Economic Development and Sustainability

Considerations for business a political communities?

Sustainable development is needed to prevent us loosing all the benefits that economic development has produced over the last half-century.

Economic development is a technique for maintaining and enhancing gainful employment through capital investment. Sustainable development is concerned with the maintenance and enhancement of the systems that keep us alive, healthy and usefully employed. Businesses are part of such systems and, as a result, they affect them and are affected by the activities of all other parts. Therefore, understanding and undertaking sustainable development is vital for business survival.

The concept of economic development arose in response to the Great Depression of the 1930s, to try to prevent such a man-made economic and social disaster happening again. However, it has also been responsible for rebuilding economies shattered by war and environmental catastrophe. Its secret is that good capital investment gives both a short-term economic boost and long-term benefits.

The British Government introduced Investment Grants in 1966 to target financial assistance to businesses in specific areas of the country in a way that capital allowances, previously used to stimulate economic development, were not designed to do. After 1972, Government sought to be more selective with financial assistance. Schemes were devised to encourage particular industries, including emerging technologies and services. Consideration was given to the effect that job creation in one location might have on employment elsewhere. Those seeking financial assistance had to demonstrate their need for public money and show the additional benefits that were to be gained for the economy as a whole. Even the value to the community provided by rival bidders came to be compared. Thus there has been considerable refinement in the techniques of economic development over the half-century since they were introduced in the UK and this is also true of their use throughout the increasingly global economy, as users have learnt from one another.

Unfortunately for us all, we have chosen to draw on this planet's capital reserves to achieve much of our economic development. Climate change is a clear indication that this debt has a cost, as do financial borrowings. Capital investment that delivers products and services, which can be accommodated by or even enhance the systems of the biosphere, should provide a short-term boost to the economy and more sustainable long-term benefits. Sustainable development of this sort takes us from change for fashion's sake to working with change for the biosphere's (and therefore our own) sake. Because bio-debt effects us all it is the responsibility of all of us (Governments, voluntary organisations, individuals and businesses) to make the necessary changes to our development techniques.

Sustainable development techniques are currently based more on concept than practice, just like those of economic development when they were first applied in the late1940s. In the UK there are some promising ideas such as SIGMA and Acorn. Provided we learn from the experiences and successes of applying economic development for over fifty years, the process of turning sustainable development to the benefit of local business and us all will be quicker.

Paul Newman

February 02

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