Archive | February, 2012

The crisis in capitalism calls for local banks & stronger local governance

3 Feb

When George Osborne pronouces a crisis of confidence in international capitalism, the majority of the public are angry about bank bonuses and Lord Mandelson recants on ‘being relaxed about wealth’ – then, you know there’s a real opportunity for socialising business and for greater governance locally as well as nationally and internationally.

Development through ‘any old supermarket’ is not good enough – there are investors out there who are interested in making a difference. There is a growing realism that ‘making money from gambling’ is ultimately unrewarding – investing in places and people is more motivating for Bill Gates etc than a bonus. The problem is that we are uncertain of the mechanisms to achieve this- too much company law rewards and accounting practice are based on assumptions that short-term financial gain is the only way to measure success.

The crisis of the banks is not just about money and debt – it is also about a set of institutions that have lost their connectedness to society, and particularly to the communities they serve, not just their individual customers. Even though, economic revival, especially in the regions, depends on SMEs – the banks continue to ignore very small businesses (which are sunk without family support) and are refusing funds even established larger companies. Their risk aversion that the corporation not the local economy.

Less tribal and more imaginative local governance could inspire  more innovative ways of supporting open-learning, local services and small businesses and along the way inject some life into local democracy.

A look at the some of the assumptions embedded in economic development thinking reveals that new start-ups and social enteprise need connectivity to supply chains, not competition;  – access to funder who care about what want to do and about what impact the business will have locally; –  business and enterprise are just as dependent on public services and infrastructure as are the public.

Collaborative leadership has become a necessity not wishful thinking -but an essential ingredient of developing a more humane society where people’s interdependence is acknowledged and valued.

What would make the most difference to SMEs and social enterprise across the country are local banks that lend on the basis on local innovation and local returns.

Theres hoping that Eden and Cornwall come up trumps with their bid for a local Green Investment Fund. Be brave BIS give Cornwall a boost.

Doing a session on commuity leadership in Eden on Sunday at their Locality Planning Camp