Another day, another survey.
This time academics from Nottingham and Ulster tell us there has been a 40 per cent leap in work-related stress during recession. And that there is a 25 per cent rise in stress-related sickness absence.
While an increase is hardly surprising, measuring the impact an economic event has on the workforce does have clear value as it helps point to possible solutions and to an additional level of economic activity that is lost during a downturn.
There is one significant caveat with this survey, though. While I don’t for one moment doubt its academic rigour, there’s an important detail everyone should be aware of when they read about it.
The study draws its conclusions from two surveys of 17,000 workers in Ulster, one conducted in 2005 before recession struck and one in 2009 when it hit in a big way. So this is a heavyweight sample, from which you are entitled to draw some solid, in-depth conclusions.
But only about the public sector. For that’s where all 17,000 of those surveyed worked.
When you consider that only around 20% of the UK workforce is employed in the public sector, and that the working environment is often decisively different to the private sector, that raises some questions about whether it’s right to apply the conclusions from this survey to the whole of the UK labour market.
Historically, the public sector has always had higher incidence of sickness absence than the private sector, including days lost to stress-related illness. While businesses sometimes take a jaundiced view of why this happens, one of the reasons is that the public sector has more well-developed mechanisms for identifying and handling occupational health issues.
And while the private sector will often let people soldier on when they’re not feeling 100%, you might expect government in all its forms to make a point of sticking to the rules it has enacted.
While there’s little doubt that fewer people and fear of job loss does cause stress, there will be those who argue that in the private sector it will, if anything, make some people less inclined to throw a sickie because they feel the need to prove their worth.
There are some valuable lessons in this survey, though the two most important conclusions will be very familiar. One is that businesses are always likely to get the best out of their workforce if they look after them, whatever the economic weather.
The other is that surveys themselves should always come with a health warning...
Wednesday, 22 February 2012
Wednesday, 15 February 2012
Unemployment: A look behind the numbers
Two more pieces of economic news today, which will of course be spun like mad by the respective political camps.
You can’t shy away from unemployment however you look at it. A rise to 2.67 million unemployed, or 8.4 per cent of the working population is the highest it’s been for 16 years. As I’ve blogged before, the problem area surrounds youth unemployment, which accounts for 1.04 million of the total.
Beyond the weak economy, the issue there appears to be at least partly a mismatch between what students are coming out of schools and colleges with and what employers are looking for.
It’s worth mentioning that the youth unemployment figure doesn’t mean 1.04 million young people are walking the streets – the number includes more than 307,000 who are in full-time education but registered as looking for work.
Locally, unemployment in the East Midlands bobbed up only slightly to 188,000, or a below average rate of 8.2 per cent. All of these figures are for the three months period to the end of December.
The odd thing for some people will be that the number of people in employment has gone up at the same time as the jobless rate. That isn’t a contradiction – it tells you that the economy is creating jobs, but at a slower rate than the numbers of people registered as available for work. Many of the new opportunities are part-time, though.
Another important clarification here – the rise in the numbers unemployed includes people who have lost jobs and people who are new to the jobs market. So the unemployment issue isn’t a simple conflict between people finding jobs and losing jobs..
Either way, the economy isn’t creating enough new jobs at the moment. The second piece of news suggests that while the unemployment trend isn’t likely to significantly improve in the immediate future, it is unlikely to worsen.
The Bank of England said today that it did not think the UK had fallen into recession again, and that the economy would grow 1.2 per cent this year. It has reached that conclusion on the back of a series of industrial surveys that have pointed to a slightly improving picture for business.
The Bank’s Governor, Sir Mervyn King, isn’t for one moment suggesting that we’re out of the woods and says there may still be occasional dips in activity.
What can we conclude from all this? That there are opportunities for business growth out there, but an uncertain outlook means that cautious businesses will try to exploit them within the bounds of their existing resources.
Same old story, really, and however much the politicians argue about it, it is unlikely government intervention will make a substantial difference. Nevertheless, the rising jobless figure is putting subtle pressure on George Osborne to adopt a growth agenda in next month’s Budget.
You can’t shy away from unemployment however you look at it. A rise to 2.67 million unemployed, or 8.4 per cent of the working population is the highest it’s been for 16 years. As I’ve blogged before, the problem area surrounds youth unemployment, which accounts for 1.04 million of the total.
Beyond the weak economy, the issue there appears to be at least partly a mismatch between what students are coming out of schools and colleges with and what employers are looking for.
It’s worth mentioning that the youth unemployment figure doesn’t mean 1.04 million young people are walking the streets – the number includes more than 307,000 who are in full-time education but registered as looking for work.
Locally, unemployment in the East Midlands bobbed up only slightly to 188,000, or a below average rate of 8.2 per cent. All of these figures are for the three months period to the end of December.
The odd thing for some people will be that the number of people in employment has gone up at the same time as the jobless rate. That isn’t a contradiction – it tells you that the economy is creating jobs, but at a slower rate than the numbers of people registered as available for work. Many of the new opportunities are part-time, though.
Another important clarification here – the rise in the numbers unemployed includes people who have lost jobs and people who are new to the jobs market. So the unemployment issue isn’t a simple conflict between people finding jobs and losing jobs..
Either way, the economy isn’t creating enough new jobs at the moment. The second piece of news suggests that while the unemployment trend isn’t likely to significantly improve in the immediate future, it is unlikely to worsen.
The Bank of England said today that it did not think the UK had fallen into recession again, and that the economy would grow 1.2 per cent this year. It has reached that conclusion on the back of a series of industrial surveys that have pointed to a slightly improving picture for business.
The Bank’s Governor, Sir Mervyn King, isn’t for one moment suggesting that we’re out of the woods and says there may still be occasional dips in activity.
What can we conclude from all this? That there are opportunities for business growth out there, but an uncertain outlook means that cautious businesses will try to exploit them within the bounds of their existing resources.
Same old story, really, and however much the politicians argue about it, it is unlikely government intervention will make a substantial difference. Nevertheless, the rising jobless figure is putting subtle pressure on George Osborne to adopt a growth agenda in next month’s Budget.
Tuesday, 14 February 2012
Negatives and positives for the UK economy
TWO interesting pieces of economic news today. In a way, you can argue that they point to a race to recovery.
The first cropped up late last night when one of the international credit ratings agencies, Moodys, decided to put the UK on what’s known as a negative outlook.
In simple terms, it emans it believes there’s a 30% chance the UK’s triple A credit rating will have to be downgraded because of the scale of the economic problems we face.
Moodys says those problems are our exposure to the Eurozone (our biggest export market) and our own slow recovery.
Interestingly, it doesn’t say the government needs to change tack. Rather, it suggests external events are placing attempts to address the deficit under threat, and may cramp manoeuvre to stimulate the economy.
Which brings us neatly on to today’s other economic news, that inflation has dropped significantly again. Consumer Price Inflation (which measures the prices of a supposedly typical shopping basket of goods) is down from 4.2 to 3.6%, while Retail Price Inflation (which includes housing costs and mortgage payments) is down from 4.8 to 3.9%.
CPI is generally the one to watch as it gives a good indication of how much spending leeway consumers have got (you can’t avoid the mortgage payments in RPI). It’s also used by government to index things like benefits, tax allowances and pensions.
One of the main reasons for January’s fall is that the impact of last January’s hike in VAT has now fallen out of the annualised calculation.
George Osborne will be hoping this kick-starts at least a bit of consumer spending. He needs some growth to overcome the drag which is partly to blame for leaving our credit rating slightly exposed.
I says slightly because a negative outlook is usually followed by a negative watch before any action on the rating is taken. At this stage, it seems unlikely the UK’s credit rating will be downgraded, and even if it did happen its impact probably wouldn’t be that significant.
For the moment, falling inflation is the one to watch as it offers the best hope of a short-term improvement in the economy, both through increased consumer spending and an opportunity for business to rebuild profit margins as inflation among raw materials softens.
Inflation is likely to continue falling steadily throughout the year, a trend which could also take the heat out of pressure for significant pay rises.
The first cropped up late last night when one of the international credit ratings agencies, Moodys, decided to put the UK on what’s known as a negative outlook.
In simple terms, it emans it believes there’s a 30% chance the UK’s triple A credit rating will have to be downgraded because of the scale of the economic problems we face.
Moodys says those problems are our exposure to the Eurozone (our biggest export market) and our own slow recovery.
Interestingly, it doesn’t say the government needs to change tack. Rather, it suggests external events are placing attempts to address the deficit under threat, and may cramp manoeuvre to stimulate the economy.
Which brings us neatly on to today’s other economic news, that inflation has dropped significantly again. Consumer Price Inflation (which measures the prices of a supposedly typical shopping basket of goods) is down from 4.2 to 3.6%, while Retail Price Inflation (which includes housing costs and mortgage payments) is down from 4.8 to 3.9%.
CPI is generally the one to watch as it gives a good indication of how much spending leeway consumers have got (you can’t avoid the mortgage payments in RPI). It’s also used by government to index things like benefits, tax allowances and pensions.
One of the main reasons for January’s fall is that the impact of last January’s hike in VAT has now fallen out of the annualised calculation.
George Osborne will be hoping this kick-starts at least a bit of consumer spending. He needs some growth to overcome the drag which is partly to blame for leaving our credit rating slightly exposed.
I says slightly because a negative outlook is usually followed by a negative watch before any action on the rating is taken. At this stage, it seems unlikely the UK’s credit rating will be downgraded, and even if it did happen its impact probably wouldn’t be that significant.
For the moment, falling inflation is the one to watch as it offers the best hope of a short-term improvement in the economy, both through increased consumer spending and an opportunity for business to rebuild profit margins as inflation among raw materials softens.
Inflation is likely to continue falling steadily throughout the year, a trend which could also take the heat out of pressure for significant pay rises.
Tuesday, 7 February 2012
Nottingham's empty shops: Behind the headlines
One-third of Nottingham’s shops standing empty? Doesn’t sound plausible, does it?
But that’s what the Local Data Company is telling the rest of the UK today.
Its national retail vacancy report sends out an apparently troubling message about one of the city’s key industries. But the consensus among people I spoke to yesterday is that LDC’s number just doesn’t ring true.
One city property agency (FHP) says the vacancy rate in the retail core – excluding tertiary locations – is less than 14 per cent. The City Council says it is 17 per cent. But that’s still 12 per cent shy of LDC’s eye-popping 29.6 per cent.
And LDC recorded a vacancy rate of nearly 30 per cent only six months after another consultancy, CACI, said Nottingham was still the fifth biggest retail destination outside London (by spend) even without the redevelopment of its shopping centres.
Hero to zero in the space of six months? Sorry, I don’t buy it.
So what’s underneath all this? As I’ve blogged before, LDC’s methodology is bound to produce a higher vacancy rate than other surveys simply because it counts more shops. Whether it’s right to do so is a moot point: while most of us view the city centre as being bounded by the two shopping centres north and south and the Castle and the Contemporary east and west, LDC goes much further, counting shop units as far afield as Canning Circus and Sneinton.
It does this because it has chosen to employ across the country geographical definitions of city centres provided by a single, supposedly authoritative source – the government’s Department for Communities and Local Government. So it can say it’s applied a uniform standard everywhere.
Yet it may still be wrong.
With the best will in the world, the likes of Canning Circus were never part of Nottingham city centre and ceased to be thriving retail zones many years ago. So you can argue that the map which defines this survey is, quite simply, out of date.
LDC also walked around the ‘city centre’ back in November – just at the point when Westfield had cleared out many of the units in Broadmarsh prior to its aborted redevelopment. So while they were definitely empty, it wasn’t for reasons related to the health of Nottingham as a retail destination.
So there is just cause to question LDC’s number - and, more importantly, the impression it is almost certain to create. Believe me, some sections of the media will be saying that Nottingham’s allegedly poor performance is yet more evidence of recession/retail woes/cash-strapped consumers/the impact of online shopping etc [delete according to agenda].
There may be a degree of truth in those analyses, but none is an accurate picture of what is happening here. LDC should have qualified its numbers.
Commercially, FHP’s survey – while not independent - is much sharper. Like most agents, it knows when shops are ‘between lets’ (empty, but a new tenant has already signed a lease) so doesn’t count them. It also knows which parts of the city are performing assets and which need a new lease of life.
This, surely, is the real issue underneath not just LDC’s survey but the failures of some retailers, the vacancy rates in secondary and tertiary locations and the growth of online retailing, be it by laptop, tablet or smartphone.
On that basis, LDC director Matthew Hopkinson is on more solid ground when he suggests Nottingham’s planners should not dismiss the bigger picture in its survey.
He told me yesterday: “Retail destinations should not deny reality or stick their heads in the sand. If all you do is what you are already doing you will keep the problems you already have because the world is changing.
“Large cities and smaller towns need to shrink their retail core to reflect the fact that demand is moving away from high streets. We need to bring people back into city centres, both by encouraging them to live there and by holding events which bring them in.”
Nottingham is probably entitled to take a well-informed swipe at the headline figure LDC has published (though it needs to do that nationally rather than locally; few here are likely to take the number too seriously).
But social, economic and technological change will not go away. If Nottingham wants to demonstrate that it remains in the vanguard of leading retail destinations then the most powerful statement it can make will be in visionary planning policies.
But that’s what the Local Data Company is telling the rest of the UK today.
Its national retail vacancy report sends out an apparently troubling message about one of the city’s key industries. But the consensus among people I spoke to yesterday is that LDC’s number just doesn’t ring true.
One city property agency (FHP) says the vacancy rate in the retail core – excluding tertiary locations – is less than 14 per cent. The City Council says it is 17 per cent. But that’s still 12 per cent shy of LDC’s eye-popping 29.6 per cent.
And LDC recorded a vacancy rate of nearly 30 per cent only six months after another consultancy, CACI, said Nottingham was still the fifth biggest retail destination outside London (by spend) even without the redevelopment of its shopping centres.
Hero to zero in the space of six months? Sorry, I don’t buy it.
So what’s underneath all this? As I’ve blogged before, LDC’s methodology is bound to produce a higher vacancy rate than other surveys simply because it counts more shops. Whether it’s right to do so is a moot point: while most of us view the city centre as being bounded by the two shopping centres north and south and the Castle and the Contemporary east and west, LDC goes much further, counting shop units as far afield as Canning Circus and Sneinton.
It does this because it has chosen to employ across the country geographical definitions of city centres provided by a single, supposedly authoritative source – the government’s Department for Communities and Local Government. So it can say it’s applied a uniform standard everywhere.
Yet it may still be wrong.
With the best will in the world, the likes of Canning Circus were never part of Nottingham city centre and ceased to be thriving retail zones many years ago. So you can argue that the map which defines this survey is, quite simply, out of date.
LDC also walked around the ‘city centre’ back in November – just at the point when Westfield had cleared out many of the units in Broadmarsh prior to its aborted redevelopment. So while they were definitely empty, it wasn’t for reasons related to the health of Nottingham as a retail destination.
So there is just cause to question LDC’s number - and, more importantly, the impression it is almost certain to create. Believe me, some sections of the media will be saying that Nottingham’s allegedly poor performance is yet more evidence of recession/retail woes/cash-strapped consumers/the impact of online shopping etc [delete according to agenda].
There may be a degree of truth in those analyses, but none is an accurate picture of what is happening here. LDC should have qualified its numbers.
Commercially, FHP’s survey – while not independent - is much sharper. Like most agents, it knows when shops are ‘between lets’ (empty, but a new tenant has already signed a lease) so doesn’t count them. It also knows which parts of the city are performing assets and which need a new lease of life.
This, surely, is the real issue underneath not just LDC’s survey but the failures of some retailers, the vacancy rates in secondary and tertiary locations and the growth of online retailing, be it by laptop, tablet or smartphone.
On that basis, LDC director Matthew Hopkinson is on more solid ground when he suggests Nottingham’s planners should not dismiss the bigger picture in its survey.
He told me yesterday: “Retail destinations should not deny reality or stick their heads in the sand. If all you do is what you are already doing you will keep the problems you already have because the world is changing.
“Large cities and smaller towns need to shrink their retail core to reflect the fact that demand is moving away from high streets. We need to bring people back into city centres, both by encouraging them to live there and by holding events which bring them in.”
Nottingham is probably entitled to take a well-informed swipe at the headline figure LDC has published (though it needs to do that nationally rather than locally; few here are likely to take the number too seriously).
But social, economic and technological change will not go away. If Nottingham wants to demonstrate that it remains in the vanguard of leading retail destinations then the most powerful statement it can make will be in visionary planning policies.
Friday, 3 February 2012
Nottingham's Growth Plan: The race is on
If Nottingham’s Economic Growth Plan is going to work it will have to break new ground and do it quickly.
Those were the key messages to come out of the launch of this draft plan at The Council House this morning.
It was encouraging to see some of the most high-profile figures from across the city turn out for its launch – a measure, perhaps, that there is recognition across the board that we are at a critical point in the city’s future.
Prof David Greenaway, the economist who leads the University of Nottingham, gave a beautifully succinct vision of where the world economy is at and where it leaves a place like Nottingham. Miatta Fahnbulleh, who is head of the Cities Unit in the Cabinet Office in London, told the room that Government was ready and willing to help cities which could show they had a vision for growth and knew how to deliver it.
But it was Sir John Peace, the chairman and co-founder of Experian, who made possibly the most thought-provoking contribution. His speech was about the need for Nottingham to fully comprehend the late Steve Jobs’ guiding principle: Think Different. But it was book-ended by two films, one which delivered a machine-gun barrage of statistics about the connected world’s change-at-the-speed-of-light, the other a portrayal of the corrosive impact of youth unemployment.
It consisted of a series of young people talking frankly about the difficulties they faced trying to find work, several of them delivering a judgement that many people in business should find pretty shocking: that the more doors they knock on, the more they got the feeling that business is turning its back on the young unemployed.
Sir John’s view is that youth unemployment is a potentially poisonous problem which has now reached levels which dictate that all responsible businesses should step up to the bar and do everything they can to help tackle it – whether that is going into schools to directly address the skills/attitude problems employers complain about, or offering young, unemployed people work experience or apprenticeships.
Sir John, who is also chairman of Standard Chartered Bank, moves in some very well-connected circles and I suspect his view also reflects the significant political pressure bearing down on corporate Britain to show that it needs to act less selfishly and more responsibly.
There is much to commend in the draft Nottingham Economic Growth Plan, and the City Council is already hard at work on some of its key features (notably a serious bid to secure crucial funding for investment in digital infrastructure).
Beyond council leader Jon Collins and chief executive Jane Todd, it is being steered by Councillor Nick McDonald, executive assistant for economic development, and John Yarham, the officer who heads economic development.
Nick McDonald repeatedly emphasised that the council did not want the plan to be seen as a council document, and the challenge now is to get Nottingham’s business community involved in its development before it is finalised in April.
I was sitting next to Adam Bird, the chief operating officer of the technology company Esendex during the presentation and he made a couple of interesting points afterwards: that the council has got to overcome the natural tendency of most businesses to simply ask ‘What’s in it for me?’, and that the plan will work best if it focuses on creating an environment that allows business to get on with the job.
For all sorts of reasons, time is short. Outside the barely believable myopia of the Eurozone and away from our own obsessions with recession and regulation of banking, the Asian economies are accelerating at a meteoric pace and the American economy is waking from its slumbers.
The Nottingham Economic Growth Plan needs real vision and some clearly identifiable targets. But it also needs to be short, sharp and deliverable.
The race is on…
Those were the key messages to come out of the launch of this draft plan at The Council House this morning.
It was encouraging to see some of the most high-profile figures from across the city turn out for its launch – a measure, perhaps, that there is recognition across the board that we are at a critical point in the city’s future.
Prof David Greenaway, the economist who leads the University of Nottingham, gave a beautifully succinct vision of where the world economy is at and where it leaves a place like Nottingham. Miatta Fahnbulleh, who is head of the Cities Unit in the Cabinet Office in London, told the room that Government was ready and willing to help cities which could show they had a vision for growth and knew how to deliver it.
But it was Sir John Peace, the chairman and co-founder of Experian, who made possibly the most thought-provoking contribution. His speech was about the need for Nottingham to fully comprehend the late Steve Jobs’ guiding principle: Think Different. But it was book-ended by two films, one which delivered a machine-gun barrage of statistics about the connected world’s change-at-the-speed-of-light, the other a portrayal of the corrosive impact of youth unemployment.
It consisted of a series of young people talking frankly about the difficulties they faced trying to find work, several of them delivering a judgement that many people in business should find pretty shocking: that the more doors they knock on, the more they got the feeling that business is turning its back on the young unemployed.
Sir John’s view is that youth unemployment is a potentially poisonous problem which has now reached levels which dictate that all responsible businesses should step up to the bar and do everything they can to help tackle it – whether that is going into schools to directly address the skills/attitude problems employers complain about, or offering young, unemployed people work experience or apprenticeships.
Sir John, who is also chairman of Standard Chartered Bank, moves in some very well-connected circles and I suspect his view also reflects the significant political pressure bearing down on corporate Britain to show that it needs to act less selfishly and more responsibly.
There is much to commend in the draft Nottingham Economic Growth Plan, and the City Council is already hard at work on some of its key features (notably a serious bid to secure crucial funding for investment in digital infrastructure).
Beyond council leader Jon Collins and chief executive Jane Todd, it is being steered by Councillor Nick McDonald, executive assistant for economic development, and John Yarham, the officer who heads economic development.
Nick McDonald repeatedly emphasised that the council did not want the plan to be seen as a council document, and the challenge now is to get Nottingham’s business community involved in its development before it is finalised in April.
I was sitting next to Adam Bird, the chief operating officer of the technology company Esendex during the presentation and he made a couple of interesting points afterwards: that the council has got to overcome the natural tendency of most businesses to simply ask ‘What’s in it for me?’, and that the plan will work best if it focuses on creating an environment that allows business to get on with the job.
For all sorts of reasons, time is short. Outside the barely believable myopia of the Eurozone and away from our own obsessions with recession and regulation of banking, the Asian economies are accelerating at a meteoric pace and the American economy is waking from its slumbers.
The Nottingham Economic Growth Plan needs real vision and some clearly identifiable targets. But it also needs to be short, sharp and deliverable.
The race is on…
Thursday, 2 February 2012
Nottingham's plan for growth
Government’s don’t grow economies, businesses do. Bur government in all its forms can make growth a whole lot easier – sometimes by what it does, sometimes by what it doesn’t do.
This week, we’ll find out what our own ‘government’ – Nottingham City Council – is going to do to help make growth easier in and around the city.
In front of an audience of businesses and city organisations, it’ll be unveiling the Nottingham Economic Growth Plan, a wide-ranging document which contains a range of ideas for what it will do – and what it won’t do – to help stimulate the city and Greater Nottingham economy.
Though the detail has yet to be determined, the Plan will already be familiar to some people. Partly because a draft has been out for consultation over the past few weeks, and partly because some parts of it are straight out of previous economic development documents.
Partly, also, because some of its ideas are plain common sense.
But that’s not to decry a genuine effort to get the city thinking about moving its own economy forwards.
And there are some genuinely big ideas in the Nottingham Economic Growth Plan – notably the idea that there should be a fund to back promising local businesses, and a separate fund to help kick-start stalled development schemes.
We haven’t seen the detail on either, but I know some serious work has been going on to try to make them happen. Here’s hoping.
There are also opportunities to exploit the use of local taxation.
The bigger picture is an identification of the key areas that will help the local economy grow. This is a mix of promising business sectors which can bring real value to Nottingham if they are sensibly supported, measures which would make doing business an easier, more friendly experience, and a push to raise skill levels.
You can probably guess the first two – creative, technology and science-based businesses which are built on original ideas you can’t ship offshore (plus the likes of retail), along with a push to raise the game of city planning (which, in the past, has been a miserable experience for developers).
It’s the last – skills levels – I’m going to look at because it is, in some ways, the single biggest challenge Nottingham faces. As I’ve blogged before, we need to get our heads around an unpleasant truth about youth unemployment – it’s a problem which has been around longer than some would like to admit.
While recession has certainly made it worse, official figures show that it started to accelerate around 2003-2004 and that there is a very serious issue with unemployment among 16-17 year olds. Some of these kids are not only leaving school with qualifications and attitudes which make them unsuitable for work, evidence in the Growth Plan suggests some are then going on spend time doing college courses which do nothing to improve their employability.
This is a waste of their lives and a waste of educational budgets.
So when the detail of the Growth Plan finally emerges, it has got to demonstrate that this awkward truth is being confronted.
Otherwise, the risk is that it is being seen to focus its efforts on the symptoms, not the cause, and tackling a problem in colleges which actually happens in schools.
Nottingham’s economy does have some structural issues which won’t be solved overnight. While only 20 per cent of the UK’s working population is in the public sector, in Nottingham the figure is closer to 30 per cent.
This not only means the city has a lower than average productive capacity (the public sector is, by definition, non-profit), it also leaves us exposed in an era when public spending is bound to be constrained for years to come.
So the city has to put much more emphasis on an entrepreneurial culture and the growth in the basic stock of businesses – we almost have to rebalance our own economy if we are to improve levels of prosperity.
Once again, that won’t happen overnight. The cultural traditions of what was once a large industrial city are taking decades to shake-off, and the youth unemployment suggests we are neither educating nor inspiring our kids in the way we need to.
A growth plan should NOT fixate on problems – entrepreneurial businesses certainly don’t. It has to start with opportunities and adopt measures which make it easier to exploit them.
Most of its success will rest not on what the city council does but on what business does. But if business gets it right then we should tell that story in the city’s classrooms. Our growth and their future should not be separated.
This week, we’ll find out what our own ‘government’ – Nottingham City Council – is going to do to help make growth easier in and around the city.
In front of an audience of businesses and city organisations, it’ll be unveiling the Nottingham Economic Growth Plan, a wide-ranging document which contains a range of ideas for what it will do – and what it won’t do – to help stimulate the city and Greater Nottingham economy.
Though the detail has yet to be determined, the Plan will already be familiar to some people. Partly because a draft has been out for consultation over the past few weeks, and partly because some parts of it are straight out of previous economic development documents.
Partly, also, because some of its ideas are plain common sense.
But that’s not to decry a genuine effort to get the city thinking about moving its own economy forwards.
And there are some genuinely big ideas in the Nottingham Economic Growth Plan – notably the idea that there should be a fund to back promising local businesses, and a separate fund to help kick-start stalled development schemes.
We haven’t seen the detail on either, but I know some serious work has been going on to try to make them happen. Here’s hoping.
There are also opportunities to exploit the use of local taxation.
The bigger picture is an identification of the key areas that will help the local economy grow. This is a mix of promising business sectors which can bring real value to Nottingham if they are sensibly supported, measures which would make doing business an easier, more friendly experience, and a push to raise skill levels.
You can probably guess the first two – creative, technology and science-based businesses which are built on original ideas you can’t ship offshore (plus the likes of retail), along with a push to raise the game of city planning (which, in the past, has been a miserable experience for developers).
It’s the last – skills levels – I’m going to look at because it is, in some ways, the single biggest challenge Nottingham faces. As I’ve blogged before, we need to get our heads around an unpleasant truth about youth unemployment – it’s a problem which has been around longer than some would like to admit.
While recession has certainly made it worse, official figures show that it started to accelerate around 2003-2004 and that there is a very serious issue with unemployment among 16-17 year olds. Some of these kids are not only leaving school with qualifications and attitudes which make them unsuitable for work, evidence in the Growth Plan suggests some are then going on spend time doing college courses which do nothing to improve their employability.
This is a waste of their lives and a waste of educational budgets.
So when the detail of the Growth Plan finally emerges, it has got to demonstrate that this awkward truth is being confronted.
Otherwise, the risk is that it is being seen to focus its efforts on the symptoms, not the cause, and tackling a problem in colleges which actually happens in schools.
Nottingham’s economy does have some structural issues which won’t be solved overnight. While only 20 per cent of the UK’s working population is in the public sector, in Nottingham the figure is closer to 30 per cent.
This not only means the city has a lower than average productive capacity (the public sector is, by definition, non-profit), it also leaves us exposed in an era when public spending is bound to be constrained for years to come.
So the city has to put much more emphasis on an entrepreneurial culture and the growth in the basic stock of businesses – we almost have to rebalance our own economy if we are to improve levels of prosperity.
Once again, that won’t happen overnight. The cultural traditions of what was once a large industrial city are taking decades to shake-off, and the youth unemployment suggests we are neither educating nor inspiring our kids in the way we need to.
A growth plan should NOT fixate on problems – entrepreneurial businesses certainly don’t. It has to start with opportunities and adopt measures which make it easier to exploit them.
Most of its success will rest not on what the city council does but on what business does. But if business gets it right then we should tell that story in the city’s classrooms. Our growth and their future should not be separated.
Wednesday, 1 February 2012
Welcome to doom-watch
I was out chatting to a mate who works in property just after the latest GDP figures dropped into my inbox last week.
In itself, the 0.2 per cent contraction was unremarkable. I’d seen enough data and anecdotal evidence to know that growth had been looking like a pancake since the summer.
What was notable was the reaction to some of the coverage of it. News websites were dominated by portentous stories which spoke of an economy ‘lurching towards recession’. Politicians wagged fingers and spoke of double dip as if it were Lord Voldemort.
When I mentioned it to my mate his reaction was one of near despair: “I am absolutely sick to the ******* back teeth with this. It’s been tough for years and you just get on with it. Some people are still doing OK. But what does the bloody television do? They just revel in it.”
Now, his company happens to be doing OK, though business is a hard slog and deals take time to happen because people are cautious. What concerns him is that he believes their caution stems in part from a relentless focus on negative sentiment in the media.
As a journalist of *cough* years’ experience, I always bridle at any suggestion we should ignore ‘bad’ news. News is the world we live in, which is not necessarily the way we’d like it to be. So it’s up to you to decide whether it’s bad or not. And I have a real beef with politicians who are all for press freedom but wish we were a bit more positive (about them).
But there is a serious point underneath what my mate was saying.
Confidence, sentiment or whatever you want to call it, is NOT an intangible concept which is separate from what happens in the real economy. The Bank of England recognises it as a key factor in investment, spending and purchasing decisions and assesses it when it does its own economic forecasts.
So it’s right to ask questions about what influences economic confidence.
The media clearly is an influence because it tells people what’s happening in the wider world – both the hard facts and people’s interpretation of what those facts mean.
There WAS a 0.2% fall in economic output between the start of October and the end of December last year. There IS a consensus that we may see the same again when the figures come out from January to March. If that happens, we WILL have satisfied the technical requirements to classify the period as having been in recession.
But what does a recession really amount to? And has the media got its head round the impact it actually has on our 21st century economy?
My mate’s belief – and he is far from alone – is that the media’s assessment of what recession actually amounts to is a doom-laden cliché rooted in memories of either 1930s dole queues or 1980s factory closures.
Neither are appropriate to where we are now.
In the 1930s, we had a depression, an altogether deeper and more prolonged period of economic contraction made more serious by the lack of a welfare safety net, out-dated economic levers which didn’t allow a dynamic response, and a political class stuck in the past.
In the 1980s, we finally began to confront the reality of an uncompetitive manufacturing sector whose costs, efficiency and working practices had long been outclassed by Germany and Japan, both of whom reinvented themselves in the wake of wartime defeat.
But that was the past.
In 2012, we are the sixth biggest economy in the world, we have a comprehensive welfare safety net, and we have a much more flexible economy which doesn’t get lost in hang-ups about major change and reacts pretty quickly.
Certainly, the view of many people in business that I talk to is that, yes it’s difficult, but not disastrous. Growth is still possible, and if the economy contracted by 0.2 per cent they’re focusing on the 99.8 per cent that’s still happening.
So while the political approaches of the main parties seem pretty traditional, the economy they pronounce on is not the same as it was even 30 years ago.
Is this where the problem lies – that the media is simply echoing the politics of the economy, which are all about heavily-prejudiced interpretations, rather than the reality for business?
The idea that business just gives up and goes home because the GDP figure ticked down a bit is utter tosh. People who run businesses just don’t inhabit that kind of negative universe.
Our attitudes to recession are similar to those we used to have about unemployment. While no one is happy that more than 2 million are out of work, the fuss being made about it is nothing compared to the uproar when it broke through the 1 million barrier in the early 1970s.
Then, with a generation whose memories of the 1930s were still vivid, joblessness was seen as a social cancer to be avoided at all costs. But the government’s attempts to solve it by throwing money at the economy simply caused rampant inflation.
The truth was that unemployment had been rising naturally since the 1960s as our economy began to switch away from out-dated large-scale manufacturing. Today, it’s broadly accepted that if we want a flexible economy with low inflation, some level of unemployment is the price we pay.
So if businesses don’t go into panicked hibernation when recession sets in, and unemployment is a natural consequence of a modern economy, why do the headlines sometimes suggest we are staring disaster in the face?
I’d point the finger at three causes.
One is that the financial crash was a near-disaster, and has caused damage which has gone deeper and lingered longer than a simple, cyclical recession.
Second, London media is dominated by a politics which can’t see beyond the end of its own self-importance – it genuinely believes that the solution to all of life’s problems begins and ends in Westminster.
Finally, large organisations like the BBC sometimes struggle to get a feel for the grassroots. In Robert Peston and Stephanie Flanders, the Beeb has one of the most powerful double-acts in the coverage of the global economy.
Yet the end result of that is that their coverage of ‘business’ is dominated by national politics and global economics.
The grassroots – which has proved far more resilient than you would expect given the scale of the crunch - doesn’t appear to get a look in. And this is why I ended up getting an earful last week. I wish Robert Peston had been there...
In itself, the 0.2 per cent contraction was unremarkable. I’d seen enough data and anecdotal evidence to know that growth had been looking like a pancake since the summer.
What was notable was the reaction to some of the coverage of it. News websites were dominated by portentous stories which spoke of an economy ‘lurching towards recession’. Politicians wagged fingers and spoke of double dip as if it were Lord Voldemort.
When I mentioned it to my mate his reaction was one of near despair: “I am absolutely sick to the ******* back teeth with this. It’s been tough for years and you just get on with it. Some people are still doing OK. But what does the bloody television do? They just revel in it.”
Now, his company happens to be doing OK, though business is a hard slog and deals take time to happen because people are cautious. What concerns him is that he believes their caution stems in part from a relentless focus on negative sentiment in the media.
As a journalist of *cough* years’ experience, I always bridle at any suggestion we should ignore ‘bad’ news. News is the world we live in, which is not necessarily the way we’d like it to be. So it’s up to you to decide whether it’s bad or not. And I have a real beef with politicians who are all for press freedom but wish we were a bit more positive (about them).
But there is a serious point underneath what my mate was saying.
Confidence, sentiment or whatever you want to call it, is NOT an intangible concept which is separate from what happens in the real economy. The Bank of England recognises it as a key factor in investment, spending and purchasing decisions and assesses it when it does its own economic forecasts.
So it’s right to ask questions about what influences economic confidence.
The media clearly is an influence because it tells people what’s happening in the wider world – both the hard facts and people’s interpretation of what those facts mean.
There WAS a 0.2% fall in economic output between the start of October and the end of December last year. There IS a consensus that we may see the same again when the figures come out from January to March. If that happens, we WILL have satisfied the technical requirements to classify the period as having been in recession.
But what does a recession really amount to? And has the media got its head round the impact it actually has on our 21st century economy?
My mate’s belief – and he is far from alone – is that the media’s assessment of what recession actually amounts to is a doom-laden cliché rooted in memories of either 1930s dole queues or 1980s factory closures.
Neither are appropriate to where we are now.
In the 1930s, we had a depression, an altogether deeper and more prolonged period of economic contraction made more serious by the lack of a welfare safety net, out-dated economic levers which didn’t allow a dynamic response, and a political class stuck in the past.
In the 1980s, we finally began to confront the reality of an uncompetitive manufacturing sector whose costs, efficiency and working practices had long been outclassed by Germany and Japan, both of whom reinvented themselves in the wake of wartime defeat.
But that was the past.
In 2012, we are the sixth biggest economy in the world, we have a comprehensive welfare safety net, and we have a much more flexible economy which doesn’t get lost in hang-ups about major change and reacts pretty quickly.
Certainly, the view of many people in business that I talk to is that, yes it’s difficult, but not disastrous. Growth is still possible, and if the economy contracted by 0.2 per cent they’re focusing on the 99.8 per cent that’s still happening.
So while the political approaches of the main parties seem pretty traditional, the economy they pronounce on is not the same as it was even 30 years ago.
Is this where the problem lies – that the media is simply echoing the politics of the economy, which are all about heavily-prejudiced interpretations, rather than the reality for business?
The idea that business just gives up and goes home because the GDP figure ticked down a bit is utter tosh. People who run businesses just don’t inhabit that kind of negative universe.
Our attitudes to recession are similar to those we used to have about unemployment. While no one is happy that more than 2 million are out of work, the fuss being made about it is nothing compared to the uproar when it broke through the 1 million barrier in the early 1970s.
Then, with a generation whose memories of the 1930s were still vivid, joblessness was seen as a social cancer to be avoided at all costs. But the government’s attempts to solve it by throwing money at the economy simply caused rampant inflation.
The truth was that unemployment had been rising naturally since the 1960s as our economy began to switch away from out-dated large-scale manufacturing. Today, it’s broadly accepted that if we want a flexible economy with low inflation, some level of unemployment is the price we pay.
So if businesses don’t go into panicked hibernation when recession sets in, and unemployment is a natural consequence of a modern economy, why do the headlines sometimes suggest we are staring disaster in the face?
I’d point the finger at three causes.
One is that the financial crash was a near-disaster, and has caused damage which has gone deeper and lingered longer than a simple, cyclical recession.
Second, London media is dominated by a politics which can’t see beyond the end of its own self-importance – it genuinely believes that the solution to all of life’s problems begins and ends in Westminster.
Finally, large organisations like the BBC sometimes struggle to get a feel for the grassroots. In Robert Peston and Stephanie Flanders, the Beeb has one of the most powerful double-acts in the coverage of the global economy.
Yet the end result of that is that their coverage of ‘business’ is dominated by national politics and global economics.
The grassroots – which has proved far more resilient than you would expect given the scale of the crunch - doesn’t appear to get a look in. And this is why I ended up getting an earful last week. I wish Robert Peston had been there...
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