‘Inclusive growth’ is increasingly invoked at international, national and city levels as offering prospects for more equitable social outcomes. Yet the concept of inclusive growth is open to a number of different interpretations, writes Anne Green, Professor of Regional Economic Development.
This has not stopped interest in developing inclusive growth indicators. In the USA the Brookings Institution has developed and combined indicators measuring growth, prosperity and inclusion for the largest metropolitan areas in the US for monitoring progress towards achievement of successful economic development trajectories of improving productivity and raising the standard of living for all people. In England the Inclusive Growth Analysis Unit updates and analyses inclusive growth indicators for Local Enterprise Partnerships with ‘prosperity’ (encompassing indicators relating to output growth, employment and human capital) and ‘inclusion’ (comprising indicators relating to income, living costs and labour market exclusion dimensions) as the main building blocks.
The OECD defines ‘inclusive growth’ as economic growth that creates opportunity for all segments of the population and distributes the dividends of increased prosperity, both in monetary and non-monetary terms, fairly across society. This definition was adopted by Anne Green and colleagues Francesca Froy, Erika Kispeter and Paul Sissons in research funded by the Joseph Rowntree Foundation looking at approaches to inclusive growth in selected cities in Europe (Barcelona, Hamburg, Helsinki, Leipzig, Malmo, Nantes, Rotterdam) and the USA (Cleveland, New York, Portland, San Antonio). Although UK cities have less local powers than many of these cities, in theory, evolution provides new opportunities for local activity and international practice can help inform UK cities to support more inclusive outcomes.
How inclusive growth policies are framed varies across cities. But in all cases the labour market is a core focus for policy to connect growth and inclusion. Inclusive growth frameworks include policies to:
- Develop labour supply and support labour market engagement;
- Shape the economy and labour demand; and
- Create a well-functioning city
On the basis of evidence and experience from the cities examined the research drew out 10 key principles for policy concerned with inclusive growth across all cities:
- See economic growth not as an end in itself but as a means to achieve inclusion and shared prosperity.
- Be prepared to proactively shape the labour market and build quality jobs.
- Prioritise connectivity and expand social networks so that they are less exclusive.
- Make poverty matter less in accessing good quality city services.
- View people as assets and invest in them at the outset and at key points in their lives.
- De-risk transitions by providing safety nets at key junctures.
- Be prepared to innovate and create opportunities for shared leadership.
- See citizen engagement as a way to generate knowledge from the bottom up.
- Get the fundamentals right (at national and local levels).
- Focus on small incremental changes as well as large ‘flagship’ schemes.
This blog was originally published in the City REDI Blog