Partnerships in Local Economic Development 5 th National Annual Local Government Conference August 2008 Presented by Gerry Delany

How important is LED? What do South Africans worry about most? - Poverty, crime, unemployment 13,2 million have work 7,4 million need work (4 m +3,4 m) Creating nearly half million jobs p a - but new job seekers each year - only gaining new jobs p a

What does that look like?

It’s important! Need to advance on many fronts Macro-economic policies fundamental National programmes important, but insufficient Globalisation changing the rules, the engines of growth are cities & regions Emphasis and resources shifting to local and regional development strategies

Emerging Trends (Gwen Swinburn) Traditional LED Subsidise FDI No legal frameworks Manufacturing & sector interventions Hard infrastructure Little economic info Public sector only Supply driven No inst mechanisms Sectoral Political boundaries Third Wave LED Biz environ, target potential Enabling legal frameworks Agric, manufacturing & service -> clusters Soft infrastructure Evidenced based stratplans Partnerships Demand driven Supportive inst mechanisms Territorial Economic space

Ways to grow an economy Create new enterprises Attract investment from outside Grow existing businesses Which gets the most attention?

Attract 10-20% Create 15-25% Retain and expand 60-80% Which should get most attention? Sources of new jobs

A balanced LED Strategy Needs three legs… and a firm foundation

Balanced LED Strategy Three legs: Retain and grow existing businesses Create new enterprises Attract investment from outside A firm foundation by investing in: Hard (physical) and soft (economic) infrastructure

10 Guiding principles (Swinburn & Yatta, Africities 2006) Strategically planned Territorial approach Locally owned, designed and delivered Partnerships both for design and implementation Reinforced by integrated government action Focus on conducive local business environment Integrated multi-sector initiatives Invest in hard, soft & institutional infrastructure Growth & retention of local businesses & people Projects by all - public, private, non-government

From planning to action Economic planning options - economic development department - across all departments - consultants - task team Who needs to take part? Partnerships for design & implementation - Relevant data they believe and understand - Consensus on what to do - Partners can then do what they do best

Pinetown BR&E Task Team

Typical BR&E findings Crime Run down unattractive environment Rising transport costs - businesses want to relocate Few local suppliers - especially IT, business services, stationary Need skills - sales/customer, technical, business No/defunct business organisation Services, traffic problems - “municipality unresponsive”

South Durban Basin action teams

Top 10 FDI location factors 1. Access to customers 77% 2. Social & political stability 64% 3. Ease of doing business 54% 4. Reliable infrastructure & utilities 50% 5. Availability of professionals 39% 6. Availability of managers 38% 7. Level of corruption 36% 8. Cost of labour 33% 9. Crime & safety 33% 10. Availability of skilled labour 32% Multilateral Investment Guarantee Agency (MIGA)

Exclusion Social - bridge gaps between groups Spatial - infrastructure, leverage outside resources Economic - connecting to markets - access to cheaper inputs - education and skills development - supporting intitutions Not just LED but a national priority also Jörg Meyer-Stamer

Inkumane

Serious about LED Understand importance – set targets Get relevant information – together Partnerships/teams for design & implementation Balanced strategy Address exclusion

Development ultimately is not a matter of GNP or money or physical capital or foreign exchange, but of the capacity of a society to tap the root of popular creativity, to free up and empower people to exercise their intelligence and their individual and collective efforts to achieve a better life. Kari Levitt Professor Emeritus, McGill University