Sustaining Local Economic Development Initiatives: A summary of the Hexagon of LED Jörg Meyer-Stamer

Process Management Governance Sustainability Policy focus and synergy Locational factors Target group Conceptualizing Systemic Competitiveness at the Local and Regional Level: The Hexagon

Planning, M+E Governance SustainabilityPolicy focus and synergy Locational factors Target group The First Triangle: The Target Group

The target group of local economic development: firms streng- thening local firms Attraction of new firms Promotion of start-ups and entre- preneurship supplier development, outsourcing, spin-off; support for owner succession Attract suppliers and complementary firms, manufacturers of capital goods, service providers franchising

LED activities around the first triangle streng- thening local firms Attraction of new firms Promotion of start-ups and entre- preneurship supplier development, outsourcing, spin-off; support for owner succession Attract suppliers and complementary firms, manufacturers of capital goods, service providers franchising address market failure business skills business contacts, networking, info address market failure entrepreneurship skills business contacts entrepreneurs’ networking coaching, business angels professional investment promotion locational marketing targeted investment promotion investor after-care

Main messages General principles: Avoid market distortions and discrimination Identify and remedy market failure (e.g. barriers to entry) Reduce barriers to entry Pursue a balanced approach: look at each of the 3 types of companies Look at the synergies between the 3 types

How to apply the first triangle in a workshop setting Conduct a mesocard-based brainstorming on the business promotion activities that are ongoing Ask the participants to organise the observations around the triangle, particularly looking at the connecting lines between the corners Discuss the result with the participants –It is likely that the result will show a certain imbalance in terms of business promotion activities –Take this as a point of departure for a brainstorming on new approaches to business promotion.

Planning, M+E Governance SustainabilityPolicy focus and synergy Locational factors Target group The Second Triangle: Locational Factors

Intangible locational factors Tangible locational factors Relevant for individuals: -- quality of housing -- environmental quality -- schools and HE -- health facilities -- social facilities -- culture and recreation Relevant for firms: -- efficiency of government -- business climate -- availability of related industries -- supporting institutions -- geographical location -- real estate -- transport and communication infrastructure -- skilled workers -- energy and environment -- taxes and levies -- subsidies Locational advantages

Intangible locational factors Tangible locational factors Relevant for individuals: + quality of housing + environmental quality + schools and HE + health facilities + social facilities + culture and recreation Relevant for firms: more responsive, efficient, consistent local government customer-driven support institutions member- and service- driven chambers/assns develop business estates real estate information system upgrade transport and communication infrastructure demand-driven skills development efficient implementation of environmental regulations competitive taxes and incentives Strengthening locational advantages

Main messages At the early stages of development, the tangible locational factors are critical As tangible locational factors become more similar across locations, intangible factors gain importance A key intangible factor is the efficiency and business- orientation of government

How to apply the second triangle in a workshop setting Conduct a mesocard exercise based on the question: What are the factors that make a location attractive for business? Organise the cards according to the three types of locational factors –It is quite likely that at least one of the three types will attract only very few observations  Address the issue of static vs. dynamic competitive advantage

Planning, M+E Governance SustainabilityPolicy focus and synergy Locational factors Target group The first and second triangle Hard-core LED

Planning, M+E Governance SustainabilityPolicy focus and synergy Locational factors Target group The Third Triangle: Policy Focus and Synergy

Focus and Synergy: The three approaches to local development Business Development Urban planning Urban development Infrastructure Development Social Development Community Development

Focus and Synergy, 1: Separating Economic Development: Quick results Competitiveness Sustainability Consumers Urban Planning : Long time horizon Planning Aesthetic criteria Social Development : Support for disadvantaged and marginalised Beneficiaries Solidarity Time horizon Visual vs. substance Profit vs. solidarity

Focus and Synergy, 2: Connecting Economic Development Urban Planning Social / community Development Improving locational quality Create a unique profile Apply business principles in social endeavours Improve quality of living in low- income areas Redefine social problems as business opportunities Focussed, demand-driven skills deve- lopment Stimulate entrepreneurship (as early in life as possible) Leverage infra- structure and facilities development for LED

How to apply the third triangle in a workshop setting Ask the participants to name ongoing or planned LED activities in their location Cluster the responses according to the three corner points. –Often, the outcome shows lots of social and urban development projects, but very few proper economic development activities.

Planning, M+E Governance SustainabilityPolicy focus and synergy Locational factors Target group The Fourth Triangle: Sustainable Development

The triangle of sustainable development at the regional level economic develop- ment ecological develop- ment social develop- ment e.g. new types of living and housing (for instance for retirees) e.g. processing of locally available bio-mass e.g. regional recycling economy e.g. labor-intensive development of industrial estates and infrastructure

Main message Address ecological and social problems as business opportunities Look for win-win-opportunities –finding an innovative approach to LED by thinking out of the box

How to apply the fourth triangle in a workshop setting Use it in a setting where local stakeholders have experience with LED but find it difficult to come up with new ideas Organize a Mesocard-based brainstorming exercise around this triangle –divide the group into four working groups, with three looking at one connection and the fourth at the entire triangle.

Planning, M+E Governance SustainabilityPolicy focus and synergy Locational factors Target group The third and fourth triangle Hard-core LED Widening the perspective

The Fifth Triangle: Governance Planning, M+E Governance SustainabilityPolicy focus and synergy Locational factors Target group

Local government Business associations The Triangle of Governance Civil society

Main message Current approach in successful regions: Network governance –Distribution of responsibilities between various governmental and non-governmental organizations –Negotiation and co-ordination without a clear decision center Subsidiarity and decentralization Participatory approaches.

How to address the fifth triangle in a workshop setting Conduct the Interaction Matrix mini-workshop format –first with a public sector group and a private sector group separately –then bring them together and display the results of each workshop

Process management Governance SustainabilityPolicy focus and synergy Locational factors Target group The Sixth Triangle: Diagnostic Planning, Monitoring & Evaluation

Participatory diagnostic (e.g. PACA) Participatory planning Participatory M+E, Participatory benchmarking Implementation Motivation + priorities Feedback Reference The Triangle of Process Management

Main message Successful LED is based on learning Don’t waste too much time with discussing, strategising and planning -- get into action quickly! LED is an iterative process

Process management Governance SustainabilityPolicy focus and synergy Locational factors Target group The fifth and sixth triangle Hard-core LED Widening the perspective Governing the process of LED

The Hexagon and LED interventions Small business promotion Investment promotion Start-up promotion Promotion of BDS Efficient public administration Enabling environment Competitive infrastructure Skills Synergy between different fields of local development Innovation: Addressing LED from a new angle Encourage independent business associations Public-private partnership Effective governance Participatory approach LED = iterative process

Process management Governance SustainabilityPolicy focus and synergy Locational factors Target group Sustaining a local economic development effort Basic instruments Innovative instruments Effective co-ordination

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