What do you do if the Government starts pinching your ideas? You could complain, of course. But then what are the chances of such a complaint being successfully upheld? Small company goes up against state? No chance.
We don’t know whether the Secretary of State for Business, Energy and Industrial Strategy, Greg Clark MP, is an avid reader of the Emsi blog, but in a recent speech he used a theme that we identified some time ago — the idea that if you really want to improve the economy, you have to first understand that “the economy” is
made up of an awful lot of very diverse smaller economies.
For example, here’s what we wrote in our Improving Lives Through Higher Education and Market Intelligence report:
“In reality, there is no such thing as ‘the British economy’, as such, but simply a number of smaller and often very different local and regional economies which are aggregated together to form ‘the British economy’. For instance, the demands and priorities in the North East are generally vastly different than those in London. If we are to impact on productivity, rather than painting with the kind of broad brush which says we need X number of graduates in Y occupation, we need to be far more specific and find out what type of graduates are needed, in what numbers, and in which area.”
And here’s Mr Clark, in his speech entitled The Importance of Industrial Strategy, which he gave to the Institute of Directors’ annual conference:
“In my view any successful industrial strategy has to be local. Governments are fond of quoting national figures – of economic growth, of productivity, of employment. But the truth is economic growth does not exist in the abstract. It happens in particular places when a business like yours is set up, or takes on more people, or expands its production. And the places in which you do business are a big part of determining how well you can do. And they’re very different places. It’s obvious that South Kensington here has very different needs from Middlesbrough. … Yet for too long, government policy has treated every place as if they were identical. It seems to me that helping Cornwall make the best of its future is as vital to a comprehensive national success as helping Birmingham – but what is needed in each place is different, and our strategy must reflect that.”
The Need to Understand Local and Regional Economic Dynamics
Of course we jest in our suggestion that Mr Clark may be pinching our ideas, but nevertheless you can probably hear that what he says is substantially the same: different regions and localities have very different needs and so require very different solutions.
Yet if this is the case, it does raise a big question. It’s one thing to say that the South West has massively different needs than Scotland, or South Kensington from Middlesbrough, or Cornwall from Birmingham, but how do we know what these needs actually are?
In our Improving Lives report, we looked in detail at the oft-repeated claim that “Britain needs more engineers”, arguing that this claim is insufficient because it:
a) Says nothing about what type of engineers are needed, and
b) Says nothing about where those engineers are needed
We then went on to delve into our Labour Market Intelligence (LMI) to give examples of how granular data can provide more specific answers by:
a) Showing what type of engineers are needed
b) Showing where in the country they are needed
In other words, the issue raised by Greg Clark – the need to understand local and regional economic dynamics – can be solved by looking at granular data for local and regional areas.
Using Data to Understand Local and Regional Needs
For instance, Mr Clark mentioned South Kensington and Middlesbrough. Using granular data, we can identify details such as job numbers and forecasted change. Below are our forecasts for the five highest graduate occupations, in terms of growth over the next five years, firstly in Kensington and Chelsea, and then in Middlesbrough:
Data can be used to identify local trends for industries too. For instance, we can look at the niche sectors within an area using a statistical measurement known as Location Quotient. This identifies industry concentration in an area compared to the rest of the country, and works on a benchmark basis, with 1.0 indicating the national average, and scores above 1.0 indicating an employment profile that is greater than the national average. Once again we can do the exercise for Kensington and Chelsea, and for Middlesbrough:
This approach gives us an instant window on a number of important details that can then be used to build a coherent growth strategy: current and future industry trends; current and future occupation trends; niche industries and occupations; and current and future skills demand. But the real beauty of this approach is that the data is not just lifting the lid on the national economy; rather it is identifying the dynamics of each of the nation’s very disparate local and regional economies.
Granular Data and a Successful Industrial Strategy
The potential of this approach is huge. As Mr Clark suggests, if we are to see a successful industrial strategy, we need to get away from viewing the economy as one, enormous whole, and instead see the nuances that exist in different places across the country. The challenge for the Government, having identified the problem, is to better understand those actual nuances, and that’s exactly where the granular data can help.
But the challenge is not just one for Government, but also for every local and regional organisation that is involved in helping to improve growth and productivity, including universities, colleges, LEPs and Local Authorities. Consider the following questions:
- How many universities are aware of the niche industries in their area?
- How many colleges are aware of how the skills needs of local employers might change over the next five years?
- How many LEPs or Local Authorities can tell education providers in their area how well they are aligning with skills demands in their region?
If the answer to these questions were all, or even most, Greg Clark probably wouldn’t have needed to draw attention to the need to better understand local economies in order to build a successful industrial strategy. It would already be happening. However, by correctly identifying the issue, perhaps we will begin to see more focused attempts by local and regional stakeholders to understand their economies better, to collaborate more effectively, and so be more effective in their growth solutions. As we have shown above, granular data is likely to form a big part of such solutions.
To find out more about how granular data can play a part in a better industrial strategy, email us at email@example.com