Abstract
At the end of 2016, the Bank of England’s Chief Economist warned that regional inequality was ‘among the most important issues that we face today as a country’. Then as now, local economies in different parts of the UK were growing at an uneven rate, and some were simply not growing at all. Here at Power to Change we want to understand the way this regional imbalance might be addressed by community businesses, businesses which are rooted in their local area, answerable to the community they serve, and which re-invest trading profits back into their neighbourhood. Can hyper-local, socially-responsible businesses help the economic performance of the place where they are based? As part of this work, this paper specifically asks which factors are associated with growth in the sort of start-up, entrepreneurial businesses which can power a local economy. This report collates and reviews literature, stakeholder advice, and data sources on local economic markets. Our framework for analysis considers four different roles – businesses, consumers of goods and services, workers and entrepreneurs, and intermediaries. It also examines the role of trust and social capital in supporting effective economic markets.