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PRIVATE SECTOR CONTRIBUTION TO REGENERATION: CONCEPTS, ACTION AND SYNERGIES: 

PRIVATE SECTOR CONTRIBUTION TO REGENERATION: CONCEPTS, ACTION AND SYNERGIES Katherine Trebeck & Alan McGregor Area Regeneration & Economic Development May 29, 2007

Introduction: 

Introduction Businesses relevant to regeneration ‘arguably the most powerful form of organisation in early 21st century capitalism, [and therefore] it is important that we understand how corporations can harness their resources for the wider social good’ (Tracey, 2005 et al.). Businesses increasingly expected to take a role in more areas/ issues Recognition that disadvantage too complex to be solved by a narrow approach CSR = activities, other than commercial outputs and beyond legally required behaviour, that address social and environmental concerns

Outline: 

Outline Our project Theory - CSR - SLA Case studies - BP, Jaguar, M&S, Boots, Salford Reds Conclusion - relative advantage - synergies between regeneration and corporate interest

The Objective: Regeneration: 

The Objective: Regeneration Regeneration = poverty reduction, reducing vulnerability, enhancing assets, empowering poor people Demand side = retain local spending and attract spending from outside Supply side = improvements to competitiveness of a locality Employment fundamental: opportunities for local people and increasing their employability Must address social and economic issues at once to stop people moving when they find work

Conceptualising Regeneration: 

Conceptualising Regeneration Framework that encompasses choice and opportunities open to a community Community development: - Sustainable Livelihoods - Community capabilities SLA = capitals necessary for regeneration: - financial, natural, human, social, physical Asset pentagon

Asset Pentagon(www.fao.org) : 

Asset Pentagon (www.fao.org)

Asset Pentagon – Different Communities(www.fao.org): 

Asset Pentagon – Different Communities (www.fao.org)

Business Case for CSR and Regeneration: 

Business Case for CSR and Regeneration Contributions reflect each company’s ‘relative advantage’ Only undertaken when there is a ‘business case’ - commercial prudence - profit-making entities, commercial incentives, shareholder interests

Business Case (con’t): 

Business Case (con’t) The ‘business case’ for area regeneration might include: - improved reputation - employee attraction, retention and motivation - consumer & shareholder pressure - ‘healthy’ community

Business Case (con’t): 

Business Case (con’t) Social licence to operate: - efforts to meet community demands - improve reputation and attain acceptance - nature of activities corresponds to that sought by key audiences Health of communities: - influence of local socio-economic circumstances on firm viability - competitive advantage

BP - Grangemouth: 

BP - Grangemouth

BP - Grangemouth: 

BP - Grangemouth

BP - Falkirk: 

BP - Falkirk Major employer, recent downsizing My Future’s in Falkirk = regeneration initiative: - environmental works - property development - business space - tourism Aim to broaden economic base of local area

My Future’s In Falkirk: 

My Future’s In Falkirk

My Future’s in Falkirk: 

My Future’s in Falkirk

BP (con’t): 

BP (con’t) Sought to reduce reliance on BP’s operations Utility of harmonious relations with external stakeholders = community investment Education efforts: - work placements - interview workshops - support for head teachers Lack of apprentices and skills shortages; benefits to BP employees involved

Jaguar - Coventry: 

Jaguar - Coventry

Jaguar - Coventry: 

Jaguar - Coventry

Jaguar – EBPC: 

Jaguar – EBPC Work-related environment with non-teachers Seeks to raise student’s aspirations, achievements and employability Modules for all levels: subjects teachers struggle to deliver Motivations: - reputational capital (changes to operations; closure) - skill enhancement amongst local w/f (shortfall of engineers) - perceptions of future employees - employee involvement & development

Jaguar – Local Reputation: 

Jaguar – Local Reputation

Marks & Spencer: 

Marks & Spencer

Marks & Spencer: 

Marks & Spencer CSR directed to communities where it operates Marks & Start = work experience programme Targeted beneficiaries: - lone parents - people with disabilities - homeless people - unemployed young people or youth at risk of exclusion

Marks & Start: 

Marks & Start

Marks & Start (con’t): 

Marks & Start (con’t) Business benefits to M&S: - recruitment & w/f diversity - skills of employees - employee community involvement - loyalty & price in M&S to attract/retain staff - reputation benefit & customer approval - links with local communities, government & opinion formers - improving socio-economic status of local communities

Boots – Airdrie Factory Closure: 

Boots – Airdrie Factory Closure

Boots - Airdrie : 

Boots - Airdrie Closure of factory in Airdrie Loss of 800 jobs Fears Airdrie would become a deserted ‘ghost town’ Company commitment to CSR - raised expectations Address local expectations because: - to manage closure process - preserve Boots’ wider reputation - ongoing retail presence

Boots (con’t): 

Boots (con’t) Community investment as closure took place: - employment projects - centre to offer employees support (CV preparation, interview techniques, computer skills etc) - Airdrie Business Centre - North Lanarkshire Regeneration Company - Reconstruction of factory site

Salford: 

Salford

Salford City Reds: 

Salford City Reds

Salford City Reds: 

Salford City Reds Local identity/ brand Community investment: - Sporting Enterprise - Safer, Stronger Communities Motivations: - marketing/ recruitment - change to new stadium

Similarities with the Theory (con’t): 

Similarities with the Theory (con’t) Some elements of the ‘business case’ more resonance for respective companies Recruitment Reputation amongst local audiences Employee development Healthy local communities in which to sell, employ & operate: - M&S: retail presence - Jaguar: needs skilled local employees - Salford Reds: fan base & attractive area for non-local fans

Relative Advantage: 

Relative Advantage How companies undertake community investment: according to their ‘relative advantage = activities that correspond to company skill sets

Relative Advantage (con’t): 

Relative Advantage (con’t) Examples of relative advantages: - BP: management expertise in MFIF; funding for a business loan fund; employee support for head teachers - Jaguar: inspiration for local children to seek work in manufacturing, Jaguar employees’ contribution to the EBPC, employment opportunities

Relative Advantage (con’t): 

Relative Advantage (con’t) - M&S: work placements suitable for those seeking to re-enter labour market, references utilise M&S prestige, flexibility and anonymity offered by large, high turnover company - Boots: connection with local agencies, commitment to re-train employees, funding directed to regeneration activities, expertise - Salford: ‘hook’ of rugby league to get youth involved and off the streets

Conclusion – Links to CSR: 

Conclusion – Links to CSR Requirement of a business case = mechanism to lever company action ie: CSR prioritises what businesses gain from an activity (company benefit from what an area offers) Therefore parallels community development concepts: community assets and capabilities - CSR as regeneration seeks to harness latent community capacity/ community assets Form of asset-based community development?

Conclusion – Regeneration Links in CSR: 

Conclusion – Regeneration Links in CSR Through community investment companies can unlock: ‘shared value by investing in social aspects of context that strengthen company competitiveness. A symbiotic relationship develops: the success of the company and the success of the community become mutually reinforcing. Typically, the more closely tied a social issue is to the company’s business, the greater the opportunity to leverage the firm’s resources and capabilities, and benefit society’ (Porter, 2006)