Between a rock and a hard place: Trade offs between prosperity and inclusivity when implementing regional growth policies
In attempts to level up, or to generate inclusive growth across UK regions, local agencies face a potential trade off between increasing prosperity and reducing inequality. Policies which prioritise the former, for example seeking R&D investments, may do little to improve opportunity for low- income workers, while investments in low-skill sectors or activities can reduce average regional productivity.
Skills and related income levels are key because these connect the prosperity (and resilience) of firms and households in local economic systems. This paper provides some initial data for exploring the relationship between prosperity and inequality at the regional level and highlights the need to better understand policy challenges at the local level. Because these trade offs vary place by place, more precise, locally appropriate policy interventions need to be developed to guide government investments designed to boost balanced growth in defined spatial geographies.