Inclusive growth in Scotland

The City Growth Commission, which the RSA ran, was a hugely influential piece of work.  In shaping government policy towards city-led devolution, the Northern Powerhouse and City Deals, it set a direction for economic policy in England which we are only just starting to see unfold.  

However, from a Scottish perspective, the Commission’s focus felt at points to be slightly out of touch with the political and social tone of voice up here.  The drive within the City Growth Commission was on city region devolution, whilst Scotland (rightly or wrongly) has continued to follow a policy focussed on national devolution, with power tightly retained by the Scottish Government.  The city region approach is one that would have resonance for Scotland, given the role of the cities in Scotland’s economy (Glasgow alone contributes 32% of Scottish economic output, 35% of jobs and 36% of exports); however it cannot be the sole answer given the geographic distribution of Scotland’s population into smaller urban centres. 

In light of that, the launching of the RSA’s Inclusive Growth Commission (IGC) is a very welcome development and enhancement of its predecessor’s work.  The Scottish Government has outlined its vision for the Scottish economy in four ‘I’s – Investment, Innovation, Inclusive Growth and Internationalisation. The language of the IGC, which recognises the social and economic cost of inequality, chimes strongly with these priorities.  Scotland has ambitious targets for growth and development – but if these are to be rooted in opportunities across different places, then how can this be achieved and what new models might we need?

We started to explore this topic at a seminar we held in Edinburgh last month, hosted by the Academy of Government at the University of Edinburgh.  Led by the IGC’s Chair, Stephanie Flanders, we were led through provocations on a variety of topics (Phil Prentice of Scotland’s Towns Partnership on place; Gordon Matheson, former leader of Glasgow City Council and now visiting Professor at the University of Strathclyde on cities; and Barry McCulloch of FSB Scotland on the role of business), and then started to explore what inclusive growth might actually mean, and might actually look like, within a Scottish context.

The report of the seminar (and the others which have been held across the UK) is available online, however some key points struck me during the event which are worth dissecting at this point – growth, capacity, place, and time for change.

Growth

Both of the Commissions which the RSA has led have placed growth at the centre of their remit, yet this remains a challenging concept from a political, social and sustainability perspective.  Traditionally there would have been a broad consensus that economic growth was a good thing, even if the method of achieving it may have been hotly contested.  But we are now in a time where the concept of growth itself is being challenged, and new ideas of what constitutes a successful economy and society are being put forward.  In many ways this can seem heightened in Scotland, where the traditional political dominance of the left has emphasised critiques of modern capitalism (although the ascent of the Scottish Conservatives to main Opposition status at Holyrood has challenged this strand of Scottish political presumptions).  As outlined above, the Scottish Government’s economic strategy focuses on growth within the inclusive agenda, committing itself to a strategy which has to include all – a welcome ambition, but one which is challenging to deliver in practice.

In particular, it is difficult to deliver inclusivity in places where growth is limited or indeed non-existent.  The Scottish economy has challenges within it around productivity, business creation and research, with the beginning of 2016 showing a flatlining Scottish economy, which lags behind the UK’s admittedly minimal growth.  This is further heightened in a post-Brexit landscape, where uncertainty over Scotland’s constitutional future and specific challenges Scotland will encounter offer significant medium to long-term threats to our economic success (check out Brian Ashcroft, Emeritus Professor at the Fraser of Allander Institute at the University of Strathclyde’s Scottish Economy Watch blog for analysis of the risks Scotland faces from Brexit).  Neil McInroy, Chief Executive of CLES has written on this area, and it is one which is worthy of serious consideration in Scotland – is growth the driver that we want to focus on, and is it the tool which will address the long term ‘wicked’ problems that many of our communities face?  For citizens who feel disconnected from traditional economic models and political structures (as demonstrated in political rejections of traditional elites and experts), how can we develop new conversations and opportunities which they can learn to trust?  The new RSA Animate with economist Ha-Joon Chang with the economist Ha-Joon Chang rightly champions the idea that economics is for everyone, yet for this to be more than a nice aspiration we need to find ways of doing things differently.

Social Capacity

This underlines the crucial importance of social capacity, or the lack thereof.  In Scotland we have seen developments such as the Community Empowerment (Scotland) Act 2015, which looks to give the opportunity to communities to take control of assets; whilst at the RSA we are exploring wider social empowerment through our Citizens’ Economic Council (CEC), work on Basic Income and the IGC.  These are noble concepts, yet run the risk of simply ‘empowering the already empowered’.  Many communities have felt disconnected from the economic progress of the country for some time now  - this can be seen in areas of long term social deprivation and inter-generational unemployment such as parts of Glasgow, yet is also present in disconnected rural communities of the Highlands and fishing communities of the North East, amongst others.  The social capacity of these communities to respond to, or even be aware of, significant political changes and opportunities, is often limited, disconnected by language, history and lack of resources.

Part of the work of the IGC, for me, therefore must be on identifying new ways to release the inherent capacity of these communities.  A truly inclusive economy is one in which all citizens would have an opportunity to participate, and where the skills and resources of those communities, and individuals, would be recognised as a key building block of the wider success of the nation.  This isn’t an easy challenge to answer  (I’ll look to return to the topic in a future blog) – it was interesting to note at the seminar that the capacity challenge was identified but not fully addressed – but will undermine the overall drive and success of the Inclusive Growth agenda if it is not resolved.

Place

One aspect of how this will be addressed is through a greater valuing and recognition of the role of place within economic development, as both a challenge and opportunity.  The City Growth Commission, naturally, focussed on the power of cities to drive economic growth, and there is definitely a crucial role for Scotland’s cities to play.  However in many ways Scotland is a nation of towns – even in the case of our seven cities the majority would not be seen as such in most other countries.  The metro growth model would by size require the Central Belt of Scotland to operate as one area, bringing together Glasgow and Edinburgh – a challenging conversation to have in the context of traditional rivalries between the two cities!  And the development of the City Deal model (with Glasgow Clyde Valley being the first in Scotland and largest in the UK) has focussed the attention of Glasgow and other cities into their regional context, rather than across the nation.

Scotland’s economic success, therefore, needs to recognise the opportunities which models such City Deals offer, whilst recognising that there is a need for different approaches in Scotland – we can’t simply replicate the Northern Powerhouse or US metro areas.  The work of Scotland’s Towns Partnership, particularly through their Understanding Scottish Places tool, looks to recognise these different contexts and the opportunities they offer.  Although a small nation, Scotland is a diverse one, and it is important that our strategy reflects those differences.   As was highlighted by several attendees of the IGC Seminar, Scotland is a highly centralised country, with control of policy and finances retained by the Scottish Government.  A truly place-led economy (which the Scottish Government has committed to in its economic vision) will require new approaches to the relationship between local, Scottish and Westminster decision makers, in order to allow for innovation relevant to the context it is being delivered in.  As part of the IGC we will be undertaking a ‘deep dive’ case study in Glasgow, to ensure that the experiences of Scotland’s largest city are fed into the Commission’s deliberations – but I am keen to work with partners to connect with experiences across Scotland, to make the conversation truly inclusive.

Time for change

The recurring message through all of our discussions was that we need to approach things differently, and need to talk about things differently.  The way we have tried to do things for the past decades is not working for us – if we truly want to see a fairer, more equal distribution of growth then we need to try something new.  It has been encouraging to see the buy in to this concept from the Scottish Government, but rhetoric is not enough – we need to see concrete steps forward.  This requires a new environment for economic strategy, one which brings together the public, private and social.  We have not been great in Scotland in recent years in knowing how to engage the private sector in the life of the nation, yet our success will require a new relationship to be forged.  The IGC is a welcome contribution within this, and will be a key driver – however for those of us rooted within a Scottish context, there is much more that needs to be carried out on top of this.

Next steps

In light of my demand for concrete steps, it is only fair for me to have offer a few.  The IGC will be continuing its deliberations, and we will ensure that Scotland continues to have its voice heard within that, with the intention of hosting another event with the Commission towards the end of 2016.  In the meantime, we will be working with our Fellow-led Building Inclusive Growth in Scotland network to deliver further work developing the topic within a Scottish context.  We will continue to explore opportunities for progress with the Scottish Government and other relevant partners, and to offer spaces for debate and thinking.  And we will aim to be truly inclusive – we need your thoughts, ideas and critiques to take the topic forward, so contact me if you would like to discuss ways of doing this, either through events or by writing here on the website.

A Scotland where inequality is challenged and where the benefits of growth are sustainable and accessible to all is a nation which will be offering a future which its citizens deserve.  Working together we can make this vision an inclusive reality.

Jamie Cooke is Head of RSA Scotland.  You can contact him at [email protected] to discuss any of these ideas further, connect with him on LinkedIn, and follow him on Twitter @JamieACooke