Monday, October 31, 2005

Choice quotes (entertainment edition)

Some of the most entertaining (as entertaining as it gets!) quotes from interviews with economic folks in my Ph.D...!!! read on:

IIP is tired!

“Investors in People is ‘tired’, and it is not really up to US company standards. We know this as we have here in many US multinational HQs in our area. If you tried to get them to do IiP, they would laugh at it’s crudity!” (this is from 1997!)

EU regional funds at odds with national policy! never!

“We have EU funding, which seems to be at odds with national policy... There’s a fundamental dichotomy between what the EU wants, which is jobs and output driven, and what you need to do - which is market- led.”

Crap managers in EDOs! I can sympathise...

“I think the [lack of attention to company management in development organisations] may be due to a large dollop of public money which enables this attitude. [Here] we’re very resource aware, and we don’t have any staff who sit and do nothing. The effective management of people and resources is essential.”

Yup the rich ones are the ones who won't let anyone else near their toybox...

“There’s a lot of money available. If you can get funds for your own agency, then you don’t really need to talk to other people.”

ah the dilemmas of performance reporting...

“In Business Links and TECs, targets are set by civil servants. They use the number of business and client enquiries as a measure of performance. This is like Heinz judging their success on who has seen the ads, instead of basing it on sales.”

The economic development mafia is what I prefer to call it... watch out for concrete boots...

“economic development is full of fiefdoms held by individuals, especially at higher levels.”

The Bill Shankly of bloody economic development... classic

That’s what the secret is - it’s all about people, and all you need to do is bring in good people. And if you bring in good people and you look after them, they will look after the company and the company can look after the area. I mean, maybe I’m the Bill Shankly of bloody economic development, but it’s as simple as that!”

German skills problems in ED...

Many of the people who are involved in regional development are hopelessly under-qualified, very limited in their outlook, don’t have the know-how to get projects going, have no strategic feeling, no real capacity for management of processes... You have the mismatch between jobs, jobs and the people who are actually involved in economic development. I shouldn’t use words like these, as they are emotional, but a blockhead is a blockhead, and there’s so many blockheads that are so ignorant really.” (from Germany)!

ED dictators...

“I feel that in many of those organisations there’s a wee measure of arrogance in there... Everyone’s a lesser in their eyes... what really compounds the felony is that in my view, a significant preponderance of those people who are employed by XYZ tend in their hearts to be top-down, tend in their hearts to be prescriptive, and tend to feel that they know the solutions and that their approach is to impose those solutions upon an unsuspecting and often unwilling community.”

This is my favourite one "you know where the smoking gun is... its in my hand!" classic. We should resurrect John Ford to make a movie...

“Every organisation needs it's creative geniuses - the dreamers - the people that put their finger in their mouth and just think about things. but... I [am not a dreamer], I just look after the company... In here you know where the smoking gun is - it's in my hand.”

I couldn't agree more, and I am writing these strategies too...

“People often think that having a strategy is having a document. Well they are wrong, because it’s got to implemented, which many of them don’t do.”

Friday, October 28, 2005

PhD stuff #2: The values of ED organisation staff

Other snippets from me Ph.D...

An important and interesting theme to come out of the interviews were the culture and values relating to an agency’s economic development approach.
Values associated with positive outcomes...

There appeared to be a sound basis for dividing the ‘philosophy’ of the agency interviewees along either ‘product driven’ or ‘market driven’ lines. A ‘product driven’ approach is characterised by a concentration on the tools, programmes or projects that an agency delivers. The focus is on economic development activity through what the agency provides operationally. Practitioners in this situation often concentrate on ‘doing things right’ without questioning or attempting to analyse the rationale behind them. A ‘market- led’ approach takes its starting point as an analysis and understanding of what is relevant and feasible in the market-place, or socio-economic environment that the agency is in. Its focus is upon ‘doing the right things’.

There were numerous values given positive and negative associations in interviews with EA staff:

Values associated with positive outcomes
“no blame culture”
“add value”

Values associated with negative outcomes“insularity”
“blame culture”
“little empires”

“There’s too many wafflers and dreamers in economic development.”
(Manager, Business Link B, London)

“I think that people can strive a little bit too much and waste time in looking for the holy grail of economic development.”
(Executive Director, LEC D, Scotland)

Thursday, October 27, 2005

Good practice in economic development agencies

Because I am too lazy to write original material today, and for some other days, I am going to post snippets from a less well known piece of academic work that I authored many years ago about good practice in economic development agencies. Based on 3 yrs of heid exploding work and being locked in a small room on my own. I did talk to 80 folks in Development Agencies in three countries though...

Pure gold, so it is...

A market-led operational philosophy

... there were several arguments used to promote the idea of market-led philosophies in economic development agencies:

i. A market-aware approach involves increasing client and market differentiation and segmentation - which is in response to the realisation that development aims are more effectively met if different client groups receive tailored approaches and tools.

ii. A market-led approach is about maximising the opportunities in the local economy.

iii. There are occasions where certain development activities in their current form become unsustainable. Public support for these activities is only a solution if it can change these activities to make them sustainable.

iv. The public sector has a poor track record of managing enterprises in the market-place in the long-term. Divestment should be emphasised once market failure is corrected or modes of intervention become self-sustaining.

v. Effective economic development involves working with the private sector. An understanding of the dynamics and needs of different forms of economic activity requires the insights of the businesses which are themselves the focus (GLE, 1997a).

vi. There are many examples of a mismatch between programmes and services on offer through the economic development institutional infrastructure, what is best for development, and what is actually demanded by potential and existing clients

vii. Close relations with the ‘market’ inform policy, strategy and operational design. This further enables services and programmes to be designed in such a way as to fulfil development aims whilst being attractive to potential clients or users.

Overall, it is argued in this research that many development agencies in the past have been predominantly product-led. That is, the service or programme on offer occupies too large a proportion of the agency’s efforts in management and development. The starting point should not be past practice or by claiming ‘that’s the way it’s always been done’, ‘it’s best practice at the moment’, or ‘it’s an improved version of our previous provision’. The starting point should be the ‘market’, encompassing the following stages:

1. Strategic market analysis. Both analysing the local economy and the requirements and demands of potential users, beneficiaries or clients of the development agency’s remit and role.

2. Design services and programmes that consider both the economic development aims and objectives, and what users or clients are likely to take- up and gain satisfaction from. Services and programmes designed with the best intentions and effort can perform poorly if no consideration is given to the user’s perception of value or demand for these as well as their ease of use and access.

3. Establish organisational structures so that there is a visible interface with the ‘market’ and there are feedback mechanisms into the wider organisation.

4. Acknowledge that transactions between agencies as producers of their services and clients or users as consumers is a long-term relationship. A consumer perspective implies excellent customer relations and management, that will further benefit operations by improving provision based on market feedback and enhanced market intelligence.

Using a common framework for categorising the ‘market management’ philosophy in firms further illustrates the relevance of this discussion. The ‘market’ doesn’t just refer to the business world, or the world of buying and selling services. It refers to the funder, client or beneficiary base in the case of economic development agencies. Further, applied marketing is a management philosophy and approach that is very useful in designing effective organisations. The applications of the principles of marketing to non-profit organisations are made evident by Kotler who states that,

The basic reason a non-profit organisation should be interested in formal marketing principles is that they will enable the organisation to be more effective in achieving its objectives. Organisations in a free society depend upon voluntary exchanges to accomplish their objectives. Resources must be attracted, employees must be stimulated, customers must be found. The designing of proper incentives is a key step in stimulating these exchanges. Marketing is the applied science most concerned with managing exchanges effectively and efficiently.
(Kotler, 1975)

(c) 1998

More tomorrow - can you wait that long!?

Wednesday, October 26, 2005

10 things that make me slightly peturbed (but not that angry really)

There's 10 things about economic development organisations and government departments that might get me a wee bit upset, but don't really make me angry any more:

PS someone asked me what I was angry about. Nothing too much really, but its a good name, innit?

Anyhow 10 things in economic development organisations that can p*ss me off potentially:

1. Economic development organisations which lead me to believe they know nothing about economics. They tend to be the ones banging on about the creative class.

2. Economic development organisations banging on about customers (no, they are beneficiaries), return on investment (no, its mostly return on expenditure dammit!)

3. Economic development organisations boards (in general) but especially when they seem to think they are running a private sector organisation, or they are trying to inject some private sector stuff into it. When they are really public sector organisations with the same staff ethos. Note - we don't want PRP. We just want a decent wage, comparable to civil service equivalents and none of your nonsense. Bugger off!

4. ED organisations who have strategies which have little relevance to their own economies, or make little of their comparative advantages

5. Trying to implement environmental sustainability into economic development. As if it wasn't hard enough.

6. European Funds generally. Why seperate structures, programming documents etc - we usually have regional ED strategies - just give us the money and we will get on with it, no need for more bureaucrats and you can stick your quarterly claims forms, thankyou!

7. People in EDOs who uncritically read management books and stuff like that. Much of it is garbage. Some is useful, but you have to be careful. Its usually case studies and some bonkers ideas off evangelical nutcases.

8. Senior staff with little track record or knowledge in/of ED. Can be a bind. They just don't have the context to make quick and the right decisions. They are not daft, they take time to bed in.

9. When EDOs believe their own hype that they are the best economic development agency in the known universe (you know which one you are)

10. People who run good projects but don't evaluate them enough. Shame when the funding cuts come in, they can't make a decent case for themselves. Very unfortunate.

Tuesday, October 25, 2005

clusters I might be prepared to believe in

You know there are some proposed clusters I'd be prepared to consider were a cluster, and have a bit of confidence in:

- London's media cluster
- associated - London's creative industries cluster
- Sheffield's steel cluster - yes! its still going - producing more steel than ever before, some highly specialised, just not employing as many bods.
- UK/London's financial services cluster - which really now extends across many cities in the UK too
- UK defense - we probably have most parts of a defence/weapons cluster - i.e we can design, build, test and sell them

These might be clusters as defined by Porter etc.

Strong bits of cluster. There might be a case for saying that some strong parts of clusters exist in the UK

- Aerospace - still quite a bit of design and build capability here
- Food and drink - some products, yes, we do have strong presence

Anyone up for identifying any more full or partial clusters? - based on realism of course, and not some RDA glossy brochure.

All this is shooting from the hip really. So take no notice. If I don't present hard facts I wouldn't blame you from saying its rubbish.

I would really like to find out where the world's tourist tat cluster is based. I always wonder how that industry functions.

Monday, October 24, 2005

are clusters a rubbish focus for intervention or economic development?

Been thinking about Clusters recently after some stuff that was said in an internal workshop.

I used to work at Scottish Enterprise, and serviced a lot of teams there as a private consultant in the late 1990s. I wasn't impressed with their clusters approach. What they did:

- identified some Scottish clusters
- spent ages (and big consultancy $$$s) mapping the clusters, mapping weaknesses etc
- spent ages meeting and connecting folks in the cluster together
- did a few specific interventions
- identified some cluster gaps as R&D, invented public sector research labs to specifically service the cluster

What was achieved? after investing in cluster teams and a huge research effort (in my opinion, the research was very patchy - good for some cluster teams, bad in others) - not a lot I reckon. This is because I think the effort and approach was misplaced.

I'd like to express some of my own theories about clusters:

#1 they are no respector of government or administrative boundaries. They operate across all artificial and formal boundaries. Especially in open markets.
#2 very few examples of successful, self-contained, highly localised clusters
#3 very few clusters created out of thin air
#4 very few clusters created in less than 10 years (take note RDAs!)
#5 must have some kind of comparative advantage for cluster presence (take note again RDAs!)

OK, ok they are engines of growth in certain parts of the world, and Porter's analysis of competitiveness is compelling. But as an economic development tool I think its not been well applied, at all.

Its big use is in understanding the economy and your locality's place in it. If this leads to some intelligence interventions, then that might be a good thing. If it tells you that you are one the outer spoke of a cluster, a branch plant zone etc, that's useful.

But that kind of analysis is very sophisticated indeed. How many RDAs do you know that intelligently create and target interventions? hardly any I'd say. The clusters approach is way too complex and sophisticated for the average RDA and RDA staff member I'd say. That's why, if you are SE, you spend £5 million on Porter's consultancy company to come and tell you about clusters.... heehee.

Anyhow, just a thought. I have to say that I am both sceptical and open minded about clusters, but they are not the panacea for everyone. And if I hear anyone say the "Anytown XXXX cluster" again, I will probably develop a nervous tic.

My big message - you can't have a highly localised cluster. They aren't valid. Don't try and create one.

Thursday, October 13, 2005

musical chairs...

*rse. My organisation is restructuring again. Just when we had nicely got our heads around the old structure!

Some of the golden rules about economic development organisations:

1) constantly reorganising
2) always having to justify yourselves
3) always claim from on high they want to use less consultants, but give less and less incentives for the experienced staff to stay on, hence increasing the need for consultants!

Sometimes I wonder why I bother. I tried being a consultant. Fun work but I don't really want to do it again at the moment, especially for a firm of consultants. Why would I need to bother, when I have the inside knowledge of how to do it myself, and also have a few good contacts for work. Although the thought appeals of quitting here and then coming back on £500 a day to do the exact same thing. That would teach 'em.

The new restructuring might bring opportunities. Already I have been offered a new opportunity in an new department, in an area I am have not, in the past, been interested in working for someone who I am not sure I want to work for! well time to dust of the 'ol CV!