Stark warnings
The engagement of the private sector in regeneration and sustainable communities initiatives has been seen as crucial in tackling the persistent challenges of deprived neighbourhoods.
To give some of the background, in the poorest neighbourhoods in the UK, 2 out of 5 people are on benefits, 75% of young people fail to get 5 good GCSEs, life expectancy is 10 years shorter than other neighbourhoods, 30% unemployment is common and 43% of housing is not up to decent standards(1). As described by the Neighbourhood Renewal Unit, “people living just streets apart become separated by a gulf in prosperity and opportunity”(2).
The economic aspect of this deprivation is significant. Historically, low income areas have been disproportionately affected by a combination of three factors of change in the UK economy: the decline in manufacturing, the growth of the service sector and the deformalisation and deregulation of the labour market(3). This leads to high levels of locally concentrated “worklessness”, which has its own impact of “reducing the numbers of working role models, limiting job-finding networks, creating alternative networks in the informal economy and breaking the link between education, training and work”(4).
Government has recognised the significance of these issues. Earlier this year, in her keynote speech, Barbara Roche MP warned that “if we fail to break this cycle (of social and economic exclusion and multiple deprivation) then both individuals and society as a whole will pay a high price”(5).
Accordingly, government has taken the lead in addressing these issues. Various action plans and mechanisms have been put in place, including government’s commitment to neighbourhood renewal, sustainable communities and the National Strategy Action Plan, various funding initiatives and targets have been set up, many targeting the private sector directly.
How does it affect me and my organisation?
Ask most businesses what the terms regeneration, social inclusion or sustainable communities mean to them, and you get a varied response. However, Article 13’s research shows that most organisations demonstrate a good grasp of the wider implications of these issues. These might be the impacts of deprivation and exclusion on communities: growing anti-social behaviour and crime. Some businesses go further and recognise the potential impact of social exclusion and deprived neighbourhoods on their business: difficulty in recruiting, motivating and retaining the right, or anti-social behaviour aimed directly at their business or staff. However, when asked about their role in practically tackling some of these issues, there is somewhat less clarity or immediate relevance.
For business, getting engaged with issues such as regeneration or social inclusion can seem like an “obligation”, something they feel the “should be doing”, something that is expected of them. This is where Article 13’s recent work gives a refreshing perspective, by exploring the opportunities awaiting discovery within this agenda.
The business imperative
In an increasingly complex and dynamic global marketplace, how can business stay ahead? A company needs to not just stay afloat, but create opportunities to "delight" the customer and satisfy employees and shareholders - to go that extra mile.
Innovation is key to this. The need to innovate to deliver competitive advantage comes into greater focus as markets come under pressure, both from slowing economies and from emerging new markets. Innovation has been described as “a culture, embraced at all levels, where creativity, the new idea or concept anywhere within the organisation, is brought to successful exploitation by the process of innovation”(6).
This is all part of what a joint CBI/DTI report calls being “a winning company” - a company that is visionary, enthusiastic, which champions change, targets innovation and has an empowered, customer-focused workforce working to exceed customer expectations(7). Sounds great…but how do you get there?
The innovative approach
The report mentioned above, describes what characterises a “winning company”. It is a company that overcomes certain “barriers to innovation”, or harnesses effectively certain “drivers of innovation”. These drivers and barriers can be internal and external factors that impact a company’s operations and trigger organisational change and innovation (e.g. customer demands, organisational restructuring, recession, people’s resistance to change, short-term attitudes).
Article 13’s research has taken each of these factors and shown how in each case, regeneration and social inclusion has provided opportunities to maximise innovation and organisational development, giving real life examples of organisations we encountered in our sample.
For example, a retailer faced with saturated markets and increasing competition, saw regeneration as an opportunity for innovation and business growth. By locating its stores in deprived communities, traditionally “no-go” areas for business, this company was able to secure new markets as well as put something back into the communities. Admittedly, the challenges are significant in moving into such as area, but the company approach was to see these challenges as opportunities. For example, by investing in intense training and development for the long-term unemployed in the area, the company created for itself a pool of skilled labour. The result was highly motivated teams with higher than average staff retention.
This is just one example of many that our research explores, including businesses in a wide range of industry sectors: property development, chemicals, food manufacturing, airlines, transport operators and more…
The “bottom line”
The need to involve business in the regeneration, social inclusion and sustainable communities agendas is apparent to government and society alike. Most initiatives to date have focussed on the 'pull' side of the debate. How can we attract business to a deprived area? How can we make it worth their while?
Article 13’s research has taken a different approach, showing how engaging with these agendas can deliver to a company’s core business by acting as a source or driver of innovation…so it can move further down the road to becoming a truly 'winning company' as well as contributing to wider societal issues.
This article has given you a taster, but find out more by contacting us on +44 (0)20 8840 4450 or purchase "New sources of innovation? The case for regeneration, social inclusion and sustainable communities to deliver competitive advantage" online.
References:
- Business in the Community website
- Communities and Local Government
- Lupton, R., and Power, A. (2002), “Social Exclusion and Neighbourhoods” in Hills, J., Le Grand, J., Piachaud, D. (eds) (2002) Understanding Social Exclusion, Oxford University Press
- Ibid
- Communities and Local Government
- DTI/CBI (1996), Innovation - the best practice
- Ibid
Also in this feature:
© Article 13, 2003
See also:
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