Ní neart go cur le chéile

Notes from the Western Periphery

COOPERATION IS KEY  Wider co-operative thinking for Mayo’s small towns would produce a step-change in overall county performance.

Balancing population density and ‘hard’ and ‘soft’ power

John Bradley

It is a truth universally acknowledged by economists (even this one) that two factors are essential for regional enterprise to thrive. There must be a cooperative balance between local ‘soft’ power and national ‘hard’ power, but that is not enough. There must also be a critical population density, but that is not enough either. Let’s examine each in turn.
Organisations like the Chambers of Commerce in Mayo, operating in Westport, Ballina, Castlebar, Claremorris and Erris, exercise influential ‘soft’ power locally. They provide fora for local enterprises where they can get to know each other, interact, communicate, lobby and promote their own and collective interests.
‘Hard’ power, on the other hand, is exercised by public agencies: government departments, the IDA, Enterprise Ireland, local councils, etc. These have national and regional statutory remits, responsibilities and significant budgets.
The ‘soft’ local power of chambers and other similar organisations and the ‘hard’ national power of public organisations must blend harmoniously if the region is to prosper and difficulties, when they arise, are to be resolved.
Furthermore, power and population density are crucial driving forces of regional success that change slowly over time. However, if selected cities are permitted to grow unchecked, the national economy becomes distorted and alternative paths to growth in peripheral regions like the north and west become constrained or blocked.

Out of balance
A good way of illustrating the importance of a happy balance between ‘soft’ and ‘hard’ power and population is to look at two cases where this balance does not exist.
Back in 2012, I was engaged in an EU-supported study of business enterprises in the cross-border area, commissioned by the Centre for Cross-Border Studies. As part of the field work for this project I interviewed the manager of the Derry City Chamber of Commerce, whose office was in the western side of the city.
Waiting in the foyer, I looked out through the glass doors. Across the road, the sight that greeted me is shown in this photograph. The placard read: ‘Londonderry West Bank Loyalists Still Under Siege – No Surrender’. As discretely as possible, I took a photo using my phone.
I learned later that this was a small pocket of six houses with families from one community (unionist/loyalist) that had become isolated in a sea of the other community (nationalist/republican). Derry is segmented considerably along sectarian lines on an east-west basis. But this group was stubborn, burned with resentment, and would not be moved.
As part of my research, I compiled an exhaustive listing of all enterprises – big, medium, small and tiny – with their geo-locations identified by postal codes. That way one can count accurately how many, and what kind of businesses operate in any specific region, county, city, town, or village.
It will not surprise anyone that the bigger the town, the more enterprises are set up there. But it is more important to look at the relationship between total town population and the number of enterprises per thousand inhabitants, a measure of the ‘density’ of businesses in the town. As the population of a town increases, both the number and the ‘density’ of enterprises increase in a fairly predictable way. For large cities, the enterprise density plateaus.
The reason is that as a town’s population increases, consumer demand becomes more complex, greater opportunities arise for businesses to set up and for entrepreneurs to meet potential business partners; to bounce ideas off each other; to grow inter-firm trade; to ensure that their town has improved business-friendly facilities. However, in Derry, a city with a core population of some 85,000, I found that the density of enterprises was about half of what would be expected for its size. So what was going on?
Then, I recalled the ‘No Surrender’ placard. Of course! Derry is not one harmonious city. It functions as two cities, consisting of non-cooperating groups, with a total population of 85,000. The negative consequences for the business sector of the absence of trusting, competitive inter-community relations were stark. Derry punched way below its weight. Enterprise culture does not thrive when trust and co-operation is low or has broken down.

Linking Mayo towns
Westport, on the other hand, enjoys a high level of cooperation and social capital, but lacks the population base of Derry. Nevertheless, business enterprises do thrive and the enterprise stats show that Westport punches above its modest weight.
However, Mayo does not contain any large metropolitan areas. The three largest towns – Castlebar (12,000), Ballina (10,000) and Westport (6,500) – have a total population of about one-third that of Derry’s. Other things being equal, this is likely to put a low limit on the number and density of Mayo enterprises.
So, what can be done?
Realistically, given their populations, to drive up the number and density of enterprises in Mayo towns, you must build links between them so that they take on at least some of the enterprise-promoting characteristics of a larger town.
Westport and Castlebar are already moving in that direction, with the concept of a ‘twin town’ being explored. Wider co-operative thinking for Mayo’s small towns would produce a step-change in overall county performance. But to drive this, an innovative, ambitious and dynamic county-wide economic development strategy out to 2040 is needed. I will turn to this in the next column.

John Bradley was a professor at the ESRI and has published on the island economy of Ireland, EU development policy, industrial strategy and economic modelling.