What is Not the Local Economy?
The two case studies, the Grocer’s Shop and the Charitable Business, illustrate some of the issues we face working in the local economy. So, what do I mean by the local economy? There is no agreed definition. There is no right or wrong answer. Here are a few things I believe are not the local economy, even though they are legitimate uses of the term.
International Development Projects
For example, international developmental projects for the local economy in disadvantaged countries. The aim of international aid is to develop local economies.
It is something I know very little about. I’m interested in UK neighbourhoods, advantaged or disadvantaged. Clearly disadvantaged neighbourhoods present a greater challenge but we cannot ignore more advantaged neighbourhoods. They may be where we can find helpful examples of local economic development.
Maybe my experience and ideas that have a wider application than UK neighbourhoods but I must write about what I know. However, it is possible lessons from international development projects apply in the UK too. For example, participatory appraisal and micro-credit are both approaches developed in disadvantaged countries to build local economies. Groups in the UK use the with some success in the UK, whilst despite a few attempts micro-credit is a tougher proposition, primarily because of the economic environment in the UK.
Government Schemes
Some people associate the local economy with large-scale government-funded regeneration projects. My experience is developmentally these, for example New Deal for Communities, do not necessarily impact upon the local economy. The money passes through the local economy but leaves no lasting change. Jobs created too often become dependent upon the grants. After grants run out, these projects rarely obtain mainstream or any other ongoing funding.
An imposed or top-down scheme without local support and centrally planned, works on a one size fits all principle. It’s possible, where there is a thriving local economy, there might be scope for an effective government scheme. But where there is no thriving local economy I doubt large-scale schemes can be effective. It would be interesting to find research into the nature of neighbourhoods where schemes have been successful but I suspect if there are any they will be neighbourhoods where there is already a thriving local economy.
Social Enterprise
Social enterprises may be an integral element in a local economy but they are neither necessary nor sufficient for the success of a local economy. They cannot be the local economy in and of themselves. They are not essential to a thriving local economy.
Social enterprises and other creative local projects may be a sign of a thriving local economy. They’re not necessary because many neighbourhoods have a thriving local economy and no such projects and next time I shall describe a couple of examples that do not include social enterprise. Whether any have successfully revived a local economy is an interesting question. I shall share any I find out about.
Social enterprise can be an exciting part of a local economy and can catalyse economic growth. Social enterprise and other innovative economic projects can be a sign of a thriving economy but they cannot thrive without grants in a local economy that is not itself thriving.
Before I go on to define what I mean by a local economy, I shall next time offer a couple of examples.