Our LEP’s vision is
“To create and foster in Gloucestershire, a sustainable, low carbon economic environment in which businesses flourish, communities thrive, and individuals have the opportunity to reach their potential.”
These are laudable words in the ‘Integrated Economic Strategy’ but what does ‘a sustainable, low carbon economic environment’ mean and what will it look like for our £11 bn per annum local economy?
Slowness to adapt and lack of innovation drove retailers HMV, Jessops and Curry’s under. Yet this is also happening throughout all products/services and their supply chains. Suppliers in the built environment have to meet onerous environmental requirements which require massive investment in new skills and technologies often at lower margins. Food manufacturers are required to reduce impacts on energy, packaging, waste and poor nutrition…. in fact there are endless examples in every sector of how we are moving beyond incremental improvements in order to keep prices down and increasingly seeing innovation driving market advantage.
It is this holistic view which is known as ‘sustainable economic development’. The word sustainable applies to longevity – not just environmental considerations, although they are increasingly the key driver as energy prices increase and resource scarcity becomes a concern. For example, Avis recently acquired Zipcar for $500m as car ownership is being disrupted by the city car clubs where for £6 per hour you have the convenience at a fraction of the annual cost of ownership and worldwide accessibility under one membership. This is what’s known as a disruptive model. Providing customer value and creating a market opportunity which forces obsolescence in the traditional model. Great for one business; fatal for the other.
Indeed, ‘ownership’ is one of the biggest issues in our consumer-based economies where intensive resource use and massive waste occur because we expect to ‘own’ things we seldom use. Transforming to these ‘closed loop’ models and their challenges takes strong strategic leadership but the rewards could be great for those who anticipate; and the writing may already be on the wall for those who dismiss ‘the shift’ and arrogantly assume it will fail. Remember HMV wrongly assumed music lovers will always want to browse in a store and own a physical CD – and they did, until they enjoyed the convenience and cost-advantage of downloading. All businesses should be thinking about the indirect, as well as direct risks to their businesses, collaborating with their critical supply chains and planning for proactive responses to create a truly ‘sustainable economy’ for Gloucestershire.