Posts Tagged ‘government’

Innovation, evidence and industrial strategy

September 1, 2017

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[A What Works Centre post that’s good here too.]

Industrial strategy is one of the big issues for the What Works Centre and its local partners and innovation is one of the main themes of industrial strategies in the UK, and around the world.

Public policy plays a number of important roles in supporting innovation — see thisdebate between Mariana Mazzucato and Stian Westlake for a good intro. And as I wrote back in January, it’s equally important that we understand what the most effective tools are.

The good news for the UK is thatwe are — slowly — building an evidence base on what works for promoting innovation, as well as other pillars of industrial policy. What’s more, what we have suggests some current UK programmes work pretty well.

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Our latest case study summarises Innovate UK’s programmes of support for microbusinesses and SMEs: mainly grants but also loans, awarded on a competitive basis, either to individual firms, or to promote partnerships with other companies or with universities.

Using standard UK administrative data, evaluators were able to set supported firms alongside similar non-supported companies, then compare how the two groups did. This ‘difference in difference’ approach is one of the methods we endorse, as it meets our minimum standards for good evaluation.

Encouragingly, Innovate UK’s programmes seem to have raised treated firms’ survival prospects (by 14 percentage points), employment (an extra 32 staff on average), and possibly sales too (although this result is less robust). These positive effects are biggest for 2–5 year old companies and those aged 6–19 years old. That is, these programmes seem to have helped innovative firms to scale.

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This is another helpful piece of the industrial strategy puzzle, for several reasons.

First, in our innovation evidence review back in 2015, we found lots of evidence that these kinds of programmes raised firms’ R&D — but rather less evidence on growth impacts further down the line. Now we have good UK evidence of those growth and scaling impacts.

Second, we already know that the UK’s R&D tax credit system is pretty effective in stimulating firms’ patenting. We can now add good evidence on grants and loans alongside that.

Third, we can set these innovation findings alongside other evidence on business support programmes — where again, we have a decent stock of UK evidence, with several programmes (e.g. on export support) showing positive impacts.

Finally, it’s reassuring to see that evidence for these types of innovation support programmes in the UK broadly lines up with what we’ve found for OECD countries as a whole. We’ve had a number of conversations with policymakers worried that innovation programmes are very context-specific, so results from one country won’t generalise to others. This may be true in some cases. But for grants, loans and tax credits, what we know suggests that what works across the OECD also works in the UK.

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Originally published here on 17 August 2017.

Citizen Jane

May 8, 2017

Like a boss.

We went to see the new Jane Jacobs documentary Citizen Jane: Battle for the City. It’s pretty good, with plenty both for Jacobs fans and those who don’t know her work. It pulls in some big-name contributors, including Saskia Sassen, Michael Sorkin, Mindy Fullilove, Mike Davis (!) and Geoffrey West (*). But it also – perhaps unintentionally – shows up some of the limits of Jacobs’ thinking as it applies to today’s cities. Here’s a review of sorts.

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The film has two particular strong points. The first is the precis of Jacobs’ most famous work, The Death and Life of Great American Cities. Director Matt Tyrnauer nicely summarise the key ideas: cities as organised complexity; street life as a ‘dance’ of uses and users; the rebellion against modernist city planning, cities for the car, and high rise living; the importance of ‘eyes on the street’, mixed uses, old and new buildings, and short blocks – concepts now hard coded into masterplans and design standards in cities across the world. Crucially, these ideas developed over many years’ close observation of New York streets and neighbourhoods, and through test runs in Jacobs’ journalism: her first book arrived in the world fully formed and ready for use.

 

 

The film’s other big plus is its retelling of the epic struggle between Jacobs and city planner Robert Moses in 1950s and 60s New York. With minimal resources, Jacobs somehow turned around Moses’ big money plans to bulldoze and run roads through Washington Square Park, the West Village and ultimately Lower Manhattan itself. These are perhaps the most gripping parts of the picture. Moses is a monstrous figure – see also Robert Caro’s 900-page biography, summarised here by Jackson Lears – while Jacobs is revealed to be a total badass.

Machine politics, corruption and the abuse of power run up against agile and well-networked social activism: we see Jacobs wearing a ‘Mailer for Mayor’ badge, organising a series of brilliant publicity stunts and photo opportunities, and roping in Susan Sontag, Margaret Mead and Eleanor Roosevelt to help out.

 

 

The gender dynamics are striking. Moses summons an army of besuited male planners, and notoriously dismisses Jacobs’ female-led network as ‘just a bunch of mothers’: fatally underestimating his opponents, but also, as a talking head points out, ’you’d only say that if you thought people didn’t matter at all’. Jacobs’ publisher sends Moses a copy of Death and Life: he returns it in a terse note (‘Sell this junk to someone else’); Lewis Mumford dismisses the book as ‘Mother Jacobs’ Home Recipes’.

The filmmakers link Jacobs’ tactics and successes to other 1960s social struggles: feminism, the environmental movement, civil rights. There’s an important point here about shared repertoires of protest tactics. It’s also true that Jacobs was both a feminist and an environmentalist. But I needed a bit more convincing that the bigger links really held together.

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The racism in US post-war urban planning is still shocking to see. James Baldwin appears in the film to point out that ‘urban renewal means negro removal’, with housing projects and highways used as tools of segregation. The minority urban poor were pushed into badly designed blocks at the city’s edge, just as in France the following decade – with similarly grim results for the victims.

The film starts to connect these practices to Moses’ development model, which raised land values in redeveloped zones, and leveraged huge federal budgets. I was left wanting to know more about the political economy: was this racial redlining? Patronage politics? Or some toxic mixture of the two?

The Cross-Bronx Expressway (1948-72) is perhaps one of the most notorious Moses schemes, literally cutting the neighbourhood in half and blighting lifechances for years afterwards. As Mike Davis points out, it’s ‘perhaps the single most damaging urban development in US history’. Jacobs was active in New York at the time, and the film is curiously silent about this. Was she involved in opposing this? If not, why not? Did she try and fail? (Was her model of protest anchored in the neighbourhoods she knew? Did construction help spur her into action elsewhere in the city?)

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If the film is sometimes in danger of reifying Jacobs’ older ideas, it also misses out some of her newer thinking. That’s a shame: The Economy of Cities (1969) is a foundational text in urban economics, with important ideas about how cities help innovation to happen, long term growth and urban resilience. Cities and the Wealth of Nations (1985), which posits cities over nation-states as the key unit of development, feels ahead of its time. And her environmental work – which I know less well – also looks increasingly prescient.

The film also skips some chances to reassess that legacy. Jacobs was a progressive and a futurist – but not a fan of big government. Her anti-planning stance has made her popular with the libertarian right: it’s the antithesis not just of the government cynicism that produced Pruitt-Igoe and Ronan Point, but also the state-funded optimism that gave us the LCC and Park Hill.

Sure, the Lower Manhattan Expressway would have been a concrete stake through the city’s heart. But I dare you not to look at the renderings and at least wonder what a Brutalist icon it would have made.

 

 

Some of the limitations in Jacobs’ vision become clearer in the second half of the film, which lays up Jacobs’ neighbourhood prescriptions against urbanisation outside the West. As Saskia Sassen puts it, the pace and style of urbanisation in the urban cores of China and India are ‘Moses on steroids’ . ‘How can we apply Jane Jacobs’ thinking to these cities?’, asks another contributor.

Good question. The film drops some hints: successful urbanisation can’t shut out the public realm; cheaply-built towers are a terrible false economy; existing urban settlements, however visually shabby or informal, embody their own ‘dances’ and should be valued by planners, not bulldozed away (see Stewart Brand for more on this).

Nevertheless, the film can’t escape the conclusion that Death and Life … has plenty of say about preserving old neighbourhoods in old cities, but rather less about building new ones:  Jacobs’ New York was losing population, as their heavy industry began to be globalised away; the cities of the BRICS are growing at speed. Equally, today’s New York is struggling with an affordable housing crisis; other US cities are still feeling the aftershocks of de-industrialisation.

As Jacobs put it in 1958: ‘the best way to plan a downtown is to see how people use it today; to look for its strengths and to exploit and reinforce them.’ Today’s urban crises need urgent solutions, and significantly, by her death in 2006, Jacobs didn’t seem so interested in these issues: as her last interviews show, she had moved on to other things.

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The film is a great appreciation of Jane Jacobs’ finest hour. Her elegant and radical thinking was inevitably a product of its time. But bettering our contemporary cities may require both a re-tooling of Jacobs’ ideas, and new thinking from other voices.

Twenty commandments

September 12, 2016

Not mine; Dani Rodrik’s. Ten for economists, ten for non-economists.

Take a look below. Read Diane’s very positive review, and this more critical one by Unlearning Economics.

Then buy the book.

 

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Ten commandments for economists

1/ Economics is a collection of models; cherish their diversity.

2/ It’s a model, not the model.

3/ Make your model simple enough to isolate specific causes and how theyr work, but not so simple that it leaves out key interactions among causes.

4/ Unrealistic assumptions are OK; unrealistic critical assumptions are not OK.

5/ The world is (almost) always second best.

6/ To map a model to the real world you need explicit empirical diagnostics, which is more craft than science.

7/ Do not confuse agreement among economists for certainty about how the world works.

8/ It’s OK to say ‘I don’t know’ when asked about the economy or policy.

9/ Efficiency is not everything.

10/ Substituting your values for the public’s is an abuse of your expertise.

Ten commandments for non-economists

1/ Economics is a collection of models with no predetermined conclusions; reject any arguments otherwise.

2/ Do not criticise an economist’s model because of its assumptions; ask how the results would change if certain problematic assumptions were more realistic.

3/ Analysis requires simplicity; beware of incoherence that passes itself off as complexity.

4/ Do not let maths scare you; economists use maths not because they’re smart, but because they’re not smart enough.

5/ When an economist makes a recommendation, ask what makes him/her sure the underlying model applies to the case at hand.

6/ When an economist uses the term ‘economic welfare’, ask what s/he means by it.

7/ Beware that an economist may speak differently in public than in the seminar room.

8/ Economists don’t (all) worship markets, but they know better how they work than you do.

9/ If you think all economists think alike, attend one of their seminars.

10/ If you think economists are especially rude to noneconomists, attend one of their seminars.

 

RGS talk on migration

May 13, 2016

(c) 2016 RGS

A late plug for this. I did a panel event on ‘Europe’s Migration Crisis’ with the Royal Geographical Society a few weeks back, alongside Heaven Crawley, Madeleine Sumption and Christina Boswell. The Guardian’s estimable David Walker chaired it.

I gave an overview of the local economics of migration, focusing on the recent UK experience, and drawing on some of my work – as well as borrowing a couple of nice maps from the Migration Observatory.

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Here’s the summary I sent the organisers:

My talk will look at migration impacts at the local level, especially in cities. I’ll argue that we should look both at people flows, but also at the diversity that migration brings. Today’s public conversation about migration is focused on jobs, housing and public services. That’s understandable, and there are some real concerns here.

I also want to shift the conversation to cover migration as an influence on long term economic growth, with impacts on productivity, innovation, entrepreneurship and trade. Skilled migrants (from inside and outside the EU) are central to this, and the evidence we have suggests that there are positive effects of these groups on economic outcomes policymakers should care about. We need to know much more about how these channels work, of course. But national government and cities can start – now – to adjust policy to make more of these opportunities. 

There’s a nice write-up of the event on the RGS blog. If you want more detail, my slides are here.

Microsolutions to megaproblems

December 9, 2015

I have a chapter in this nice new Policy Press book, After Urban Regeneration, expertly edited by Dave O’Brien and Peter Matthews.

Here’s the intro [pdf].

The book takes a critical look at urban policy in the UK, particularly in the post-crash period, and explores the way thinking  about regeneration has changed under austerity, and under localism.

It tests the idea that we’re now in a ‘post-regeneration’ era; it also takes a close look at the way communities and ideas of ‘community’ have been used to design, deliver and justify programmes on the ground.

My chapter covers the recent history of UK economic regeneration, sets out what we can expect programmes to achieve given the mega-trends shaping urban economies and communities, and also explores how the ‘what works’ agenda can help, both in developing the evidence base and in hands-on policy design. Cities and communities have been in tough times for years now, but I try to find some grounds for cautious optimism.

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The editors put together a strong and diverse team: we have excellent contributions from Stuart Wilks-Heeg, Antonia Layard, Kate Pahl, Liz Richardson and Chris Speed, as well as my Birmingham colleagues Catherine Durose and Phil Jones.

You can get the paperback here, or the hardback for a terrifying cost.

What I did in New Zealand

August 4, 2015

Matiu / Somes Island. (c) 2015 Max Nathan

Am back from New Zealand and just about over the jetlag. Thanks again to Motu and the Caddanz team for hosting me. I’m already plotting a return trip …

Here’s my talk from the Pathways conference. This is on the economics of migration and diversity, and brings together various projects from the past few years.

Here are slides and audio from my public policy talk at Motu. This looks at the What Works agenda in the UK, particularly the work of the What Works Centre for Local Economic Growth, and some of the opportunities and challenges these institutions face.

… and we’re live

October 25, 2013

our London launch

We had the London launch of the What Works Centre yesterday. It went very well – full room, sharp discussion, plus strong contributions from LSE’s Director Craig Calhoun, from BIS and DCLG Ministers Michael Fallon and Kris Hopkins and from Joanna Killian from Essex.

We’re off to Manchester in a couple of weeks for a second launch session. Details here.

Now the hard work begins

In the meantime you can catch up on what we’re up to here and here.

What Works

September 11, 2013

As some of you will know, LSE, the Centre for Cities and Arup will be running the new What Works Centre on local economic growth.

The Centre will conduct systematic reviews of UK and international research, ranking the most effective interventions, and will work closely with local government, local enterprise partnerships and other ‘users’ to help develop stronger economic policymaking across the UK. As NICE and the EEF already do, it may eventually commission research too.

The Centre has just begun work – we had a great workshop today with a number of our local partners – and we’ll formally launch later in the Autumn. We’ll be part of a network of six working on health, education, ageing, crime reduction and early intervention as well as local economies.

Henry Overman is stepping down from SERC to lead the Centre. I’m becoming one of the Deputy Directors, and will be working at LSE alongside my research-focused role at NIESR. I’ll be leading on the academic workstream, co-ordinating the systematic reviews and demonstrator projects, as well as advising Henry on the Centre’s direction.

We’ll be working with a strong team of academics across the country – in Liverpool, Leeds, Newcastle and Bristol, as well as London. We’ll also team up with New Economy Manchester on capacity-building and demonstrator projects. And we’ll be using the UK-wide networks developed by Centre for Cities and Arup.

Developing a new organisation from scratch is exciting, challenging and a huge amount of work, as I can attest from my early days at the Centre for Cities. Unlike most start-ups, we are very lucky to have secure initial funding. And we have an emerging body of good practice to draw on. But we still have a great deal to do in the months ahead. I look forward to working with many of you as we build out.

Big data and digital firms

July 23, 2013

(C) 2013 niesr and growth intelligence

I’ve just published some new analysis of the UK’s digital economy, joint with Anna Rosso and Growth Intelligence, and funded by Google. We had a launch session yesterday with Vince Cable – see here for a good write-up by the Guardian.

We’ve done pretty well for media so far: see coverage from the BBC, FT [£], Sky, Telegraph, Independent, Scotsman and Guardian (again) among others, and a nice blog post from Google’s Hal Varian.

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This is the first phase of a research programme with roots in the resurgence of industrial policy around the world. Like many others, the UK government wants to promote ICT and digital content activities – in the global North at least, this is generally high value activity, with spillover effects to the rest of economy.

A big problem is that we have little idea of the true size and nature of these digital companies. That’s because official definitions use SIC codes, which don’t work well for companies doing innovative, high-tech stuff.

To try and fix this, we use big data provided by Growth Intelligence. GI pull in data from the web, social media, news feeds, patents and a range of other sources, and layer this on top of public data from Companies House. That gives a much richer picture of who’s out there, their characteristics and their performance.

Crucially, GI’s data buys us a lot more precision than SIC-based analysis. We can look at industries and at products, services, clients and distribution platforms.  For increasingly tech-powered sectors like architecture, that allows us to distinguish ‘digital’ companies producing (say) CAD specialist software from ‘non-digital’ ones making buildings.

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Overall, we find over 40% more digital companies than official estimates suggest. We also find that digital companies who report revenue or employment are pretty resilient, with faster revenue growth and higher average employment than non-digital companies.

And contrary to the popular sense that it’s all about London start-ups, we find hotspots of digital activity across the country, including some perhaps surprising places like Aberdeen, Middlesbrough and Blackpool.

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Okay, this is all fascinating stuff for researchers. But what should Government do differently? First, the big data field is still in its early days, and we’d encourage officials to explore how it can complement conventional statistics. Second, better data should lead to better-designed industrial policies. Finding the optimal policy mix, however, is a separate and much harder question to answer.

BIS’ information economy strategy is rightly cautious about hands-on intervention. This NBER paper by Aaron Chatterji, Ed Glaeser and Bill Kerr is a good overview of the wider evidence. Henry Overman and I will be publishing a piece in the Oxford Review of Economic Policy soon too, which puts the case for a more agglomeration-focused approach.

We’ll also be continuing the data analysis, thanks to further support from NESTA. Look out for further mapping and econometric work in the months ahead.

Barriers to the brightest?

July 2, 2013

The UK Government’s Migration Advisory Committee has just published some new research on the economic impacts of high skilled migrants, written by me alongside colleagues from NIESR and the Migration Observatory. We did a major review of the international evidence, and spoke to a number of Tier 1 entrepreneurs and investors living and working in the UK.

We found a number of areas where UK policy design could be smarter. In particular, we’ve suggested the UK start moving towards a genuine ‘start-up visa’ of the kinds operating in Canada and Chile, and being debated right now in the US.

You can read more in NIESR’s press release here. Or download the full report here.

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