People Powered Prosperity

David Boyle9 July 2015

New Weather Institute/David Boyle

Additionality?

Protectionism?

Local institutions?

Small firms impact

“Our research shows that regional economic growth is highly correlated with the presence of many small, entrepreneurial employers—not a few big ones." Glaeser, E.L. and Kerr, W. (2010), ‘The Secret to Job Growth: Think Small’, Harvard Business Review, July.

Ownership impact

“Economic growth models that control for other relevant factors reveal a positive relationship between density of locally owned firms and per capita income growth, but only for small (10-99 employees) firms, whereas the density of large (more than 500 workers) firms not owned locally has a negative effect.”Fleming, D.A. and Goetz, S.J. (2011), ‘Does Local Firm Ownership Matter?’, Economic Development Quarterly, August, vol. 25, (3), 277-281.

Market failure?

UK distribution of value-added (OECD figures)

Large business SMEs

UK bank investment in SMEs (BIS figures)

Large business SMEs

49% 51%

89%11%

What next?

• Joint team at the Treasury or Cabinet Office between very local economic practitioners and civil servants.

• Link up with a university business department with an expertise in the area.

• Hold the reins for a dialogue with the banks about their own potential role in funding and shaping an effective local lending infrastructure.

…find out more

www.newweather.org

www.friendsprovidentfoundation.org