Blogs

Linking the economic and the spatial

5 September 2008

By Paul Miller

Recently, we've been working with a architecture practise and urban designers called IDP Partnership. They built the Sage Software HQ in Newcastle - and if you get the chance to see that.....

We've been thinking about how the economics of a place and the spaces in it work together.  All of this prompted by new planning guidelines and the government saying that regional spatial strategies and regional economic strategies should have a vague relationship to one another!

So how do these two things link?

The economic performance of a place is a product of the ways in which the industrial structure and its spatial environment interact. Put simply, a place’s well-being is fundamentally determined by the success of the businesses housed there. Only a business can offer employment, generate wealth, stimulate competition.

For a business to do that, both it and its employees must be appropriately housed and both it and they must enjoy appropriate ‘access’. For employees, they must be able to get to and from work and for the business it must be able to access suppliers and customers.

Once in place, the business must be able to attract people as it grows and retain them once they are in place. To do that, ‘attractors’ are fundamental. These include cultural and sporting amenities and appropriate retail as well as those given things such as beautiful landscape.

It follows that it is appropriate to think of the ‘economic’ as a statement of the demand side and the spatial as an aspect of the ‘supply’ side.

Four fundamental things have to be right on the economic or demand side.

Firstly, a place must have a critical mass of businesses. Business density (number of businesses per head of population) has to be as high as possible. Therefore, all places should be keen to stimulate new firm creation – irrespective of the industry. This has spatial implications.

Secondly, places have actual and potential industrial strengths (financial services in London or chemicals on Teeside) and these must be supported and further strengthened. It follows that understanding what these actual and potential strengths are is important and a strategy to enhance them will also have spatial implications.

Thirdly, industrial strengths or specialisms often need shared spatial solutions to business problems. The Stock Exchange was a spatial solution to the need for businesses to exchange ownership papers. Exhibition space is necessary for small fashion designers jointly to show new products to retailers.  Understanding the strategic relationship between the market needs of an industry and the spatial implications of those, is crucial.

Fourthly, new businesses and businesses that are associated with a place industrial strength must be supported. This support must in particular address the continuing need for innovation. This might come from further and higher education or management consultancy or private sector research and development.  Encouraging the presence of these related businesses and organisations also has spatial implications.

Permalink: http://www.gavurin.com/econspat (copy'n'paste)

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