1. PLANNING AND ORGANISING local economic development
ArR720S: applied regional and RURAL economic development

2. outline Local economic development: why, what, who, where and how
P3 processes and tools
LED approaches/strategies: categories, planning, implementation and delivery
Discussions and review

3. objectives
To examine the meaning, actors and elements involved in local economic development (theme I)
To discuss the approaches and strategies associated with local economic development (theme II)
To engage students and assess their understanding through interactive discussions

4. Theme I
LED meaning, actors and elements

5. introduction
Globalisation, removal of trade barriers and increased competition
Opportunities and threats
Colonial history and reliance on commodities
Citizen participation in economic decision-making
Creativity, innovation and democratic decentralisation

6. Why is local economic development (led) important?
Strengthening local economic capacity
Improving investment climate
Enhancing productivity
Ensuring competitiveness of businesses, workers and entrepreneurs

7. What is led? An ongoing process
A process driven by local actors from different sectors
Joint planning: people, business and government
Citizens and their needs
Private enterprises and the need for an enabling business environment
Government obligations
Implementation by public, private and non-governmental sectors

8. Definitions of led
“LED is an ongoing process by which key stakeholders and institutions from all spheres of society, the public and private sector as well as civil society, work jointly to create a unique advantage for the locality and its firms, tackle market failures, remove bureaucratic obstacles for local businesses and strengthen the competitiveness of local firms.” (GIZ)

9. Definitions of LED (cont’d)
“LED is a participatory process which encourages social dialogue and public-private partnerships in a defined geographical area. LED enables local stakeholders to jointly design and implement a development strategy which fully exploits local resources and capacities, and makes use of the area’s comparative advantages.” (ILO)

10. South African government’s vision for local economies
“Robust and inclusive local economies exploiting local opportunities, real potential and competitive advantages, addressing local needs and contributing to national development objectives” (National Framework for LED, ).

11. South African government’s vision for local economies (cont’d)
Notion of developmental local government: characteristics (White Paper on Local Government, 1998)
Maximising economic growth and social development
Integrating and coordinating
Social development
Leading and learning

12. Who is responsible for driving led?
Partnerships are important
Alignment of development strategies at national, regional and local levels
Essential roles of national and local governments

13. Role of national government
Coordinating and supporting activities of municipalities
Providing legislative and regulatory framework
Maintaining inter-governmental relationships
Providing resources and disseminating information
Increasing administrative efficiency
Monitoring outcomes and impact

14. Role of local government
Prioritising social and economic development
Conducting studies on local economic regeneration
Establishing capacity for inter-departmental collaboration
Creating a forum for mobilisation of resources and efforts
Establishing and maintaining an economic database
Identifying and marketing new economic opportunities
Creating an enabling environment for local businesses
Communicating and networking with key role players
Mobilising civil society and encouraging public participation

15. Where to unlock led
Factors that influence the choice of a LED approach:
Local economic structure
Existing businesses and leading sectors
Local communities
The business environment
Human resources and a skilled workforce
Networks and partnerships

16. How to develop and implement led
Get the basics right
Understand the local economy
Plan for LED and develop the strategy
Prepare for implementation
Measure results and impact

17. Elements of the led strategy
Vision
Goals
Objectives
Programmes
Projects and action plans

18. How to prepare for and affect led
Recognition of unique local conditions and relative advantages
Investment: government and private sector, skills and continuous learning

19. Prevailing situation
Much of existing LED materials focus on theoretical issues
Relatively low emphasis on implementation
Practitioners not well-equipped to tackle problems

20. P3: Partnership, participation, progress
Membership: Sweden, South Africa, Namibia and Botswana
2010/2011: supporting 25 municipalities – transparency, relations between local government and citizens
LED component: municipality impact on business enabling environment

21. P3 Processes
Supply-side LED interventions to promote capacity building
Selection criteria: stability, staff, satisfactory performance, core competencies

22. P3 tools LED roundtable concept: new in Namibia and Botswana
Red-tape reduction: process/regulatory review, improvement and efficiency
Business retention and expansion: feedback, partnership formation, responsible business
Plugging the leaks in the economy
Business enabling environment surveys

23. Theme i: discussion questions
Discuss the historical origins of local economic development (LED).
What is LED? Why is LED important?
Discuss the South African government’s vision for local economies.
Who is responsible for driving LED and what are their roles?
Where can LED be unlocked?
How does one develop and implement a LED strategy?
Examine the elements entailed in a LED strategy.
What is P3? Discuss the processes and tools associated with this initiative.

24. Theme II
LED approaches and strategies

25. Introduction: local economic Development (led)
Traditional LED approaches: competing municipalities
Offering of incentives e.g. tax rebates, utility subsidies

26. Categorising approaches to led
Entrepreneurial competitive strategies
Local comparative advantages and small business job creation
Urban efficiency
Local authorities and urban productivity

27. Categorising approaches to led (cont’d)
Progressive competitive strategies
Human resource development
Community based strategies
Sustainability, working with low-income communities and organisations

28. Led Developmental approaches
Community-based development
Municipal grassroots assistance
Linkage between profitable growth and redistribution
Construction linkage, balanced investments by financial institutions
Human capital development
Living wages and productivity

29. Led Developmental approaches (cont’d)
Infrastructure and municipal services
Reliable, cost effective service delivery
Leak-plugging in the local economy
Use available resources, buy local, utilise local expertise
Retaining and expanding local economic activity
Enhanced productivity, increased market share, value addition

30. Lessons from south Africa
First ten years of democracy: limited sustainability and partnership building in LED
Direct funding and lack of local markets
Poverty alleviation: strong state intervention
Local Economic Development Fund: Department of Provincial and Local Government
Economic growth: creation of enabling environment

31. Lessons from south Africa (cont’d)
Small local authorities: project focus, service delivery, public works, SME development, compliance with statutory requirements
Large local authorities: institutional market enabling frameworks, conducive business environment, business clusters and retention, red tape reduction

32. Led strategy development tools
Strengthening local economy and building local capacity
Time frame: 3-8 years
Annual implementation plans

33. led: a five stage strategic planning model
Organising the effort
Competitive assessment
Strategy making
Strategy implementation
Strategy review

34. Organising the effort Create an internal group
Manage and engage stakeholders
Establish an ad-hoc/steering committee

35. Competitive assessment
Conduct a SWOT analysis: initial rough draft, formal final presentation

36. Strategy making Create a vision Develop goals
Create specific objectives
Develop programmes and projects to achieve the objectives

37. Strategy implementation
Project responsibility
Targets: output, time and funding
Reporting structures
Performance measures, monitoring and evaluation

38. Strategy review Validity of SWOT analysis Required changes
Project achievements
Performance indicators

39. Led delivery mechanisms
Public sector
Public and private sectors
Private sector

40. Funding a led strategy Competition for scarce resources
LED strategies must have budget attached to them
Sources of LED funding:
Local government revenue
Sale or renting of local government property
Intergovernmental transfers
International donor grants and loans
Private sector funding
Foundations

41. Assessing quality of led strategies
Two schools of thought
Develop credible LED strategies
Implement pragmatic, bottom-up initiatives to improve local economy
Ideal situation: good strategy and good implementation

42. Assessing quality of led strategies: important questions
Timeline
Implementation plan
Method
Implementation budget
Data quality and depth
Uniqueness and focus of strategy
Internal LED capacity
Key economic sectors

43. Assessing quality of led strategies: important questions (cont’d)
Problem analysis and solution identification
SWOT
Public participation
Private sector involvement
Alignment with regional/national development policies
Scenario planning
Existing LED activity
Concise strategy and clear layout

44. Theme II: discussion questions
Discuss the various categories of approaches to LED.
Examine the main LED developmental approaches.
What are some lessons from South Africa with respect to LED?
Assess some major LED strategy development tools.
Examine the five-stage strategic planning model associated with LED.
Discuss the various delivery mechanisms entailed in LED.
What are the main elements and sources associated with funding a LED strategy?
Examine the major schools of thought and questions entailed in assessing the quality of LED strategies.

45. Review: theme I Sub-theme Details
Local economic development (LED): historical origins
Globalisation, colonial history and citizen participation
Why is LED important?
Strengthening local economic capacity; improving investment climate; enhancing productivity; ensuring competitiveness of businesses, workers and entrepreneurs
What is LED?
An ongoing process; a process driven by local actors from different sectors
South African government’s vision for local economies
Robust and inclusive local economies; maximising economic growth and social development; integrating and coordinating; social development; leading and learning
Who is responsible for driving LED?
Partnerships are important; alignment of development strategies at national, regional and local levels; essential roles of national and local governments
Role of national government
Coordinating and supporting activities of municipalities; providing legislative and regulatory framework; maintaining inter-governmental relationships; providing resources and disseminating information; increasing administrative efficiency; monitoring outcomes and impact
Role of local government
Prioritising social and economic development; conducting studies on local economic regeneration; establishing capacity for inter-departmental collaboration; creating a forum for mobilisation of resources and efforts; establishing and maintaining an economic database; identifying and marketing new economic opportunities; creating an enabling environment for local businesses; communicating and networking with key role players; mobilising civil society and encouraging public participation
Where to unlock LED
Local economic structure; existing businesses and leading sectors; local communities; the business environment; human resources and a skilled workforce; networks and partnerships
How to develop and implement LED
Get the basics right; understand the local economy; plan for LED and develop the strategy; prepare for implementation; measure results and impact
Elements of the LED strategy
Vision; goals; objectives; programmes; projects and action plans
P3: Partnership, participation, progress
Membership (Sweden, South Africa, Namibia and Botswana); 2010/ supporting 25 municipalities (transparency, relations between local government and citizens); LED component - municipality impact on business enabling environment
P3 processes
Supply-side LED interventions to promote capacity building; selection criteria (stability, staff, satisfactory performance, core competencies)
P3 tools
LED roundtable concept; red-tape reduction:; business retention and expansion:; plugging the leaks in the economy; business enabling environment surveys

46. Review: theme II Sub-theme Details Categorising approaches to LED
Entrepreneurial competitive strategies; urban efficiency; progressive competitive strategies; community based strategies
LED developmental approaches
Community-based development; linkage between profitable growth and redistribution; human capital development; infrastructure and municipal services; leak-plugging in the local economy; retaining and expanding local economic activity
Lessons from South Africa
First ten years of democracy: limited sustainability and partnership building
Poverty alleviation: strong state intervention
Economic growth: creation of enabling environment
Small local authorities: project focus, service delivery, public works, SME development, compliance with statutory requirements
Large local authorities: institutional market enabling frameworks, conducive business environment, business clusters and retention, red tape reduction
LED: a five stage strategic planning model
Organising the effort; competitive assessment; strategy making; strategy implementation; strategy review
LED delivery mechanisms
Public sector; public and private sectors; private sector
Funding a LED strategy
Competition for scarce resources and budgeting; sources - local government revenue, sale or renting of local government property, intergovernmental transfers, international donor grants and loans, private sector funding, foundations
Assessing quality of LED strategies
Two schools of thought: develop credible LED strategies; implement pragmatic, bottom-up initiatives to improve local economy
Ideal situation: good strategy and good implementation
Assessing quality of led strategies: important questions
Timeline; implementation plan; method ; implementation budget; data quality and depth; uniqueness and focus of strategy; internal LED capacity; key economic sectors; problem analysis and solution identification; SWOT; public participation; private sector involvement; alignment with regional/national development policies; scenario planning; existing LED activity; concise strategy and clear layout

47. Plan for next TWO weeks
Lecture: Practical Examples and Case Studies of LED Activities and Initiatives in Namibia
Group Presentations
Review for Test 2

48. references
Martindale, L. and P3 Team (2012). Develop your own LED strategy: creating a credible LED approach for your municipality. A local economic development toolkit for South Africa, Namibia and Botswana.
Martindale, L. and P3 Team (2012). From words to action: making it work on the ground with LED tools. A local economic development toolkit for South Africa, Namibia and Botswana.
South Africa LED Network and South Africa Local Government Association (2011). A councillor's guide to local economic development in South Africa. The why? what? who? and how? of LED.