Posts Tagged ‘place’

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.

Estate renewal and neighbourhood regeneration

March 8, 2015

(c) Max Nathan 2012

At the end of January the What Works Centre on Local Economic Growth, where I’m a Deputy Director, released its review of estate renewal programmes. For many of those who’ve worked in regeneration policy, and (like me) want such programmes to succeed, the results were deeply disappointing.

The team found that

1/ Estate renewal programmes do a good job of improving housing, public space and physical amenities.

2/ Estate renewal programmes lead to increases in property and land prices and rents, although not necessarily for nearby properties that do not directly benefit from improvements.

3/ Programmes tend to have a limited impact on the local economy in terms of improving income or employment.

4/ Programmes tend to have a limited impact on the local area in terms of reducing crime, improving health, wellbeing or education.

Worse, we found no evaluations that were able to unpick effects on existing residents, as opposed to people moving into an area. This matters, because it means that – for example – area-level improvements in employment rates might simply be driven be people moving into the area, rather than real improvements in life chances for people already living there.

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A few thoughts on this.

First, as Ruth Lupton points out, we have to be careful to assess such programmes on what they set out to achieve. The main aim of estate renewal is usually to improve the quality of housing supply, the built environment and other local amenities. The review shows programmes are pretty good at achieving these. An important result.

Where such programmes score less well is on broader objectives. New Labour broadened estate renewal into a wider ‘neighbourhood renewal’ agenda – programmes like the New Deal for Communities included economic as well as social goals. The review included a number of independent and officially-commissioned NDC evaluations, and the results on these wider goals are not great. As John Haughton suggests, this is consistent with a larger body of evidence on ‘people’ vs ‘place’ interventions, and where views cut across the political spectrum.

It’s worth thinking a moment about why this might be. Urban economies are complex, and adjustment is hard to predict, sometimes chaotic. There’s clearly space for for neighbourhood regeneration programmes to try and deal with co-ordination problems, provide public goods, and try to mitigate some of the problems facing people in deprived areas.

On the other hand, these programmes are microsolutions for megaproblems: the economic elements of NDC are trying to roll back huge structural trends that two decades of national intervention under Labour more or less failed to shift. I’ve got a chapter coming out in this book, edited by Dave O’Brien and Peter Matthews, which talks more about these ‘regeneration expectations’.

Second, as John also says, it is important to understand in more detail *why* some estate renewal programmes have not delivered on their objectives. John suggests a few reasons: lack of community ownership, a lack of learning culture in the ‘estate renewal industry’, and shifting / conflicting central government priorities (a point also made by Ruth and others).

To dig into this, we need better quality impact evaluations (the What Works team used just 21 out of over 1,000 candidate studies). We also need to look through the complementary literature on programme process, implementation and management. The Centre has now started to do this – across a range of policy areas – and will be reporting back in the coming months.

Third, we need to set our expectations for such policies in the future. As a whole, regeneration programmes involve an implicit contract with communities, as Lee Pugalis and David McGuinness argue, and there remains a strong equity case for such initiatives. However, effective urban and neighbourhood policy is hard to design: neighbourhoods and cities are complex systems, which adjust in messy and uneven fashion. This creates space for policymakers – dealing with market and co-ordination failures – but also implies that impacts are likely to be incremental at best. That means presenting a realistic positive case for regeneration and estate renewal, rather than asserting economic transformations that stand little chance of coming about.

My new book

May 23, 2014

I have a book out: Urban Economics and Urban Policy, written with Henry Overman and Paul Cheshire, and published by Edward Elgar.

In a nutshell, it’s ‘economic urbanism’. We bring together last two decades of work by economists and economic geographers on urban issues, and distill some high-level lessons for policymakers. We look at trends in city growth and change, spatial disparities and urban housing/labour markets, as well as evaluating a range of urban policies.

The focus is on the UK, and especially work done at LSE’s Spatial Economics Research Centre since 2008. You can read the first chapter here.

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The book began as a kind of greatest hits compilation for SERC, but has morphed into a broader attempt to show what economists (and economic geographers like me) can bring to cities and urban analysis.

Economics’ influence on urban policy has historically been very limited: urban thinking has been dominated by architects, planners and governance types.

In part, this is because economists haven’t been very interested in space until recently. As Paul pointed out at the book’s launch, economics 101 classes mention the three factors of production – capital, labour and land – after which land is rarely (if ever) discussed again. That has only really begun to change in the last decade or so, with the very obvious death of ‘death of distance’ arguments, and people like Paul Krugman and Ed Glaeser making their influence felt in the profession. (Ed kindly wrote the foreword for our book.)

It’s also because spatial economic concepts and techniques are fiddly and difficult to explain. Dealing with spatial autocorrelation is rarely as glamorous or compelling as iconic buildings or big political personalities. Evan Davies did economic geographers everywhere a great service with the Mind the Gap series, which did a bravura job of distilling agglomeration, knowledge spillovers and path-dependence into everyday language.

And of course lessons from spatial economics aren’t always ones policymakers want to hear. Urban systems tend to build in spatial differences, and these inequalities are self-reinforcing and hard for policy to reverse. Many urban policies are effective, but many popular ones – such as Enterprise Zones or cluster programmes – often don’t have much impact.

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In turn, that highlights both the advantages and limitations in the economic urbanist’s approach. City leaders should take economic ideas and analysis seriously, especially when making decisions about housing, planning or development. The book is an attempt to put economic thinking back in the room. But we can’t reduce cities to purely economic processes: as objects or systems, they are too complex and chaotic for that. And as Max Weber says:

… The explanation of everything by economic causes alone is never exhaustive in any sense whatsoever, not in even in the … economic sphere itself. In principle, a banking history of a nation which adduces only economic motives for explanatory purposes is naturally just as unacceptable as an explanation of the Sistine Madonna as a consequence of the social-economic basis of the culture of the epoch in which it was created. 

That logic also applies to policy choices. In practice we often have to trade off economic, social and environmental goals – when planning new roads or houses, for instance. Citizens’ welfare is rather wider than economic welfare, and we should avoid collapsing the first into the second.

Given those complexities, economists need to be mindful of real-world priorities and politics when giving policy advice. (As do others – Richard Rogers’ reductionist readings of Jane Jacobs have not been very helpful in the UK, for example.) The What Works Centre for Local Economic Growth, which I’m helping to run, is one attempt to translate quantitative academic analysis from a range of fields into feasible, pragmatic policy ideas.

As an economic geographer, co-authoring a book with two economists proper is a rewarding experience – and a challenging one. The three of us didn’t agree on everything: as you can imagine, my views on regeneration, brownfield development and place-based policies are more optimistic than some of my co-authors. In the book we carefully flag who led on each chapter, and which work is genuinely joint.

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I hope all that’s encouraged you to take a further look. The hardback is painfully expensive, as academic books always are. The ebook edition is quite a lot cheaper. Either way, order it from the EE website and use the code CHES35 to get yourselves a 35% discount. Happy reading!

Do inventors talk to strangers?

January 15, 2014

Not such a productive meeting, (c) wikimedia

I’ve a new working paper out, written with my LSE colleagues Riccardo Crescenzi and Andrés Rodríguez-Pose. It’s available in three flavours, CEPR [£], IZA and SERC.

Here’s the abstract:

This paper investigates how physical, organisational, institutional, cognitive, social, and ethnic proximities between inventors shape their collaboration decisions. Using a new panel of UK inventors and a novel identification strategy, this paper systematically explores the net effects of all these ‘proximities’ on co-patenting. The regression analysis allows us to identify the full effects of each proximity, both on choice of collaborator and on the underlying decision to collaborate. The results show that physical proximity is an important influence on collaboration, but is mediated by organisational and ethnic factors. Over time, physical proximity increases in salience. For multiple inventors, geographic proximity is, however, much less important than organisational, social, and ethnic links. For inventors as a whole, proximities are fundamentally complementary, while for multiple inventors they are substitutes.

In other words, we find that physical proximity is critical to break the ice in a research collaboration; once the relationship has been established, however, other forms of proximity become more important. Crucially, for multiple inventors we find that co-location basically disappears as a driver of collaboration.

Obvious, you might think. But I’d argue that the multiple inventor group finding is pretty counter-intuitive. Our results also imply that the gains from incubators and research labs are strong for young researchers, but may fall off quite quickly. And our numbers chime with the ‘nursery cities’ hypothesis – basically, big cities are better for small young firms than older, larger ones.

UPDATE: an improved version of the paper is forthcoming in Research Policy. Read it here.

The book of SERC

August 21, 2012

I’m happy to say that LSE’s Spatial Economics Research Centre (where I’m a Research Fellow) has been asked to write a new book. From Urban Economics to Urban Policy will be published by Edward Elgar in 2013. Paul Cheshire, Henry Overman and I are the editors.

The book is essentially SERC’s Greatest Hits Part 1. We’re putting together a number of chapters based on the Centre’s first phase of research, under four broad themes: the nature and drivers of spatial disparities, labour markets, housing markets and planning, and policy / governance responses.

You can get a flavour by looking at some of SERC’s policy papers imprint. Many of these authors will also be contributing book chapters. But we’re also commissioning brand new material (some of which I’ve been working on today).

More news when we have it. Academic publishers don’t move at great speed …

The Terminal Beach

January 5, 2012

Orford Ness is one of the most extraordinary places in England. A spit of land on the Suffolk Coast near Aldeburgh, it was used as an experimental weapons testing site in both world wars and during the Cold War.

It’s now a National Trust nature reserve and Area of Outstanding Natural Beauty. However, it still holds traces of its mysterious former life.

Old military bunkers and pagoda-like blast chambers dot the landscape. From viewing towers, vast diagrams are visible on the ground, purpose unknown. Parts of the spit are still off-limits.

Reuben and I visited the site in October with our cameras. You can see some of the photographs on Flickr. The full set of pictures are in this lovely microsite.

Planning reform

November 6, 2011

The past few months have seen furious public debate about planning reform in England. Here [pdf] and here [pdf] are two new papers on the economics of planning, written by me and SERC Director Henry Overman. Versions were also submitted to the National Planning Policy Framework (NPPF) consultation last month.

The papers pull together SERC research on planning, alongside wider evidence (paper 1) and assess the Government’s proposals for planning reform (paper 2). Henry and I don’t agree on all of this – I’m certainly more pro-brownfield than he is – but we both felt that important pieces were missing from the recent public conversation.

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The key messages are:

1) The job of planning is to balance environmental, social and economic welfare. This means tradeoffs, so all planning systems have costs and benefits.

2) Planning’s economic effects, especially the costs of the status quo, have been underplayed in recent debates. We summarise evidence strongly showing current rules increase house prices and volatility, increase office rents, probably lower retail productivity and lower employment in small independent shops.

3) Paradoxically, land restrictions in the most popular areas have led to some truly unsustainable development – such as selling off school playing fields for housing. Similarly, brownfield-first policies have delivered some positive benefits for cities like Manchester, but aren’t a panacea.

4) The draft NPPF needs to be much clearer about sustainable development, potential tradeoffs and how practical decisions might be made (for example, using the National Ecosystem Assessment).

5) We agree with the National Trust and others that there’s a basic tension between Government’s desire for localism and some important national objectives. Ministers need to be clearer about what trumps what, or (more in keeping with localism) provide stronger incentives to align interests.

6) The presumption in favour of sustainable development that is consistent with the plan should be retained. But local authorities need time to adjust to the new rules, and the Government should introduce the change gradually.

7) Current incentives to ramp up housebuilding, such as the New Homes Bonus, are probably too weak and need to be strengthened. And one-size land restriction policies (such as town centre and brownfield first) don’t work well in practice. Rather, we suggest Whitehall sets the appropriate framework to try to encourage particular patterns of development but then allows local authorities to develop their own land use restriction policies.

What’s the point of Outer London?

June 30, 2011

I left today’s LSE/Demos Outer London seminar scratching my head. What is ‘Outer London’ for? It doesn’t make much sense – except as a voting bloc. Given we’re less than a year from Mayoral elections, though, perhaps that’s the point.

Here are some brief thoughts from the day. (Disclosure: I’m affiliated with Demos’ new Centre for London, but these views are my own.)

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There are different ways of thinking about cities. Planners focus on systems and zones. Economists think about markets, and clusters of people and firms. Sociologists look at communities, neighbourhoods and relationships. In practice, we need all of these lenses to understand real world places.

London has many distinctive features. For now let’s pick two. First, it’s a ‘city of villages’ – over time, the capital has emerged from dozens of small centres merging in a single urban mass. Second, it’s a mega-city-region. London’s economic system spills over political boundaries and across much of Southern England.

Given this, drawing lines around bits of London is a bit of an arbitrary exercise. Using official definitions of ‘Inner’ and ‘Outer’ London to make policy is actively unhelpful. 

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This became very clear during the morning. Demos’ Paul Hildreth took a classic systems approach, tracing links between Outer London and the rest. But his slides demonstrated just how hard this is to do. Data on people flows, industry mix, residence types and productivity all show how interconnected the London system is. 60% of Londoners live in the outer Boroughs, but most don’t stay there: commutes within Outer London make up less than a third of total journeys. 

Alan Mace from LSE London took a communities angle, presenting some very rich data on three outer boroughs. These showed some classic suburban features – stable populations and a strong sense of belonging. But it’s not clear these neighbourhoods are distinctively different from inner suburbs like parts of Hackney or Islington – or that similar to other outer communities. In the Q&A, it became obvious how heterogenous ‘Outer London’ neighbourhoods actually are.

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 As Scottish law would say, Outer London is ‘not proven’ – either as an economic space or a state of mind. But it does work in political terms.

Boris won the 2008 Mayoral election largely on the basis of outer boroughs’ votes. Ken, learning from past mistakes, began his 2012 comeback bid in Croydon. No surprise that Boris is re-launching the Outer London Commission less than a year before the vote, with £10m to spend on Outer London town centres before May (and £40m after).

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What does this mean for policy? The political imperative means Outer London features heavily in the new London Plan, which launches on 11 July. Economic and social realities mean there are tensions in the Plan’s overall strategy, and in the gap between policymaking and impact on the ground.

On strategy, the Plan has a welcome focus on thinking across ‘mega-London’, and identifies high-growth development hotspots across the capital. But it then goes on to set out a number of Outer London-specific policies on the economy, transport and quality of life.

On impacts, OLC chair Will McKee rightly said at the seminar that planners can’t turn market forces around, and need to work opportunistically within the business cycle. So given the deep trends taking retail off high streets and onto the internet, what can the OLC’s £50m town centre fund actually do? It is unlikely to have more than a marginal effect on retail employment. Better, as Mary Portas suggests, to take a hard look at how shopping behaviour is changing – then intervene where sensible to help high streets adapt. 

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Outer London is driven by electoral realities, more than economic or social truths. Let’s hope the next Mayor, whoever they are, recognises which of these is the best basis for policy in the capital.

Why Tech City is like Fight Club

February 10, 2011

‘The first rule of Tech City is, you don’t talk about Tech City,’ someone says. We’re sat in a conference discussing the Coalition’s plans to turn East London into Silicon Valley. Others around me nod their heads. ‘What we’ve got here already is great,’ says someone else. ‘My message to Government is: don’t fuck it up.’

The Tech City proposals still feel like ideas without a strategy. Government wants to support the nascent tech cluster around East London’s Old Street; bring in big investors like Facebook and Twitter; and develop the post-2012 Olympic Park into a high-tech hub.

It’s not hard to see tensions (see above, from one of the breakout sessions). Will big arrivals threaten existing firms? Could start-ups be pushed out by rising rents? How far will East Londoners benefit? And what’s in it for the rest of the UK?

So far, Ministers have mixed hands-on optimism and hands-off caution. ‘This is our attempt to generate Silicon Valley in the UK’, announced one at the event. ‘We seem to have a cluster on our hands,’ said another. ‘Do we need to do anything about it?’

Here are some evidence-based thoughts that I hope will help.

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In theory there’s no need for cluster policies: firms should sort across space to optimal locations. In practice this often doesn’t happen. Because of agglomeration economies, co-locating firms raises their productivity – which raises urban wages.  So cities can benefit if we push firms together.

Some sectors are far more location-sensitive than others, though. So a tech city strategy needs to start with the firms we’re interested in, then configure urban space accordingly. First tech, then city.

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BIS already has a shopping list from the tech industry – better access to finance, improving intellectual property regimes, improving workforce skills, easing immigration caps, cheaper rents and widening the open data initiative. Not all of these merit intervention, although some do (more below).

The technology industry also tends to cluster locally. Yet firms’ markets and supplier relationships are often global, and important functions (like customer services) are often offshored.

So how does the city fit in? London’s tech businesses are largely service-sector, and benefit from the matching, sharing and learning economies that big cities offer.

These effects kick in at different scales. At city level, London offers economic diversity, access to skills, finance and world markets. At neighbourhood level, East London offers soft infrastructure – the cheap spaces, bars and coffee shops where a lot of creative work actually gets done.

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We need to be realistic about growing our own Silicon Valley. As I’ve said before, the Valley is a city-region, over 1300 square miles across – more than twice the size of Greater London. It also emerged over decades – Tech City has barely begun.

UK research suggests that science parks can boost innovation rates. But much of this is driven by bringing smart people together. Elsewhere, purely property-led strategies have failed.

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I think this leaves six big challenges for London.

First, what is London’s USP in the global tech field? New York City might be a better comparator than Silicon Valley. Like NY, London’s tech scene is cross-pollinated by the wider creative economy.

Second, how much strategy do we need? The wider role for government isn’t clear from international experience. In the Bay Area government did little, except spend large amounts on defence-orientated research. But Bavaria’s leaders took the opposite approach, developing a cluster through political leadership, public spending and public research agencies like the Fraunhofer Institutes.

Third, finance. Both the Bay Area and New York have large local venture capital scenes. London firms complain about this. Are there information gaps or deeper structural problems in connecting London VC to London  businesses? What, if anything can policy do to help?

Fourth, how best to build human capital? Bavaria grows its own skilled workforce; Silicon Valley depends heavily on skilled immigrant workers. London is somewhere in between, although the Coalition’s migration cap is already making life harder for tech firms.

Fifth, should we worry about gentrification? Silicon Roundabout is a vibrant local scene, but higher rents could push local firms (and services) out. London is big enough for that cluster to reform, but does short term disruption outweigh any wider gains?

Finally, what’s in it for the rest of the UK? At the moment, very little. Whitehall can probably help by concentrating on ‘tech’ – sectoral support that helps firms everywhere – and devolving the ‘city’ bit – property, planning, economic development – to the GLA.

Fortresses of Insanity

November 14, 2010

Der Spiegel, one of Germany’s biggest papers, has published some of my sea forts pictures, and run a fascinating backstory (in German) about life on board. Enough said. See it here.

You can also find out more about the forts, including how to visit, at the Project Redsand website.

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