Wednesday, July 12, 2006

The future of RDAs (city regions)?

I am wondering if RDAs have a future? what leads me to think that their future is less than secure is:

- the increasing discussions about city-regions from central government and the likes of the IPPR
- allied with some talk of local government being the most appropriate level of delivery for regeneration/economic development
- so we might see a combination of local government reform with more responsibilities
- this leaves RDAs in a bit of a precarious posision!
- plus there is the next round of the Comprehensive Spending Review, and the need for RDAs to make a 'zero based' budget grab - i.e. prove your worth in the past and, more importantly, in the future
- its difficult for many RDAs to prove their worth - they simply have not done enough of a job of monitoring and evaluation

I think that there's several pertinent points about city regions and regen/ED though:

- local authorities as they stand are very diverse and there are significant differences in track records and capacity to deliver. Some are really great at economic development, some are really dire and endlessly reinvent the wheel of poor schemes
- there'll need to be some amalgamation of local authorities at city regions - voters don't want more tiers of regional or local government - witness the rejection of the North East assembly. One canny Geordie reckoned they would not vote for a new set of paid elected members and officers, if they weren't going to disband another level somewhere - i.e. reform rather than additional tiers is the key for voters
- its a hard political act to engage in wholesale reform of local government
- city region mayors may be the answer but they still have to be approved and voted in - and local government somewhere else must give up some power
- What's gonna happen to non-city regions? they may be a bit disenfranchised, to put it mildly. Expecting more country folks in wellies marching down the Mall in the next few years.... we may have to reinstate hunting to keep them happy.

As ever - random thoughts that no-one ever reads!....

Wednesday, July 05, 2006

Clusters in economic development - twaddle or useful?

Ok Ok I am rehashing a previous post I made on another blog BUT!

I recently heard someone talking about 'local clusters' - as if they operate at a neighbourhood level. Get this people - clusters (where they properly exist, and aren't just the wishful thinking of a public official) don't operate on the basis of tiny geographies. They operate on the scale of regions, often nations, often areas that go beyond national boundaries. So there.

I used to work at Scottish Enterprise, and serviced a lot of teams there as a private consultant in the late 1990s. I wasn't impressed with their clusters approach. What they did:

- identified some Scottish clusters
- spent ages (and big consultancy $$$s) mapping the clusters, mapping weaknesses etc
- spent ages meeting and connecting folks in the cluster together
- did a few specific interventions
- identified some cluster gaps as R&D, invented public sector research labs to specifically service the cluster

What was achieved? after investing in cluster teams and a huge research effort (in my opinion, the research was very patchy - good for some cluster teams, bad in others) - not a lot I reckon. This is because I think the effort and approach was misplaced.

I'd like to express some of my own theories about clusters:

#1 they are no respector of government or administrative boundaries. They operate across all artificial and formal boundaries. Especially in open markets.
#2 very few (none!) examples of successful, self-contained, highly localised clusters
#3 very few clusters created out of thin air
#4 very few clusters created in less than 10 years (take note RDAs!)
#5 must have some kind of comparative advantage for cluster presence (take note again RDAs!)

OK, ok they are engines of growth in certain parts of the world, and Porter's analysis of competitiveness is compelling. But as an economic development tool I think its not been well applied, at all.

Its big use is in understanding the economy and your locality's place in it. If this leads to some intelligence interventions, then that might be a good thing. If it tells you that you are one the outer spoke of a cluster, a branch plant zone etc, that's useful. For example - it can be a great way of looking at the skills needs of your regional economy.

But that kind of analysis is very sophisticated indeed. How many RDAs do you know that intelligently create and target interventions? hardly any I'd say. The clusters approach is way too complex and sophisticated for the average RDA and RDA staff member I'd say. That's why, if you are SE, you spend £5 million on Porter's consultancy company (Monitor) to come and tell you about clusters.... heehee.

Anyhow, just a thought. I have to say that I am both sceptical and open minded about clusters, but they are not the panacea for everyone. And if I hear anyone say the "Anytown XXXX cluster" again, I will probably develop a nervous tic.

My big message - you can't have a highly localised cluster. They aren't valid. Don't try and think you can create one out of thin air. However if you have localised industry specialisms - you might want to think about how they fit into and relate to a wider industry cluster, and there might be some ways of capturing additional economic activities for your region.