Greater Manchester (GM) is one of a handful of ‘trailblazer’ areas selected to work with government on a local industrial strategy (LIS), due to be signed off in a few weeks’ time. As deliberations enter their final stages, Ruth Lupton, Head of the Inclusive Growth Analysis Unit (IGAU), looks at how the strategy might shape up to deliver inclusive growth, setting an example for other city regions.

• Greater Manchester has the opportunity to use its local industrial strategy to achieve inclusive growth in the city-region and provide a model for other cities.
• It has already demonstrated a recognition of and commitment to inclusive growth in its Independent Prosperity Review.
• The Inclusive Growth Analysis Unit recommends five key elements that, if included in the LIS, could ensure the strategy goes further, leads to reductions in inequalities and poverty, and threads inclusive growth into all its recommendations.

In post-crash times, and with entrenched inequalities and rising social divisions, the need for ‘inclusive growth’ – economic success to which more people can contribute and from which more can benefit – is widely recognised.  But what can be done locally to achieve this? And could the government’s idea of local industrial strategies be a key tool?  GM’s position as an LIS trailblazer area puts it in the driving seat in addressing these questions.

The Greater Manchester LIS is expected to be revealed in a few weeks’ time. Based on our (the IGAU) review of the emerging evidence on inclusive growth, we hope that five key elements will feature.

The five key elements

First, we hope that the strategy will signal (through its name) commitments to more broadly shared outcomes. For example, that it will be called ‘strategy for economic growth and economic justice’ or ‘strategy for shared prosperity’. This may seem like a ‘window-dressing’ suggestion, but the example of international cities such as Seoul and New York suggests that this kind of high-level signalling provides the basis for a coherent and long-term approach, in which politicians are held to account for the distribution of outcomes. It would be an important sign that a new direction is being taken.

Second, that it includes measures for creating a more inclusive economy as well as strategies for strengthening health and education and connecting people better to jobs (although these are needed too). History suggests that industrial strategies won’t be successful in reducing inequalities and poverty if they only focus on maximising the volume of growth, even if this is backed up by much stronger social investments. They will also need to shape the nature of that growth to be more inclusive of people and places: for example, strengthening and supporting industries that offer better quality jobs; working with priority growth sectors to make sure they develop inclusively with a focus on employment practices, workforce development and progression; strengthening business support to small and medium sized enterprises (SMEs) to help them develop more equitable employment practices and invest in training; and investing in the development of the social economy.

Third, and linked to the second, we hope the GM LIS will support the vision of inclusive growth set out in the recent GM spatial framework (GMSF) of a Greater Manchester where the benefits of growth are more evenly distributed spatially. It can reinforce the GMSF proposals for new development with efforts to build struggling local economies through the kinds of strategies listed above, as well as through targeted social investments, building on the assets that are already there.

Fourth and in a similar vein, we hope that the GM LIS will put an emphasis on ‘inclusive growth for everybody’, ensuring that all its initiatives for employment, training and progression give explicit attention to promoting equality and diversity and that this is monitored.

Fifth, this needs to be a strategy for a long-term transition to a more inclusive and sustainable economy, so we hope that working with GM, central government will recognise the governance processes and systems that will be needed to support this – for example ‘soft infrastructure’ such as support for anchor institution activities and employer engagement, better data, and greater research and intelligence capacity for learning about the distributional impacts of GM policies and from other cities.

Mapping the future

Work towards the strategy has included the commissioning of the GM Independent Prosperity Review (GMIPR). A document with a very different tone than its predecessor, the Manchester Independent Economic Review (the MIER, written in 2009), the review endorses many of these inclusive growth principles. It emphasises the need not just to focus on the shiny and new – cutting-edge firms, technological innovators and city centre developments – but to address issues of participation and productivity across the whole economy, including in high volume but lower paying sectors. Importantly, it also places a strong focus on process and collaboration, and leadership and governance mechanisms to join up social and economic policies in the interests of inclusive growth. There is a welcome recognition that successful economies depend on social investments – particularly in health – as well as economic ones and that these are legitimate territory for industrial strategies.

But the GM LIS could go further than the GMIPR, knitting inclusive growth more closely into all its recommendations. For example, it could make sure that recognition of health does not just lead to a strengthening of population health strategies but also to ensuring workplace practices that promote health and wellbeing, and enable people with long-term health conditions to work. It could build on the recommendation to improve and simplify business support to ensure that this focuses on promoting equitable employment practices and helping SMEs to develop workforce skills and progression. It could make sure that the ‘dual approach’ proposed by the IPR panel (focusing on global strengths and on the routine economy) is an integrated one, with strategies for growth sectors designed with social and spatial inclusion in mind, for example through building stronger skills pathways. Our review, and a paper produced last week by the Joseph Rowntree Foundation, provides some detail and examples.

What was really encouraging at the launch of the GMIPR was to hear both the Mayor, Andy Burnham, and the Deputy Mayor with responsibility for the economy, Sir Richard Leese, highlight the need for cities like GM to take a sophisticated approach to economic development, addressing the fundamental challenges of social and spatial inequalities, and achieving more inclusive growth. The intention is there. The GM LIS is their chance to show other cities the detailed route map.