Levelling up – Is it the right cure?

Abstract

In medicine, treatment normally starts with an examination of symptoms followed by a diagnosis of their likely cause and then a ‘cure’ to counter that cause. In the case of ‘Levelling Up’, the symptoms presented appear to be significant disparities in economic vitality between different areas – but a diagnosis of the cause is not clearly indicated. However, if the recommendation amounts essentially to encouraging private sector growth in under-performing places by pump-priming infrastructure schemes, (for instance, investment funds, education, skills, health care, local leadership and community pride), that might suggest a diagnosis that the under-performance occurs because entrepreneurial endeavour is constrained by infrastructural deficiencies. That diagnosis fits the conventional wisdom but is it correct? The rationale appears to be based on an assumption that the better the infrastructure the more entrepreneurial endeavour there will be – but many commentators indicate that humans are more influenced by historic, cultural and/or social norms than by such considerations. Therefore, continuing to fund infrastructure is unlikely to change the situation. Although that does not itself indicate what might be the answer – or even that a quick solution is possible. But it does suggest both the necessity to look and possible avenues to explore.

Keywords

levelling up infrastructural investment culture social influence historic constraints medical analogy

You can lead a horse to water but you cannot make it drink. (Proverb)

Introduction

In 2020 the UK government announced that it was to launch a ‘Levelling-Up’ fund – apparently to help to boost the economic prosperity of areas of the UK outside London and the South-East of England. However, few details were forthcoming until eventually, in February 2022, a long-awaited Levelling Up White Paper was produced.

The White Paper indicates that the initiative was developed because ‘not everyone shares equally in the UK’s success’ and, ‘while talent is spread equally across our country, opportunity is not’. Therefore, the initiative ‘needs to begin by improving economic dynamism and innovation to drive growth … unleashing the power of the private sector to unlock jobs and opportunity for all’ (Levelling Up, 2022: p. 1) and the next stage is ‘to transform places and boost local growth: strong innovation and a climate conducive to private sector investment, better skills, improved transport systems, greater access to culture, stronger pride in place, deeper trust, greater safety and more resilient institutions’ (p.3).

However, the White Paper also recognises that ‘there has been no shortage of attempts to tackle geographic disparities in the UK over the past century’ but 'these have been insufficient to close the widening gaps’ (Levelling Up, 2022: p. 5). That suggests that a change of approach is needed but, if the initiative really wants to make a difference, is the programme outlined for Levelling Up sufficiently different and, if it isn’t, where is an alternative to be found? There doesn’t appear to be an off-the-shelf ready-made one and knowing what doesn’t work does not necessarily indicate what does.

The problem and the prescribed solution

The situation presented is that, although in recent years the UK’s major towns and cities have been the focus for economic growth, the consequent improvement has been uneven. Those areas which have had relatively high growth have mainly been in London and the Southeast but in the North, while Leeds and Manchester have performed well, some of the older de-industrialised places such as Middlesbrough, Stoke and Scunthorpe have performed less well. Consequently, there have been significant regional differences.

In response to this imbalance the UK government originally announced that it was to launch a Levelling Up Fund worth about £4 billion for England (plus £0.8 billion for Scotland, Wales and Northern Ireland) for investments in local infrastructure which are intended to have visible impacts on people and communities to support economic recovery. This was eventually followed by a White Paper in February 2022 which listed a range of policy initiatives designed, apparently, to ‘spread opportunity’ and grow the private sector by delivering a ‘new model of economic growth, public and private investment, a business friendly environment, incentives for inward investment and a high skill, high wage labour market’ (Levelling Up, 2022).

The White Paper summarises the relevant situation by stating that ‘the UK has larger geographical differences than many other developed countries on multiple measures, including productivity, pay, educational attainment and health’ and ‘places with particularly high levels of deprivation … have the highest levels of community need and poor opportunities for people who grow up there’ (Levelling Up, 2022: p. 4). However, it would seem that those are symptoms of the problem, not causes, and it is not clear what the White Paper thinks are the causes as, instead of considering them, it proceeds instead straight to a description of the methods it proposes should be delivered to improve the situation.

In effect, the White Paper indicates that a cure for the problem is to be effected by ‘spreading opportunity’ through a process of ‘improving economic dynamism and innovation to drive growth across the country, unleashing the power of the private sector to unlock jobs and opportunity for all’. To do this, there are to be ‘five mutually reinforcing pillars’ comprising:

• Clear and ambitious medium-term missions

• Central government decision-making fundamentally reoriented

• Empowering decision-makers in local areas

• A transformed approach to data and evaluation

• A new regime to oversee levelling up missions. (p. 6–8)

This, the White Paper indicates, ‘will require a new model of economic growth, public and private investment, a business-friendly environment, incentives for inward investment and a high skill, high wage labour market’ (p. 9) – which are to be achieved by policies designed to:

• Boost productivity, pay, jobs and living standards by growing the private sector, for example, by investing in R&D, in innovation accelerators, and in regional investment funds.

• Spread opportunities and improve public services – including Education Investment Areas, the creation of the UK National Academy, Local Skills Improvement Plans and the introduction of the In-Work Progression offer.

• Restore a sense of community, local pride and belonging

• Empower local leaders and communities. (pp. 9–16)

However, in not identifying the underlying cause those methods are supposed to address, is there something here which the prevailing understanding appears to have missed because, as McIntyre (2020: p. 194) puts it: ‘we need to understand the world before we can change it’? By what mechanism is it expected that the proposed policy levers will deliver the outcome apparently sought of enhanced economic growth? In the presentations of ‘Levelling Up’ the identified cause of the observed symptoms is not stated and so has to be inferred by working back from the prescribed cure. In this case, the prescription would appear to be consistent with a series of assumptions starting with a presumption that, in the poorer performing areas, the entrepreneurs who might otherwise be expected to start and/or grow businesses and thus contribute to economic growth, are being held back or dissuaded by something external to them. Therefore, as it appears to be assumed that the places thus affected do not have the local infrastructure relevant to stimulating and/or encouraging new and growing industry and investment, that is thought to be the reason why their growth is being constrained. It also appears to be further assumed that this infrastructure is missing because the places concerned lack leadership and/or are either unable or unwilling to afford the financial contribution necessary to pump-prime the relevant local facilities.

Therefore, if the symptoms indicate poor economic performance in some areas and the reason for that is perceived to be a lack of relevant infrastructure improvements, the sort of thinking indicated above would explain why the Levelling Up plan is prescribed as the cure. Thus, the diagnosis appears to be that the symptoms presented are the result of a lack of local leadership and/or the infrastructure investment which are needed to drive and/or support private sector growth. Therefore, to try to rectify this, the new ‘regime’ will be based on the five mutually reinforcing pillars which, in turn, will help to develop the following six ‘capitals’, deficiencies in which, the White Paper suggests, can lead to spatial disparity:

• Physical capital – infrastructure, machines and housing.

• Human capital – the skills, health and experience of the workforce.

• Intangible capital – innovation, ideas and patents. (Is this what is referred to by others as ‘intellectual’ capital?)

• Financial capital – resources supporting the financing of companies.

• Social capital – the strength of communities, relationships and trust.

• Institutional capital – local leadership, capacity and capability. (p. 4/5)

Towards an alternative diagnosis

But will those methods work? It has been suggested that the missions indicated in the White Paper need refinement in things like clarity, focus and targets (e.g. by Shearer, 2022) but, irrespective of that, are they actually appropriate for the cause(s) of the issues Levelling Up seeks to address? The White Paper makes much of the observation that ‘while talent is spread evenly across our country, opportunity is not’ but is that meant to suggest that a lack of opportunity is a cause the observed symptoms? It would seem so because the paper also indicates that the response aims to spread opportunity – but has it considered the possibility that opportunity might exist but is not being taken up?

Is the belief that, if opportunities and support are there, people will avail of them? If so is this similar to the enterprise policies pursued in many counties for the past decades? The relevant programmes have usually concentrated on improving the institutional support, with objectives like that of the former UK Small Business Service (SBS) which had the declared aim of ‘Making the UK the best place in the world to start and grow a business’ (SBS, 2003). However, despite apparently positive reports about programmes in many countries (e.g. OECD, 2020), there is a noticeable lack of evidence that relative start-up rates have consequently risen anywhere (Bridge and O’Neill, 2018: p. 336). Indeed, it could be argued that the declared SBS policy objective has been achieved as a recent survey found that ‘more than 70% of Britons believe it is easy to start a business in the UK’. However, it also found that, despite this, ‘less than (sic) one in 10 has any intention of doing so’ (ERC, 2022). So is intention the issue and could that be subject to the influence of localised social norms?

The power of social norms

An example of the durable economic influence of social norms was highlighted by Dodd in 1990 in his analysis of The Influence of Culture on Enterprise in which he argued that ‘in order to understand so-called ‘enterprise culture’ in any locality today we must examine the relevant social history of that area for many hundreds of years’. He compared enterprise and economic generation in the Black Country, Southampton and Tyneside. He suggested that the history of the Black Country (the region just west of Birmingham) is one of the places bypassed by the Romans and largely left to its own devices where, because of the easy availability of coal, it developed associated industries before the industrial revolution. These were small-scale enterprises, often family based, and that culture he suggested, has persisted. Southampton, he noted, is also entrepreneurial but its prosperity has a different base and has come from its port and the guild of merchants and associated craftsmen which that facilitated. In contrast, Dodd suggested, Tyneside has had a feudal feel about it with its 19^th century prosperity being based on large industrial firms where there was an ‘enormous gap’ between owners and workers – and that difference has persisted. It had no significant history of prosperous small-scale enterprise and so its culture has not facilitated their establishment.

To illustrate the consequences Dodd quoted from a Northern Region Strategy Team working paper in 1977:

‘While the process and structure of industrialisation in the North gave rise to relatively few small firm operations in manufacturing it also engendered attitudes incompatible with entrepreneurial endeavour. The fact that the region’s economy has been dominated by the few major industries means that the employment choices have been particularly limited. The industries … which traditionally provided most regional industrial employment, are all characterised by a preponderance of manual workers and a disproportionally small proportion of middle managers. The effect of this has been twofold. First, it has limited the supply of entrepreneurs, many of whom tend to be drawn from middle management. Second, the large scale of plants in the basic industries, highly cyclical employment and limited opportunities for advancement provoked collective rather than individual action as an escape from economic difficulties. As a result strong class attitudes persisted far longer in the Northern region than in most other parts of the UK and militated against individual initiative.’

Another reflection of this legacy of a once dominant industry might be found in what Checkland (1976) referred to as the ‘Upas tree effect’ – named after the tree found in Java that was reputed to kill anything growing in its shadow. Checkland related how, in Glasgow, shipbuilding had at one time become so dominant that it stifled the emergence of new businesses. Not only was it common for multiple generations of a family all to find employment in the yards, and so people came to expect such employment, but its pervasiveness starved or otherwise discouraged competitors, spin-offs, start-ups or investments in other forms of new, and therefor untried, thinking. Why invest time or money in something new when shipbuilding, and other heavy engineering businesses, were such a proven and predominant source of wealth and employment? Reades and Crookston (2021) also suggest that Detroit may have suffered a similar fate as, before the dominance of the big motor manufacturers, it had ‘once contained many start-ups pursuing a range of automobile technologies’.

Social capital and ‘culture’

Such norms might be considered to be an aspect of social capital and the Levelling Up White Paper’s list of ‘capitals’ includes ‘social capital’ – but that is a somewhat fuzzy concept as there is no single agreed view of what it is. Also, by presenting the six ‘capitals’ together, the White Paper tends to imply that the cumulative total of them is important rather than their separate contributions. However, social capital may not fit that view. Dennis (2011), for instance, suggests that both cultural support (which might be associated with social capital) and institutional support can be crucial for enterprise but that they act, in effect, in different dimensions. Thus, if neither are favourable conditions may be very stagnant, if both are favourable very entrepreneurial, but if the culture is favourable and the institutional approach unfavourable, enterprise is likely to be present but supressed. However, if the culture is unfavourable then, even if the institutional support is very favourable, people will not be inclined to be entrepreneurial and any enterprising initiative may have to led top-down – and this can only be changed by improving the culture, not by yet more institutional effort.

Coleman (1988) in his analysis of what constitutes social capital proposed that there are three aspects of social relations that can constitute useful capital resources for individuals and they are:

• ‘Obligations, expectations and trustworthiness of structures’;

• ‘Information channels’; and

• ‘Norms and effective sanctions’.

It is the ‘norms and sanctions’, which may be of relevant here – and Baumol clearly thought so. He suggested that all human societies have more of less the same proportion of people with entrepreneurial tendencies, but that whether this is put to productive, unproductive or destructive use depends on the way society’s norms, or ‘rules of the game’, direct its application. For instance:

• In Ancient Rome people of honourable status had three acceptable sources of income: landholding, usury and political payments. Therefore, their enterprise tended to be unproductive as engaging in things like innovative business was not socially acceptable.

• In Medieval China supreme prestige was accorded to those in high positions in the state bureaucracy. So young men with ability wanted to pass the exams to get into the bureaucracy although any enterprise they engaged in there was unlikely to be economically productive.

• In Europe in the early Middle Ages the only real opportunity for the younger sons of barons lay in warfare – and so for them enterprise was likely to result in destruction and pillage – not wealth creation.

• However, in England, at the time of the Industrial Revolution, society’s ‘rules’ allowed those who engaged productively in industry to accumulate wealth as well as respect and influence. So their enterprise could be very productive. (Baumol, 1990)

Could it be that, when so much of a local economy is dependent on one large industry, there is no tradition, incentive, credible reason or social encouragement for engaging in the enterprise needed to start something new? And does that view then become embedded in what people view as the recognised way to approach work and employment? Did the prevailing culture in Glasgow discourage the pursuit of the opportunities, which existed, in automobiles or aircraft and thus there was no encouragement or support for anyone considering departing from the norm in that way? Is there a strong echo of Baumol’s society rules in the suggestion that many people in places like Glasgow and the North of England did not engage in individual independent and economically productive enterprise because that was not how people were accustomed to act in their (micro-level) social groups – and that was a product of the history of that society and not a reflection on the current level of enterprise support? If so, then is it the influence of the history of the area on people’s perceptions which imposes a significant constraint on enterprise?

Is this aspect of social influence often missed in official strategies? According to Reades and Crookston (2021) ‘the search is always on for the next silver bullet that will ‘solve’ a city’s decline or ‘future-proof’ it against tomorrow’s threats’ (p. 4) and ‘governments have invested a great deal of money in trying to replicate the success of Silicon Valley without ever really understanding or caring about how Silicon Valley came to be and how what is there now differs from what was there at the start (p. 80). But, they suggest, ‘the examples from New York City, from Silicon Valley and from Hollywood show how the geography of interaction is important (p. 56).

Levelling Up also refers to Silicon Valley as something its Innovation Accelerators will try to replicate ‘leveraging our global lead in scientific research’ and supporting ‘high-growth businesses’ (Levelling Up, 2022: p. 10). While that might accord with the conventional economic wisdom that, given the opportunity, people will generally act logically to maximise their individual benefit, a number of commentators have presented a different picture of human motivation. It this context it is interesting to see the analysis of Silicon Valley provided by two of its participants. In their book, The Rainforest, Hwang and Horowitt (2012) suggest that its success is due to a significant extent, not to policy and official investment, but to the social environment there. Thus, for instance, they suggest that traditionally the pros and cons perceived by someone thinking of starting their own business might be:

Pros: You might make more money. (But, while some people do make money this way, the evidence suggests that on average self-employed people earn less than their comparable employed peers).

Cons: It requires a considerable investment of time, effort and stress. It is also likely to mean sacrificing, not only any existing career investment and future prospects, but also the social standing and respect that comes from being seen to be in a recognised profession. (p. 124)

However, they indicate that in Silicon Valley the perception is more likely to be:

Pros: It satisfies a sense of adventure, opportunity, discovery, independence and/or passion. It has social approval and often the joy of sharing / successful teamwork. And it can leave a legacy for others.

Cons: It does require time and effort and it involves exposing yourself and your ideas to new contacts (but this can be compensated by making new friends). It might lead to ‘failure’ (but you could regret not trying and set back is often mitigated by social support) (p. 126).

Social influence matters

These examples indicate that, whether it is called culture, social capital, attitudes or society rules, it is clear that social influence plays a big part in determining what people do. Whether traditional economic thinking allows for it or not, humans are a social species and social norms and habits are very influential:

‘The notion that we are rational individuals who respond to information by making decisions consciously, consistently and independently is, at best, a very partial account of who we are. A wide body of scientific knowledge is now telling us what many have long intuitively sensed – humans are a fundamentally social species, formed through and for social interaction, and most of our behaviour is habitual.’ (Rowson and McGilchrist, 2013)

This is consistent with studies which find that people take their attitudes to many aspects of life from the social group with which they identify. Christakis and Fowler (2010) note Eric Hoffer’s opinion that, ‘when people are free to do as they please, they usually imitate each other’, and relate that, in their own work looking at obesity, they concluded that obesity was ‘contagious’ because people ‘caught’ it by socialising with obese people.

Cova and Cova (2002) note that human behaviour might be observed at three levels: at the macro-social level, for instance considering counties, social classes or genders; at the micro-social level of tribes, clubs and gangs; or at the individual level of single actors. Earls (2009: p. 95/6) in commenting on this, suggests that in Western societies the main focus in attempting to understand behaviour has been either on the individual or on the macro-social level but missing the micro-social level. This is therefore relevant if it is at this level that the example and influence of others might be strongest. It is also relevant if it is at the micro-social level that influence is generally not uniform across countries and thus the prevailing attitude in some towns and cities might differ from others.

The Rainforest’s analysis of Silicon Valley’s success is that it is not due just to the sort of intersection of different ideas and thinking that the Medici model might suggest, although Silicon Valley does have that, but to the social environment that encourages, directs, supports (and even regulates) the combinations of ideas, abilities and resources needed.

As Earls (2009) summarises when introducing the subject of mass behaviour: ‘we do what we do because of other people and what they seem to be doing’. Humans are clearly a very social species and, not least when trying to promote enterprise in disadvantaged areas, social conditioning and example can be very influential. For instance Atkinson and Kintrea (2002) point out that ‘the social dynamics of deprived areas can promote inward-looking attitudes, stigmatization and weak social capital’ and Parkinson and Howorth (2017) suggest that ‘communities develop cultural norms that shape their response to economic and social problems’. They examine how communities can, through their discourses, develop a culture in which ‘enterprise, as they perceived it was problematic and did not fit and show how ‘the lack of ‘fit’ between enterprise and deprived communities could develop and be sustained’. Therefore, they note that ‘fostering place-based enterprise cultures is not simply about investment and infrastructure but also about attitudes and prevailing discourses’. Consequently, they suggest:

‘If people collectively construct their community of place as problematic for enterprise activity, top-down efforts to stimulate or support entrepreneurship may be ineffective. It is important for policy and research to appreciate how local social practices (in addition to material circumstances) can prevent positive versions of enterprise from proceeding.’ (p. 386)

‘Understanding how context is shaped becomes particularly important for settings such as deprived communities, partly because of the faith vested in enterprise as a panacea for deprivation.’ (p. 399)

‘The interplay between discourses, material “realities” and context means that efforts to stimulate enterprise for place development need to consider discursive, as well as material, barriers and assets’. (p. 399)

Other examples come from people like Kibler et al. (2015) and Bensemann et al. (2021) who look at the interplay between place attachment and social legitimacy and from Drakopoulou Dodd et al. (2013) who, in looking at the ‘contentious appeal of entrepreneurship’, argue that its appeal lies in how people understand it and ‘in how and in what ways, they value or demonise the enterprise’. They also suppose that for some people ‘entrepreneurship is admired as a concept for others but rejected and shunned as a practice for themselves’. Such effects, they suggest, are broadly cultural but note that cultural influence is ‘largely unobservable’ and ‘the effects of culture are notoriously difficult to capture’.

Other relevant entrepreneurship examples

While they may not all obviously be linked to this view of social influence, the following examples illustrate that what is often referred to as ‘culture’ can be very relevant to economic activity – and in particular to the readiness of people to avail of business opportunity.

An example of observation at the macro-social level has been attempts to compare levels of ‘entrepreneurship’ which, have generally looked at the level in different counties, or regions, but not at levels in smaller groups. One of the main such examples has been the Global Entrepreneurship Monitor (GEM) which for over 20 years has been trying to compare levels in different countries, but not within countries. Nevertheless, it is also relevant that, despite a variety of macro-social level programmes in different countries to increase levels, an examination by Reynolds (2014) of the GEM data found that there has been ‘a high level of year-to-year consistency for individual countries’.

Although GEM has not done it, other comparisons of levels of enterprise have been made at levels closer to that of micro-social groups – and have found significant and lasting variations (despite the same national programmes) between different groups within countries. For instance, Audretsch and Keilbach (2007) reported on a study in which they looked at the capacity to create new firm start-ups (which they called entrepreneurship capital) within different regions in Germany. They found that, whether they were looking at knowledge-based entrepreneurial new ventures or low-tech entrepreneurial new ventures, ‘entrepreneurship capital shows significant spatial autocorrelation and does not spill over into neighbouring regions’. Fritsch et al. (2021) also looked at Germany and again found significant and persisting differences between different regions going back possibly nearly 2000 years to Roman times:

‘Our analysis reveals that regions in the former Roman part of Germany show a stronger entrepreneurship and innovation culture today evidenced by higher levels of quantity and quality entrepreneurship and innovation. … Our findings thus help in unpacking the hidden cultural roots of present-day economic performance, with important implications for research and economic policy.’ (p. 1)

Other countries where similar lasting variations have been found include Sweden (Andersson and Koster, 2011), Poland (Fritsch et al., 2019) and Switzerland (Erhardt and Haenni, 2021) as well as the UK:

[In the UK] ‘the results obtained … suggest that interregional differences in new firm formation and their determinants are time persistent.’ (Fotopoulos, 2014)

[In England and Wales] ‘regional stability over long periods of time is the norm – especially for low enterprise areas’ and ‘stability can be interpreted as reflecting the powerful role played by cultural factors in explaining spatial patterns of entrepreneurship’. (Fotopoulos and Storey, 2016)

As an example of social norms and sanctions in action the case presented in Box 1 illustrates the negative effect peer group influence can have on someone’s enterprise.

Box 1 – An example of how social norms can hinder enterprise

David (not his real name) was brought up in an impoverished working class estate and, although he served his apprenticeship as a joiner, he found himself out of work in his early 20s still living at home with an unemployed father and unemployed brother and a very sick mother. His thoughts were that he should use his own initiative to start a business (any business) that would bring in money and keep the wolf from the door.

So, he started a gardening business on a shoe-string. His grandmother gave him a mobile phone and his girlfriend managed to get some flyers produced which he distributed. Directly after this David started to get a lot of calls on his work line in the middle of the night and when he answered it the phone went dead. He told me about these phone calls and how worrying they were because his mum was in hospital and each call woke him and filled him with dread. David confided in me that he thought it was ‘some of his mates just having a laugh’. I replied that it wasn’t funny and they were not good mates, they were men who wanted David to stay their little friend, they didn’t want him to better himself or outgrow them. They were happy with the unemployed David they knew and were trying to keep the situation unchanged and in effect were holding him back. I advised that he should keep his business life very separate from his social life and stop discussing and confiding in these guys because they wanted to maintain the status quo at the expense of his business. …

Some months later I received a call from David out of the blue asking for my advice regarding the following situation. He was sorting out a garden for a girl and her dog bit him. The owner was naturally very upset and (as she knew me) confided in me that she was embarrassed and upset, not only did her dog bite David but he never returned. This worried the girl as she didn’t know how he was, the extent of his injuries and if he was even prepared to finish the garden. David’s phone call clarified things for me, he was fine but his friends wanted him to sue. … they said he would be mad not to do so, that he could make a packet. He wasn’t sure about this, he felt that he shouldn’t but they advised so vociferously he thought he had better run it by me. I told him that if he took her to court that would be the last money he would ever make because no one would employ him (including me and my friends). He said he agreed and followed my advice and texted his client to say ‘Apologies in the delay in getting back to you, bite now a distant memory – no scarring no pain, will return to complete gardening at your convenience. Please advise’. I advised David again that he should keep his social and business life separate but for such a guy it’s always going to be a struggle and perhaps not one he will win without changing his friends!

Related to the author by David’s course tutor, July 2014

Implications

The preceding section suggests that, in attitudes to enterprise/entrepreneurship and in the tendency of people in an area to engage in activity which results in economic development, ‘culture’ and social influence matter and group attitudes can develop which, once established, can be significant and long lasting. If, as described by Checkland and Dodd, people are in an environment which does not support individual enterprise and where, as was suggested recently in a radio discussion, people ‘think it is someone else’s job to do everything for them’, then that is very different from the culture which encourages and supports a sense of adventure and a willingness to share in exploring innovation opportunities which appears to sustain Silicon Valley.

If social disincentives are a relevant issue, how is Levelling Up going to change this? If, at least in part, its aim of is to stimulate more enterprise-led economic growth in the ‘left behind’ areas, then this analysis would suggest that continuing to do more of the same and just applying money in the usual way is unlikely to change the situation and address the problem – and would therefore be a waste of time and resources. This analysis suggests that there is a good case for thinking that it is the different histories, and consequently the different cultures, of places which leads to the disparities between them, and not just their different financial spending on the support infrastructure.

However, accepting that diagnosis does not immediately indicate what might improve the situation – or even that a quick solution is possible. Knowing what does not work does not automatically indicate what does work – but it does suggest that, if a change is to be achieved, there is a sufficient need to look, if necessary using the established innovation process of ‘trial and error’. Therefore, although it does not define a precise solution, this analysis indicates that there is a strong case for a different approach and that social influence is likely to be a helpful avenue to explore.

Inculcating the appropriate social capital by changing human attitudes and behaviours might not be easy but there are areas where it is being done and there are examples of the application of this to enterprise. Ní Bhrádaigh (2009) studied a historically disadvantaged and peripheral Gaeltacht community in Ireland in which a lack of social approval may have been what was discouraging prospective entrepreneurs. She indicates that in that community social enterprise seemed to have been a necessary pre-cursor for for-profit enterprise. Apparently the Gaeltacht community had been accustomed to distrust entrepreneurs and an explanation for Ní Bhrádaigh’s finding is that, in such circumstances, the social/community enterprise encouraged the community together to partake in entrepreneurial activity – an experience which might have led to a form of ‘tipping point’ from which the members of the community could then start to see such enterprise as acceptable and even laudable not just in the community as a whole but also in individuals.

As Einstein is reputed to have observed, insanity is doing the same thing over and over and expecting different results. While such examples do not provide alternative solutions ready now for application, they do suggest possible routes to explore to find a better response.

In conclusion

In examining the thinking behind Levelling Up, an analogy with the field of medicine might be helpful: both for examples of the persistence of misguided thinking and for the stages of problem diagnosis and prescription. The history of medicine provides many examples of mistaken theory leading to harmful cures, such as the practice of bleeding patients to cure fevers, and even today some branches of medicine are said to have a knowledge half-life of less than 10 years. Nevertheless, medicine does seem to have evolved credible practices such the diagnostic process of observing the situation and the symptoms of a problem, diagnosing what might be their cause and them seeking a remedy which is likely address that cause – although some people still hope for or expect a fashionable remedy and want the diagnostic process to be adjusted in order to fit that conclusion.

As medicine shows early theory can be misleading and it has been suggested that much social science remains ‘embarrassingly unrigorous’ (McIntyre, 2020: p. 187) with theory often based, not on empirical research, but on ideas that appear to ‘feel right’ or ‘make sense’. Could the Levelling Up diagnosis fall into that trap by seeking to apply a cure which is traditional, popular and available but for which there is little evidence of effectiveness? In effect the ‘Levelling Up’ programme seems to be presented as the prescribed cure for economic weakness but, to assess whether a cure is likely to work, is it helpful to know what problem it is meant to address and what has been diagnosed as the cause of that problem. However, in this case neither the nature of the problem nor the identified cause seems to be made clear – which leaves a suspicion that the cure has been selected, not as the result of a careful diagnostic process, but because it is available, customary and/or likely to be politically acceptable. It prompts a suspicion that, by quoting various historic exemplars like Renaissance (Medici) Florence and Golden Age Holland, their example provides a recipe with the necessary magical property of curing economic ills just by its application.

The apparent rationale behind Levelling Up appears to link infrastructure investment and productive entrepreneurial activity – but, between them, which is the cause and which is the consequent effect? The diagnosis seems to assume that it is a lack of infrastructure that is holding back entrepreneurial endeavour – as if the better the infrastructure the more enterprising endeavour there will be. If the main objective is to be seen to be doing something then the proposals might do that – but if the aim is indeed to ‘rebalance’ the national economy and actually make a difference by encouraging industry and new investment to revive the social and economic fabric of the ‘left behind’ places, then there are concerns about whether the specific policy levers proposed will work.

By not clearly indicating the perceived problem and the diagnosis of its source, the proponents of ‘Levelling Up’ may be seeking to avoid such conclusions being drawn. Nevertheless, if the main constraint on enterprise is a legacy of social ‘rules’ in the area, that will not easily or quickly be overcome. Therefore, if a change is actually sought, rather than just wanting to appear to be doing something, this paper suggests that there is a clear case for recognising social attitudes and culture as the likely issue and ways sought to modify them accordingly, even if it takes time. As the African proverb indicates: if you need a tree the best time to plant one is 20 years ago – but the second best time is now. Although culture might not be an easy cause to address, that is not a good reason for rejecting the diagnosis and seeking a different one which might suggest a seemingly easier, and faster, solution.

Consequently, the conclusion of this paper is that, to boost the economic prosperity of the ‘left behind’ areas outside London and the South-East of England, the cure prescribed by ‘Levelling Up’ is unlikely to work. It may have other effects, such as making places more attractive for external investors but, because it does not recognise and attempt to address the cultural obstacles, it is likely to prove to be the wrong cure for the problem targeted.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

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Simon Bridge

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