The significance of a place-based industrial strategy for the West Midlands

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A place-based approach to industrial strategy frames the first report published by the Industrial Strategy Commission, an independent body established by the Sheffield Political Economy Research Institute (SPERI) and Policy@Manchester. Place is central in two ways. First, it is identified as one of seven ‘foundational’ themes that the industrial strategy must be built on. Second the report outlines the place dimensions of the six other foundational themes, which include: (i) Institutional framework; (ii) Science, Research and Innovation; (iii) Competition policy; (iv) Investment; (v) Skills; and (vi) the state’s purchasing and regulating powers. City-REDI (Birmingham Business School) had the opportunity to inform this place-based approach when we presented our academic research on understanding city regions at one of the Commission’s evidence sessions. But what does this mean for the West Midlands? This blog blends the findings from the report (ISC, 2017) with City-REDI’s own ‘call for evidence’ document (City-REDI, 2017) to highlight the significance and action points of a place-based industrial strategy for Whitehall officials.

Place-based Institutional Frameworks

  • The institutional framework for industrial strategy at the national level should be seen as enhancing the capacity of local authorities to deliver the strategy at the local level (ISC, 2017).
  • Need to further roll out devolution to achieve its full potential – this will require local areas having more decision-making powers and fiscal autonomy (City-REDI, 2017).
  • In a recent blog Rebecca Riley highlighted the “opportunity within the instability for Mayors to steal a march and ask for more powers… The lack of clarity and consistency at national level provides not just an opportunity, but an imperative, for regional governance structures to step up their game”.

 Place-based Science, Research and Innovation

  • Part of place-based investment should be built on the existing strengths or comparative advantages of regions. These strengths could be mapped using the Science and Innovation Audits that the government has recently sponsored (ISC, 2017).
  • Whitehall Officials need to encourage local responses to the industrial strategy that identify and grow the niche to compete on the world stage (City-REDI, 2017). To do this they need to spend significant amounts of time working with business and regional policymakers, to find and understand industries and places in which the UK has, or could have genuine comparative advantage (ISC, 2017).
  • A smart specialisation approach is appropriate here, where policy makers develop policies that build on a region’s existing assets, rather than adopting “off-the-shelf” policies copied from other successful regions. This would support place-based innovation policies that help regions to identify their competitive niches (City-REDI, 2017).

Place-based skills development

  • A one size fits all approach in systems, resources or objectives is unlikely to succeed. The new strategy should consider a much more differentiated approach and a renewed commitment to thinking about further devolution in skills policy (ISC, 2017).
  • It is important to ‘know’ a place when developing local strategy by encouraging a dialogue between politicians, policy makers, universities and communities to help refocus, rethink and reshape approaches to local economic development. This interaction can be achieved by establishing, regional or even more local fora where local government, universities and industry representatives will gather to discuss the needs of local areas and how best to fine tune education and training delivery of skills (City-REDI, 2017).
  • Tailor educational provision to meet the needs of local businesses – these can be understood by asking local companies about their needs (City-REDI, 2017).
  • City REDI’s recent policy briefing on anchor institutions highlighted the role of universities as a source of regional skills and expertise, encouraging links between teaching programmes and local organisations.

Place-based public procurement

  • In situations where users and innovators can be brought together, particularly where system/ institutional level change is required to benefit from technological innovation, there can be an argument that local procurement can support the development of a geographical cluster of expertise (ISC, 2017).
  • Targeting public sector procurements in ways that support specific regions (to reduce inequality), specific firms – e.g. assisting high-potential SMEs to scale-up, or promote innovation – would harness the power and scale of national and regional public sector procurement (City-REDI, 2017).

In a time of such political uncertainty it is unclear what direction the industrial strategy will take. However, if Whitehall officials engage with the Commission’s report then it is likely that place-based approaches will be adopted. This would create significant opportunities for the West Midlands and other city regions. So watch this space!

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