Are efforts to attract innovative, entrepreneurial companies and their highly qualified knowledge workers misplaced?

A common focus of many national economic and industry development plans are strategies to attract and grow high-performance, innovative, globally competitive companies and industries and high value jobs.

This is seen as the best pathway to prosperity. Is it the right path?

These well-known investment attraction and innovation strategies give priority to globally mobile, highly skilled, technology-adept and knowledge-intensive economic activities, often concentrating on financial and information technology services, urban renewal and property development and the highly productive traded sectors of the economy. 

These have an in-built bias favouring cities and metropolitan centres, and the asset-rich and professional and creative segments of the population. Left behind are those in lowly-paid, low-skill or insecure employment, areas affected by de-industrialisation or those in outer suburban, rural or remote regions. 

Inequalities result. Analysts and policymakers have been concerned about the damaging disparities in jobs, income and opportunities across cities, regions and communities.

The ‘trickle down’ effect does not seem to be working. This leaves many in our society pessimistic about their opportunities to get ahead, and feeling alienated and disengaged. Further, there is much doubt that politics and politicians can solve the problem.

Then comes the COVID-19 pandemic, which starkly forces a rethink of what constitutes essential work and essential workers. It makes sense to shift attention from elite industries and jobs to vital activities of the ‘everyday economy’.

The everyday economy describes sectors that are immobile and relatively protected from competition, but that provide what has been called “the services, production, consumption and social goods that sustain our daily lives. Its core activities include transport, childcare and adult care, health, education, utilities, broadband, social benefits and the low wage sectors of hospitality, retail, food processing and distribution”. (Reeves, Tomaney and Williams, 2019).

Essential workers are, among others, truckies, “warehouse workers, delivery workers, police officers, fire fighters, utility maintenance workers, sanitation workers, supermarket cashiers, stock clerks, nurse assistants, hospital orderlies and home care providers”. (Sandel, 2020).

The everyday economy is significant because everyone, regardless of income, participates in the everyday economy – in the public, private and social sectors and distributed across all cities, regions and hinterlands. 

The message is that to enhance prosperity and wellbeing, it is just as important to secure the everyday economy, as it is to foster the traditionally-acknowledged engines of growth and productivity. 

There is also a message for people in places losing out in the wealth and job-creating knowledge economy. Don’t just imitate the strategies of strong, large urban regions, but build on your own strengths and capabilities to create lasting local sources of competitive advantage. By making the most of what you have locally, you can lock in investment, industries and jobs. You can also reduce the risk of exposure to footloose capital and short-lived incentives. 

The task is to invest in existing skills, talents, capabilities, assets and infrastructure, involving a range of political and civic actors and a diverse mix of policies and programs tailored to getting the best results from local conditions. This includes strengthening the performance of the everyday economy and in particular, serving its unmet needs. (Tomaney and Pike, 2019).

The activities of the everyday economy include lowly-paid, but highly necessary, caring and learning functions. These are often not captured in measures of productivity, but they are central to human connections and social ties that are essential for a sense of belonging, resilience and identity in communities. The everyday economy has even been described as “the economics of belonging”.

Greater attention to the everyday economy can unlock the untapped potential in communities to drive both their economic and social wellbeing.

REFERENCES:

Reeves, J. Tomany and K. Williams, The Everyday Economy: why it matters and how to rebuild it, London School of Economics and Political Science, 7th April 2019, see blogs.lse.ac.uk

Tomaney and A. Pike, The economics of belonging: the hidden costs behind large cities, Prospect Magazine, 19th September 2019, see https://www.prospectmagazine.co.uk

Institute of Public Administration Australia, NSW, IGNITE newsletter, COVID-19 and the frailty of the social contract, reprinted from Financial Times, accessed on 16th April 2020.

M.J. Sandel, Are We All in This Together?, The New York Times, 13th April 2020, see https://www.nytimes.com/2020/04/13/opinion/covid-workers-healthcare-fairness.html?smid=em-share