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A Smarter way to grow the economy

A Flexibility Nine Point Plan for Growth

Putting the 'Smart' into economic growth

Smart and flexible working practices - 'Smart Flexibility' - add a new dimension to how we should pursue economic growth.

Here is our Nine Point Plan for a smarter approach to growth:

1) Focus on creating flexible jobs

Part-time work and temporary work are not only better than no work, but can have many advantages for both employee and employer.  Though constantly criticised from traditionalists on the Left as 'not real jobs', the fact is that three quarters of people in part-time or temporary work do this through choice rather than necessity - even in a recession.

And even if for those who would prefer to have full-time or permanent work, being in this kind of employment is a better stepping stone forwards than being out of work. It can be a chance to make new contacts or learn new skills, as well as being important to the CV.

Employers should be encouraged to take a more flexible approach, rather than wait until they can be sure that they can afford full-time and permanent roles.  There is a wealth of talent waiting in the wings.

2) Aim for spaceless growth

Using the smart working techniques highlighted in Flexibility.co.uk, companies can reduce the costs of taking on people to a minimum.  Smart Working environments mean that new employees can use existing shared spaces, eliminating the additional facilities costs associated with office moves.

This also involves employees being equipped at the outset with technologies for mobility, that can be used both in the office and beyond.

For smaller companies this can mean having a strategy of expanding as an entirely virtual company.

And for many companies this can also mean a strategy of 'expanding into smaller space'. Traditional ways of organising work and offices leads to huge amounts of underused space.  Cutting space and channelling resources into productive work is one key area of promoting growth.  It's about investing in people rather than real estate.

3) Respond to changing global markets with Virtual Mobility

Using techniques of virtual mobility is important for reducing both business travel and commuting travel.  That means reducing costs to both employers and employees - saving money that can be spent more productively elsewhere.

But virtual mobility purely offers more than just these savings.  Today, business agility is based on virtual mobility.

Global markets are undergoing massive changes.  The emerging economies in Asia, Latin America and Africa present huge opportunities to companies that are agile and adaptable and ready to build new relationships and sell into these markets.

While physical face-to-face 'getting to know you' meetings and meetings to seal the deal will often continue to play a part, most interactions will be online using a variety of techniques including virtual meetings.  In the UK, we are generally behind the game on this, and it's no coincidence that we are also slow in entering these new markets.

And where a person is needed on the ground in these new areas, the principles of spaceless growth apply - minimum overhead is the order or the day, using professional third party office or meeting facilities as needed.  Hospitality budgets will tend to be more important than office accommodation budgets.  But learning good techniques to build relationships at a distance are even more important.

4) Speed up truly high speed broadband with 100% coverage - and no compromises

At last there seems to be some movement on rolling out fast broadband in the UK.  But it remains very patchy, and parts of the country will remain out of scope.

High speed broadband is vital for modern businesses.  Higher upload as well as download speeds are essential, both for virtual meetings and to deliver products and services online.  And the need for bandwidth will only increase as new technologies come on stream - think 3D media and meetings, for example.

Policy has focused on broadband users as consumers.  The needs of a widening population of freelance and small business producers has been neglected and needs to be brought centre stage.

It is interesting to compare the 530 million earmarked to stimulate commercial providers to roll out high speed broadband with the mind-boggling 33 billion set aside for a high speed rail line between London and Manchester, which will have much more limited economic benefits.  It's a clear sign of the 'old hat' thinking that still tends to dominate in the world of economic development. 

5) Create a dynamic programme to promote and facilitate home-based enterprise

We have known for a long time that most new businesses (around 60%) start at home.  Over 40% of all businesses are home-based.  But so far government has not done anything practical to promote or support it.

Our investigations with the Live/Work Network into home-based businesses and workhubs show a clear demand, many success stories and pioneering new ideas for supporting home-based enterprise.

People running home-based businesses need easy-to-access business support and access to professional business spaces and services on an as-needed basis, and access to good networking opportunities. 21st century business support needs to be completely remodelled in this context.

Part of the solution is to find better uses for unwanted employment land.  Building homes that operate as both living and working space (live/work) is a far better option than building pure residential zones in this kind of brownfield development.

6) Integrate public sector reform with economic development

Smart Working is a key element of the current wave of public sector reform.  Reducing property and enabling staff to be more mobile - including working from home - are key elements of cost savings and efficiency for government and public services.

These types of measures can be integrated with planned measures to boost the local economy.  Here's how:

  • staff working at or closer to home do spend more money in the local community, providing there are services there to spend on
  • vacated buildings can be used to support economic growth, as workhubs that support both mobile public sector staff and provide facilities and networking centres for home-based and local microbusinesses.

It just needs a bit more joined-up thinking to support an innovative approach.

7) Promote a 21st century approach to business incubation

Business incubators do a great job helping start-ups and small businesses expand and grow.  Increasingly there is an emphasis on offering virtual services.  And there is far less of a need to offer physical premises as part of the mix.

The 21st century new business operates on lower overheads, and the 'business park' incubation model is no longer needed, as well as being environmentally dubious. 

Local authorities and other government agencies need to look at supporting new businesses without seeking to centralise them in one location, and the services supplied need to be agile and reach new businesses wherever they are located.

8) Boost support for the unemployed to move into self-employment

There is more that employment advisors can do than encourage people without work to polish their CV and send endless job applications.

The time is right to try to break the dependency mindset that sees the choice as being only benefits, jobs or training.  These are the low risk options, and the most natural to focus on.  By comparison, starting a business may seem high risk.  But wouldn't it be better to do far more to encourage people - especially the young unemployed - into taking their first steps into enterprise?

We don't have all the answers here - but maybe there is a piece of work that needs to be done to ease the path (in terms of loss of benefits) into enterprise.  There is an irony here that for the most part, you can have state financial support if you are not enterprising, but lose it if you try to be.

9) Sweep away regulation that constrains home-based businesses

Most new businesses start at home, and two things that worry people thinking of starting up are planning permission and business rates.  Often these worries are not well-founded, but they inhibit enterprise nonetheless. 

The government should just clarify the situation by sweeping away the doubt.  This would mean saying neither business rates nor the need for planning permission apply to home-based micro-businesses that create no local disturbance or extra need for local services, and are clearly ancillary to the main residential use of the home as a whole.

There should be no question of having to classify part of a home differently if it used for the typical home-based modern business or freelance work that has no impact on neighbours.

We need to lay the conditions for the recovery to begin at home.

The old solutions are not going to work

Our Nine Point Plan is based on clear thinking about the future of work and the changing world we live in.  We are going through a painful period of readjustment, and it's time to look ahead - to think what the world will be like in 10 years, and then plan how to be best placed to take advantage of it.

Any measures for economic growth have to recognise the changes that are going on, in particular:

  • The nature of work is changing fast - it is faster, more fluid and footloose. So the infrastructure and skills needed for this new kind of work is different
  • Traditional forms of inward investment will not happen, or not to any significant scale. Enterprises employing thousands of people in traditional sectors will be based in the emerging economies, not in West, South or Central Europe.  So any dreams about this need to be set aside, though it may upset industrial romantics on the Left.
  • The old 'collectivist' solutions won't work in the 21st century. The future lies with people willing to break out of the 'dependency mindset' - that is, depending on the state or other large entities to provide jobs, training, or benefits.  There are major cultural barriers to overcome here, especially in areas with low self-employment and heavy dependence on the public sector, like the North of England, Wales and Scotland.  The old times are not coming back, so a fresh and enterprising approach is desperately needed.
  • There are exciting new sectors developing which offer the prospect of transforming the way we live and work, based on new materials science, biotechnology and genetics, nanotechnology, artificial intelligence and robotics, and new communications technology. The physical infrastructure, skills and commercial context to support these sectors all need to develop fast to support innovation and growth.  That means on the one hand the digital networks,  and on the other the smart and agile companies and networks of highly-skilled and mobile individuals that can collaborate across boundaries.
  • The 'four generation society' means that being economically active will mean that the sharp divisions between work and non-work will fade more and more, with people seeking work more individually tailored to their circumstances.  Part-time work, short-term contracts, homeworking and freelancing are already favoured choices by many, and fit well with different stages of life. So 'old hat' approaches that sees growth as primarily about promoting full-time jobs at a separate workplace are flying in the face of a range of trends.

So we have a choice - do we adapt or not? 

One thing is clear: subsidising old solutions through increased borrowing is not the answer.  Any new investment has to have its eyes set firmly on the future.

June 2012

Time for some new thinking

After more than four years of economic troubles, the economy is languishing and there are few signs of growth.

One thing seems certain.  We are a long way from being out of the woods. And there's a pressing need for some new thinking.  But it seems to be in short supply at the moment.  We're in a prolonged period of massive change in the world economy, and the old solutions are not going to work.

Here we offer our Flexibility Nine Point Plan for smarter economic growth.  The old world is rapidly fading, and we need to create the conditions to prosper in the new conditions we will see when this painful period of readjustment is over.












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