In view of the significant transformation towards a knowledge-based economy which is taking place, as investment and people are now more mobile than ever before, so does the consideration of the quality of a place also become much more important.
The most important component of this transformation is a much greater reliance on intellectual capital and its application, based on significant advances in communication and other technologies and the management of data. The importance of place and place-making is that it plays a much more significant role in current decisions affecting business growth and development than ever before. Quality places retain and attract skilled and talented people. Talented people like places with natural, community, social, leisure, creative and cultural activities for themselves and their families. Combining this with effective professional networks, access to resources and opportunities is even more attractive to the entrepreneur inclined to exploit intellectual capital. Investment decisions are made by people in terms of their time, talent or money based upon an assessment of the anticipated benefit or return. Investment decisions are also made by institutions and businesses according to their own interests and balance sheet objectives, but even these interests are increasingly being directly influenced by place.
Determining what to focus on starts with identifying what key assets, services and growth opportunities the location provides which will shape the desired economic opportunities but also day-to-day life. There is a series of challenging questions to be answered – for example, are the various forms of infrastructure adequate or a real factor in supporting a competitive commercial environment? Are the basic and hopefully higher-level elements of living in, working in and developing the various aspects of the intended local community firmly established? If the attraction of specific high-level talent is important, is there evidence of an enviable quality of life comparable to recognised successful locations? If not, why would someone consider investing their time, knowledge and expertise, or money (including persuading others) in your location with the associated risks connected with each of the shortcomings? Why would anyone wish to invest in a place that cannot demonstrate a will to invest in itself?
There are well-founded challenges to the perceived wisdom that consideration by investors should be to the South East first before anywhere else in the UK. In terms of the knowledge economy, are smaller and medium sized cities better placed to rise to these challenges? Ideally, an economically successful city-based economy comprises the following easily identifiable key characteristics:
- a diverse industry base including distinctive specialist niches;
- one or more high-level research and education-based institutions that have a mutually beneficial relationship with businesses;
- strong communications infrastructure;
- a variety of good transport links with and to other cities, with multi-modal options;
- public – and private-sector institutions working together;
- strategies to ensure that all communities benefit from the economic success;
- high levels of economic success and knowledge-based activity.
To illustrate this discussion, the wider Exeter economy has much of this approach already established. There are other similar-sized cities that justify the proposition. Exeter’s economic performance before, during and now amid the signs of post-recession is of a place-making approach with credible examples of success. Some aspects are in need of further investment, and its most recently approved economic development strategy certainly embraces this approach as fundamental to making its transition to a knowledge economy. Following this approach has resulted in independent studies identifying the city as outperforming larger cities within the UK and confirming its beneficial regional economic impact. The creation of high-value employment opportunities, attracting and retaining highly skilled workers and graduates and capitalising on existing strengths and assets, is especially important as the city continues to strengthen its economy. Encouragingly, Exeter is outperforming the South West of England in terms of the percentage increase in qualifications among workers in the area in the past 10 years.
There are key drivers to establishing a successful knowledge economy, inextricably linked to place-making, on which the new economic development strategy for Exeter is based:
- having the architecture and accommodation that businesses and workers require;
- building on what’s there – recognising the city’s existing strengths and weaknesses and playing to these;
- ‘smart specialisation’ – focusing on the range of economic specialisms for which there are credible opportunities, for example, in Exeter’s case, in sectors related to big data, climate change mitigation, health, water science and agri-tech;
- attracting and retaining high-skill organisations – organisations that rely on productivity through high-quality jobs and highly skilled people;
- an acclaimed education sector – linking closely with the city and businesses;
- distinctive ‘knowledge city’ offer – for businesses and people who are considering investing, working and living in the city, supported by a diverse cultural offer;
- maintaining and improving strong connectivity within and outside the city economic area with major economic hubs;
- strong leadership – around an economic vision supported by proactive networks and partnerships;
- a business-friendly and pro-growth local administration.
Proactive support is important to create the right environment to attract and retain talent, entrepreneurship and technology transfer to those smaller and medium-sized places which can offer as much of a complete if the not more affordable package to secure growth in investment and employment away from the massive metropolitan areas. It’s about focusing on the value-for-money return that such locations really do offer.
The term ‘growth hub’ is being used to describe a number of different initiatives more recently, drawing on government funding obtained through a series of competitive bidding rounds providing hundreds of millions of pounds under the Regional Growth Fund, European Regional Development Fund and others. Funding has been made available for extensive programmes of initiatives supporting infrastructure improvements, sector-specific projects and individual company growth plans, with job creation as the required objective and measure of success. What will distinguish them will be how integrated the initiatives are in supporting the approach, set out above, to create the place for successful investment and growth, not piecemeal developments focussed, for example, mainly on infrastructure. There are excellent examples of combined housing, an employment site, education and skill-based programmes under the banner of the Growth Point support which have set the standard for joined-up economic development programmes around the country.
For examples of how Exeter is pursuing its growth agenda, see www.exeter.gov.uk/index.aspx?articleid=13847
Assistant Director Economy
Exeter City Council