What is an inclusive economy?

Written by Beth Sharratt, Project Manager at GMCVO

I don’t know about you but economic policy was never been something that I could get enthusiastic about. I always thought of it as a dry subject best left to people in suits. I never thought it was very interesting, and I definitely did not think I had any control of or power to influence it, despite knowing that it mattered.

I have since realised that policy, especially economic policy doesn’t just matter, it fundamentally shapes all of our lives. Despite being vocal and active in all sorts of other areas related to social justice, I never felt those conversations about the economy were ‘for me’. I was wrong.
In this video, the economist Ha-Joon Chang explains why ‘Economics is for Everyone’

What is an ‘inclusive economy’?

There is not one clear definition of exactly what an inclusive economy is, as it could vary between places, but there are a number of characteristics you would expect to see. In March 2021 – the Greater Manchester VCSE Leadership Group published ‘Building a Greater Manchester: Our Economic Vision’. This report talks about some of the characteristics you would expect to see in an inclusive economy, but broadly speaking an inclusive economy is fairer, with good employment (i.e. paid at living wage and is secure), and equitable distribution of wealth and opportunities for all, not just those lucky enough to find themselves at the top of the food chain.

The problem

According to Wikipedia, ‘The economy of the United Kingdom is a highly developed social market and market-oriented economy.’

That is one way to describe it. Many would argue that the UK economy is fundamentally broken. (This video attempts to explain, in simple terms, the current context of the economy of the UK and around the world).

The economic status quo causes, contributes to and exacerbates a myriad of profound and deep inequalities, and deprived or marginalised communities are more likely to experience their effects

The basis for this thinking is that the economic status quo causes, contributes to and exacerbates a myriad of profound and deep inequalities, and that deprived or marginalised communities are more likely to experience their effects. These inequalities are the reason why many voluntary, community and social enterprise (VCSE) organisations exist. They pick up the pieces caused by poverty, poor physical and mental health, social isolation and loneliness, to name but a few complex social problems the VCSE sector plays a huge role in tackling. I doubt there is a chief officer of one of these organisations who would disagree that in an ideal world there would be no need for their organisation to exist.

So what would need to happen for that to be a possibility?

(Part of) The solution

We can say ‘FIX THE BROKEN ECONOMY’, but this is easier said than done.

No one organisation, sector or government, is going to be able to overhaul the economic model of the UK in the near to medium future. It is built into our lives in a way that cannot be easily dismantled, and it would be naive to think that would be something that everyone would buy into, even if it were possible.

We need to create opportunities for deprived and marginalised communities to hold power and resources

So what can we do? We can make the current economic model more inclusive of those deprived and marginalised communities for whom the current system serves so poorly. But how? In essence, we need to create opportunities for those communities to hold power and resources. There is no one way to do this; an ‘inclusive economy’ can feature a range of different things including:

• Social Enterprises
• Co-operatives
• Employee-owned businesses
• Community Wealth Building

There are some examples of the above in the ‘Building Back Better in Greater Manchester: together with the VCSE sector and the wider social economy’ report commissioned by the inclusive economy working group of the GM VCSE Leadership Group.

We also need to support those already doing this work, and amplify their voices.

This is an important part of GMCVO’s mission, we seek to improve the lives of people in Greater Manchester and tackle existing inequalities. This is at the core of our work with Social Enterprises and our Social Investment portfolio of products, as well as our role in delivering the VCSE Accord alongside the GM VCSE Leadership Group.

We are far from alone in championing the need to create a more inclusive economy.

What else is happening in Greater Manchester?

You will have heard about the Government’s ‘Levelling Up’ white paper – this recognises the long term and deep-rooted geographical inequalities that exist outside of London and the South East. Most of the projects and spending mentioned in the paper do not rock the boat in terms of the economic model - it is about creating more of the wealth and prosperity generated through the status quo rather than doing things differently. However, Greater Manchester (GM) has an opportunity to see what can be delivered differently on a city-region footprint. As one of two ‘trailblazer’ devolution sites (alongside the West Midlands) GM will take the commitments from the newly launched Greater Manchester Strategy, which incorporates the recommendations of the Independent Inequalities Commission. An inclusive economy is a big part of this collective ambition, and negotiations could pave the way for GM to turn some of its vision into reality, via newly devolved powers and the shared prosperity fund, the replacement for EU structural funds following Brexit.

‍