Insights
The core objective of the What Works Centre for Local Economic Growth is to answer the question: which policies are most effective in supporting and increasing local economic growth. The answer, of course, depends on many things – not least what we actually mean by ‘increasing local economic growth’.
In looking at the evidence, and talking to local decision makers, it is very clear that there is plenty of disagreement about what is meant by increased local economic growth. In our evidence reviews, we tend to focus on two specific outcomes: employment and productivity. That is, we use a fairly traditional (some would say narrow) definition of local economic growth. We also worry about whether effects come about because of improvements for existing firms and residents, or because of changes in the composition of the local economy.
Quite rightly, some people worry that employment and productivity are not the main objectives of some policies that we review – e.g. estate renewal or the provision of sports and cultural facilities. But the reason for focusing our reviews on these two outcomes is precisely because we want to help local decision makers understand the most cost-effective way to increase local employment or productivity. After all, that’s our main remit.
All of that said, we also think it is very important to understand the wider effects of local policies on a whole range of outcomes. The crucial thing, especially when it comes to evaluating specific projects, is to carefully think through what effects we expect the project to have. To put it another way: in order to determine whether or not a project is a success, we need to think about what success would look like, and therefore how it should be measured. If, for example, estate renewal has objectives other than employment and productivity, then what are they and how would we know if we achieved them?
Unfortunately, even when the projects involved have a narrow economic focus, we consistently find that success is poorly defined. For example, in reviewing the evidence base for business advice effectiveness, we found a large number of assessments which were very muddled in stating the objective of a policy (if this was even defined). Policies often set out to support businesses to ‘grow’ – so far, so good – but when you start to measure business growth you have several choices. Are you interested in growing profits? Growing employment? Growing turnover? Output? Market share? Productivity?
Each of these factors is measured in a different way. More importantly, however, different forms of support will produce different kinds of ‘growth’. The importance of clarity on objectives is not merely an evaluation concern. If we want business advice to serve the end of local economic growth, we may need to look beyond the effects at the business level. Increased profits or market reach may not have much impact at all on the local economy if they don’t reflect increased productivity or translate into increased employment.
As we discussed in our post on ‘starting early’, one of the benefits of embedding evaluation into the design process is precisely that it forces us to think about how we might measure and define success. In turn, that forces us to think through exactly how we expect given policies to affect the local economy.
