The following are the reflections of Rev. Richard Turnbull upon attending Grant Thornton's "Vibrant Capital Summit" on Tuesday, May 15.
A great title from Grant Thornton.
Several hundred people came together to celebrate the vibrancy of London and its economy and to look to the future. The CEO of Grant Thornton, Sacha Romanovitch, introduced the occasion reminding us of the central place the London occupies in the world economy, yet also the challenge of achieving an economic settlement that is inclusive, fair, and rewarding for all. In doing so, we face challenges of how we grow the economy, how we work in the future and, of course, the challenges we face in living in capital city.
There was a fascinating array of speakers, the proceedings masterfully overseen by Sir Trevor McDonald, from founders of business mentoring networks and advisers, to government to key players in the housing sector and even a poet.
The essential celebration was of the diverse talent of London’s people and how that can be put to good business purpose and good social purpose.
Grant Thornton had conducted its own research on the opportunities and challenges of living and working in London and were clear that London’s economy needed to be profitable, but that did not mean it should not be purposeful.
To at least some degree, excessive regulation hinders ethical behaviour rather than encouraging it. How can we permanently change the mainstream culture?
Certainly with the generational changes that we have seen – and, indeed, in the light of the financial crisis and corporate scandals – it is now axiomatic that business must be purposeful. That does not mean – in the old language of Corporate Social Responsibility – that a company simply sets up a foundation and makes grants to worthwhile charitable causes, though that may still be part of the picture. Rather, it is a point about the fundamental purpose of a company: its aims, methods of operation, sustainability, relationships to employees, community and society. None of that means that profits cannot and should not be made, even large profits. Even more so, it is a move in the direction of, perhaps, Corporate Social Innovation – how profitable companies purposefully align themselves with social objectives. That might mean thinking about more flexible working arrangements for employees as much as grand statements about social justice. The aim is healthy, purposeful and meaningful companies.
Vibrant Capital sought to think about some of these things with the ideas of live, work, grow. I appreciated this combination; recognising that a vibrant economy will be a growing economy, one that encourages innovation and creativity. Similarly, this leads to questions about the nature of work and how we live. Unsurprisingly, the question of housing arose again and again in the discussions. I will return to that point subsequently.
Three things that I learnt either from speakers, or others, or in discussion and from my own observations:
- The British economy is better at encouraging start-ups than scale-ups
And here is the complexity. Scale-up requires capital. London is the leading capital market in the world, with New York. Yet access to capital for many companies remains difficult. The future shape of the economy requires a trusted and purposeful financial sector, the ability of firms to access capital, the building of real and indeed local relationships between the providers of capital and SMEs.
- London attracts real talent across a vast range of sectors, which gives the city is vibrancy
The Industrial Revolution harnessed massive resources of capital, labour, land…and entrepreneurship. We have always been an innovative, creative nation, attracting real talent and expertise, both homegrown and providing opportunities for those from elsewhere. Let’s celebrate this entrepreneurial talent. We have always been a trading nation, but we need to do everything possible to mentor and help companies into new markets. There may be a new Industrial Revolution coming, new patterns of work, new ways of doing business. Such change will always bring challenges as it did 200 years ago, but we have an opportunity to think about and shape the nature of that economy.
- New partnerships, public and private sector, companies and communities, cities and citizens will shape the future
I do not think that it is the responsibility of business to solve the housing crisis in London. However, first, business has a fundamental interest in solutions being found to that problem and, second, business talent applied to social need can produce innovative solutions. One speaker said in relation to housing that we need to be willing to try things that fail. More widely, the point is how we have come to compartmentalise society – business, family, politics, arts – everything in its own self-contained box or silo. If we really are to seek some solutions to our societal needs, then these silos need to be broken down.
Three challenges.
- The danger of the echo chamber. If you put 300 business people in a room and ask whether they think business should be responsible and purposeful, the answer will be "yes," and they will mean it. Only a tiny minority of people in business either do or wish to behave in immoral or exploitative ways. The challenge though can be uncomfortable. We need to ensure that we think more precisely about the ethical challenges we face in business. There are questions for financial services, corporate governance, and audit sectors. To at least some degree, excessive regulation hinders ethical behaviour rather than encouraging it. How can we permanently change the mainstream culture?
- Sharing the vibrancy broadly. The diverse and cosmopolitan nature of London and the worldwide talent it attracts, makes it attractive to many of us – but the reality is that view is not shared nationwide. To change that mindset, we need to make sure the vibrancy of London, its economic success and creativity, is not held in, but spread broadly. And not by more redistributive taxation but by empowering the regional economies of the UK.
- Learning from our history. Too often we think we are doing things for the first time. The UK economy can learn from its industrial past, both economically and socially. In the nineteenth century, there was a vast range of institutions which developed micro-finance, access to credit, housing initiatives for key workers, the encouragement of saving and so on. We have lost many of these "intermediate institutions." As we face new business challenges, the future of work, and the challenges of social inclusion, we need to realise that we need a new social contract drawing public, private, and voluntary sectors together and a new debate on the proper role – but also the proper limits – of government.
At CEME we think about these things all the time, seeking to encourage the intellectual and practical debate about how we build a vibrant, enterprising economy, one in which creativity and innovation is rewarded and celebrated, but one also in which all have opportunities and all can flourish. We have events later in the year on Work and also The Future of Capitalism.
Watch this space for the continuing debate.
For now, though, thank you to Grant Thornton.
This article has been reprinted from the Centre for Entreprise, Markets, and Ethics and is reprinted with permission.
