Ahead of the release of his book, Britain’s Cities, Britain’s Future, Mike Emmerich looks at the issue of short-termism in policy making and sets out some ways forwards for addressing the geographic imbalance of economic growth and productivity in the UK’s cities.

• Encouraging long-term thinking in policy making has long been a challenge, both with politicians and providers of business capital
• Successful city-building involves vision and leadership and then doing the right things, at scale, for a very long time
• Other cities need to push further and harder in what they are trying to achieve if they are going to secure the growth seen in London over recent decades
• Many policy failings are grounded not in the failures of neo-liberalism or post war corporatism, but in the very DNA of our urban industrial culture
• To address the nature of our enterprise culture, we need more socialised corporate behaviour where it’s in the interests of businesses and society to encourage firms themselves to be more permeable in respect of talent, ideas and capital
• It is time we looked harder at Universities as anchor institutions and how they could help more purposefully to lubricate and intensify investment, innovation and other markets

‘Short-termism’ is one of the favourite accusations levelled at the so called liberal elite at the helm of the global economy (and locally too) these last decades. It is an issue that has rarely been far from the surface in the work I’ve done as a policy maker. Why do the providers of business capital take such a short term view of risk and reward? How can we encourage politicians elected on four yearly cycles to invest resources in projects that will only pay off in twenty?

As I set about to write Britain’s Cities, Britain’s Future which is something of a stocktake on my work in economic policy and interest in cities, time was at the forefront of my thinking. The emphasis is on the future, on how we get urban Britain really growing, even if the approach is historical in nature. That’s partly because if I learnt one thing from my decade or so working in Manchester it is to take the long view.

Early on, as Howard Bernstein and I sat in a London taxi following a meeting with Government officials trying to extricate themselves from their commitment to fund the supercasino Manchester had fairly won, I recall him fuming. “Let them. They and their Ministers come and go. We don’t. We know what we want. We’ll get there another way.” I’ve actually censored that quite a bit, but the sense was clear. Manchester had a goal: to put deep investment into East Manchester to generate footfall and spending, putting strong institutions and the vitality that goes with them back into the areas where long-gone steel and textile plants had once created the city. The casino wasn’t the objective, merely a means to a much more important and long term goal. It was the goal, not the means of its achievement that was paramount. My job was to create the intellectual map of how we’d get there and in key areas, to come up with the big ideas that would accelerate our progress.

As I wrote the book, then, it wasn’t surprising that the need for long-termism was at the front and centre of my thinking. It sets out London’s rise to greatness from what was widely regarded in the 1970s as its post war failure. I describe the role of the state, as well as business, in creating what most of us today think of as one of the world’s most vibrant and successful cities. The conclusion is clear. Successful city-building involves vision and leadership and then doing the right things, at scale, for a very long time. London has been at this for decades.  Other cities, Manchester and Birmingham included, still need to push further and harder in what they are trying to achieve if they are going to secure the growth seen in London over recent decades.

The more I researched and thought though, the more powerful became the institutional part of the argument as this was implicit in what we were doing in Manchester. For sure, my time there was focussed on chasing money from Government. But initially implicitly, then more explicitly over time, we focussed on rebuilding the institutional infrastructure of the city. But it was never an overt goal of policy. And the more I read, the more it struck me that so much of the academic critique of modern capitalism has focussed excessively on the people and institutions we have, and how little has really focussed on why our cities are so institutionally weak and what we should do about the fact. That’s why I decided to take an historically based approach, looking not just at the economy but also at the societies of cities in the UK. What arises from this is a revisionist critique, grounding many of our policy failings not in the failures of neo-liberalism or post war corporatism, but in the very DNA of our urban industrial culture.

It could be argued that some of the ideas arising from Universities and think tanks that have been tossed aside, dismissed as corporatist claptrap by Ministers and their officials have been discarded precisely because they too are overly short-term. Take one example: if, as the data tends to suggest, our problem in city economies has been 200 years of a low-capital-intensity form of development, simply making available cheap state-backed investment may be bad policy, unless there is also progress in improving the capital absorptive capacity of small and medium-sized businesses who may be resistant to taking equity or even long term debt capital to absorb capital and invest and use it effectively.

If both investment and the capacity to use it are not put in place the result will be (and has been) government backed investment chasing what’s looking for funding rather than the projects and ideas that could really deliver jobs and growth. The problem is that tackling this issue requires us to address the nature of our enterprise culture: to bring about more socialised corporate behaviour where this is in the interests of businesses and society and to encourage firms themselves to be more permeable in respect of talent, ideas and capital.

The results of successful policy might make British cities more Germany or Silicon Valley, two places with vastly differing ways of achieving these goals but both with more enduring success than our model. It would probably involve more government and/or university activism. We think a great deal about the role of local government in this context. It is time we looked harder at Universities – core anchor institutions in most cities –  and how they could help more purposefully to lubricate and intensify investment, innovation and other markets. This won’t involve the re-creation of out-of-date 19^th century policy or importing ideas from other areas that won’t work in our modern cities. But it will definitely mean long term policy, learning from and building on them.

• Britain’s Cities, Britain’s Future by Mike Emmerich will be published on 15 March 2017 in the ‘Perspectives’ series, edited by Diane Coyle