This post was originally published on www.localgovernmentmatters.co.uk.
I recently participated in a workshop arranged by a council to bring together its staff, local businesses and other relevant stakeholders in a session which focused on envisioning a future economic strategy.
It was an impressive piece of co-creation, and as is usual with these things the greatest insight came from listening to the customers – businesses in this case, about how their interaction with the local authority affects their own success.
For local authorities the whole issue of business growth is moving up the agenda, both because of the general need to drive economic growth – often through supporting local SMEs – and more prosaically because planned changes in business rates will mean that local councils have an more immediate financial stake in the success, growth and coverage of local businesses.
Local authorities have their hands on many levers of economic success – planning, transport, parking, housing, education (to an extent) and a broader influence over workforce supply, and can set a tone and context through formal and informal support to business networks and organisations.
A specific area that’s easy to overlook is regulation. Recent research has shown that for 54% of local businesses their only face to face contact with the authority is from trading standards, environmental health or similar. The Local Better Regulation Office is currently promoting improved standards and competencies for regulation, with a clear line of sight to economic growth. For firms with operations in more than one council area the primary authority concept is crucial to simplifying regulation and we are already seeing firms moving their choice of primary authority, and the associated spending based on the council’s capability to manage the national network of relevant regulatory agencies. A strong regulatory team will be a factor in relocating headquarters in the future.
Some chief executives I talk to in business-oriented councils know the names of, and regularly meet with, the chief executives of their major local businesses. We all know that some councils are better at promoting their locality for business rather than others (I suspect most people will remember the “Peterborough effect”). Councils vary in their level of sophistication: one council with a pressing need for social housing nonetheless ensured that their plans included provision for a modest increase in executive housing because they were aware that a gap in this area made them less attractive to businesses. This is undoubtedly an area amenable to strategic analysis, Michael Porter’s ‘Competitive Advantage of Nations’, whilst obviously written on a larger scale, poses questions of relevance for local authorities in terms of the strategic industry clusters that they can create and support based on local factors, and recognises that supporting the competitiveness of your local businesses with customers outside your area is important to your own economic success.
And this is where it gets interesting. There is obviously “competition” between councils and LEP areas for businesses and inward investment, but this is often implicit. I have yet to see a Council’s economic development strategy (please point me at one) which explicitly addresses specific competition. The technology exists to deploy a much more focused, almost predatory approach. We could envisage an MD receiving an email like this
I’m the cabinet member for business at Bizton – you will know that we are a thriving centre for business, and we have been doing some research on your company. Our industry analysis shows us that you are growing impressively, but are likely to be constrained for space in your current office, and if you are thinking of a move we would like to make you aware that:
- 10 miles from your current base we have a unit that should be a similar rent to your current business but with 30% more space for your expansion
- From analysis of our own businesses we know that four of your largest customers would be nearer to you here than they are currently
- Moreover 23 businesses within Bizton have said they would welcome greater provision of the graphic design services you provide
- We know that print and distribution are important to your business, the site we’re thinking of is adjacent to a thriving print business and there is a distribution hub within 5 minutes
- The site has car parking, and there are three restaurants within a 5 minute drive, and two more within close walking distance
- Average education attainment at GCSE level is 8% higher in Bizton than at your current location, our local FE college does Graphic Design to Foundation Degree level and 73% of the students have said that their first preference would be to find a local job
- In terms of workforce, we don’t have detailed statistics for local businesses but we do know that staff sickness rates at our local council are 30% lower than the council where you are now.
In short we think there are very specific reasons why you might want to move to Bizton now, to create room and opportunity to grow. I’d welcome the chance to show you around personally, together with the Council’s chief executive and one of our business relocation specialists who would work with you free of charge to help make your office move a success with minimal disruption. We’ve done some homework on you but what we’d really like to do is understand in your own words how you see your business growing to think together about how we could help with that. And in case you think this is a mass mailshot I can assure you that we approach only three businesses a month in this way: just the ones where we think there’s a really good fit for them and us.
I hope you can spare the time, if you’d prefer to do it at the weekend that’s no problem. We’ll be happy to send a car for you and any colleagues you’d like, to meet with us. I’ll be in touch later today to see how we can support your business growth.
It’s like a move from simply advertising job vacancies to headhunting. Will we move from competition for new business to becoming aggressively competitive, cherry-picking the best businesses from near neighbours and if we do, how will that affect collaboration in other spheres?