1. New sources of income
Capital has never been more abundant and its costs have never been cheaper, but the revenue needed to sustain any new infrastructure has never been more expensive or so rare.
New ideas are needed to generate new incomes.
2. Risk-based finance
Old-fashioned grants of public finance are not yet dead, but the trend towards risk-based finance is now well-established.
The investment of public cash is also increasingly used to de-risk more investment by the private sector.
Many decisions and are still made in London, but the long-run trend towards decentralised decision-making and investment is also very clear.
Many local institutions now have access, and rely more on, investment finance from local sources than they do from central sources.
Working both vertically with London and horizontally with their local partners is now essential for many anchor institutions.
4. Fuzzy boundaries
Economies are becoming more complex and the Government is reforming public agencies.
This means that multi-disciplinary approaches, the growth of soft power, and ever-more fuzzy boundaries are replacing the idea of institutions working within fixed boundaries.
Reconciling internal decision-making with the cultural complexities of multi-level governance is now an essential skill of stakeholder management for senior leadership teams.
5. Localism and the left behind
Critically, the process of globalisation and agglomeration is driving not convergence of economic performance and productivity, but divergence and dislocation of local economies with many local places and people left behind.
In many of these places it is the anchor institutions that increasingly represent the most, and sometimes only, important business in the local area.
This new reality features heavily in the emerging policies from central Government.
So it’s little surprise that these institutions are being encouraged, incentivised and required more so than ever before from the ‘top-down’ to do more to work with local businesses and other public agencies, especially to ensure that new growth is more inclusive.
6. The effect of austerity
Ongoing austerity in public finances has reduced the capacity of the state at all levels.
The local level has been faced with increasing calls on its services, but with much-reduced budgets.
Local public bodies are understandably calling on their local anchors to do more to help, especially where they have the knowledge and capacity to share.
Efforts to make better shared use of physical assets, especially land and buildings, where some of these are redundant or obsolete, also makes good sense.
How is this affecting the HE sector?
These factors are affecting institutions across the country, but in different ways and to varying degrees.
In all places they are building a need for new cultures, skills and structures within single institutions.
Individuals and teams need not only a deep understanding of their own institution and sector, but also of their whole local place.
Knowledge of commercial and financial markets, entrepreneurial cultures tied with strong management of risk, are becoming more essential than desirable.
Required leadership skills are increasingly collaborative, especially across institutions and geographies – and the need for ‘boundary spanners’ able to work comfortably across different sectors is more evident.
And, no matter the capacity of single institutions, the need for strong professional capacities, including more informed and sophisticated client management of professional service firms, has never been more needed.
So it’s little surprise that the demand for the Local Growth Academy is so strong. Watch out for details for a whole series of future modules that will be launched shortly.