I’ll be speaking at this Inside Government event on 7th December in London.  My talk will examine the links between economic development and tourism in the UK, in the context of the economic crisis.  Click on the image below to go straight to the event booking page which has a list of all the invited speakers.  I’ve copied some of the information about what looks to be an excellent day underneath.

Tourism is essential to Britain’s economy. Government statistics show that tourism generates £97 billion each year, employs over 3 million people and supports thousands of businesses. The government aims to help tourism achieve its potential as a central part of Britain’s growth strategy.

Britain’s landmarks, monuments, countryside and culture attract visitors from all over the world. Major international events such as the Royal Wedding, Diamond Jubilee and the 2012 Olympic and Paralympic Games provide a great opportunity to boost tourism, showcasing what Britain has to offer, and created a sustained tourism legacy.

Developing the visitor economy is a priority for the coalition government. The Government Tourism Policy, published in March 2011, aims to harness the potential this area holds to grow Britain’s economy. Objectives include growing the overseas market across the country using London 2012 and other sporting and cultural events, strengthening the domestic tourism market, increasing private sector investment and increasing flexibility for local tourist organisations. There is also a focus on improving Britain’s international gateways and national transport infrastructure.

The tourism strategy is driven by a local agenda. Destination Management Organisations will work with Visit England, local authorities, local enterprise partnerships, and local businesses to regenerate and market their area in the most effective way.

A £100 million partnership marketing fund, co-funded by the government and the private sector, will aim to draw 4 million extra visitors to Britain over the next 4 years, which equates to a £2 billion spend for Britain’s economy, and 50,000 new jobs. The government has also announced the Regional Growth Fund (RGF), worth £1.4 billion, which supports projects that use private sector investment to create regional economic growth and employment.

Agenda

This forum comes at a time of exciting growth for the sector, and will offer delegates the opportunity to understand the implications of the new government tourism strategy in boosting the tourist industry. Key issues to be discussed include strategies for promoting the growth of the visitor economy, and best practice for delivering services, partnership working and localism.

Speakers include representatives of:

Department for Culture Media and Sport

Visit Britain

ABTA

Olympic Park Legacy Company

People 1st

National Trust

Broads Authority

British Library

Marketing Birmingham

*photo courtesy of Chris Campbell: http://www.flickr.com/photos/cgc/

This is the presentation that Charles Bladen and I gave at yesterday’s SHIFT 2011 conference at the University of Greenwich. It sets out some of the framework of ideas behind a research project that we are developing, in which we are taking a critical perpsective on the ethics and practicalities of voluneering by event management students and graduates.

How low can it go?  The devolution of economic development and the possibility of economic insurgency

This presentation provides a critique of the UK Government’s policies and plans for devolving economic development processes from the regional to the local and neighbourhood levels.  Drawing on economic development theory and experiences from Europe, Latin America, the United States and Japan, radical approaches to economic development are reviewed that suggest possibilities for innovative approaches to the problems of economic development in the cities of the UK.

International examples show that alternative models are available for growing the economies of our cities and towns that have the character of a challenging, bottom-up insurgency – a stark contrast to the conservative models of growth being offered by the new Local Enterprise Partnerships and Government departments[1].  In an economic insurgency, traditional, hierarchical institutions and frameworks come under attack from below as new economies take shape and start to re-shape places from within.  

Following the financial crisis of 2008, Western governments have struggled to develop consistently successful responses to stimulating sustainable growth in post-crash economies[2].  In the UK, the Government’s ‘local growth’ white paper appeared to promote a return to pre-crash methods of top-down economic development with an increased role for the private sector, despite the rhetorical references to a ‘new localism’[3] and economic ideas of subsidiarity and sustainability.[4] However, despite these contradictions, recent Government espousals have the potential to create an environment in which more radical approaches to economic development are becoming possible.  This presentation argues that an economic insurgency is a necessary next step in local economic development in the UK.

Spain has used tourism in two ways since the fall of Franco that might be constructive when thinking about the role of tourism now in the UK.  Firstly, tourism was a key way of bringing foreign exchange and investment into the country when it was close to economic collapse.  Taking advantage of innovations in travel, especially air travel, and construction technology, the Spanish government built resorts and supported a tourism industry with preferential taxation and legislative treatment , succeeding in positioning Spain as a mass tourism destination.  Secondly, the Spanish government and the European Union have funded the development of agro-tourism in the country, attempting to diversify economies where agricultural production has become economically unsustainable.  This has been achieved not through the market mechanism, but by the diversion of public funds to support specific policy aims in tourism and economic development.  We know that these development haven’t been unproblematic – resort development in the south of Spain has been an environmental nightmare in places, and supporting farming communities to develop facilities and skills for a new tourism sector has been costly – but they show how government can support tourism directly.  In the first example, taxation and legislation regimes were implemented that favoured tourism development creating a medium-term economic fix.  In the second example, tourism has been used as a development mechanism, helping the transition from and old economic model to a new one.

Looking more widely across Europe, it is clear that the majority of countries have viewed tourism as a high value industry, worthy of specific state support.  Only the UK, Denmark and Germany apply to the top rate of VAT (sales tax) to their tourism industry.  This puts tourism service providers in the UK at a competitive disadvantage from the start.  The majority of countries in Europe, for example, have a rate of 0-8% tax on accommodation – in the UK it is now 20%.   A reduction in taxation on key elements of the tourism industry would increase demand, but also support vital secondary spending in destinations, which would ensure that the positive impacts of this tax change would be felt by businesses and citizens more widely.

Taylor & McGlynn published a fascinating article in 2009 called ‘International Tourism in Cuba: can capitalism save socialism?’ - this begs the question, of whether tourism can save the capitalist economy of parts of the UK? 

image from: https://www.aarpglobalnetwork.org/netzine/TrendWatch/latinamerica/Pages/CubantourismsurgesasrestofCaribbeanstalls.aspx

Following the collapse of the Soviet Union and the communist bloc in 1989, Cuba lost 75% of its international trade.  Faced with this, Fidel Castro said “‘‘We have to develop tourism. It is an important source of foreign currency. We do not like tourism. It has become an economic necessity.”  This turn to tourism, supported by a relaxation on development laws and new initiatives supporting entrepreneurship and destination development and marketing, took place at the same time as the government implemented severe austerity policies to rein in public spending – hoping that this new sector would grow, create jobs and save the country from economic crisis.  Sound familiar?

 By 2000, tourist arrivals to Cuba had doubled, and revenues from tourism grew from $1.1bn to $2.25bn per year.  By 2003, tourism was responsible for more than 50% of Cuba’s exports and was the main engine of a newly resurgent economy.  “Cubanos used to declare, sin azucar, hay no paı´s (without sugar, there is no country). Now, they say, sin turismo, hay no paı´s (without tourism, there is no country)”.

So, what advice am I offering here?  Well, we know that Eric Pickles, Secretary of State, has a picture of Che Guevara on his wall.   

 It is almost unbelievable that for the last fifteen years the tourism industry has failed to spark the imagination of government.  In a period where radical thinking is needed to recalibrate the relationship between the state and the economy in many areas, there is an opportunity to develop a form of industrial policy that benefits the tourism industry and places it at the center of both growth and sustainable development.

Most coalition policy so far has been put together at speed, based as it is on a document written in haste to cement a coalition between two parties with, at the time, very different agendas.  I’m hearing rumours however, that ministers and officials are now beginning to devote more time to meetings and consultation and that there is an acknowledgement at a high level that ministers need to invest more time in developing policies with depth and buy-in from the people and organisations that they affect.   This may explain the long delay between David Cameron’s very early announcement that tourism would be a key industry in the recovery and the eventual production of a policy to support this aspiration.  Let’s hope so. 

Tourism policy in the UK has often fallen between departments and has meant that the tourism industry has often struggled to be heard in the cacophony of industry voices expecting to have the ear of government.  A strong policy statement on tourism, supported by departmental commitments would help to position tourism in the public eye and help organisations and individuals working the industry to contribute to the growth that our economy so desperately needs.   When Labour came to power in 1997 on a wave of Cool Brittania excitement, it was clear that they were championing the cultural and creative industries, which had a galvanizing effect on that sector, which saw employment growth, led by creative industries exports and underpinned by state support for training, networking and promotion of creative producers.   This government’s new tourism policy should be equally bold – situating tourism as a key industry for sustainable economic growth and championing the success stories of UK tourism to domestic and international markets. 

My next few posts on this blog are going to be suggestions for where the state can intervene effectively in the tourism industry to support entrepreneurial, sustainable growth, led-by SMEs in the  private sector, but supported by an enabling state.

The Centre for Cities are a think-tank who investigate economic development issues with a focus on British cities and they publish an annual ‘Cities Outlook’ report which sets out the performance and prospects of the UK’s 64 main cities.  Their latest report was published a couple of weeks ago.

Like everything in this field at the moment, it makes for quite depressing reading.  Unemployment has risen to around 8%.  Retail, financial services and construction are the hardest hit sectors so far, all of which are key aspects of city economies.  The centre forecasts that it will take around 5 years for employment to return to pre-crisis levels.  We can add to this by noting that there is probably still some way to go before we hit the bottom of the unemployment curve.  With cuts still to come to the public sector and the commercial property market due to underperform significantly this year it is likely that unemployment will reach 10% by the end of the year, before it begins to pick up again in 2011.

A Key focus of the report is on what they describe as “public sector cities”, those urban centres whose recent growth has involved the re-location or creation of large numbers of public sector jobs.  As we all know, the pain of this crisis is going to be felt most strongly by the public sector. The Government is now taking steps to address the budget deficit produced by the bailouts of the banking sector and the programme of quantitative easing that is still ongoing, and necessary to keep the hyper-capitalist juggernaut rolling.  The graph below, taken from the report, places cities into categories of vulnerability according to their exposure to the effects of public sector cutbacks:

From a seaside perspective, the two cities that jump out  here are Brighton and Hastings seperated by only35 miles of coastline, but representing the most insulated and the most exposed groups of cities in terms of the risks associated with the coming cutbacks.

Brighton has seen highest contribution of any city in the country from the private sector to job creation -70.4% of all recent new jobs have been in the private sector, with a 20.8% growth in job creation since 2008,  and also the 6th highest rate of new business creation in the country.  Hastings, 39th on the list in terms of private sector contribution, saw a net loss of 0.3% of jobs in the same period.  In Hastings, only 57.5% of new jobs have been created in the private sector.

Hastings is the 2nd highest ranked city for earnings growth in the country, but 63rd in terms of average income, suggesting that the job creation is still taking place in the lower reaches of the earning scale.  This is supported by the city’s occupation of 58th place in the rankings for knowledge economy jobs (9.7% of the workforce), comparing poorly to Brighton in 10th place with 23.2%.  This contrast in the skills and profile of the two neighbouring cities is also reflected in the percentage of high skills (NVQ4+) in the local labour market:  Brighton is 6th on the list with 38.1% and Hastings is 40th with 22.5%.

It is clear from data like this that Brighton has a built-in resilience to the kind of economic shocks that Hastings is particularly exposed to in the current climate.  Brighton has been undergoing a renaissance since the early 1990s, with the regeneration of the town facilitated by good transport links to London, a growing creative industries sector and high levels of entrepreneurship.  Hastings, however, is still struggling to deal with the repercussions of the restructuring of the tourism industry following the recessions of the late 1970s and early 1980s.    As the report says, “Many of the cities that have been hit hardest are places still suffering from the legacy of industrial restructuring and previous recessions”. 

The regeneration of Hastings, which has recently embraced the cultural route to redevelopment, has been extensively supported by the public sector, notably the local authority and SEEDA, the regional development agency.  One of the reasons that the economic impacts of regeneration are so difficult to pin down in the short-medium terms is the effect of increasing public spending on job creation.  Major regeneration projects require investments in human, as well as physical capital, and these projects create employment by virtue of their existence.  Increasing the capacity of the local public sector to deliver change and bringing new facilities and projects online, often means increasing the size of publically subsidised sectors through the creation of new agencies, administrative structures and individual posts.  This growth in local employment is now at risk.

It would seem that Hastings, which has seen huge public sector investment over the last 5 years, is now in a precarious position.  No doubt, without the massive government interventions that the city has benefited from, Hastings would be in a far worse position.   Assuming that the funding continues to flow, the regeneration of the Harbour area and the presence of the new Jerwood contemporary art gallery will help to drive tourism in Hastings and begin to create secondary employment in the accommodation, catering and other tourism services sectors.  The real question for Hastings is can it weather the storm of the coming period of public-sector cuts without losing momentum? 

The reinvention of Brighton has been high-profile and dramatic; a more dramatic commercial-sector crash may have (and still might) jeopardise its future sustainability.  If public sector investment can be maintained in Hastings then this will help to maintain local development capacity and enable the city to push on with its ambitious plans when we come out of the other side of this crisis. Eventually, the public investment will begin to lever in private money and the city can look forward to the development of a more balanced economy.  If momentum is lost in Hastings it may never catch up with its more glamorous neighbour. 

The Centre for Cities report emphasises that the recovery, when it comes, will be uneven.  This will be no less true for our seaside towns.  In the south-east alone, the development of formerly bustling resorts is a patchwork of public, private, charitable and organic approaches to regeneration.  There will be winners and losers in the competition to become the next Brighton, but it appears that the city that has provide a template for so much current thinking about seaside cultural development will be on top for some time to come.

I’m going to use this post to apply David Harvey’s ‘seven moments’ model of the economic restructuring process that I heard him speak about here and that he has most recently outlined in an essay for the Monthly Review that you can read online here.  I have adapted these seven moments to analyse the tourism industry in this period of restructuring; it will be interesting to see whether this adds some clarity or helps us to think about how the tourism industry will emerge from the crisis.  

Some of these topics I’ve already written about, some have suggested new areas of investigation.  Over the next few months I’m going to post on each of these topics and then, eventually, bring them all together to summarise this period of restructuring in the tourism industry.

1. The organisation and technological forms involved in producing tourism products and services

It is likely that technological changes within the tourism industry will accelerate during this period of restructuring.   The effects of an increasingly competitive marketplace and problems of over-supply are combining to produce a favourable climate for innovations in the online packaging and knowledge-gathering aspects of the industry and  price-concious customers are driving an increase in competition between web sites, which seems to be providing a stimulus for big providers to move into web 2.0 provision, so as not to lose their competitive advantage.  Where the previous waves of web development have increased efficiencies for tourism businesses and helped to reduce prices for consumers, it is likely that this next wave of web 2.0-style developments will illuminate differences between providers and give new prominence to tourists as expert reviewers of tourism products.

Another aspect of tourism development that it might be interesting to focus on here will be the emergence of new destinations.  This will be driven by three factors, as we have seen in previous crises:

1. Decline within specific resorts and regions, as part of the fall-out from the economic crisis
2. The growth of new tourism markets, as the national and regional ‘winners’ of the crisis emerge
3. Socio-cultural changes that occur as a consequence of the restructuring and as a way of integrating it into pre-existing cultural frameworks.

2. The relationship to the environment

From the mid-1990s onwards, the concepts of sustainable development and eco-tourism have been central to debates about the future of tourism and have provided acres of newsprint for the broadsheets’ travel supplements as middle-class tourists have differentiated themselves from the masses by seeking our ‘responsible’, ‘ethical’, ‘sustainable’, or ‘green’ holidays.  With predicted declines in the market for organic food, ethical fashion and fairly-traded products – has this mode of tourism development also suffered and what is the future for this sector after the downturn?

3.  Social relationships within tourism

Along with the rising importance of green perspectives on tourism, ethical concerns over the social relationships brought about through tourism have been a key element of tourism discourse since the 1990s. 

This area has mainly been focused on the nature of the host-guest interaction within destinations, but has also included concerns over representation in and governance of tourism destinations, authenticity and exploitation.  As with sustainable / eco-tourism, it remains to be seen how organisations that work in this area will fare during a depression.  Recent problems at Tourism Concern are hopefully not indicative of a gradual lessening of support for ethical tourism initiatives from the public and the tourism industry.

4.  Conceptions of tourism and its values

The core question to be answered here is ‘what is tourism for?’  Historically, tourism has been seen variously as a privelege, a human right, a leisure activity, a cultural form and as a social practice.  I wrote here about contemporary developments in the relationship between tourism, social policy and regeneration.  The current crisis provides two non-exclusive conceptions of tourism within the public sphere. 

Firstly, and most likely to gain prominence quickly, is the assertion of the direct and indirect economic benefits of tourism.  In a period of a weak national currency tourism can be a key export for the UK economy and a parallel rise in domestic tourism places tourism in a position of potential growth, even if that growth is relative rather than absolute.   This potential could see tourism taking a stronger role in economic and regional development strategies, perhaps displacing retail and creative industries development in the development zeitgeist.

Secondly, it is possible that the new economics of tourism, if coupled with a sense of corporate social responsibility or development levies of some kind, could create a more favourable climate for social tourism in the UK.  In many European countries, tourism plays an important role in social policy.  Social tourism can take many forms: In France, subsidised tourism channels tourism spending to particular destinations whilst in many part of Scandanavia tourism is seen as a human right, creating obligations on the state to secure this right for its citizens.  In the UK, organisations like the Family Holiday Association have a history of providing tourism opportunities for disadvantaged groups, but this approach has never been mainstreamed into public policy. 

5.  Industrial relations within tourism

We have seen a sharpening of industrial relations within many sections of the economy over the last twelve months.  Disputes at Visteon, Vestas, Lindsey and the Royal Mail appear to be the harbingers of a new period of renewed labour militancy in the UK, but the mixture of compromises and legalistic disputes that have postponed resolution of the BA strike and the Royal Mail strikes mean that it is unclear as yet whether unions are likely to become more or less powerful through the restrucuring currently underway in response to the economic crisis.  The activities of unions in the travel and public sectors are likely to have the greatest impact on the tourism industry, but rising worker militancy generally could lead to changes in the way that non-unionised workers (the majority of tourism employees) react to threats of closures, job losses, pay cuts and work intensification, as the employees of Thomas Cook in Dublin show in the video below:

6.  Tourism policy and politics

In the UK, most public agencies are in a state of paralysis at the moment as they wait for an election and the almost inevitable period of regime change that will follow it.  The smart money seems to be on an early election in March, so until then it is going to be very difficult to get a feel for how tourism policy in the UK is going to develop.  The incoming conservative party have let it be known through various outlets that they plan a ‘bonfire of the quangos’ and no doubt this will hit our tourism agencies.  However, every incoming government since 1979 has promised exactly this and then, faced with the prospect of losing control over spending or developing truely accountable structures of governance, has tended to spend a lot of money on the restruturing and rebranding of the quangos instead.

7.  The social reproduction of tourism

Within Harvey’s model, this seventh term relates to the social reproduction of labour within capitalism and the way in which systems of production are maintained and developed through social processes.  Within this adaptation, I will develop the final category as a synthetic product of the preceding areas of analysis.  Once the 6 areas above have been considered dialectically, it will be possible to draw some initial conclusions about the ways in which the tourism industry is being maintained and developed as the crisis progresses and the strategies of restructuring become more clear. 

Each of these seven areas will provide material for blog posts throughout 2010, with a final article being produced towards the end of the year.

Hutton points out that an economic recovery will require a rise in spending, by consumers or businesses. The consumer, claims Hutton, is concentrating on rebuilding savings, while businesses are becoming debt-minimizers in order to future-proof themselves against difficult economic times. Whether the British are re-building savings or merely starting to save after years of credit-fuelled spending is a moot point, but the likely outcome of this is stagnation in the economy, as happened in Japan in the 1990s after their economy crashed following a sustained boom. Stagnation of course, is even more problematic than a recession for a capitalist economy. A recession and a collapse in asset values at least offers the opportunity for growth and the restoration of the rate of profit; a prolonged stagnation denies capitalists the ability to grow their capital and limits the potential for competition, destroying the engine of the economy.

The stagnation that Hutton predicts however, doesn’t look like stagnation at the level of the individual worker or their communities. In order to maintain profit levels, it is likely that the current rate of job losses could continue at 60,000 per month for another three years before stabilisation is achieved. This could (should) lead to a period of social change as the economy and social provision is restructured to reflect this new socio-economic reality. Whether this period of change can be politicised to promote positive political developments remains to be seen, but already the possibilities of workforce mobilisation and collective responses to the crisis are facing up to the use of the recession to intimidate and manipulate workers. Politicians are keen to avoid taking the blame for the current crisis, as each country seeks to line up other markets or ‘the world financial system’ as the villains of the piece. This tactic creates a moving, camouflaged target for the public at large to aim at, and one that is obscured further by techno-managerial jargon and PR.

Will Hutton’s prescription for the crisis is a super-Keynesian level of fiscal stimulus, mainly based around a massive programme of public works similar to that which helped to lift the US economy out of the great depression in the 1930s. This might include large engineering projects and the development of a green economy. Of course, after the 1930s the US was left with a vastly expanded productive capacity which could only be usefully employed on a war footing over the following 60 years. The government funded expansion of production can only fix the system in the short-term, eventually the levels of state production work against competition and so have to be reduced and the debts incurred have to be repaid.

As David Harvey has pointed out, the current crisis offers an opportunity, as do all crises, for the reconfiguration of society within a different ideological framework. A more equitable society is not the necessary outcome of this process. Previous crises have seen the deepening and strengthening of the current system of power and attempts to provide a stimulus to return the economy to ‘normal’ are attempts to do just this.  The human costs of this will be enormous, and should shame journalists and politicians out of their current fetishisation of the fiscal stimulus as they hide behind superlative descriptions of it’s size and importance.