Levelling up our economic recovery: the regional opportunity for employee ownership
The ambition to ‘Level Up’ the economy is a familiar phrase but it’s not necessarily clear how this ambition will be realised, what it means to families, businesses and the regions in which they are based or how its impact will be measured. However, what is clear is that imbalances in economic activity across the country, with wealth and prosperity in some areas driven by investment whilst other areas struggle to shake off their post-industrial decline must be addressed if there is to be a level, UK-wide, post-Covid economic recovery.
In addition, the UK’s overly centralised structure of Government and governance, with a resulting lack of influence and resources delegated to its cities and regions has resulted in decisions being made for places rather than by places, and hence some people feeling things are ‘being done to them’. Whilst major capital investment such as HS2 seeks to address some of the historical infrastructure imbalance, there is also an urgent need for practical solutions at place level that will address the economic regional imbalances and lack of local empowerment.
Employee ownership, which delegates rights to information, influence and reward to the many is increasingly becoming more relevant and important to the UK’s ambitions for a level recovery, as local politicians and partnerships seek workable, proven solutions that enable more people to have a true stake in their future and in the places in which they live.
We were therefore delighted in June, that the EOA, in partnership with Co-operatives UK was able to announce the Sheffield City Region as the first region in our innovative programme, The Ownership Hub.
Having seen the rapid growth of clusters of employee and worker ownership in economic sectors such as in manufacturing and the built environment, and especially in SME and family-owned businesses, the Ownership Hub will encourage and support similar growth across geographic regions. Designed and developed by the partnership, it directly supports the #1MillionOwners campaign which aims to create 1 million employee and worker owners in the UK by 2030. With the ambition to work with a number of regions, the Ownership Hub will support businesses, professional advisers and places to raise awareness, develop knowledge and increase their capacity to grow employee and worker ownership in a sustainable, long-term way.
The timing of this opportunity, with the focus on regions was a targeted decision, as elected mayors and their associated regional structures are ideally placed to be the catalyst for this regional approach to the growth of employee and worker ownership. With an electoral time-limited opportunity, these influential representatives have a place focus, access to significant resources and a strong sense of urgency to resolve the challenges of regional economic recovery and growth.
The last 18 months have seen many more business owners forced to consider their own futures, with a resulting growth in the number considering employee ownership as their succession solution. This appetite to identify a route that will preserve both jobs and the long-term prosperity of the business is music to the ears of the UK’s elected mayors and other regional bodies – and hence we expect more interest from other regions to join the Ownership Hub in the coming months.
However, there are other benefits that more employee and worker ownership can deliver for the UK’s regions.
Employee-owned businesses have demonstrated their resilience in the past and recent research undertaken in the wake of the pandemic has further evidenced this. Therefore as regions start to rebuild, conscious that developing their future resilience will be critical to withstand any future economic shocks, they are looking to more sustainable business structures like employee and worker ownership.
In addition, an increasing number of businesses and regional economies are now focussing on better business, with a light being shone on the environmental, social and governance (ESG) credentials of enterprises, which the EOA have touched on in our Better Business webinar series. More sustainable businesses like the hat currently exist in the UK are well placed to tackle the challenges posed by considerations of ESG, particularly relevant as the UK prepares to host COP26, highlighting the need for all businesses to consider their responsibilities to tackle climate change.
Finally, the CBI’s ambitious strategy to ‘Seize the Moment’ places a strong focus on regional economies and the development of companies that have a stronger bond with their employees to provide more meaningful work and a focus on wellbeing.
The political and economic argument for greater regional devolution and economic empowerment is now made, and the current moment is arguably one of the biggest opportunities for more employee ownership. We very much look forward to working with UK regions as they realise the benefits and impact of the Ownership Hub to contribute to a level recovery across every region and for every SME and family-owned business.