Writing an effective Local Industrial Strategy (LIS) is currently a prime focus for Combined Authorities and Local Enterprise Partnerships (LEPs) up and down the country. Strategies have recently been published in West Midlands and Greater Manchester, but there are still plenty more to go before all areas have them in place.
Last summer, we published our 10 principles that places should bear in mind when developing their LIS. This was followed by two series of workshops held across the country. The first series focussed on the principles themselves. The second looked at how ‘Place’, one of the pillars of productivity identified by the Government’s Industrial Strategy interacts with the other pillars – ‘People’, ‘Ideas’, ‘Business Environment’ and ‘Infrastructure’.
Using the pillars to structure the sessions allowed us to both build on the higher-level principles and discuss specific interventions and case studies, joining up conversations at the local and national levels.
During the workshops, we explored the following questions for each of the pillars:
Why is this pillar important for productivity?
- While it may sound simple, the question set out at the start how the pillar feeds into productivity, the ways in which the relevant ‘markets’ may fail and thus why Governments might intervene to fix those failures. Clarifying this helped us maintain a productivity focus across objectives, interventions and outcomes.
What do we know about what works?
- The evidence base is of differing strengths for different pillars. While we know a fair amount and with reasonable certainty about what works when improving peoples’ skills, we know less about, for example, which kinds of infrastructure projects will have the biggest impact on the local economy.
- What we do know is that there is still a lot to learn – historically, interventions have been implemented without much testing and feedback. Robust trialling and testing of interventions need to become commonplace for us to be able to make strong conclusions and avoid the mistakes of the past. With their focus on experimentation, LISs are a good vehicle through which to do this.
What do we need to bear in mind when thinking about this policy area in the LISs?
- Our discussions of the principles, and broader discussion at the events, highlighted the importance of the need to understand the state of the local economy as it is and how it performs in relation to comparable places, before setting out objectives for how this might evolve. Greater Manchester’s LIS for instance, is based on evidence up-dated by their Independent Prosperity Review and West Midlands’ LIS is supported by their evidence base. While recognising that resource, capacity and time available are not the same across all places, these are useful documents to look to as reference points.
- Moving beyond describing the local economy, a key first step in analysis to support the LIS is outlining whether the case for intervention lies on the supply side or the demand side. This was a recurring theme of discussion in figuring out the questions that LIS need to answer.
What should we do when we are implementing the policy response?
- A clear message throughout all the sessions was the importance of co-ordination and engagement of different groups with the LIS process. For example, both Greater Manchester and West Midlands carried out consultations as a part of their LIS process.
- The geography of this can look different in different policy areas. For the ‘People’ pillar, the focus was on co-ordinating with the various stakeholder groups within a place, but for the ‘Ideas’ pillar, it was more important to connect experts across different places.
- Separating discussion and analysis by pillars is useful but there are clearly significant overlaps in the role they play in determining local economic performance. The ‘People’ pillar ties especially strongly into all the others – ideas are generated by people, businesses are run by people, and a key purpose of infrastructure is to connect people across place. Ideas and business environment are also connected – innovative technologies generate most value when they are spread and adopted into everyday business practice. These interactions, and many others, are worth bearing in mind when developing strategies and programmes for funding.
Interactions across places are also important. This is particularly true for the pillars with inherently large spill overs, ‘Ideas’ and ‘Infrastructure’. Ideas generated in a place usually have wider geographical benefits as they are spread and adopted more broadly and improvements made in a place to infrastructure contribute to building a better network overall. These spill overs should be recognised by partnering across LEPs where appropriate to improve the effectiveness of initiatives.
The LIS programme is a chance to move away from shorter horizons of the Strategic Economic Plans towards a longer-term view more appropriate to the economic processes that drive growth. They are an opportunity to engage with other LEPs and central government, with everyone working on the same timelines and using the same framework. It comes at a challenging time, with the LEP review pending and the Spending Review expected later this year, but embedding our principles and drawing on the evidence base will help areas makes the most of this opportunity.
You can read more detailed notes on each of the workshops here: