Who needs time travel when you have enterprise?

The economy is back to where it was in 2006 - where do we go from here?

It’s strange to be waking up in summer 2012 to find ourselves in an economy that is no bigger than it was in 2006. So how can we travel "back to the future" and get the economy back on track? In the absence of a plutonium-powered car, the vehicle to get us back to economic growth is enterprise.

Centre for Cities’ new report, "Open for Business", shows how important enterprise is to a city economy. The research, sponsored by ICAEW, takes a detailed look at the make-up of city economies to establish what makes a city economically successful.

It finds there are two prongs to private sector economic growth in our cities – the ability to attract businesses from elsewhere (other UK cities and abroad) and the ability to "grow your own’. Our strongest cities are those that have been able to do both.

A detailed breakdown of the business bases of UK cities reinforces this point. The majority of the UK’s strongest cities are those that have a large proportion of branch businesses and high levels of enterprise:

Of course, being open to external business also means that in the short term some cities may be even more exposed to turbulence in the global economy. The Eurozone crisis may impact upon businesses headquartered in the Eurozone, potentially leading to consolidation of businesses and knock-on job losses. Cities like Coventry and Swindon, with a higher proportion of Eurozone-owned businesses, will need to focus on policies that can support domestic enterprise to help offset any potential fallout from troubles across the Channel.

Overall it is clear from the research that cities with a mix of home grown businesses and branches are best placed to weather any storms heading our way. But what does this mean for policy?

There has been no shortage of enterprise initiatives from previous Governments, ranging from Thatcher's Enterprise Allowance Scheme to New Labour's Local Enterprise Growth Initiative. The recently launched Start-up Loans are the latest addition to the list. But the impact that these schemes have had upon levels of enterprise is difficult to quantify based on existing evidence. So what can the government and cities do to hit the accelerate button on enterprise at a time of economic instability?

One thing that can make an important difference is for national government and cities to continue investing in the core themes that make a big difference to business. This means improving transport and skills and making the planning process more responsive to business needs.

Cities also need to respond to the specific challenges facing their local economies. Our work shows that open, entrepreneurial cities are best placed to grow, and cities should aim for this mix of home-grown business and receptive to new ideas and people.

Depending on the city’s specialisms and where it needs to improve, this could mean implementing policies from support for start-ups or existing companies to ensuring the city is working with UKTI and others to showcase where there are opportunities for external investment.

It will take time to get back to where our economy should be. But by getting enterprise policy right today, cities can help to steer the wider UK out of economic underperformance and into growth.

TechHub, a start-up shared space in Old Street, West London. Photograph: Getty Images

Alexandra Jones is the director of the Centre for Cities

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New Digital Editor: Serena Kutchinsky

The New Statesman appoints Serena Kutchinsky as Digital Editor.

Serena Kutchinsky is to join the New Statesman as digital editor in September. She will lead the expansion of the New Statesman across a variety of digital platforms.

Serena has over a decade of experience working in digital media and is currently the digital editor of Newsweek Europe. Since she joined the title, traffic to the website has increased by almost 250 per cent. Previously, Serena was the digital editor of Prospect magazine and also the assistant digital editor of the Sunday Times - part of the team which launched the Sunday Times website and tablet editions.

Jason Cowley, New Statesman editor, said: “Serena joins us at a great time for the New Statesman, and, building on the excellent work of recent years, she has just the skills and experience we need to help lead the next stage of our expansion as a print-digital hybrid.”

Serena Kutchinsky said: “I am delighted to be joining the New Statesman team and to have the opportunity to drive forward its digital strategy. The website is already established as the home of free-thinking journalism online in the UK and I look forward to leading our expansion and growing the global readership of this historic title.

In June, the New Statesman website recorded record traffic figures when more than four million unique users read more than 27 million pages. The circulation of the weekly magazine is growing steadily and now stands at 33,400, the highest it has been since the early 1980s.