Who gains from growth?

We have often heard governments in recent decades saying that growth is good for everyone. Never mind wasting precious resources on panaceas for the impoverished, they say, we need to pump prime business and jump-start the economy. Invest in growth, so the argument goes, and the standard of living will rise for everyone.

A report today though seems to confirm what many of us already suspected, that economic growth does not benefit everyone after all. At this delicate moment of cuts, this news is troubling for those of us who are already worried about the inequalities dividing us from our neighbours, or who are simply unlucky enough to be in the poorer half of society.

The Gardencentreshopping href="http://www.resolutionfoundation.org/publications/who-gains-growth-living-standards-2020/" target="_blank">Resolution Foundation's Who Gains from Growth? report, published today with Warwick University and the Institute for Fiscal Studies, predicts that the lowest income families in Britain stand to lose 15 per cent of their incomes by 2020. Middle-income families will also lose out in the long-term, with only the wealthy standing to gain materially from economic recovery.

all working-age households below middle income in 2020 will be worse off than those in the same position a decade earlier. A household at the bottom of the low to middle income group1 in 2008-2009 had an income of £10,600 a year. By 2020-2021, under the baseline, the income of a household in that position falls to £9,000 a year (in 2008/09 prices), a real terms decline of 15 percent. A household at the top of the low to middle income group would, in the same position, see its income drop from £23,000 per year in 2008-2009 to £22,200 in 2020-2021, a real terms fall of three per cent.

What is particularly troubling is that, as the report itself says, "all the projections in this report rest on GDP forecasts of modest growth to 2015 and of annual average growth of 2.5 per cent from 2015-2020 which, by comparison to more recent forecasts, now look optimistic."

In other words, even if the Government deliver what they promise on economic policy, most of us will still lose out.

The shift has much to do with changes in the job market, in which admin and manufacturing work is being replaced with lower-paid roles in retail, caring and leisure. As the report summarises:

The UK economy is set to create both more highly skilled jobs at the top and more low skilled jobs at the bottom, while jobs in mid-level occupations are in decline. While these changes in the structure of the labour market are good for most people, they are also set to boost pay far more for higher income households than for those lower down

When I read this I was struck by its similarity to Professor Richard Florida's recent RSA President's Lecture. He argued that economic growth is now linked closely to the levels of creativity in our cities, and that nurturing the creative industries and high tech businesses such as in London's Tech City holds the key to making Britain internationally competitive.

In the Q&A afterwards, I asked Richard about the implications of this for the job market. If our economy is increasingly based on creative, high tech businesses - ones that, for example, radically compete with traditional publishing businesses by cutting bookshops out of the loop and allowing authors to self-publish and sell direct - then what does this mean for the number and nature of jobs available in this new economy?

His answer was sobering. He pointed to the growth in "personal services" - massage, personal shopping, pedicures - and suggested that this was the future growth area for the labour market. To his credit, he made the strong point that we need to make these roles creative and enjoyable for people, and ensure they provide a good standard of living, but I was still left feeling uneasy.

Are we becoming a two-tier society, of the wealthy, tech-enabled "creative classes", and their servants?

This report today seems to suggest that there is a risk of greater divisions, at least if we continue to push single-mindedly for growth without looking at the wider social factors at play. Whilst the  report itself doesn't suggest specific policy directions for solving this problem, and stresses the complicating factors such as the spread of unemployment or withdrawals of benefits, it does point the way:

Some alternative scenarios – boosting low wages, improving skills or raising female employment - lead to modest improvements for those in the bottom half of the income distribution. However it is only when all three measures are combined that many people in the bottom half become substantially better off.

Of course the report will have its critics and it needs to be submitted to rigorous review. What is clear though is that we need a much wider and more informed debate about growth than the stultifying "increase public spending" / "get Britain back on its feet" bun-fight that is currently dominating our political discourse.

We need our Government to focus on getting every part of the economy back on its feet, particularly those who are suffering most right now. Because if we don't, we risk more and more people becoming disenfranchised in a system that simply doesn't allow them to win.

UK Riots

New Season, New Sociability

September is here and the leaves are turning brown. As Philip Larkin once wrote, “begin afresh, afresh, afresh.” A time for renewal, perhaps.

Sociability launched in 2007 in a very different environment to 2012. Back then I was part of a small but passionate movement to use “web 2.0” tools to reorganise our social systems, improve public services, connect people together and build the world we want to live in. Now civic responsibility has given way to economic reality, and unfortunately many of those that were leading this charge are now pursuing other strategies to survive in this leaner, meaner world.

But Sociability has persisted, and so too have many of the projects and conversations we were part of five years ago. Being a network has made us more resilient to change, and many of the trends we were part of in 2007 have grown rather than receded.

Three years on from our publication of Social by Social, the Arab Spring, Wikileaks and #Occupy mean everyone is now talking about the role social media is playing in social change. Four years on from starting Mindapples, the Government is now measuring our national wellbeing and there is more talk than ever about the centrality of mental health real venus factor reviews in public health. Two years on from the publication of Local by Social, the Big Society agenda and spending cuts have made collaborating with citizens a key part of the work of local authorities and public service organisations.

Okay, so maybe we didn’t expect the Olympics to be quite as good as they turned out to be - but hey, we can’t get everything right.

So as we enter our sixth year, with a revamped website and a new focus on social business and social technology, we hope that over the coming years we’ll continue to push boundaries and break new ground, and have some interesting conversations along the way.

We hope that our new projects, Lock-in TV and Do a Bit, will turn out to be as prescient as our previous innovations, and that we can continue to help our clients adapt to an increasingly turbulent but also ever-more dynamic new global market.

And most of all, we hope people will keep sharing their ideas with us and helping us learn more about the world we live in, and how to thrive in it.

Expect to see a bit more blogging from me too. I’ve missed blogging.

Happy Autumn everyone.

Andy

SI Camp: The Movie

Social Innovation Camp: the Movie is now online, courtesy of our friends at The People Speak:

Feeling incredibly inspired now. We must do it again!

(I don't really think the truth is overrated by the way...)

Too much technology, too much innovation

This cracking piece about innovation on BNET got Dugg recently and deserves a share. Whether it's replacing car keys with complex wireless authentication technologies, or grafting endless functionality onto otherwise perfectly usable software - innovation is becoming synonymous with new things you can do, rather than doing what you want more easily. It reminds me of something I used to ask a few years back: how come in science fiction, everything works perfectly? Hover cars don't break down, phasers don't need rebooting, spaceships don't get stuck. Technology is often presented to us as this unstoppable force that will make our lives so much easier. But for every finger-print ID door lock, there is a team of fingerprint ID door lock service engineers; for every automated grocery reordering system, there is a pile of misordered vegetables rotting in the distribution centre; for every matter transporter there will be a matter transportation workers union. The more technology we have, the more humans we need to make it work.

This week I've got Social Innovation Camp, followed by Disruptive Social Innovators, and then an RSA "civic innovation" event, not to mention chats with about a hundred people with "social" and "innovation" in the job/business names. Meanwhile everyone from DIUS to Channel 4 is talking about supporting innovation and the Innovation Nation. We're in danger of overdosing, elevating the new above the useful and throwing away past successes. And more importantly, we risk elevating the technology, the "innovations", above the users themselves.

A line in Clay Shirky's recent Q&A at the RSA comes to mind (slightly paraphrased): "It's not about novelty, but ubiquity. If you are looking for social scale change, it's adoption."

Social progress is often about making more widespread use of what works already, not just putting new things in their place. Car keys work perfectly well, thanks: they're cheap and robust, they never need upgrading, and most importantly, everyone can use them.

So let's focus our energies on making simple, easily-supportable things that everyone can use, and spreading the behaviours and technologies that already work. And fewer hoverboots please. (Although having said that, this is waaaaay cool...)