Economic Development UK

commercial property crunch - bad news for regeneration?

2008-02-04T15:04:00.000Z

The commercial property market's been sliding over the past year (Times, Telegraph) - what's happening is that:

Asset values are decreasing
Shares in property related stocks and funds have fallen
Restricted debt availability means less means to fund buys or new developments

Basically demand has slumped, the supply of capital has shrunk, and there's a lack of deal flow which has deflated confidence. The commercial property market has had a long boom, and probably over reached itself some years ago. The market seemed to be saturated with investments and assets years ago.

Its bad news for regeneration

For some cities who are still awaiting redevelopment of their centres of docksides, there might be no investment funds, and changes to the risk climate might have now pushed them out as a viable development project.

And then there's the developments in progress. Could a developer go bust? maybe - British Land have seen 10% wiped off their asset value recently.

Developers have got a lot more sophisticated over recent years. They really understand the local differences in UK markets much better than in the 1980s and 1990s. However, their appetite for risk is different now.

Your partnership not working?

2005-12-01T10:21:00.000Z

#1 - partnerships need clear objectives for partners to coalesce around. I've lost count of the number of partnerships I see who spend too much energy deciding what they are supposed to be doing. I am a great proponent that form should follow function. Sometimes a partnership is not the answer!!!

More lessons from some research I did below...

1. Partnerships need clear and reasonable rationales and objectives for their creation, maintenance and continuity. They should never be seen as an end in themselves.

2. Collective arrangements are more effectively constructed around definite and clear objectives.

3. In the initial stages of a partnership arrangement, a small number of lead participants can more effectively and quickly establish policies, strategies and operations.

4. The danger must be avoided not to be too exclusive in membership when establishing a working relationship or formal partnership. Parties that are asked to participate once the partnership is established or even has established policies and priorities can often resent this, or even interpret their position as one of being forced to fit into existing arrangements. It is important that research is done to identify key organisations and constituents at an early stage. Consultation may be enough to give them some ownership of the partnership arrangement in early stages.

5. A distinction must be made between participation of a partnership as a decision-maker or leader, and as a consultee or constituency representative. Combining these roles with a large number of partners in addition makes decision making slow and cumbersome.

6. Inclusion based on constituent or interest group representation alone is perhaps insufficient. It is more beneficial if members can bring additional benefits or skills to the relationship.

7. Consensual decisions are not necessarily the best decisions in the interests of the local area and its development and regeneration. There is a danger of reaching the ‘lowest common denominator’ in consensual decision-making. The ‘common denominator’ can be made even lower as the decision-making membership is increased in number.

8. Inter-organisational tensions are healthy and educational for participants. Development agencies can be kept informed by listening to the opinions of other groups. This process may improve the implementation process, fill gaps in knowledge and expertise and provide feedback on the effectiveness of programmes and services.

9. Inter-agency working requires certain skills and attributes to maximise its potential. Careful thought, and personnel development need to be made in the agency prior to, and in the process of, external relations and inter-organisational working. Managing a relationship with another organisation is not simple nor straightforward. It requires much appreciation and knowledge of other organisations as well as requisite skills. It must also be recognised that experience is a necessary part of building up this expertise.

10. Partnership relations represent an important conduit for feedback about the agency’s performance and reputation amongst its peers. They are also a forum for establishing favourable reputation. Importantly, it must be also remembered that they can also sour the agency’s reputation in a very public arena.

The data-driven organisation - an allegorical tale...

2005-11-25T09:23:00.000Z

BAD PRACTICE: THE DATA DRIVEN ORGANISATION
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.

BUT!

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 OF THE STORY

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.

THE ANALYSTS EXPERIENCE – COMMON ISSUES AND PROBLEMS WITH SURVEYS
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.

parchutists in the civil service

2005-11-24T13:08:00.000Z

Ah um, so a certain government department whom used to do a lot in a certain area of economic development and business stuff devolved a load of it down to the regions. And now they have appointed regional officers. Besides the point that well, why do we need a regional officer if its all devolved now, the officer doesnae have much of a scooby doo.

I have heard the new regional officer speak, and well, they haven't really mastered their brief yet! It was amongst experts, and was a cringeing moment. Mind you, it will be easy to fob them off as they won't be able to tell a red herring until someone else slaps them in the face with it.

What is it about the UK civil service where they radically change jobs as often as Portsmouth FC gets a new manager? Its annoying. Like we have people who come and work in employment policy who previously worked in policy for liquor export licensing or something as bonkers as that.

Where I worked previously, in Scotland, the head of skills and employment changed about three times in three years. Can you believe it. They'd have to be briefed every time. I remember a presentation by one, and thinking my goodness those ideas are at least 5 years old! they obviously had an early edition of the textbook!

What is it about our Civil Service where people are encourages to be generalists and there are few senior specialists?

how to do evidence-based policy - some pointers

2005-11-21T16:18:00.000Z

GOOD PRACTICE: PROVIDING THE EVIDENCE FOR ‘EVIDENCE-BASED POLICY’

I was extremely privileged to work for several years in an applied research unit which had been tasked with using evidence to influence decision making. This applied to the decision making of a varied bunch – from policy makers and their executives, to careers advisers and their clients. The idea was to collate and analyse labour market evidence and to tell people really what it meant – i.e. to improve their knowledge of the labour market to inform their practice or their actions and help them make better informed decisions.

EVIDENCE-BASED POLICY IN ACTION

It was extremely challenging to start to make evidence more useful. Traditionally, economists and analysts in the area in which we were working had typically delivered long-winded reports with innumerable tables and complicated graphs, and had shied away from analysing the key insights and messages from evidence. It was left to the practitioners to try and become analysts themselves – a flawed assumption. Of course, there were a few practitioners with the time and energy, that could do the analysis, but 99% couldn’t and it was unreasonable to expect this.

It was clear we would have to take a different approach. We did this by:

* Getting to know the market for analysis, intelligence and information – just what did people want from economic analysis and in what format or style? They told us they didn’t use voluminous reports – they sat on the shelf. We actually segmented the market in terms of sophistication of understanding and use of intelligence. Quite quickly there was one market we weren’t interested in catering for – the experts. The experts could do their own analysis, and were comfortable with long winded reports but represented a very small user base for our services who mostly had limited influence on policy or delivery. There was no payoff in catering to this user base, apart from being well thought of by our peers. I think it is a mistake of many research units in the public sector that they try to emulate experts as they think it’s the best way to go about things – but they ignore the bulk of their consumer base which is the middle ranking public sector official or service delivery agent.

*Getting to know how people could use intelligence to better inform their decisions – what do they need to know and when? This involved identifying a few key constituencies and opening up lines of communication about their needs – for example, we did this with the Further Education College sector and with the Careers Services sector. This eventually led to collaborative products that were market tested with clients before public release.

* People wanted short reports! They were fed up with 100-page reports – they wanted much shorter reports – in the case of careers advisers, they wanted one or one-half page news stories! We started to provide a hierarchy of reports – we would have the 100 page reports and tables that were necessary in the first place on which to do the analysis – we provided these but didn’t make a song and dance about them; we then provided a 20-30 page easy to read report; then a 5-10 page executive summary; and then a few 1-page tabloid articles covering the main points of analysis, findings and messages in an engaging way.

* People wanted key messages and insights directly relevant to them, but to be also assured of the robustness and quality of the research behind these messages and insights. Ok, we needed to provide short and accessible reports, but the work behind them better be robust and comprehensive. We achieved this through setting high quality standards for ourselves and our contractors. Contractors whose quality of work was inadequate were not rehired. We also engaged in some training for presentations with media people – this meant that we made good external presentations and that we could stand up and be credible as well as informative. We tried to establish and maintain a quality standard for our ‘brand’.

* People wanted ad hoc or regular access to key statistics that were up to date. They wanted this for their reports, their boss’s presentations, or their funding applications. They also wanted all the background information about the statistics – what they meant, the source, the accuracy. Plus, there was a selfish motive by us, the staff – for who wants to be bombarded with requests for the latest unemployment rate or other figures? We had some online resources developed which would provide a range of key indicators in an easy to use internet based toolkit.

*We wanted people to use evidence – as such we had to ensure it was relevant, they would read it, and would find it beneficial.

THE MORAL OF THE STORY

People want information, intelligence and economic analysis for a reason or a purpose. To meet this it must be ‘fit for purpose’ – and that doesn’t just mean technically correct or accurate (we’re taking this as a given, folks) but in a format and style which genuinely makes a decision or service delivery easier to make or enhanced in some way.

An academic gave our little applied research department a favourable review in a letter to a local newspaper – he said ‘evidence based policy needs evidence’ and congratulated us on sourcing and providing the evidence. I would like to take this further by saying ‘evidence based policy needs accessible, meaningful and relevant evidence’. It is no use providing 200 pages of evidence if it is irrelevant or if no-one is inclined to read it.

For some analysts, they may feel ‘cheapened’ or that they are selling themselves too far to provide their analytical insights in a one page tabloid article. For me, this is unnecessary snobbishness. I would rather do a piece of research and have 1,000 people read it and benefit from it than just 10 fellow analyst who probably knew it all anyway.

USEFUL LINKS:

The best Careers labour market intelligence resource I have ever seen: Oregon Labour Market Information Service - www.qualityinfo.org/olmisj/OlmisZine

Using evidence to inform policy in the labour market in Scotland: www.futureskillsscotland.org.uk

Interesting research - survey of 4000 London businesses

2005-11-16T15:36:00.000Z

A decent survey with a decent sample (report here: http://www.lda.gov.uk/server/show/nav.001005005002)

Some interesting findings about business growth - turnover, profitability, jobs. Where they did some nice multivariate analysis.

Key messages:

• The London Annual Business Survey 2004 revealed that growth is more likely to occur in businesses that have one or more of the following characteristics of behaviours:
– employ at least 5 employees, are sole proprietorships or partnerships, or private or public limited companies;
– use business planning tools and formal management information systems;
– are expanding their markets in the UK or globally;
– have successfully gained external finance, and/or are investing in equipment;
– collaborate with other organisations, mostly other businesses;
– undertake R&D and innovation activities;
– adopt a range of competitiveness strategies such as adopting IT, launching of new products and services, expanding markets, and/or cutting production costs; and/or
– use Business Link and other public sources of business advice or information.

• High performing businesses perform well across most measures of performance – they tend to perform well in turnover growth, profitability growth and productivity growth at the same time.

• Businesses less than 10 years old; in financial services, business services or ICT activities; or with a mixed ethnic ownership were more likely than average to have experienced turnover growth.

• IT investment has high positive impacts, and many businesses are actively engaged in this. Most businesses use IT regularly.

• The most commonly cited methods for enhancing competitiveness were: to improve customer/client relations; advertising/marketing strategy; adopting IT; and launching new products and services.

Nice fluffy things in business support

2005-11-08T15:41:00.000Z

Wouldn't it be NICE to have Business support services and systems that…

- Have leadership, clarity of role, priorities

- Are tailored to the locality/region's situation

- Offer a better customer experience

- Deliver quality advice and information

- Work with the grain of the market

- Use the advantages of locality/region as a business location

- Achieve better impacts to the economy for our money

- Deliver to priority groups and growth businesses

Ah as Gilbert from Gilbert's Fridge used to say "you can aalways dream..."

Mondays

2005-11-07T19:13:00.000Z

Ah some Monday's one can't be arsed can one? A day of watching the clock. I like my job, but sometimes going on holiday permanently must appeal to everyone. Especially on a dark November morning after a weekend of unremitting rain.

My vernacular is being influenced by the queen since I took a trip up an East London tower block to view the Olympic Site. Following in the footsteps of HRH a few weeks ago.

Anyhow - thinking about innovation these days. What's it all about in RDAs? not many seem to have got their act together really. Its all a bit wooly - promoting innovation, erm well its really promoting productivity and use of new products and processes. Innovation is all a bit too vague really. In Scotland it used to mean spending large dollops of cash on science parks and technology institutes. The RDAs seem to have all their development/capital cash tied up in regeneration stuff.

And what about regeneration - the SRB is drying up next year! I am a bit sceptical that regeneration really achieved much for the money spent in lots of areas. Some good projects, but also a huge rush to fund anything to get the cash out of the door every year.

I am half brained

2005-11-02T14:37:00.000Z

In the spirit of Stumbling and Mumbling I have renamed my tagline to "Half-brained ramblings and insights...."

This is because I got called half brained by a guy doing a doctorate in Austrian economics when talking about sticky prices here.

Hmm I also got called Mr. Central Planner. Which is interesting. But I don't do intellectual name calling or baiting at all, and I won't even try and ridicule AJE's website at all because I quite like it actually, although admit to being a bit flaky about libertarian economics. I'm happy to learn under my own steam, but also happy to disagree or debate without the insults. Unless its insulting the royal family, politicians or Guardian columnists. Which are all fair game.

I did have a temporary feeling of intellectual inadequacy. I get this a lot when it concerns economics. The subject is so vast, subject to much theoretical debate and many ideas etc. Its actually quite overwhelming sometimes. I am happier sticking to the numbers sometimes. A spreadsheet or SPSS analysis can sometimes help answer more questions than theories from dead economists sometimes. Sh*t I must stop drinking 10 cups of black coffee a day. Does this induce paranoia?

For me, economics is all about learning. I would never call myself an expert at anything. As Kurt Vonnegut said about his table tennis playing days, just when he thought he was unbeatable, some young guy in the army came along and tore him a new asshole. Life is like that. But it doesn't dim my enthusiasm for learning more about economics and putting it into practice.

In terms of different models, theories, schools, I definitely do not stick to one philosophy. Maybe this is because I am also an athiest. I really view market models as imperfect tools for understanding how the economy works or doesn't. No different to most sensible economists I'll bet. I don't put so much stock in them as to remove common sense from operating from my full or half brain.

I am also a good analyst of data. I put a lot of stock in evidence too. This leads me to view theories as nice and vaguely useful, but not always relating to the numbers swimming around the screen in my spreadsheets. etc.

Does the US have STATE AID rules?

2005-11-01T16:12:00.000Z

In my recent time in the US, it was notable that a lot of their economic development professionals work hard, and spend a lot of time and $$$ trying to lure mobile investment, and property developments into their patch. This is done with incentives, tax breaks, land deals, cofinancing, or tons of cash. Now - this led me to think - so they don't have State Aid rules then similar to the EU?

I have been advised that US guidelines are fairly weak. In all federal economic development programs, US states and local government authorities are barred from providing funds that lead directly to job displacement (i.e. moving jobs from one region to another). The purpose is to ensure that federal funds only support new job creation or job retention. Some (but not all) states have similar rules for intra-state job displacement. At the federal level, these rules are enforced in fairly strict manner. However, direct federal investments in economic development do not account for a very large part of activities in this field – it is mostly states and local governments who are active. Most of the money for economic development comes from states and localities and even then, the money comes from off-budget items like tax abatements as opposed to direct cash outlays. Like the EU, funds for worker training are exempt, and thus in the US it is possible to do the same things as were done in London with Ford. For recent new auto plants in Alabama and Mississippi, the major public investments were in the areas of training and local infrastructure (highway off-ramps, nearby roads, etc.). This money was primarily from the state, but the federal government did provide some workforce related funds.

Now this is interesting. But I believe that there is a good case for State Aid rules. Such incentives and deal brokering between localities can be a poor use of public cash. And its a pyhrric victory or zero sum game in the end in Europe.

However, anyone whose ever had to deal with State Aid issues knows its a f*cking nightmare (so I am told). First you ask the lawyers who tell you that it might be ok if an economist says there's market failure, and if you explain that you are an economist, they look puzzled... and so the dance begins.

Choice quotes (entertainment edition)

2005-10-31T16:52:00.000Z

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.”

PhD stuff #2: The values of ED organisation staff

2005-10-28T12:48:00.000+01:00

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
“openness”
“support”
“no blame culture”
“customer-oriented”
“add value”
“market-driven”
“accountability”
“accessibility”
“implementors”
“customer-focus”
“quality”
“co-operative”
“innovative”
“objectivity”
“professional”
“business-like”

Values associated with negative outcomes“insularity”
“fiefdoms”
“blame culture”
“defensive”
“complacency”
“arrogance”
“product-driven”
“unaccountable”
“inaccessible”
“dreamers”
“parochial”
“inflexible”
“prescriptive”
“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)

Good practice in economic development agencies

2005-10-27T09:19:00.000+01:00

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!?

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

2005-10-26T17:36:00.000+01:00

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.

clusters I might be prepared to believe in

2005-10-25T14:23:00.000+01:00

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.

are clusters a rubbish focus for intervention or economic development?

2005-10-24T13:50:00.000+01:00

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.

musical chairs...

2005-10-13T10:45:00.000+01:00

*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!

I think we need to distinguish between delivery and engagement

2005-09-20T15:59:00.000+01:00

Something to think about when I am away. I have been in deep and somewhat frantic (due to deadlines) thought over recent months. Too many wee projects developed for different client groups that essentially deliver for the same business needs or benefits as other projects are delivering. To the extent we have things like 'business planning for BME businesses' vs 'business planning for women owned businesses'. And its gone on for ages. And we wonder why we aren't doing so well at reaching certain groups.

Is it the service, or the method of engagement that is problematic, or both? Nonetheless I think we need to distinguish between them. They need to be considered seperately. Otherwise we try and fix the situation with yet more wee projects that reinvent the wheel somewhat.

So I reckon that there should be a marked distinction between increasing engagement and improving delivery in business support:

- Engagement – is the method in which RDA/YOUR DEVELOPMENT AGENCY seeks to raise demand for support; recruit clients to services, systems, initiatives and programmes of support; and linking clients and demand to the supply of support. Some particular types of entrepreneurs and businesses will need different methods and levels of engagement. Selecting the most appropriate level and type of engagement will recruit the clients that RDA/YOUR DEVELOPMENT AGENCY wishes to assist into a transaction for business support services (whether standard pan-Your area programmes or specific assistance tailored to groups of businesses or individuals).
- Delivery – is what RDA/YOUR DEVELOPMENT AGENCY’s ‘service offer’ is in terms of programmes, initiatives and services. It involves the design of programmes, services and delivery mechanisms to assist businesses.

Some critical questions to ask about engagement and delivery include the following:

- Is the current low market penetration in certain client groups due to faults in the way in which RDA/YOUR DEVELOPMENT AGENCY engages with, and recruits clients, or with the services that are on offer?
- It may be the case that RDA/YOUR DEVELOPMENT AGENCY can deliver a fairly standard range of programmes and service to a diverse range of clients with similar business needs and market failures, if only it had a better performing engagement and client recruitment performance
- Development agencies can target businesses both by their specific needs as a business, and by particular client groups. RDA/YOUR DEVELOPMENT AGENCY could do one, or the other, or both over its portfolio of clients and services.

F*cking off to the USofA

2005-09-20T12:32:00.000+01:00

Well, it had to happen eventually. Someone would have to decide that they needed to learn more from ED practice overseas and they would choose me to go there!

Off to the US to the IEDC annual conference in Chicago which should be fun. Never been to the windy city but it looks fantastic.

Then off to talk to some folks about business support in another major US city. Again interesting.

The Americans aren't as much into enterprise support as we are here. Apparently its a bit of a fledgling thing to move beyond land use planning and fiscal incentives.

Anyhow will post any interesting tidbits.

AE

Business Support - Unplugged

2005-09-15T13:09:00.000+01:00

Stripped down, this is fundamentally what I think public funded business support should be about:

1. Driving up economic impact and business peformance

2. Economic impact maximised by giving businesses:

A ‘hand-up’ – to allow them to either start a business, or correct their existing business performance from failing to stability or growth, perhaps assisting someone whose business would fail. High impact is achieved from ‘correcting’ downward trajectory

A ‘push-up’ – to assist them to enter a significant growth trajectory that they wouldn't have necessarily embarked upon. High impact is achieved from increasing likelihood and scale of growth

Fundamentally its all about driving business peformance upwards really, and trying to lessen the risks of failure or flatline performance.

I think an approach should also work with the market better. But I'll get back to you on that later.

AE

Prioritising business support - who gets what?

2005-09-15T09:29:00.000+01:00

Okay I am being lazy - this is work I am doing at the moment - about being a bit more clued up and systematic about who gets a slice of the meagre RDA budget for business support. One could ask, shouldn't RDA's be doing this anyway - why haven't they been doing it? well the answer is that yes they should be doing it but they aint. I am being paid to right the wrongs... (maybe not for much longer - another story sometime). But then again as part of this I am going to Chicago and NY to speak to folks about what they do for entrepreneurship so it can't be all bad, can it?

Why prioritise who gets government support, what support is given, and why?

- Some businesses, and types or groups of entrepreneurs have greater needs than others
- Helping some businesses will result in greater economic impacts and benefits than helping -others
- Helping some businesses will result in more successfully exploiting business and economic opportunities than others
- In the UK/your region, not all entrepreneurs require public sector support to be successful – enterprise support is neither suitable nor warranted for many individuals
- Some economic development activities will be more effective than others in the UK/your region
- There are methods of delivering business support that are more effective than others
- UK Government has limited resources and there are limits to what it can do especially in term of intensive support to businesses – it can help only a small number of businesses in a very intensive way
- Currently business support is not cohesively assessed or delivered according to UK’s priorities. It is has been designed in response to a mixture of priorities, many of them a legacy from before RDAs were created, and many of them from the national government or government office, some of them politician’s tinkering (Take note Mr. Brown)

Altogether, more effective prioritisation means that RDAs can achieve better results for their money and staff resources.

I have a nice framework which is in draft form for my particular client/employer. I will punt it on the web once its in a fit state for public consumption. Its all nice if its applied, but the biggest stumbling block has to be the pet projects of certain people, which, if put through my prioritisation framework would fall of the edge into the abyss!!!

I might have much more interesting things to say after my trip to the US.

I also have a typepad blog account under a personal name - I think I will merge it with this one once ADSL is up and running at home.

Chin chin.

The Angry Economist.

Lessons from 35 years as a professional economist

2005-08-25T09:30:00.000+01:00

As reported in the New Economist

Dr John Llewellyn, chief global economist at Lehman Brothers, has recently turned sixty. In the 7 August issue of The Observer he says this turning point led him to ask: "what, over the past 35 years as a professional economist, I have learnt that is of real use". Ten useful lessons for a sexagenarian is his answer. New Economist summarises his ten points below as:

1) Economic events - what economists call 'shocks' - seldom produce just one consequence. Usually the effects ripple on for years.
2) Good economic policies do not guarantee good economic performance; but bad economic policies inevitably result in bad performance.
3) It is structural, not demand-side, policies that most influence economic performance over the long term.
4) People respond powerfully to economic incentives.
5) Economic and social policies have to be considered as a whole.
6) Competition is one of the most powerful of forces that motivate the perpetual quest for more efficient ways of doing things.
7) History seldom, if ever, repeats itself precisely. Economies have the habit of producing new mixtures of circumstances that require new approaches.
8) Complicated economic policies whose rationale is hard to explain usually fail.
9) Some of the biggest, and most important, economic issues remain unresolved.
10) Just because professional economists don't always have a confident answer, it does not follow that all proffered solutions have equal validity. ...often the biggest contribution [they] ..can make is to demonstrate why the current fad or nostrum is wrong and will fail.

Its definitely worth reading the article and also the New Economist has an interesting summary of the latest evidence about migrant workers coming to the UK and the largely beneficial effects of this: In praise of foreign workers

RESEARCH MUST BE DEMAND- OR NEEDS- DRIVEN

2005-08-23T09:40:00.000+01:00

Take a tip from a professional, experienced researcher and analyst – take some time to build a sound reason and rationale for a piece of work. Talk to people – especially the ones who are looking for intelligence or analysis to help them make a decision. Try and understand the context and needs from other people’s points of view. Remember – if you don’t supply them with intelligence or analysis that they can use, your work (and you) will not be valued.

Your needs: be clear about – The research question – what do you want to find out?
– What’s it for? What use will be made of the answer?
– Who is it for? Is it for a specific group of people?

The ultimate value of research is to help people make better-informed decisions. Sometimes its hard to determine exactly what those needs are if other people are involved. Often they don’t know about research in a particular field to be able to articulate exactly what they want.

How do you become a good analyst or economist?

The best way to learn about how do perform analysis, is to look at real life examples and have a go at doing analysis yourself. Also you need to get someone more experienced to review your work. This is the way I personally learnt how to do this. For this kind of work you need a critical eye, patience and concentration. Personally I think anyone with a sufficient level of education or motivation could do it. The rewarding thing about this is you will get better incrementally, and the economy is so diverse that you are constantly learning. Personally, I am still learning and hope to be in 50 years time.

Another issue is that to successfully triangulate and cross-examine, you can’t do this alone. You need other people to scrutinise information and your initial analysis. A few heads are better than one. Other people may spot something you didn’t. A lot of economists get hung up and precious about their work and do not like criticism. A good analyst welcomes criticism and embraces the pedant. I like nothing better than the most pedantic, nit-picking, irritating proof reading and reviewing of my written work and outputs. I like someone who can at one level, pull apart an analytical point and tell my when I am wrong, and at the other level, identify a mistake in one of my table headings. High quality control yields even higher quality at the end. Some economists don’t like this – I always think that they have something to hide. Its my suspicious nature.

Analysis – how to learn and get better

1. Doing: Have a go – learn by doing
2. Learning together: Learn off someone experienced – read their work, have them review yours
3. Reflection: Be your best critic – analyse your own work – ask if your analysis and conclusions are watertight
4. Validate: Always ask yourself – ‘what is the evidence telling me, what can I confidently say from it? Is there anything I am saying that the evidence doesn’t justify?’
5. Peer review: Always get an experienced person to proof-read, review and validate you final report. Get them to provide constructive feedback.

The professional challenge as an analyst is that your piece of analysis is of high quality, robustness and is valid before you give it to anyone else to proof read or check. You will learn, as you become an analyst that there are few things more insulting than wasting your time checking a piece of work that has not had enough thought, care and attention put into it.

That old chestnut Market Failure...

2005-08-12T08:43:00.000+01:00

Does anyone believe or use it any more!? Here is a list of the "ususal suspects" of market failure as relating to business support (SMEs usually).

Big problems for me in trying to apply market failure:
- lots of theory, little evidence - rarely is there good robust evidence that MF is occurring
- poor monitoring and evaluation - so we can't decide that if there was a MF in the first place, whether we have cured it or not

Quite a bit of business support is actually fairly closely related to MF. But some of it isn't. Personally I think its going to be useful to look into it in more depth. I have a lot of surveys and statistical things and my disposal and it looks like its time to dust off the SPSS manual...

Rationales for business support

2005-08-11T11:17:00.000+01:00

Its basic, yes I know but have I covered off all the angles here? it might seem like teaching grandma to suck eggs but round here we really are getting back to basics after inheriting 3000 seperate projects from the Government Office!

Anyone got anything to add?

Another one in market failure will be posted soon.

Do small businesses really care about regulation or is it another red herring???

2005-08-02T11:26:00.000+01:00

Been taking some evidence from some business people - mostly people on business representative organisations. Someone was moaning that regulation is the curse of small business.

I am not convinced really. What difference would less red tape make to the bottom line of a business? When I have seen decent research ranking the challenges that businesses face themselves - competition and market conditions are always number one and regulation is way way down, below skills, transport etc.

I think a danger is that red tape could be something else we get lumped with but can do feck all about.

Red tape would be an easy win for the public sector. Surprised Gordon Brown isn't into doing more about it. But he likes to create it too.

Also - are we headed for a recession? does this kybosh Gordon B's plans to become Prime Minister if he presides over an economic catastrophe? the public's memory tends to be myopic in the face of mortgage reposessions.

Anyhow meandering thoughts continue to permeate my brain...

Is the UK's enterprise policy and practice better than the USA's?

2005-07-26T10:44:00.000+01:00

I was at an interesting seminar yesterday by someone who is heavily involved in enterprise and entrepreneurship policy and practice in the USA.

Several issues stand out for me that tend to counter some of the mythology around entrepreneurship in the USA amongst other things:

- Enterprise development as a serious strand of economic development and regeneration is relatively recent - especially for State and city governments. Most tended to rely on business attraction and retention.

- There's not many universities any good at spin-outs in the US - he could only think of 2! same in UK I think. Despite its policy promotion, universities are crap at acting entrepreneurially and perhaps should be avoided. I was involved in one initiative in Scotland which aimed to assist technology and innovation start-ups and totally avoided universities as they were detrimental to success!

- The Federal Government is pulling out of economic development - halving the budget to £3 billion and consolidating all programs into one budget to be given to States. The Small Business Administration is being cut back too.

- Interestingly research points to many young people indicating that entrepreneurship is the preferred option over working for someone in the US.
However, enterprise education is hugely under resourced and under developed.

- Many US States are experimenting in enterprise support. Some weaknesses are that funding is short term (one-off programmes), ambitions are very high, and there may be a lack of stability or pragmatism.

- Good work in US on equity funding and Angel networks - seems to be a conducive climate to this, and public sector can help by pulling together angels or assisting SMEs to become investment ready.

- Like many European counterparts - US states are poor at tracking the performance of their business base and interventions

A big impression I got was that the US government at a Federal level is not particularly pro business or pro-enterprise and has no particular agenda or policy. Additionally, the issue of local and state taxation now seems to be a small influence on business location decision.

Overall, the US guy suggested that the way forward is for the public sector to pull out of direct delivery but play more of a role in information, pulling together networks and formalising support or the interface for support, and perhaps incentivising or subsidising private sector advice a bit.

One striking thing was that he thought that US entrepreneurialism is heavily dependent on immigrants, and post 9/11, immigration policy is not doing so well at retaining entrepreneurial people.

fixing business support

2005-07-21T13:27:00.000+01:00

A few things that I think will fix business support in various parts of the country:

1. Do what businesses want but within the bounds of market failure and a public rationale for assistance. This mere point has been forgotten for a while.
2. Tailor support to what can guarantee some positive economic impact.
3. Lose the fantasy that the public sector can be an expert delivery agent for advice in itself. But it can play a big role in setting up such delivery.
4. Services should resemble those you can get in the market place. Plus a business should know transparently what the benefits will be from its engagement in business support.
5. Strict enforcement and external monitoring of contracts for business support services
6. Some evaluation would be nice
7. Encourage innovation and competition - lets avoid a monolithic service like the past. Clever use of contracting, key funds and bonus payments could do this. So could voucher systems
8. Within this, we can design a neater customer interface. Whats behind it may be shambolic, but if the business doesn't notice, that's the point.
9. Forget about structures aligning etc - its all about the customer journey - it needs to be quick and to the point of what the business needs to sort out its particular issues

That's it so far. Plenty more in the pipeline.

Service temporarily halted

2005-07-05T12:01:00.000+01:00

Not that there are many of you out there who give a sh*te but service is temporarily suspended as the day job is very very busy at the moment. Plus other domestic things like buying a house are coming to the fore. This might turn into an extended summer break. But I should generate some interesting materials for discussion in due course.

I am in the midst of planning to write a book on 'How to analyse your local economy'. When I get time to write it I don't know. Feeback is welcome on the following:

- is anyone aware of any books out there which attempt to do a similar thing?
- what kind of qualities or contents would such a book need?
- what are the key aspects of local or regional economic performance of prime interest to practitioners and policy makers? I can incorporate guidance on how to analyse these in this book hopefully. Don't mention anything to do with R.Florida's creativity index etc for goodness sake!

The book aims to be a guide to how to analyse, as well as how to use the data, where to source it, what it means. And other things like economic forecasting, commissioning consultants and ensuring good vfm etc. The kind of punters I am thinking of will be for the average practitioner or Master's level postgrad.

ULTIMATE AIM OF THE BOOK - to help get better analysis and use of evidence in the public sector to inform understanding of economies and responses to opportunities and problems. Overall to improve quality of evidence and correct use of evidence.

Labour Market Myths

2005-06-24T16:07:00.000+01:00

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!!!

Portfolio workers fail to emerge...

2005-06-23T09:05:00.000+01:00

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...

Business Support: is market confusion just a red herring?

2005-06-20T14:58:00.000+01:00

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?!

Common pitfalls in using consultants

2005-06-16T19:51:00.000+01:00

I DIDN’T GET WHAT I WANTED…

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.

THE REPORT IS TOO LONG

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.

THE REPORT IS TOO TECHNICAL

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

THE REPORT IS POORLY WRITTEN AND STRUCTURED

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

I DON’T LIKE THE REPORT’S RECOMMENDATIONS

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.

THE CONSULTANTS COME TO CONCLUSIONS OR ANALYTICAL POINTS WHERE THERE SEEMS TO BE LITTLE EVIDENCE OR RELEVANCE

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.

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

2005-06-14T17:14:00.000+01:00

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.

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

2005-06-10T14:41:00.000+01:00

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 (http://www.delni.gov.uk/docs/pdf/DEL%20LMB%2016amended.pdf):

“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!

LEADING THINK TANK CAN’T FIND KNOWLEDGE ECONOMY:

“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???

2005-06-10T08:45:00.000+01:00

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?

Is your organisation data-driven?

2005-06-09T08:50:00.000+01:00

BAD PRACTICE: THE DATA DRIVEN ORGANISATION
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.

BUT!
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 OF THE STORY
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.

THE ANALYSTS EXPERIENCE – COMMON ISSUES AND PROBLEMS WITH SURVEYS
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.

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

2005-06-06T14:12:00.000+01:00

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 (www.futureskillsscotland.org.uk). 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.

What rationale for Sector Skills Councils?

2005-06-01T15:47:00.000+01:00

.

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.

How to tell if you are an economist...

2005-05-23T12:18:00.000+01:00

I have been putting a lot of thought of this - personal and participant observation reveals the following worrying signs of being an economist:

You have had several pens in your shirt pocket for several hours, and have even gone to a meeting with them in. You have only just noticed this in the mirror in the bogs.
You can't find a good quality retractable pencil these days...
You start to think that the magazine "The Economist" is far too journalistic and strays away from the facts way too much.
You start reading economics books, no matter how interesting and easy going, at bedtime.
You know more about the methods of economic forecasting than the mouthpiece the consultants have put on stage for the presentation... you smile wanly to yourself that you can see through their bullshit
You have heard of "Richard Florida" but you absolutely regret having ever heard of him!
Other colleagues in your workplace cite Richard Florida. You feel like shooting them.
You roll your eyes when you see the case study for a successful comparator economic region is... Baden Wurttemburg/Emilia Romagna/Baltimore...
You research mortgage rates in depth and design a spreadsheet on which to calculate various things. You try and recreate the payment streams and how they calculate APR. You build in scenarios of where interest rates may be going! this takes days and days and weeks. The wife is annoyed you haven't even got round to applying for a mortgage yet.
You lose your temper that the figures in the report you are reading are 'unrounded'! a sign of a lack of professionalism...!
You schedule a Christmas Day's dinner and guests using a spreadsheet!

The Golden Rules of Forecasting

2005-05-23T08:43:00.000+01:00

I am trying to develop some 'golden rules' for using economic forecasts in local and regional economic development and analysis....

looking into the future - the golden rules:

Forecasts should be used as part of a process of trying to understand the future – they provide only a partial insight into the economy
Any judgements about the future are not facts waiting to happen – there is a chance that they won’t come true
Any judgements about the future are based on current information – and this information can be out of date, inaccurate or wrong
The forecasts you use should be based on the most accurate (thanks dearieme) and up-to-date information available
It is strongly recommended that forecasts do not lead policy response
For any forecast it is correct to focus on broad movements and changes rather than on precise numbers
The user should recognise that all projections are subject to error
Forecasts cannot predict shocks or sudden events
Forecasts should be read with a critical eye – they are usually based on modelling techniques and can overlook the specific uniqueness of local characteristics
Finally, forecasts should never be used as the sole input into planning or decision-making

Who is the bigger fool!? I would say that the bigger fool is the person who places forecasts as the most influential factor in their decision making. The lesser fool is the person who provides the forecasts and pretends that they can either accurately predict the future or can predict it more accurately than anyone else.

Fun Friday

2005-05-20T17:31:00.000+01:00

I decided to lighten up a bit this afternoon. This was partly brought on by a discussion with a former colleague yesterday when we were reminiscing on the phone about a former boss of ours who was the David Brent of the economic development world and bore a close physical resemblence.

There were several amusing episodes of note:

One year he took all the staff performance budget and gave it all to his number one stooge in a big bonus, salary hike and company car
He didn't give a colleague any work to do for 3 months because he didn't hire him and didn't want anything to do with him. Meanwhile the rest of the team were working until 7pm most weekdays!
He managed to take over entire departments in the space of months at one stage! but really did bugger all.
He let another whole department write tenders! none of the tender writers had ever been consultants!

It really was a mad place to work. It was reputed at the time to be one of the top local or regional development organisations. On balance, in some things it was actually very good, in others it was dire but overall it was schizophrenic ... more tales...

it restructured itself on paper 2 times in 6 months
it went public and exposed itself to a potential £10 million profiteering asset stripper all to get the glamorous tag of 'plc'
the nice colour template and layout we invented for our reports was, on orders of the Chief Executive, scrapped to be replaced by a very basic Times New Roman 12 pt format invented by a secretary whose husband was a golfing partner of said Chief Exec

...I left after 6 months! I was posted in the economic consultancy department and found I was the only person there who could actually do economic research! I can still laugh about it though!

Economist letter latest

2005-05-20T14:02:00.000+01:00

They didn't publish it did they!? Maybe I upset them too much by calling them a bunch of journalists rather than economists.

Some of their (The Economist) stuff is interesting, but too much I have been reading in the past year has been a partial analysis of economic events and issues, a handful of items have just been preposterous in terms of the seriousness with which I could take them.

Ah well I would like to tell you that I am busy working on a diatribe of pointing out the Economists mistakes but basically I can't be arsed.

A diatribe about 'sloppyness'

2005-05-19T08:57:00.000+01:00

Ah I am getting wound up by the sloppiness of some folks - whether they be consultants, academics or working in the same organisation. The more I work in the trade of 'economists' the more I see some builders out there who forgot to paint the skirting boards so to speak.

When I were a lad - I had my work scrutinised to the nth degree. As a junior consultant I was lucky to work for an organisation where all final reports had to be checked by a Director, where they were very reluctant for junior staff to actually write final reports. By the time you were allowed to go to town on a report, you had a fairly good idea of how to do it and that it must be to a high standard of detail and robustness.

And before that in postgrad I had a fairly pedantic supervisor who had an eye for detail.

And then I worked in the public sector where all our work was peer-reviewed and the boss had the final say and had very high quality standards.

Its this eye for detail that seems to be lacking. That and being sensible in having your work or report proof read by a peer. Oh and not being offended at having to change things.

Its hard to admit to mistakes but everyone makes them. No-one on their own can author a faultless piece of work or analysis.

I have seen a number of recent outputs from various folks. Some are a blessing and are well analysed, and the detail behind them has been carefully put together.

Others - I have been shocked by the sloppiness. The number of ambiguities or things that don't add up, badly written, make pretty unsubstantiated claims... the list goes on. I am stereotyping a bit.

I just wanted to rant and get that off my chest!

Site news

2005-05-17T18:41:00.000+01:00

Ah due to gross incompetence on the author's part I have deleted most of the other content except the Economist letter. Back soon.

Economist Magazine Rubbish

2005-05-17T15:54:00.000+01:00

I used to like the Economist. It is starting to get right on my t*ts now though. They seem to be getting more and more journalistic.

For example, in the latest edition they have spouted a bit about public expenditure as a proportion of GDP in 2004/05 and concluded that Southerners were so p*ss*d off they don't get enough of this as a slice of GDP they generate that they voted Tory. Well b*ll*cks. Bad analysis. They produced a graph ranking public expenditure as a proportion of GDP and the northerners get the lions share as it seems BUT!

In a letter to the Economist (will it get published??)...

In the 'Big Divide Widens' you have a very one dimensional analysis of the reasons why southern Englanders voted against the government. Very poor I thought.

The analysis behind this is misleading and poor for several reasons:

It is better to look at public expenditure per capita perhaps? this evens out imbalances nicely - London is actually in the top three for this using 2002/03 data from the Treasury and ONS.
The South East economy generates much higher GDP than the north - public expenditure as a proportion of GDP might be smaller as a result of this. It might not but you need to analyse the figures for this to be certain. Which you didn't do.
GDP is a bit of a meaningless measure of individual wealth, as is public expenditure a measure of the cost burden and benefits on individuals. There are far better measures for all of these. Please try harder next time Economist.
There is no official data for 2004/05 GDP or public expenditure. Instead the numbers come CEBR so I assume they are an estimate.

All in all, the Economist is moving ever more towards journalism and away from economics and decent analysis of issues. You guys create nice headlines, but it would be good to see some honest, robust analysis in there.