It’s not just the economy, stupid!

By Lucy Gravatt, Director of Partnerships & Communications, Hertfordshire LEP

In the latest in our series looking at Hertfordshire’s key opportunity areas, we address this fundamental question - how can the benefits of local economic growth be more widely shared?

In 1992, when James Carville was advising Bill Clinton in his successful run for the White House, he coined the slogan, “[It’s] the economy, stupid!” making it the central thrust of the Democratic campaign. This now infamous quip speaks to a broader fundamental truth – that the economy and how it is managed has the greatest impact on citizens’ lives and future well-being. So how is Hertfordshire, as one of the most prosperous counties in the UK, seeking to ensure its communities benefit from its economic success?

To help address this question we first need to set out Hertfordshire’s economic credentials. The county contributes over £46bn GDP per annum to the UK economy. Abutting a global city and with excellent connectivity to European and US markets, Hertfordshire has genuine worldleading strengths across many sectors, often built upon the excellence of its academic and research institutions, working hand in hand with the engine of innovative businesses.

Its economy is defined by its connectivity to London as a world city, with associated benefits and costs in relation to jobs, housing, transport and digital infrastructure. Its leading scientific industries and research capabilities are right at the heart of the ‘Golden Research Triangle’ (Oxford, London, Cambridge).

The county has outstanding sectorial strengths in advanced manufacturing; film, TV and creative digital; life sciences (cell and gene therapy); sustainable construction and clean growth; agri-science and agri-tech. Its specialist science and technology businesses and research institutions are driving some of the most advanced developments in pharmaceuticals and cell and gene therapies; aerospace, satellite, robotic and defence technology; and sustainable construction and agriculture.

Its enterprise zone, Hertfordshire Innovation Quarter, is leading the development of 3 million sq. ft. of new commercial space into a zero carbon, digitally connected workplace, just 30 minutes outside London. The University of Hertfordshire is also a significant contributor to the national economy. According to its Powering Economic Impact report of 2023, the University had an economic footprint of £730m in gross value added for the UK and £330m in gross value added for Hertfordshire, while 11,170 full-time jobs nationally – and 6,280 full-time jobs regionally – were dependent on it and its activities.

However not all communities benefit from this economic success, due to lower level skills, low pay, digital exclusion and difficulty accessing quality affordable housing. And, like the rest of the world, the county is facing a climate emergency. Hertfordshire Growth Board, the way the county is working together to manage future growth, comprises public leaders from across local government, health, Homes England and Hertfordshire Local Enterprise Partnership (LEP). Together they are developing an ambitious vision to have: “Healthy, inclusive and connected communities with access to sustainable quality places to live, study, visit and work that current and future generations can enjoy. A place that grows responsibly and celebrates the character and diversity that makes it special. A thriving economy that’s open to opportunity and puts Hertfordshire people first.”

In order to take this forward Hertfordshire Growth Board has six supporting and interlinked missions that take a more holistic approach to growth: climate and sustainability; healthy, active environment; access to good jobs, skills and supporting key sectors; quality, affordable housing; transport connectivity and access to digital. Each mission has clear actions and means of measuring success against existing baseline data.

Cllr Richard Roberts, Leader, Hertfordshire County Council and Chair, Hertfordshire Growth Board, said: “Hertfordshire is a county of prosperity and opportunity, with one of the strongest economies in the country. We have some of the highest performing schools and best employment rates. Our strong business and entrepreneurial spirit, makes the county an attractive place to locate for industry. Working in partnership with the business community, district, and borough councils, we will ensure that Hertfordshire continues to be the county of opportunity where residents lead happy, healthy, prosperous lives and businesses thrive and succeed.”

Cllr Elizabeth Dennis, Leaders of North Herts Council, and Vice Chair of Hertfordshire Growth Board, said “Hertfordshire Growth Board has been an invaluable space for districts and boroughs, bringing us together as equal partners with county, health providers, the PCC and LEP. As the form of government closest to our communities, we are on the frontline when it comes to delivering the strategic priorities necessary for Hertfordshire to succeed. The vision for Hertfordshire has been codesigned by all key stakeholders, and we all recognise the parts we need to play in order to deliver not on cold KPIs, but on the determinants of health and well-being which matter most to the people who live, work and visit Hertfordshire. By doing this, we will deliver benefits for communities which go far beyond crude economic outputs and deliver a socially wealthy county.”

Hertfordshire LEP is responsible for the Growth Board’s economy mission with its focus on jobs, skills and key sectors. The LEP is also developing a new Economic Strategy that will set the direction for the county for the next 10 years. This will align with Hertfordshire Growth Board’s economy mission but will be much broader, focusing on:

• Key sectors, innovation and inward investment

• Employment, employability, skills and future jobs

• Smaller businesses (including social enterprises) across Hertfordshire

There will be a particular focus on the five ‘wealth-building’ sectors of national and international significance and the key supporting sectors that are key to our quality of life.

This will create a more resilient economy that is far better equipped to navigate future macroeconomic/geopolitical risks.

This will help Hertfordshire go beyond metrics such as GDP towards a more sustainable and inclusive definition of economic success. Covid-19 brought into sharp focus the close relationship between health, well-being and the economy. It exposed those jobs and industries within society that are most vulnerable to economic shocks and has accelerated the need to transition to a ‘wellbeing economy’, highlighting in particular the imperative to upskill and re-skill local people to fulfil the roles of the future. In adopting this more considered approach to wealth-creation and a more well-rounded definition of prosperity, the result will be:

• better economic outcomes, linked to productivity, export/trade, and investment – and enriching jobs;

• better environmental outcomes, particularly progress against net zero targets and resource use;

• better social outcomes: inclusion, cohesion progression, health & well-being, equality.

As part of the Government’s decision to integrate LEPs into local government, this strategy will be taken forward by a refreshed version of the LEP early in 2024.

Already Hertfordshire is being viewed by Government as a trailblazer for successful integration thanks to its joined-up approach to the environment, local job creation and skills delivery. One of the first functions of this NewCo will be to listen to the views of a diverse range of voices to ensure that this strategy is relatable and relevant to all parts of society and resonates with businesses.

Neil Hayes, CEO, Hertfordshire LEP, said: “Hertfordshire LEP has played a key role in setting the economic direction for this county over the past decade. This new Economic Strategy will build on this important work and go much, much further, reflecting the wider social, environmental and technological drivers that could accelerate and impede our progress. By working hand in hand with local government and industry, this strategy will provide a new economic road map for the future.”

This 360 degree view of the economy will also shape our response to inward investment and the definition of success. Measurement of performance over the longer term must not just be narrowly calculated in terms of foreign direct investment wins, new projects and direct jobs, but also the wider spill-over benefits to the whole of Hertfordshire’s economy. We need to measure what matters in order to deliver the widest range of benefits to the economy, its people and without further cost to the planet. In short, it’s not just the economy, stupid.