Friday, June 24, 2005

Labour Market Myths

I was having a quick look at the work foundation's website the other day expecting a load of nonsense. This is because the work foundation's founder, Will Hutton has been known to talk a bit of shite over the years. He's well intentioned, yes, but he has been known to fall into the Richard Reich view of the future of the labour market, which was in the end, rubbish.

Which made it refresing to read this - Still At Work? An Empirical Test of Competing Theories of the Long Hours Culture by
Marc Cowling - which did start to mention labour market myths.

This is good. I do also know of some great work done by Futureskills Scotland in researching and exposing labour market myths in a refreshingly easy to read format (1 page!). Examples include:

Myth: "People are working longer hours" - Working hours have remained remarkably stable over the past ten years.

Myth:"Part- time employment increasing at the expense of fulltime jobs" (PDF-39kb) - It is a myth that part-time jobs are replacing full-time ones, and that most people who work part-time do so against their wishes or because they cannot find full-time jobs.

Myth: "Scotland is running out of workers?" Is Scotland in a population crisis? Scotland is unlikely to 'run out' of workers and there remains time to address most of the challenges that might emerge.

Myth: "Jobs have become less secure" - There is little evidence that the labour market has become less secure.

Myth: "Most employers are ageist" - in fact - most employers are not ageist (PDF format - 45kb) - Most Scottish employers are willing to hire older workers, according to evidence.

Myth: "High technology industries are the main source of tomorrow's jobs" - just not true

More stuff here

SO! that's Economists 6, Mad 'gurus' 0!!!

Thursday, June 23, 2005

Portfolio workers fail to emerge...

Despite the efforts of many ED colleagues in the mid 1990s to latch onto the idea that portfolio working would be the 'next big thing' stumbling and mumbling finds a lack of increase in 'teleworking'... more...

However, teleworking is still rare. In the US, there are 24.1 million teleworkers. That's less than one-in-five of all workers. And this includes people who work at home for just one day a month.
UK figures are only available for 2001. They show a mere 2.2 million teleworkers, one-in-14 of all workers. And that includes those who work just one day a week at home.

This generally ties in with static self employment in the UK over the past 10 years - it hasn't increased much. Methodologically its difficult to try and separate out genuine portfolio workers from those self employed folks on FT contracts working in offices, such as the one I am sitting in now...

I am not surprised though - its a pretty much a well experienced professional that could possibly be a portfolio worker and be able to get the business and do it to make a decent living. There's a few consultants and journos out there and some other trades that lend themselves to this.

Unsurprisingly the rising tide of the knowledge economy is still awaited to make these dreams come true...

Monday, June 20, 2005

Business Support: is market confusion just a red herring?

Like many people in my game, we have been handed over the Business Link brand to deliver and a bunch of service level agreements and targets. The wider choices are in the long term delivering a more cohesive enterprise support system that has some rationale aligned with local and regional needs.

And I keep hearing about confusion in the market place as being a big issue. I am not that convinced yet for several reasons:

- I have not seen any tangible evidence that 'confusion' is a really bad thing, or has really market negative economic or business impacts
- I think the big question is over managing how the client interfaces with these services
- I think its overkill to design a whole range of projects and services on the basis that duplication is the big problem. No.1. priority for me is to cope with these three questions - (A) are the right services, incentives, forms of help in place - (B) is their a sound market failure and impact/benefits rationale for this - and (C) can the businesses that need these services and are experiencing market failures or aren't realising their potential access them?
- Too often we're stuck in the poor public sector interpretation of things and end up pissing about with structures. Which leads to monolithic arrangements. I point to Scotland to an enterprise support system that monolithic and akin to a network of NHS Health Centres rather than a dynamo for entrepreneurialism.

Anyhow - show me the big bad negative impacts of 'confusion' someone please?!

Thursday, June 16, 2005

Common pitfalls in using consultants


But you probably got what you asked for. This is the most common complaint people have about consultancy outputs – it is almost invariably due to one, or a combination of:

- Not being clear yourself about the research – i.e. the five W’s – why, what, who, what use, why contract out?
- Not being able to clearly express needs and desired outcomes in the brief
- The brief was vague
- The brief let the consultants decide what to do and how to do it, and this wasn’t agreed with you, or you didn’t check if this met your needs
- You didn’t get anyone with technical experience to help you write the brief
- In other words… a lot of this is in the brief – put the work in early on.


Then you should have specified a length – to do this it helps if you know what you will do with the report and who the audience is.


Perhaps you need to specify that as well as a technical report, you need an easy-to-read executive summary


It still amazes me that some consultants regularly submit drafts of reports which are exceptionally poorly written. Some pointers to avoid this happening:
- As part of tendering, ask the consultants to provide a) examples of similar reports or work to the assignment/audience and b) a client reference
- Provide a style guide to the consultants in the brief or examples of styles you could like to see emulated
- Mention the importance of final reporting in the brief and the standards required
- Look at who is involved in the report writing from the tender – are they experienced enough, do they have a track record?
- Ask consultants to put in place quality assurance for report writing (such as internal lead writer, proof readers, editors etc)
- If this is a piece of research, at the last resort you need to completely rewrite it – it is helpful to make sure as part of the research brief the consultant is asked to provide individual project components:
Annexes or appendices of data, or research findings
Stand alone reports from research components – for example, ‘report of workshops with SMEs’ or ‘tables from business survey’
All evidence mentioned is sourced fully
Get ownership of the data and copyright of the reports – ensure this is part of the contract


There’s a question as to whether consultants should be providing recommendations anyway. Its far better to ask consultants to present ‘key messages’ or ‘implications’ of research than to proscribe what your organisation should be doing. Far too many consultants get carried away at this point and stray away from the evidence that has been produced as part of their assignment. In some – ask for key messages and implications. Don’t ask them to tell you what to do. Remember that the Freedom of Information Act requires you to make most of your research reports publicly available.


There can be a tendency for any researcher to over-analyse information, data or intelligence – to read too much into this. This tends to be due to inexperience in research and analysis; lack of knowledge about data sources and statistical validity, or a need to ‘bulk out’ a report. You can try and avoid this by:
- Set standards for analysis in the brief – ask for robust analysis and reporting.
- You need to proof read draft reports carefully to pick up points that are not valid.
- Often, too much is made of small samples of interviews, workshops or focus groups. Rememember that these tend to present impressions of people’s perceptions rather than hard facts. They can still be useful, but recognise the limitations of such information. They are best used in combination with hard evidence.
Setting strict limits on the sizes of reports tends to concentrate the minds of consultants a bit – and gets them to stick to the main findings and facts.

Tuesday, June 14, 2005

Richard Florida gets a kicking - The Curse of the Creative Class

Dicky Florida gets a well-deserved kicking!

Calling time on another guru-bullshitter:

Steven Malanga writes in City Journal:

Richard Florida’s theories are all the rage worldwide. Trouble is, they’re plain wrong.

...Florida was stunned to find, correlated highly with the other indexes. Cities with many gays were also places with lots of performers, creative workers, and tech companies.

At this point, Florida made two big—and dubious—leaps in logic. First, he assumed that there was some causal connection linking all of these indexes to economic growth. Then he decided he could infer just what it was about these cities that helped power this growth.

...much of The Creative Class is little more than Florida’s depiction of the Internet bubble’s go-go culture, the last third of the book offers urban policymakers a seemingly dazzling new economic-development agenda derived from these observations. To capitalize on the hot new economy, Florida tells policymakers, they must reach out to the creative class...

Armed with such notions, cities across North America, Europe, and as far afield as New Zealand are rushing to implement the professor’s ideas....

But Florida rarely lets basic economic data get in the way of his theories. Since the Internet meltdown, for instance, he has said that, although some of his most creative cities don’t seem to be doing very well these days, their performance shouldn’t be viewed so narrowly. “These places have been growing for decades building solid new industries that have helped to strengthen our economy,” he writes. But this simply isn’t true. Jobs data going back 20 years, to 1983, show that Florida’s top ten cities as a group actually do worse, lagging behind the national economy by several percentage points, while his so-called least creative cities continue to look like jobs powerhouses, expanding 60 percent faster than his most creative cities during that same period. None of this is surprising: given that many of Florida’s most creative cities are so tech-oriented, the further back one looks, to the days before the tech boom, the less impressive their performance is likely to be. In fact, the economics of Florida’s theories look good only if you take a snapshot of the numbers in a narrow time range—just before the Internet bubble burst.

Florida likes to talk about his most creative cities as centers of innovation, and, based on his writings, one would assume that these cities would be home to thousands of fast-growing companies.

But many are not. In fact, according to one recent independent study of entrepreneurship in America, Florida’s most creative cities are no more likely to be powerful incubators of fast-growing businesses than those at the bottom of his rankings

In 2001, a National Commission on Entrepreneurship [concluded that] the study concludes that “most fast-growing, entrepreneurial companies are not in high tech industries,” but rather “widely distributed across all industries.

Among major cities, Detroit—omitted from Florida’s most creative cities—finished second in the commission’s report, incubating about 50 percent more fast-growing companies than the average of all major cities, [but] with a particular strength in nurturing high-growth manufacturing businesses.

If Florida’s cities can’t produce jobs or high-growth companies at a rapid rate, you would think they would at least do a good job of attracting and retaining people, given the professor’s notion of the importance of place in the new economy, as a magnet not just for the talented but for residents of all kinds. But Florida is wrong again. Many of his “talent magnets” are among the worst at attracting and, more importantly, hanging on to residents. Just look at the 2000 census reports on domestic migration, which follow the movements in and out of metro areas by U.S. residents. That report found that New York, among Florida’s top talent magnets, lost 545,000 more U.S. residents than it gained in the latter half of the 1990s, the worst performance of any U.S. city. The greater San Francisco metro area was close behind, with a negative domestic migration of more than 200,000 people. In fact, five of the ten places atop Florida’s creativity index had steep losses of U.S. residents during that period, while some of Florida’s creative losers—including Las Vegas, Memphis, and Tampa Bay—were big winners.

It’s no coincidence that some of Florida’s urban exemplars perform so unimpressively on these basic measures of growth. As Florida tells us repeatedly, these cities spend money on cultural amenities and other frills, paid for by high taxes, while restricting growth through heavy regulation. Despite Florida’s notion of a new order in economic development, the data make crystal-clear that such policies aren’t people- or business-friendly. The 2000 census figures on out-migration, for instance, show that states with the greatest loss of U.S. citizens in 1996 through 2000—in other words, the go-go years—have among the highest tax rates and are the biggest spenders, while those that did the best job of attracting and retaining people have among the lowest tax rates. A study of 1990 census data by the Cato Institute’s Stephen Moore found much the same thing for cities. Among large cities, those that lost the most population over a ten-year period were the highest-taxing, biggest-spending cities in America, with per-capita taxes 75 percent higher than the fastest-growing cities. Given those figures, maybe Florida should have called his book The Curse of the Creative Class.

The city that sits at the pinnacle of Florida’s list, often jokingly referred to as the “People’s Republic of San Francisco” because of its socialistic political culture, is the perfect example of what happens to cities that follow this heavy-handed governing philosophy. While San Francisco sports taxes higher than all but a few U.S. cities, and passes laws forcing business to boost wages, San Francisco’s jobs economy has expanded at only one-fourth the rate of the national economy over the last 20 years. Similarly, high-tax New York has been caught in a cycle of boom and bust that has produced no net job growth in 40 years. During the mid-1990s, the city briefly got back to basics when the Giuliani administration focused on fighting crime and cutting some taxes and spending, and—presto!—for the longest period since World War II, the city’s economy outpaced the nation. However, now that the city’s political culture has veered sharply to the left again, with a mayor who declares that taxes don’t matter to businesses or residents, New York is once again an economic slacker, having lost 200,000 jobs, or nearly 6 percent of its jobs base, in the current recession.

These examples only accentuate what is otherwise obvious: that there is little evidence that people or businesses set much store on what Florida is prescribing.

It is exactly because Florida is an exponent of this kind of aggressive, government-directed economic development (albeit with a New Age spin) that liberal policymakers and politicians have latched on to his theories so enthusiastically. To them, an expanding government is always more interesting than an expanding economy—especially if economic growth depends on something so very uninteresting as low taxes and small government. But it is just as likely that the Floridazed brand of aggressive governing will get things as wrong as the builders of sports stadiums and convention centers.

Friday, June 10, 2005

THE KNOWLEDGE ECONOMY will solve the problems of your local economy in the time it takes you to say 'portfolio workers'...?!?

In my career to date, one of the most perplexing and at times bizarre phenomenons has been the rise of the "Knowledge Economy". From a piece of analysis, basically looking at SKILLS and COMPETENCIES and TACIT KNOWLEGE and how these were increasing in developed countries, allied with the rise in the service economy and activities THE KNOWLEDGE ECONOMY HAS NOW GONE VOODOO! it will solve the problems of your local economy in the time it takes you to say 'portfolio workers' (another bugbear of mine).

My frustration stems from the fact - all research essentially looks at the skillsets and occupational mixes of industries. If they are high skill, they are 'knowledge industries' - hold on - aren't they just 'high skill industries'???!!!

And so the bandwagon rolls on until every regeneration and economic problem can be solved by "the knowledge economy". And now its come to this in my job...

The blandness of the Knowledge Economy solution that has so far been put in every major strategy helps us not one jot to work out which businesses to assist, which training courses to fund and why and how. And folks are afraid of promoting sectors like food manufacture and processing to politicians which is a shameful state of affairs to be in because it requires low skills and will employ a lot of local people and there's demand for it in inner city region XYZ - i.e. its not knowledge economy or sexy - they want to save the sites for something that is intangible and unknown instead.

I defer to a far superior demolition job:

Terry Morahan writes in the Northern Ireland Labour Market Bulletin Edition 16 2004 (

“The new knowledge-based economy” This essentially meaningless phrase hasn’t gone away – see LMB No 16, page 201 – who has ever heard of an ignorance based economy? The hunter gatherer Australian aborigines could thrive in their desert environment 40,000 years ago – onlybecause of their intimate knowledge of the topography and natural resources oftheir tribal territories, their complete understanding of the animals they hunted and the plants they gathered for food and medicine – a truly entirely knowledge based economy.

And when the so called new knowledge economy is attempted to be measured (e.g. A Regional Perspective on the Knowledge Economy in GB, DTI) it is defined as “private sectorled industries where graduates make up at least 25% of the workforce” – hardly a satisfactory basis. This would imply that a generation ago (when under 5% were graduates) there were almost no knowledge-based sectors!


“At the heart of the knowledge-based economy, knowledge itself is particularly hard to quantify and also to price. We have today only very indirect partial indicators of growth the knowledge base itself. unknown proportion of knowledge is implicit, uncodified and stored only the minds of individuals. Terrain such as knowledge stocks and flows, knowledge distribution and the relation between creation and economic performance virtually unmapped”.- OECD 1996

In other words – its an article of faith, not reason. As Terry further said: “Most of what policy-makers need to know is still unknown, and the result is sometimes confusion.”

This article has been restored from an earlier posting that was deleted by accident.

Economic Baselines - why bother???

An argument against baselining that I have often heard is “available statistics can’t tell us about the impacts that our policies or projects have”. That is partially correct – they can’t tell you about the direct impacts. However, they can signal changes in a local economy that may either be down to your policies, or that your policies had better take account of and respond by changing. Too often this argument is used as an excuse for not doing anything(!). And then, when evaluating your programme 10 years later when it has already been substantially delivered, you have to unpick a whole lot of data and information that you could have started work on… 10 years ago! If you plan a baseline and monitoring of your activities and projects you will start to collect and analyse relevant information. If the information isn’t there you can make an informed plan and decision on how to capture information.

In sum, baselines are useful in the following ways:

- At the simplest level, a baseline is a tool for monitoring change and impacts of your projects or policies. It will not authoritatively nor directly measure these impacts, but it will make a useful contribution.
- Economies change, and so should your responses to these changes – if you have no way of tracking these changes, its much harder to respond in a timely and appropriate manner.
- Linked to this is the fact that your policy might be flawed or inappropriate (or maybe directly relevant) to the local economy. Unless you do some kind of study, you will never know this.
- Another link is in designing the balance of resources, provision and targets. If you budget for assisting 10,000 small businesses, but there’s only 5,000 in your local economy then you need to reallocate/rebalance. Similarly you can do this on the basis of economic priorities, needs and opportunities – a baseline can help identify all of these.
- A baseline helps you think about what you need to know to deliver or monitor your policy or project. You identify information needs, then look at available indicators and intelligence and are able to identify gaps.

Any more anyone?

Thursday, June 09, 2005

Is your organisation data-driven?

An economic development agency can’t understand why drop-out rates for its training programmes for unemployed young people are so high. So they commission a survey to find out, spending £100,000 on consultants to survey training programme participants and drop outs, conduct focus groups and research with a final report.

A little bit of intelligence work on the local and national economy suggests that at the present time, more and more young people are staying in formal education, and the labour market offers fairly good job opportunities and prospects for young people, whether unemployed or just leaving school. Anecdotal feedback from training providers tells the agency that the entrants into the training programmes are people who cannot continue in education or cannot access jobs – they are the least qualified, and least employable young people. The training programmes were originally designed to cope with the average unemployed young person 20 years ago, and not aimed at those who have more acute problems in attaining qualifications and accessing work. Therefore the training programme does not meet the needs of the client group today, as it did 20 years ago. The issue is that the labour market has changed, while the training programme has stayed the same. Spending a few days finding this out is cheaper and provides more insight than commissioning a £100,000 research project.

The moral is that gathering intelligence on its own doesn’t provide you with answers. You must go one step further and ask what intelligence is telling you about your activities, the market and environment that you operate in. Initially, its best to analyse information already at hand to see if it answers your questions than to go and collect more and more data.

This analyst gets angry!
I have lost count the number of times that I, or a colleague, have been administering and delivering a survey for a range of economic development organisations and they have asked for a bigger sample for their local area – AND – they have not been able to justify or give any rationale for the survey boost! Say the survey boost costs £100,000 and there is no reason for it – what’s the point? Then the local agencies tell us that its not accurate enough for local purposes - we ask ‘for what local purposes?’ – too often they couldn’t come up with any answer.
But – before we get too bolshy – people often have great difficulty expressing their needs and why they want things. A good analyst gets to the bottom of this need, if there is one. A good analyst asks the questions ‘what do you want the extra sample boost for?’ – as it tells them where the client or partner is coming from. And then the answer may not lie in a sample boost at all.

Monday, June 06, 2005

There is no such thing as a self contained local labour market

There is no such thing as a self contained local labour market. according to a Ph.D. published last year by Patrick Watt from Futureskills Scotland ( The main thrust of over 300 pages of evidence, analysis and prose are thus:

1 Within the UK, Travel-To-Work-Areas (TTWAs)are often adopted as convenient approximations to ‘local labour markets ’.For this to be valid,it is important that some aspects of TTWAs are fully understood.
2 TTWAs are academically defined areas,designed to provide a consistent basis for reporting unemployment rates.They were last revised in 1998.
3 TTWAs were not originally designed to be approximations of local labour markets,however much they are used as such.
4 TTWAs are defined in a consistent manner,using clear concepts and criteria,to allow for convenient comparisons across the UK.But their individual characteristics vary greatly – there is no ‘typical ’ TTWA.
5 TTWAs are static representations of a dynamic process,and as such cannot represent all the flows of jobs,workplaces,and people in an area.
6 TTWAs are based on the commuting patterns of the ‘average worker’, omitting variations across gender,occupation and other characteristics which are important in labour market terms.
7 TTWAs are based on Census data,and as such,their definition can lag behind changes in the economy and labour market.

How then, can the local labour market be analysed? In summary,caution is prudent when discussing the ‘local ’ labour market ’ in spatial terms:
- However universal the concept,there is no standard,spatial definition of the local labour market.
- The complex and dynamic nature of labour markets makes any definition of a local labour market difficult,and invites over-simplification.

As such, perhaps the best approach is to understand the spatial factors that influence labour market dynamics in the administrative area of interest,be it global,European, national,regional or local.Such a detailed understanding,allied with appropriate local knowledge and evidence can lead to effective intervention in the labour market locally.

Its far more sensible and practical to start with your area of interest (be it linked to a ‘community’ or an administrative boundary) and to try to understand the economic features and processes operating in, across and through your area. To gain this understanding you will probably need to look at features and factors both within and beyond the boundaries of your local area as you have defined it.

Wednesday, June 01, 2005

What rationale for Sector Skills Councils?


Past experience, recent events and comments from folks working in economic development and regeneration lead me to think about Sector Skills Councils.

Are they misconceived as a concept or delivery model?

Several things would lead me to believe so:

  • Skills and competencies tend to be occupationally specific - related to the type of work, more than the sector the workers are operating in.
  • For example, lots of sectors employ accountants. Would it make sense for each industry to provide skills policies and training for its own bunch of accountants? probably not.
  • There could be a case for highly specific engineering skills. But then again, when it gets to specifics - aren't the businesses or employers themselves best placed to assess the training needs and help the employee get the training? Aren't the public sector bods best providing the generic skillsets or graduates etc with the raw ability to do the specialised jobs, with the employing organisation sorting out very specialised training?
  • There are some industries who do employ large proportions of workers with certain skills, but I still think that an industry/sector specific focus is somewhat flawed.
  • Most FE colleges and careers services think about occupational pathways rather than sectors. They do this for a reason - because they guide people into job types where they may access broad or detailed occupational specialisms.

This seems to be reflected, to me, in the constantly shifting sector footprints of the SSCs themselves, and the complicated exercise of licencing and delivering sector skills agreements. They have to cover such a diverse range of skills that overlap with everything else, they shift and expand - will they eventually have lots of overlap? probably so.

Are the SSCs doomed to failure? interesting to see what happens in the next 24 months.