Expert Comment: Sustainable growthWednesday 25 April 2012
Dr. Bob Doherty, Head of Liverpool Hope University Business School
Despite the peak (one trillion), the government are arguing they have got borrowing under control. The real issue is more to do with sustainable growth. The austerity measures have cut deep and the Chancellor George Osborne MP is saying these reductions in expenditure combined with both the bank levy and the increase in VAT will bring the Coalition government in line with their borrowing targets. However, what is more concerning are both the decline in economic growth and the rise in unemployment to 2.62 million people and rising. Rising youth unemployment, job losses in the public sector, intergenerational worklessness and of course graduate unemployment are all areas that require urgent attention.
This is illustrated at a local level. According to Liverpool Vision the current unemployment level in Liverpool city region stands at 40,000 people unemployed, this is compared to a current level of 1,200 advertised vacancies in the city. Hence our minds should be focused on how we bridge this gap and create sustainable economic growth. Obviously a key part of this strategy should be enterprise growth, which includes helping both current enterprises to scale-up and to encourage new venture creation. The debate should be centred on what mechanisms are required to foster and stimulate this entrepreneurial culture.
Individuals need to recognise the opportunity to be employers rather than employees. This requires creativity, opportunity recognition, the ability to build relationships and utilise knowledge networks. We need to be facilitate and support individuals and groups of people who have identified a gap in services and products. The Universities and Liverpool Vision are working to stimulate an entrepreneurial culture in Liverpool. I took part in a ‘Dragons’ Den’-style event last week, where sustainable new business ideas were put forward and discussed with a range of potential investors from both social investment and private equity groups . It’s innovative ideas which fill gaps in products and services that will stimulate growth.
Growth should be sustainable and long-term. It’s should be embedded in the community and it needs to be environmentally sensitive. There’s a lot of opportunity for growth and innovation in in new products and services that meet the demands of a changing society including demographic change e.g. ageing population, changes in attitudes towards diet and health, new demand for environmental services and green products, developments in waste management, growth in hospitality and tourism and arts and culture particularly at the local level. Hope’s Creative Campus is doing some great work in this department.
Hence future growth will not necessarily be led by the same type of goods and services that stimulated growth in previous decades but by a reconfigured economy based on an entrepreneurial spirit that is more in tune with changing global societal needs. As a result of this universities are adapting to this changing landscape with much more emphasis on enterprise and entrepreneurship in the curriculum, the need for a plural economy and a more pro-active approach to graduate employment. At Hope we are partners with the University of Liverpool in the graduate Merseyside initiative and also provide incubation space for new venture creation.