Hannover A1 urban unrest

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Hannover policy forum background papers

Workshop A1 - ENTREPRENEURSHIP AND URBAN UNREST

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Contents

Workshop objectives

  • To demonstrate the importance of strategies for creating jobs that are open and accessible to people living in deprived or “sensitive” urban areas.
  • To demonstrate the importance of strategies for inclusive entrepreneurship and the social economy in creating these jobs.

What is the challenge?

Paradoxically, the very same cities that are constantly referred to as the driving forces of economic development, innovation and competitiveness in Europe also contain some of the greatest concentrations of unemployment and poverty. In some cases, the residents of inner city neighborhoods watch with despair as large numbers of highly qualified professional workers commute to the booming jobs in the knowledge and financial economy – just past their doorsteps. The tension inevitably increases when this kind of social exclusion is compounded by racial segregation and/or discrimination.

In other cases, the contrasts are not so immediate. The unemployed may be “landlocked” in peripheral housing estates that are far from the main sources of jobs or they may become “marooned” in poorer, declining cities in regions hit by restructuring. However, the Urban Audit reports that even cities with high average levels of unemployment tended to have neighborhoods with at least twice the average and in some cases these rates ran to 60%.

Rehousing and physical regeneration, on its own, has been shown not solve the problem. Clearly measures to increase the employability, human capital, mobility and connectivity of the residents of deprived urban areas must play a central part in any solution. But when one compares skill with job profiles it becomes clear that a large proportion of the residents of deprived urban areas are still likely to be left out.

In response, many cities have tried to encourage the creation and growth of local SME’s and social enterprises. The scope for change here is important. Some EU Member States report that their business start-up rates are ten times worse in their worst performing areas than in their best. The UK for example states that the country as a whole suffers as loss of 5 billion euros per annum and dozens of thousands of jobs as a result of lower start ups in inner city areas. Similarly many existing inner city firms are locked into low margin, dead end sectors.

What kinds of solutions are being tested?

A very high proportion of the 500+ EQUAL partnerships in the business creation and social economy themes have been testing policies for entrepreneurship in deprived urban areas. Much of their work involves designing integrated chains of business support which may start with individual and community capacity building and end with help for breaking into new markets and technologies. One of the key lessons is the need to combine financial and non-financial measures through various forms of partnership.

The URBACT Community Initiative has also created a cross-cutting working group to analyse the recent experience of over 100 cities in stimulating economic development in deprived urban areas. In a recent report for the German Presidency, it highlighted at least three other dimensions of policy:

  • Firstly, the use of area-based policies like the Zones Franches Urbaines in France, the Kansenzones (Opportunity Zones) in the Netherlands and the Business Improvement Districts in the UK to change some of the underlying conditions affecting the competitiveness of certain urban neighborhoods
  • Secondly, the scope for opening up public procurement to SMEs and social enterprises
  • Lastly, the opportunity to integrate strategies for entrepreneurship with other aspects of city policy around culture, social services, the built environment, security and the knowledge economy in order to open up new markets and jobs for local people.

Questions for discussion

  • Is enough being done to create jobs for the residents of deprived urban areas? What are the risks of continuing with the status quo?
  • To what extent can physical policies for urban planning and regeneration solve the problem? To what extent is it possible to place the residents of deprived urban areas in growing sectors and parts of the city?
  • What are the most important ingredients of inclusive entrepreneurship policies in deprived urban areas?
  • What aspects need to be strengthened in the next round of the Structural Funds?

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