Revisiting Coventry

John Newbigin

In a note sent to me just after our visit to Coventry, Jonothan Neelands said

“Culture is neither a tool for regeneration nor gentrification and instead a way of connecting and strengthening communities. It’s not just about economic impact in terms of tourism, growth and employment; it’s also about the economic value of stronger communities, inclusive participation and growth, health and wellbeing.”

The oath of citizenship in Periclean Athens (550BC) required citizens to promise to “leave the city richer and more beautiful than I found it”.

The Greek reference came to my mind because of Jonothan’s allusion to Coventry’s ‘City of Culture 2021’ initiative being a kind of Trojan horse – smuggling arts and culture into civic life in a way that catches people unawares.  If a city council announced “we’re going to have a year of the Arts” most people would assume it was nothing to do with them.  If the city said “we’re going to do a major rebranding exercise” they would be attacked for a profligate and pointless use of public money.  But the City of Culture project has somehow managed to sneak its way past all that because it starts with place and people’s desire to be proud of their home town and feel it to be a place worth living in.

Descriptions

Sarah Windrum explained how, in their LEP discussions, they’d chosen to treat ‘digital creative’ as a ‘state of mind’ rather than a precise definition of a bit of the economy.  That seems eminently sensible – after all, the ‘creative industries’ is itself a hopelessly woolly way of identifying a sector of the economy.  In fact, it’s not really a definition at all – it’s a branding exercise to give political profile to an eclectic jumble of trades and professions that the banks don’t take seriously.   It’s a short-hand description.  One of the things I like about Coventry’s approach (if I’ve got it right) is that it starts not with definitions about culture and creativity but simple descriptions – What do people do?  What are their circumstances? How can culture make things better?

So, a good starting point to thinking about culture and its relationship to economic or social wellbeing might be ‘go for description – who’s there?, what’s there?, what do they do?, what would they like to do more of?, what would they like to be good at?’

Mike Whitby used the phrase “our great provincial cities” three times in his brief talk.  What was he describing?  One of the things that made those provincial cities of the Victorian era ‘great’ was that they each had a clear area of expertise that made them distinctive  – Sheffield was steel, Sunderland was shipbuilding, Derby was rail engineering, Nottingham was lace, Hull was fish, Manchester was cotton mills … etc.  And the important thing about those defining characteristics was that they meant something to everyone – the owners of the yards and mills as well as the people who worked in them, or even those who just experienced the noise and the pollution they generated.  At school, kids were taught which city did what.   Those activities defined the place and people.

What’s to distinguish one city from another now when they’ve all got the same dreary chainstores and franchise restaurants in their High Street, the same out-of-town superstores on their fringes and the same tacky clusters of Barratt ‘executive homes’. Even being ‘City of Culture’ may prove to be no more than a short-term buzz.

Perhaps one of the problems in finding a cultural identity for a place is that our whole approach to culture has become so transactional.  Instead of description our cultural agencies have to focus on prescription – where’s your mission statements, impacts, KPIs, targets, evaluations, strategies by well-paid consultants?

No useful purpose

So, how brilliant that it was down to an Arup engineer to rhapsodise about the value of playing and doing things “that serve no useful purpose” – in his words.  Government funding agencies wouldn’t give you a penny if you said that was your plan – but a world-class engineering firm recognizes its value to the kids who are playing, to their own staff who are playing with the kids and – as he said – to the sparking of great new engineering concepts.

The economist Diane Coyle, in her book about GDP, says – my paraphrasing – any activity that can be measured by the metrics of productivity, i.e. output per hour, is best done by a robot – and probably soon will be.  Then she goes on “What humans excel at is WASTING TIME, playing, experimenting, creating, exploring.  None of these fare well under the scrutiny of productivity … but they are the foundations of long-term growth.”  I like to think she meant the long-term growth of individuals as well as of the economy.  It makes obvious sense.  No wonder we love the story of Newton snoozing in his orchard, Archimedes lounging in his bath – major conceptual breakthroughs achieved while doing nothing in particular.

‘Description’ begins to shape ‘state of mind’ – and ‘state of mind’ creates the possibility of new perception, new ambition, new possibility. It’s partly about logic but mostly about mood, it can feed the inconsequential things that maybe do start giving a place a sense of identity and pride.  And as any economist will tell you, growth is driven by confidence and optimism.

So, reflecting on Jonothan’s note to me after our day in Coventry, maybe that’s the economic value of stronger communities.

Hull City of Culture 2017 – impact

The recent evaluation of Hull’s UK City of Culture year suggests that there was a significant boost to the local economy, with positive impacts on jobs, businesses and increased investment. Key findings include:

  • Almost 800 new jobs have been created in the visitor economy and cultural sector since 2013 and the projected value of tourism in 2017 is on track to contribute in excess of £300 million to the economy
  • 1 in 4 businesses surveyed in Hull and East Riding took on new staff in 2017 and 1 in 5 businesses extended their opening hours. Over half of these businesses felt that 2017 had contributed to an increased turnover
  • 64% of businesses who made an investment during 2017 said it was of a higher value as a result of UK City of Culture and 72% made this investment sooner than planned
  • Funding for local cultural activity grew in the build up to 2017, with successful Arts Council England applications increasing by 346%

Fuller information on the evaluation of the City of Culture year is available here.

Coventry’s creative cluster

Stephen Roper, ERC and Warwick Business School

What do we want from creative industries? Why do we think they are important? Productivity? Jobs? Innovation? Or, a combination of all three?

We recently looked at the growth of digital creative industries in Coventry over the last decade. This was based on the DCMS definition of ‘digital creative’ which includes a wide range of manufacturing and service SIC codes. Based on this definition there has been a growth in the number of digital creative enterprises (with one or more employee) across each of the major urban centres of the West Midlands, with Coventry experiencing the fastest overall growth – 5.6 percent pa – over the 2006-16 period. This was equivalent to a rise in the number of digital creative enterprises in Coventry from 663 in 2006 to 1138 by 2016. Sales by digital creative businesses in Coventry also rose over the 2006 to 2016 period, increasing on average by 6.5 percent pa. This was the most rapid growth across any of the major urban centres, and meant that by 2016, digital creative businesses in Coventry had a turnover in excess of £510m. Over the same period employment in the sector grew more slowly, rising by only 1.0 percent pa in Coventry. In 2016, digital creative businesses employed 3,669 people in Coventry, up from 3,336 in 2006.

So, in Coventry growth in the digital creative sector has been through increasing productivity and sales not new jobs. The average number of jobs per firm has also fallen. This pattern reflects what we see in other sectors: fast-growing scale-ups tend not to increase productivity; productivity enhancing firms tend not to produce lots of new jobs. So, let’s be clear about our ambitions for the creative industries.

To complete the story of our recent study of the digital creative sector in Coventry we also did interviews with key informants across the city. These suggested:

  • There is strong competition from Birmingham for firms to relocate and the demand for digital creative skills from the gaming cluster in Warwickshire and digital firms in Birmingham and beyond also limits local skills availability.
  • To date there has not been any systematic support for digital creative businesses in Coventry. Other cities – Manchester, Bristol, Birmingham, Leicester – have been more determined and ambitious to draw on the benefits and opportunities offered by the digital revolution.
  • The lack of suitable premises means Coventry is not seen as a go-to location for digital creative start-ups or growing businesses. New developments, both planned and currently underway, however, may provide the momentum for change.

A new northern economy in Preston?

Michael Taylor
This is an edited version of an article first featured on the Marple Leaf blog

The Economist recently ran a piece about how Preston has used the power of its “anchor institutions” (the NHS, Preston’s College and UCLAN), to create the model of a smart-procuring, entrepreneurial state for a guide to how Jeremy Corbyn will govern and encourage a thousand co-operatives to bloom.

It seemed like an attempt to do what economists (as opposed to The Economist writers) often do, look for something that’s working and apply a theory to it retrospectively, but it has been the product of some interesting work with the Centre for Local Economic Strategies and Preston City Council.

Lancashire is no stranger to experiments in economic planning and innovation. In much the same way, Lancashire County Council in the 80s was hailed as the cradle of New Labour. Under leader Louise Ellman in 1983 the council created Lancashire Enterprises, who’s chief executive was urban regeneration visionary David Taylor.  It was the very model of a pump priming activist state, much of the thinking leading to the strcuture of the regional development agencies under Blair and Taylor’s friend John Prescott. The longer term corporate legacy was a utilities support business Enterprise PLC, now part of Amey PLC, in turn the UK subsidiary of Ferrovial. But it also spawned Enterprise Ventures, now part of Mercia Technologies, an active venture capital investor in growth businesses in the North, the Midlands and Scotland.

Preston City Council’s recent ambition has been created out of a response to local government cuts to its budget. just as Lancashire’s response in the 80s was to the wholesale collapse of northern industry. One is a brave, necessary and innovative response, that feels strategic, but is intensely tactical. The earlier one, similarly, fashioned an ambitious response that grew and grew as it proved to have a relevance and need. It’s not to spot the virtue in a locally based procurement strategy, supporting local businesses.

Much of the work on the Preston example, has been done by Neil McInroy from the Centre for Local Economic Strategies. As this from the Guardian explains, more of the £1bn plus public sector budgets were spent locally.

Taking that on a stage, Neil’s outline case here, where he argues for ‘a new economic agenda’, that can replace failed neo-liberalism. But I found myself asking at the end of each paragraph, but what about the businesses who’ll create the jobs?

The four pillars of Neil’s argument are: to recognise decline; understand technological shifts; build on local strengths; and invest in the economy of care. In many ways it’s a bold and suitably broad synthesis. But I kept coming back to a common niggle I have with many conversations with people on the left, wouldn’t life just be so much easier if everyone worked for the NHS?

And then the other question, but where are the businesses?

My starting point is that wealth is created in a business by someone having an idea, spotting an opportunity, selling that service or those value added goods for a surplus and growing that enterprise, employing people, their families spend that money locally, pay their taxes, replicate that across the entire economy and that’s what makes the world go round. Larger existing businesses are enticed to stay, to relocate, and a careful co-ordination of their presence almost certainly contributes the conditions for even more people to take risks, build another business, that in turn makes that place even wealthier. The fewer people want to do that, or do it well, then that place gets poorer.

There’s a line at the end of paragraph three that says: “Cities need to invest in social infrastructure and social enterprise and above all, support indigenous small business activity.” My question therefore is how? To use Lancashire as an example again, the red rose county isn’t short of initiatives from the public sector to “support” small business activity. There’s the very noble Boost Business Lancashire for a start, which I should declare I have done some work for. But despite these valiant efforts and more, many of the same systemic issues continue to hold northern towns back and no amount of smart procurement can patch it up.

It brought to mind something Peter Mandelson said as long ago as 2013, that all too frequently ambitious industrial strategies are little more than ‘pea-shooter’ initiatives; haphazard and ineffective programmes too small to make any kind of difference.

And in this context, are we facing something similar? And what does “democratise” the economy mean, other than letting committees of part time councillors decide where to spend money? Spending more state money locally isn’t a new economic strategy, it’s arguably a good thing to do, but it isn’t a paradigm shift it’s been cracked up to be.

There is also need for a regulating, guiding and protecting state, more than has been previously fashionable. But my sense is there are two elephants in the room which the “new economics” thinking doesn’t acknowledge. The first is big business. In Lancashire, again, the major anchor institution of Preston isn’t even in Preston, but the city would be stuffed were it not for BAE Systems at Warton and Salmesbury, and its supply chain.

The second is that hard infrastructure works. It’s not neo-liberal economics to build better roads, rail links and make housing an integrated strategic plank of an industrial strategy, it’s sound social investment. The Treasury methodology needs fixing, and an industrial strategy needs to reach deep into all parts of government, including the Treasury if it is to be effective. Afterall, the return on investment model for Crossrail will not be the same for the Todmorden Curve, but both are necessary.

How we solve a problem like the northern towns and smaller cities hasn’t been taken seriously enough for decades. But we start from where we are, not where we’d like to be.

Regeneration through culture

Is regeneration through culture the way forward for our ‘left behind’ places?

Paul Swinney, Centre for Cities

This article first appeared in the Centre for Cities, October 2017 and is reprinted with the kind permission of the Centre for Cities.

The role of culture in regeneration appears to be back on the radar. Hull’s designation as UK city of culture 2017 has sparked a flurry of articles on the economic benefits it will have. And the Conservative manifesto in the last election tapped into similar thinking, stating that the Tories will move cultural institutions out of London to help bring prosperity to other parts of the country. But what role does culture play in economic regeneration?

Cultural projects are often measured in terms of the economic impact they are going to have, but thorough evaluations do not back these claims up. The What Works Centre for Economic Growth has looked at the economic impact of large sports and culture events and facilities. It found very little evidence of positive impacts on the local economy in terms of jobs and wages, while it found that facilities may push up house prices in their immediate surroundings (benefiting home-owners but not renters).

The fundamental challenge that struggling places face is to attract more business investment in high-skilled activities, which in turn will create more and better-paid jobs. One of the principal reasons they find this difficult to do is because they haven’t got the skilled workers that high-skilled businesses are looking for. The opening of a cultural institution doesn’t change this, as it doesn’t improve the skills of existing residents. It is also unlikely to attract-in skilled workers from elsewhere either, who will look for the availability of a job first, then weigh up the cultural offer of a place after.

This can be seen in a number of examples that have attempted to do this in the past. The Middlesbrough Museum of Modern Art, in the centre of Middlesbrough, is an impressive building, but a walk around its surrounding area suggests that it has done little to change the city’s economic performance. The same could be said for the Hepworth Gallery in Wakefield, and even the O2 Arena in London. Similarly, the impact of the Sage and the Baltic galleries in Gateshead, which cost a combined £115 million to build, is also unclear. While they may well have had an impact on the wider image of Newcastle, our previous research has shown that between 1998 and 2008 the immediate area round the galleries saw a reduction private sector jobs.

What must be stressed here is that there are many good reasons to opening new cultural institutions or hosting large cultural or sporting events that stretch far beyond economics. The problem is that these initiatives are often either held up as the answer to a place’s economic struggles, or are sold on the economic impact that they are going to have. Neither are a fair measurement for them.

Moreover, cultural projects are often envisaged and implemented in isolation to other policy initiative – which further minimises their impact – or essentially amount to a case of the cart coming before the horse. Barcelona offers an example of how to get this process right, in the way that it incorporated the 1992 Olympics into a wider plan to regenerate the city which included improving skills and infrastructure. Similarly, Bilbao’s Guggenheim Museum was not conceived as a way to kick-start economic growth in the city, but instead came off the back of years of economic development to restructure the city’s economy.

As such, if the aim is to turn around struggling economies, increasing the job opportunities available and the money in the pockets of people living there, the evidence suggests that culture-led regeneration is unlikely to do the trick. If struggling places are to attract jobs, then they have to deal with the fundamental challenges that prevent high-skilled businesses investing in them. While the specifics will differ from place to place, skills is the biggest challenge in many of them – and this is where the primary focus needs to be.

 

Keeping a creative focus

Tom Campbell

A decade ago, there was barely a part of the UK that didn’t aspire to be world-leading in the creative industries. Every Regional Development Agency prioritised the sector, and dozens of areas, from Cornwall to Sheffield, adopted the ‘creative’ prefix and associated strategies to boost their creative economies. Much has changed, and much has been learnt since then. But while funding is far from the level it once was, cities and regions continue to develop initiatives to support creative clusters.

An important difference, however, is the greater emphasis on focus and the use of evidence. This is well demonstrated in Coventry and Warwickshire where the LEP is implementing a growth strategy not for the creative industries, or even the audio-visual sector, but exclusively the video games industry – building on the strengths of what has been dubbed ‘Silicon Spa.’[1] While this might have risked upsetting the region’s wider creative industries, it has enabled the LEP to invest its resources more strategically with a bespoke programme of support, skills and trade promotion tailored for its games businesses.

There are several cities in the UK that can claim to be leaders in certain creative industries – or rather, distinctive elements and supply chains of industries. Oxford, for instance, is arguably the global centre for academic journal publishing. Cardiff’s television production industry is thriving, designer-making in Stoke is undergoing a renaissance, Liverpool has recently launched a strategy for growing its renowned music sector, while both Warrington and Dundee have nurtured significant games production clusters.

This more granular approach to economic development is known within the EU by the term ‘smart specialisation’[2], with a recognised process for identifying place-based interventions on the basis of mapping existing strengths and stakeholder engagement. Central to this is the prioritisation of knowledge domains and market niches – specific activities where regions have a competitive advantage and the potential for growth. Through this approach, innovation support programmes in small urban areas have enabled countries such as France and Germany to successfully build up knowledge-intensive regional economies in fields such as advanced manufacturing, chemicals and aerospace.

Given the alarming, and worsening, regional imbalance in the UK’s economic performance[3], a similarly fine-grained approach is badly needed. By contrast, the UK’s large metropolitan centres are competitive because of their breadth and do not need to focus: London’s strengths in a dazzling range of creative industries, from advertising to fashion and film, give it a scale that fosters innovation, attracts skilled workers and captures investment. Strategies intended to replicate this and simplistically boost local creative economies will not work for the likes of Coventry. Not every city can be a centre for feature film production or home to multi-national advertising agencies. But through an approach rooted in depth rather than breadth, and an understanding of distinctive strengths, markets and supply chains, there is real potential for cities, whatever their size, to flourish in the global creative economy.