10 September 2011

LEP Summit: My Impressions of the Day as a Delegate

Yesterday I attended the Local Enterprise Partnership Summit at the Leeds Armouries. As you can see from the programme it was a very long day but also an instructive one. There were said to be over 750 delegates. Throughout the day there was a constantly updated twitter stream which you can find at #lepsummit2011.

Although the focus was on Leeds City Region (an area that includes the five metropolitan boroughs of the county of West Yorkshire as well as Barnsley in South Yorkshire and Craven, Harrogate, Selby and York in North Yorkshire) the summit was important to local enterprise partnerships ("LEP") everywhere. That was no doubt why Mark Prisk MP, the Minister of State for Business & Enterprise, was invited to speak together with representatives of the Manchester, Sheffield and North East LEP, the OECD, the British Chambers of Commerce and the Centre for Cities.

As I have said many times in this and my Inventors Club and IP North West blogs, the LEP represent a sea change in regional development For as long as I can remember regional development strategy of both major parties has taken the form of handouts from central government for big infrastructure projects such as motorways and universities usually administered by quangos in the hope that they would stimulate enterprise. And it just hasn't worked. As I observed in my question in a breakout session on infrastructure on what can we do to encourage a "Silicon Roundabout" in Yorkshire along the lines of the one in Old Street, businesses will cluster where they see advantages in clustering and not where well-intentioned planners want to put them.

The reason why the traditional strategy does not work was explained by Dr Enrique Garcilazo of the OECD. It is ironic that it took an economist from Paris to explain the reasoning behind LEPs rather than the Minister and the massed ranks of local and national politicians. Dr Garcilazo is author of the OECD publication "How Regions Grow: Trends and Analysis". Briefly, his research shows that central government spending on infrastructure and human capital development (education and training) in isolation are not enough to stimulate enterprise. If you build a motorway to a depressed region as was done in Southern Italy you simply make it easier for people to get out. Similarly, if you improve the education system without creating employment or business opportunities they will just find it easier to get jobs in places like the South of England or Northern Italy. There has to be a systematic and holistic approach to local development best managed from the bottom up that utilizes the competitive advantages of each region.

That seems to be the thinking behind the Leeds City Region plan which was unveiled at the conference. It is perhaps best summarized in the following passage from a handout to delegates:
"The LEP will lead a cross-sector, balanced approach to economic growth, and will build on the unique combination of city region assets to unlock the potential of our economy, businesses and workforce."
The handout outlined 4 priorities for the LEP:
  • unlocking the growth potential of business and enterprise;
  • enabling a flexible, skilled workforce;
  • facilitating a low carbon economy; and
  • creating the environment for growth.
The LEP aims to achieve a minimum of 2.6% GVA (gross value added) growth every year to 2030 and a return to pre-depression levels of employment by 2016.

Of course, these are very fine aspirations but they can be achieved only if businesses actually find a market for their goods and services. Mike Spencer, Senior Policy Adviser to the British Chambers of Commerce, displayed bar charts that showed that consumer and government spending had more or less flatlined since the start of the current downturn. Mr Spencer reasoned that if there was to be any growth it would have to come from exports. As the USA and EU were doing no better than us we have to sell more to Brazil, India and China. I mischievously asked the panel what exactly suppliers in our region had to sell to consumers in Bahia, Bangalore and Beijing. Neil Mclean the LEP Chair suggested biotech and IT. Mark Ridgway of the Rhodes Group mentioned all the things that his company did in India. The fact is that Yorkshire and Humber does not seem to do as well as other regions when it comes to developing new technologies with just 1,144 patent applications in 2010 trailing the South East with 2,810, London (2,584), East of England (1,984), South West (1,639) and the North West (,246) (source IPO Facts and Figures 2009 and 2010).

While all credit is due to Mr McLean and his fellow board members for staging this event I left feeling that they had a mountain to climb. One of the first questions in the manufacturing breakout section was "What about old technology?" Other questions were on what can be done to make the NHS buy from local suppliers. I had to intervene to point out that we were in a single European market and indeed a single national market where everyone was entitled to a fair crack of the whip. I detected more than a whiff of protectionism in the air.

Another depressing theme was inter-regional rivalry and dependency on London. One gentleman from the floor asked when Leeds-Bradford airport would restore its link to Heathrow. There is already a major international airport at Ringway connected by a direct rail service and the M62 motorway to most parts of Yorkshire. There are some things such as airports that are best done on a Northern and not just City Region basis. I think our LEP Board realizes that which is why they invited representatives from the other regions.

Overall I hope this project works and in my own small way I shall do my best to help it along the way. Over drinks after the conference, I met several of the young men and women who had been seconded by local authorities and businesses to work for the LEP secretariat and was very impressed by their quality and enthusiasm. I hope I am no sycophant but I am also genuinely impressed by the members whom I have met over the last 6 months such as Neil McLean and Mehboob Khan from Leeds and Philip Bartey and David Grey of Sheffield. They give their time to this project for nothing for which they deserve our gratitude. I just wish there were more representatives of the communities that they serve.