In simple terms, to recover the economy needs more jobs. Only when people have stability will they feel confident to spend, rather than hoard, their cash. It's widely recognised that enterprise is the main route of sustained growth - that we need an 'enterprise led' recovery - and that within this there are two main sources of new job creation:

1. High Growth Businesses - the 6% of firms that create the lion's share of new jobs and wealth - (NESTA, Vital 6, 2009)

2. Business Birth Rate - new firms are a major source of NET new jobs (Kauffman Foundation).

There is however a third opportunity - to sustain jobs in local areas (particularly those most vulnerable to public sector cuts) through:

3. Making the £ work harder for the local economy by linking local businesses with local opportunities.

In the engine room of any local economy are the majority of businesses; those that may not have High Growth potential but are nonetheless critical to stimulating sustained demand for local labour and resources. They may not have a huge 'direct' impact on the overall levels of 'new' jobs but they do however have a massive role to play in 'maintaining' the level of jobs and growth within the core business population. In today's climate of austerity and shrinking markets 'maintating the level' is no mean feat, the normal pattern is for existing businesses to destroy not create or maintain jobs.

Our approach draws on the excellent work of the New Economics Foundation (www.pluggingtheleaks.org) in recognising that more can be done to maximise local opportunities and stimulate positive money and resource flows. In addition to a focus on business birth rate and high growth we believe that we can deepen the economic resilience of local areas by maximising the use of local knowledge and resources in a way that makes the £ work harder for the local economy.

Here are a few thoughts on how:

Supply chain leverage and institutional thickness: Most, if not all, areas have significant supply chains, be they driven by the private or public sector. In most cases those supply chains are drawing on resources, knowledge and skills far beyond the immediate area. This is driven by the Prime's need to access the best quality, knowledge and service. The result for the local economy if they do not cater for this need?  Loss of local jobs and wealth. To avoid this outcome, we need to make the local £ work harder by developing local supply chains, forming collaborations and connecting local businesses with local opportunity. 

Develop social and intellectual capital: high value added sectors rely on the continual development and deepening of social and intellectual capital.  This is not only about developing scientific and technical knowledge, but also about breeding a 'BIG' thinking and savvy entrepreneur who can both recognise and exploit opportunities. Institutions are critical to investing in the development of such capital. More could be done to help them recognise (and capitalise on the fact) that developing the intellectual and social capital of their immediate communities has a direct influence on their ability to compete and innovate. UK economy, life choices and working patterns are changing.  Such changes include the growth of flexible and freelance labour and the choices young people will take when choosing their educational routes. Vocational sponsored degree courses and apprenticeships are already growing in popularity. There is a significant opportunity to work with businesses to spot and nurture local talent, to encourage the retention of those skills and capabilities within the area.

Export and trade beyond the local area: Making the £ work harder will have a significant impact on the local economy, but by itself is not enough. To create more jobs and wealth we must be increasing the local money supply by trading outside of the area and attracting and retaining more £s from elsewhere. Exporting is often viewed as something manufacturers do, however sectors such as ICT, Creative and Business Services sectors have scope to export on a much greater scale. Winning Moves itself is an example of this. We license our software in 20 countries.

Restructuring of the public sector: this is a sector that, in my view, will undergo significant change. We have witnessed a series of cuts aimed at balancing the books; this will be followed by structural change. Change will be driven by the pursuit of higher economic and social returns and to achieve this many believe that the public sector will make a transition from being deliverers to commissioners. Not only will jobs have to be replaced, to make the necessary adjustment, innovative and entrepreneurial solutions must be found. Significant opportunities exist for the private and third sectors to providie the levels of innovation and enterprise needed to make the adjustment -they do this on a daily basis in their own businesses.

So how can we connect local businesses and individuals with such opportunities?

The public sector has a role to create the conditions in which local economies flourish, seeking to address both social and economic imbalances. This is essentially the purpose of the newly formed Local Enterprise Partnerships. The below model helps to illustrate how targeted enterprise and business support is targeted and interacts. 

Connecting local businesses and start-ups with the local opportunities will help sustain economic competitiveness. This mitigates against the risk of low business survival rates and a consequential reduction in overall employment, making economies more resilient over the longer term. The net effect will be the retention of wealth, the development of skills as well as the more efficient use of local labour and resources within and outside of the immediate area.

A 3-step programme for local economic development:

Creating the conditions for effective networking and collaboration: Growing and productive businesses need resources, knowledge and competence to expand their business; they rarely achieve this in isolation. We must create a 1 + 1 = 3 dynamic. This isn't an organic process; networking must be done with intent, hence businesses and individuals must be connected on the basis of their complementary skills and knowledge.

Creating economic leverage through business investment and infrastructure development:Significant opportunities exist in most economies through business and infrastructure investment. However, the decisions surrounding such developments rarely consider the impact on the local economy in any great depth. There is an immediate opportunity to work with those successful in securing Regional Growth Fund investment to engage local businesses and apprentices in their supply chains. Through Local Enterprise Partnerships a dialogue can be facilitated with such organisations to understand emerging opportunities and their supply chain needs and requirements.

Work with local business to make them tender/opportunity/supply-chain ready: Once the opportunities have been identified then the next step is to connect businesses with opportunities that will not only help create wealth and jobs within the local economy but develop their capability to export their knowledge, competence, products and services elsewhere - their capability to do so will be greatly enhanced through collaboration. Our BenchmarkIndex^® software is being extensively used by the United Nations for this purpose. Benchmarking modules allow organisations to review their readiness to exploit opportunities.  This process allows businesses to identify where they need to improve and which resource acquisitions will provide the greatest return.