London is unlikely to agree that the new Heathrow should be relocated just south of Birmingham courtesy of HS2 or cross-railed to East of Dartford in that estuary so memorably described by a leading architect as ‘the backside of Britain’.  For years they have all fought their corners, been urged to differentiate themselves, strived to develop unique identities and have told their children that, in the margins of their city maps, ‘Here Be Dragons’.

Looking for devolutionary comfort, the proponents of scale assume that economic viability is attained beyond some ‘critical mass’. They point to London as evidence and then wonder if there could ever be any more than one or two counterbalancing cities within this small island.  They shouldn’t worry – not many communities out here ‘in the sticks’ imagine they want to be just like London. 

What governments are less keen to point out is that London benefits from a massive municipal enterprise funded by the local ‘tax’ revenues from Transport for London’s fare base.  Even so, London’s local funding (and borrowing) capacity is relatively insignificant compared to other global cities like New York.  If any other UK metropolis seeks to raise local taxes they must first clear the expensive hurdle of a referendum.  Such is the ideological addiction to ‘keeping local taxes down’ that whenever trouble is brewing it’s often a trigger for a City Deal; some package of reprioritized funding to keep the lid on electoral prospects.

What then for the provincial city or community that longs to seize its destiny?  How can local economies escape strangulation?  The answer will not come from Grandma in Whitehall.  Nor will it come directly from Town Halls or any of the public-private ‘partnerships’ with big national brands.  Top down doesn’t work in the rejuvenation business.  The regeneration of local economies does not need tax breaks.  It needs people and communities to believe in their own future wellbeing.  But, being realistic, folks abhor Advanced Wishful Thinking.  They reject any belief or expectation that someone else, some outsider, or some distant politician, will contribute anything useful on what is often a very long journey.

So aspiring communities – communities comprised both of people and the enterprises they create and work within and the citizen-owned organisations that serve them – must find solutions for their future wellbeing outside of the conventional party political arena. 

Cultural Investment

This may sound unlikely but we are all in the midst of an extraordinarily peaceful but highly transformative revolution; the transition to an ‘Information Society’ and the new freedoms of ‘digitalised economies’.  In this relatively new era we can understand that easy connectivity of ideas and information enables ‘innovation without permission’.  Most of us look to a future when we will be properly empowered to just get on and do things.  No waiting for someone else to approve the plan.  No need to get anything exactly right from inception for ‘tis easy to correct along the way.  But, enabled by that enhanced connectivity, what exactly is it that we will choose to ‘get on and do’?

Living.  We get on with life.  Beyond the necessities for survival, we get on with every aspect of our culture, our sport, music, writing, painting, drama, caring, poetry, learning, gardening, healing, innovating, building  . . . .  or whatever.  Now, being not only creatively connected in all these things but also using social media to intensify and consolidate those linkages, we can make them manifest so that our cultural activities assume greater prominence and cannot so easily be overlooked. 

This awareness and tangibilisation of social activity adds new dimensions and contexts to previous, largely theoretical, pondering about a supposedly bigger society.  The knowledge, mapping and comparison of the strengths and virility of these cultural connections enable a much greater understanding of the way local economies function.  In design terms, we can better understand the ‘Whole System’.  If, for example, a city now wants to measure Wellbeing as a post-modern alternative to the old and narrow money-economy measure GDP, there is no reason why they shouldn’t define the metrics themselves, capture the data and understand the strengths and weaknesses of their local communities.  This is not simply a new a research field for anthropologically inclined cultural economists.  It’s more a process of citizen engagement.  New depths of understanding can change the way citizens’ needs are prioritized and managed.  New analysis can change how a locale represents its future both within the community and to potential inward investors.

But how exactly might these new cultural revelations come about?  The answer, in technology jargon, is found in ‘platforms’.  Platforms in this digital world are forms of social hub that can facilitate interactions and, as a byproduct, spew out evidence of the strengths of those activities.  We may be familiar with face-book, Linked-In or Twitter – each providing global connectivity – but few cities or communities have yet tried in earnest to use social media platforms to develop a clear sense of local cultural identity.  For sure there are many locally worthy blog sites and a few potential platforms like Placebook but these are often passive information directories that lack engagement and continuing interactivity.  There are now many services that enable deeper engagement – one example being Powernoodle customized for communities.

The arrival of this notion – that the transformative growth of local economies can be driven by cultural investment – neatly coincides with another theme of our times, ‘Municipal Enterprise’.  Some may regard this phrase as an oxymoron – such has been the misrepresentation of the public sector as inefficient, lacking in innovation and a thorough ongoing bureaucratic drag that dampens the spirit and impact of private enterprise.  

Rethinking the Rules

The balance between ‘public bad’ and ‘private good’ attitudes is long overdue for reappraisal.  It may scare the pants off Whitehall but at both a national and local level it is time to recognize that we should value the input and resources of public investment and expect a return to the public purse – not just a return through central taxation on the new jobs created but real and ongoing equity stakes that would in turn (TfL-like) bolster the ability of cities and communities to raise finance. 

Some of the work of Prof. Mariana Mazzucato (Sussex University) shows quite clearly how, at a national level, state input (particularly in research) fills the gaps left by a risk-adverse private sector seeking quick returns. But her research also notes that, in gifting these subsidies, the state so often fails to capitalize on the resulting success.  And the same effect can be seen at a local level.  Businesses across all sectors have come to expect to be subsidised but also expect to garner all of the profits – even to the point of minimising taxation.  The industrial revolution didn’t work quite that way - witness those mighty northern town halls built on the profits of enterprise but recognising partnership with the community.

At a sub-national level two other drivers are becoming apparent.  Firstly, in matters of procurement, any local government dedicated to the development of their local economy will be aware that “small businesses are the heartbeat of our local economies. Today's report shows the benefits of working with local firms - for every £1 spent with a small business 63 pence is reinvested locally” – Local Government Minister, Brandon Lewis MP commenting on the FSB’s Procurement report.  It follows that monies spent on distant national or international brands are largely lost to the local economy.

Secondly, ally that thought to the matter of basic utilities and investment in infrastructure that has been proclaimed by central policy makers as a vital injection of enabling energy into local economies.  How much more sensible would it be if this infrastructure was part owned by local authorities to yield ongoing revenues that would enable services to be improved whilst still reducing other local taxes?  

Our Study Tours to places around the world that have made a decent fist of something as basic as digital broadband reveal that municipal enterprise is so often at the heart of visionary initiatives.  Public Service Networks are used to enable local enterprises and create nationwide flexibility for business networks – with the profits happily feeding back into public services.   Much has been made of the extraordinary creation of a 100% FTTH gigabit network in Chattanooga, Eastern Tennessee by the local energy utility.  Scratch the surface and you find that this strategic programme, with huge knock-on benefits for the local economy, was developed because the local energy company is part owned by the city.  And you need go no further than the fourth floor of their local city library to discover the cultural impacts – even if, remarkably, you somehow failed to notice the vitality of life all around this regenerated city.

Forward Thinking

So where will you begin?  So much enthusiasm has been poured into Smart Cities – and it’s not difficult to see why major technology suppliers like the idea for new markets for clever widgets.  But all that infrastructure investment needs to run in parallel with the development by communities of their life - the way they want to work, learn and play and develop an identity that will improve local wellbeing.

The current enthusiasm for evidence-based policy development demands a view of the past that limits a forward-looking dependence on trust, faith and visionary leadership.   So, by steering clear of this structural log-jam and focusing on cultural investments with evidence of a renaissance within our Information Society, the long road towards regeneration of local economic growth and societal development can now be navigated.  The ‘art of the possible’ is becoming the ‘possibilities of the arts’.



Readers of this editorial may also have read ‘The Great Dot-Joining Debate Continues


Last Updated on Friday, 04 April 2014 10:48

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