Mainstreaming community economic development for inclusion, redistribution and local diversity
During 2012-13 Localise WM were funded by Barrow Cadbury Trust to research the potential for mainstreaming economic localisation and community economic development. This research has what we think are significant findings to help adapt our economy to meet the challenges of today. Community economic development, as we explore it here, is not as a nice irrelevance but a way of making our core economic activity more successful and more closely centred on places, people and local resources.
Below are links to its reports in full and summary. You can also read some of the report material in webpages linked from the brief synopsis below.
About Mainstreaming Community Economic Development
“Capitalism has become more and more centralised…and as power becomes centralised, ordinary individuals feel as if they have less and less influence over critical decisions…and that when decisions are made, they are not responsive to local situations and local needs” – Prof. Gary Hamel
The research was part of a Barrow Cadbury Trust funding strand seeking the development of new economic policies for the UK that would reduce social injustice and economic inequalities.
The UK economy is one of the most centralised in Europe. It is increasingly recognised as remote from people and society, unequal, exclusive and unstable. Localise West Midlands’ experience of working with local economies led us to believe that in a more localised, place-based economy, more people have more of a stake, which redistributes economic power, reducing disconnection, inequality, and vulnerability to economic failure.
The purpose of Mainstreaming Community Economic Development was firstly to establish what evidence there is for these benefits and secondly to explore how the successes of such an approach could be replicated and scaled up in mainstream economic development.
Research addressing such economic solutions tends to deal with development of micro-projects, treating community economic development (CED) as marginal to the mainstream. Instead we explored how community economic development and stronger local economies can be integrated into the macro and mainstream economy: what are the conditions needed for local economies to be built around SMEs, social enterprises and community groups with support from public sector and larger private companies; and what is needed to ensure that this can become the ‘usual’ approach of economic policy at local, subnational and national levels so that the greater redistribution and diversity impacts of localisation approaches can be maximised.
We define CED as economic development led by people within the community and based on local knowledge and local action, with the aim of creating economic opportunities and better social conditions locally. It includes both initiatives with social objectives, and also private sector activity that is locally controlled and based, where the community’s participation is as owners, investors, purchasers and networkers. CED is defined and understood differently across the world; being a more developed concept in Canada and the USA than in the UK. The Canadian CED Network demonstrates a holistic and strategic, community-led approach rooted in local knowledge, incorporating social, environmental and economic goals.
Scope and methodology
An initial literature review examined evidence for the comparative socio-economic benefits of localised and centralised economic approaches. Following this we chose case studies, mainly from the building retrofit and food sectors, from known good practice but also to cover both initiatives with social objectives and purely business-focused activity that nevertheless has a good social impact, values or both. Interviews with case study representatives tested ideas emerging from the literature review and gained an understanding of how community economic development can be mainstreamed. Two workshops were held, one for practitioners and case study representatives to test the ideas emerging from the research, and one for LWM associates to evaluate lessons from their consultancy experience. A desk review of the financial context was carried out, including access to finance for small-scale enterprise and opportunities for local finance
Our full conclusions and recommendations can be read on pages 60-72 of the full report. In summary, the project identified strong evidence that local economies with higher levels of SMEs and local ownership perform better in terms of employment growth (especially disadvantaged and peripheral areas), the local multiplier effect, social and economic inclusion, income redistribution, health, civic engagement and wellbeing. It also has benefits in terms of supporting local distinctiveness and cultural diversity. We identified a need for further research to fill gaps in evidence which can be read at section 7 of the literature review and then at section 3.6 of the full report.
These findings signal the need to revalue how we balance and integrate more community-based approaches to economic development with the more dominant experience of attracting inward investment in economic development practice and policymaking. Through the research we have identified actions and approaches locally and nationally that could progress this balance.
A MCED approach involves developing a mindset that thinks of the local economy as a complex ecosystem in that it takes a ‘supply and demand chain’ approach rather than focusing on individual businesses or sectors. In an ecosystem, removal of a link in the food chain upsets the whole system; likewise regeneration and economic development decisions need to be assessed for their impacts on existing supply networks.
The CED approach mindset also seeks to build a relationship-based economy, focuses economic development on partnerships and networking, understands the strategic importance of the multiplicity of the small scale, seeks to maximise local power rather than handing it to absentee landlords with little interest in or understanding of the local area, and takes a long-term perspective, with clear aims to support greater social and economic inclusion. The practical actions and policies that could support this can be read in full on pages 60-72 of the full report.
Adopting a CED approach can make the economy less remote, more linked into place and benefiting people, and inclusive for all parts of the community. The locally-orientated option should at least always be considered on its merits with more centralised options. Ignoring or dismissing its potential effectively restricts the future development and shared wellbeing of many localities across the country; it is like entering a boxing ring with one hand tied behind your back.
We make a number of practical recommendations for change, but perhaps the first point of call is simply as an idea for exploration and debate. Mainstreaming community economic development could provide an attractive new political and civil society point of interest, supporting business whilst addressing public concerns about the concentration of economic power. We hope that local and national exploration of the approach can at least contribute towards changing the terms of the debate.
We are extremely grateful to our case study organisations and representatives who gave their time generously for this project. Throughout this research project we have been struck by their efforts and commitment in creating an inclusive local economy, private, public and voluntary sector alike. With more like them we would have a far more just, inclusive, sustainable and interesting economy. For full acknowledgements see Appendix 7.
The funder – Barrow Cadbury Trust
The Barrow Cadbury Trust is an independent, charitable foundation, committed to supporting vulnerable and marginalized people in society. The Trust provides grants to grassroots voluntary and community groups working in deprived communities in the UK, with a focus on Birmingham and the Black Country. It also works with researchers, think tanks and government, often in partnership with other grant-makers, seeking to overcome the structural barriers to a more just and equal society.
Other projects funded under this strand:
The same Barrow Cadbury Trust programme funded research by:
– Chamberlain Forum: Communities Managing Change: researching innovative approaches to tackling poverty and inclusion through more sustainable communities, ie communities that can manage change.
– Centre for Local Economic Strategies: Understanding Community Resilience in North Walsall, exploring the relationship between and the inter-relationships within the public, commercial and social sectors in North Walsall.
– Birmingham & Solihull Social Enterprise Consortium, to create a framework which can guide providers and purchasers through the Public Services (Social Value) Act 2012.
– New Economics Foundation: The New Austerity and The Big Society, working with communities in Birmingham and London to enable them to monitor and express their unfolding experience of cuts in public spending and plans for a ‘Big Society’, and to develop strategies for turning these changes, as far as possible, to their advantage.
Collaboration on findings and dissemination will maximise our collective impact.
This project is also supported by the core funding we have received from Polden Puckham Charitable Trust.
For more information about the project or the rest of our work, contact us. LWM staff and associates working on this project were Jon Morris, Karen Leach, Paul Cobbing and Pat Conaty.
“It is simply practical to organise society so that everyone feels that they can attain some kind of stake in it, achieve some sense of responsible agency, however modest. “ – Deborah Orr.