The UK economy is at a cross roads. At every level we are having to reconfirm strategies for growth, as we move into new territory as to how and where the state intervenes or incentivises in order to stimulate economic activity. But there will be some areas, Britain’s poorest places, where the effects of the downturn will most likely be experienced for much longer. Poverty is in danger of becoming more entrenched, and a culture of dependency on the state taking root for generations. Some wards have over 40% of working age adults out of work, with corresponding impact on life chances of their children and spending power in the local economy. This article makes the case for a new enterprise strategy to help turn around Britain’s poor places and improve economic and social policy outcomes.

Through work I have undertaken both politically and as a management consultant in the West Midlands and some of its poorer parts, I have become convinced that we could and should take a new look at local enterprise as a route for Britain’s poor places to grow in self sufficiency and re-integrate with surrounding local economies. We have been courageous politically over the last 12 years in getting the basics right; tax credits to support income levels of parents, investment in schools and communities, and strategies to increase the numbers of young people going to university. But what often happens is that the young people who go to universities unsurprisingly leave the area to get jobs elsewhere, and so the talent pool of poor places is increasingly reduced. The public message to people is get a better education to get a job, but jobs are often few, unstimulating or low paid. The investment focus is on persuading people or companies with capital from outside the area to invest; and whilst this may in the short term get a few more into work, it is not sufficient to change the culture of a place nor will those investing have the same deep emotional connection to the place they invest in.

We can now build on the foundations we have achieved, and start to strategically review our education and business support to encourage young people and indeed enterprising adults to start to re-energise their local communities. Research shows the demand is there; a study by Liam Byrne of school children’s aspirations in Hodge Hill showed the potential of the enterprising spirit of those in poor places at a young age. More often than not, the entrepreneurial spirit is not supported, and is beaten out of them by external and other influences by the time they become teenagers and leave education. Around age 12 is a crucial age for psychological development in children; they both start to distinguish between fact and fiction in a clearer way, and also begin to make early life decisions about what they perceive to be realistic for them; dreams start to be left behind. So an enterprise strategy that begins post-school is likely to be too late.

Alan Sugar has talked about introducing the concept of entrepreneurship into primary schools. “If we are to get Britain working again we have to teach children from a very early age to have a work ethic” The son of an East End tailor, he says: “When I was a child I desperately wanted to become self-sufficient, children don’t have that desire now.” I probably disagree with that. I think children do have that desire, but it manifests itself in alternative ways, and often negative and destructive as they grow older. Secondly, we should also distinguish more clearly enterprise and entrepreneurship, as the skills to run a small enterprise are often fundamentally different from being able to create and sell an innovative product.

I also believe we need now to look at entrenched poverty in poor places with a different lens to other areas. Perhaps we can learn more from strategies in other places. It is common knowledge and widely accepted that enterprise and access to finance commonly seen as micro strategies are vital to help turn around prospects in developing countries – so why not for Britain’s poor places? There could be much to apply that could break through the postcode lottery of where you live having a major impact on your life chances. Local people could be (re)trained with marketable and enterprising skills to start to generate economic activity in their own areas.

The benefits could be more than just economic, but part of a self fulfilling strategy for multi-generational success. A paper published by Andrew Oswald of Warwick University in 2007 concluded that “self-employed individuals – a special but well-defined entrepreneurial group – report markedly greater well-being than equivalent employees.” Secondly, strategies that create community connection and a financial interest in community well-being could have knock-on effects for children’s aspirations. Cabinet office research published last December showed that children of poor families that have a sense of community have higher than average aspiration and GCSE results. And perhaps I am a product of this myself. I grew up in a community general store in Hounslow, and have early memories of calculating at age four the change my parents gave to customers following their purchases, or the excitement of accompanying my dad on trips to customers with a suitcase full of samples of imported jewellery or clothes so they could put in an order. I’m convinced that this early education in public service and trade set me up for a lifelong interest in community and public life, as well as in the private sector/small business and its public contribution at a local level.

Of course delivering this change won’t be easy. Cultures are very hard to turn around. It will need much greater appreciation of the influences of success on enterprising individuals, which include the family, social capital and effective targetting of support. It may well need a revisiting of the quality of business support services, which from my own experience some years ago when I ran my own business was ill-suited to meet my needs, old fashioned and out of touch. Some work I am currently undertaking with small businesses, particularly ethnic minority businesses, suggests that there is still a lot of room for improvement.
If we get it right however, the rewards could be great, and unleash a new enterprising energy – whether individual or through cooperatives – in our localities that could help ensure a faster recovery from recession, and more sustained growth when the good times return. Perhaps it is now time to create the next generation of John Lewises and Marks and Spencers.