1. Partnerships and the economic development of regions: the case study of North-West Tasmania
Dr Chris McDonald
34th Annual Conference of the Australian and New Zealand Regional Science Association International (ANZRSAI)
Wednesday 8th December, 2010

2. Overview Background to this research Theoretical framework
Empirical findings
Conclusion and policy implications
I want to focus on four issues with you today:
Background to my research and the key questions
Theoretical framework I developed
Empirical findings
Conclusion and policy implications.

3. Professional background in designing the delivering partnership initiatives
Learning Cities and Regions Conference (2002) – entrepreneurial and locally led approach to economic development and social inclusion, advice for incoming government regarding regional policy
A Fairer Victoria (2004/ 05) – developing the idea about the importance of working with local communities to address disadvantage
Management role in Local Team (2006/ 07) – listening, negotiation, compromise and bargaining (with communities, service providers, local government, state and federal government agencies) to set priorities and mobilise resources
Your personal background shapes your research and for methodological reasons it is important to be transparent about that.
I undertook an undergraduate degree in urban planning and during it I had the opportunity to spend some time in Glasgow on a university exchange. There was a strong focus on place-based approaches to economic development and regeneration. From this time I developed an interest in how communities and cities adjust to the uneven distributional effects of economic change.
During my time in the VPS I have observed that partnerships have been utilised as a policy instrument of choice in planning, community and economic development. For example:
Learning cities and regions/ 2002 election advice
Development of A Fairer Victoria
Local Team experience in Melbourne’s west.
Government does have a role in managing problems associated with spatially uneven development, which is justified on equity and efficiency grounds. As I mentioned there has been a growing use of place-based partnerships in Victoria as a means of addressing spatially uneven development.

4. Existing debates – focus on the question of agency (capacity to influence economic development)
Regional Partnerships construct advantage & help solve wicked problems versus partnerships do not redistribute decision making authority & resources
Difficult to articulate the value-add of partnerships - association between them and the economic development of regions is at present unclear
In my view there has been a bit of a “dead end” debate occurring about the role of partnerships in regional development strategies.
To be blunt on the one hand there are those who say they help regions adapt to change, whilst others conclude they are a spray on solution.
This debate does not have common conceptual grounding.
My PhD attempts to progress this debate by focussing what value is generated through partnerships and how these resources are associated with the economic development of places.

5. Research question and key themes
Do partnerships promote regional economic development and if so, who shapes this agency?
Key themes:
Regional economic development in a global context
Value add of partnerships
2 case studies:
North and West Tasmania
Leicestershire
My research question focussed my inquiry on how to understanding the effect that partnerships have on economic development. In summary I needed to bridge these concepts:
regional economic development (in a way that could situate regional governance within a broader political economy)
value-add of partnerships (what particular resources are produced through the work of partnerships and how this relates to the first point)
I selected two case studies of regions that had experienced rapid socio-economic adjustments:
North -West Tasmania
Leicestershire
A case study methodology was chosen because this is an exploratory study. The key sources of evidence were interviews with key players and documents produced by the partnership and partner organisations. The cases were selected because they met my methodological criteria and for opportunistic reasons.
Today I will focus my discussion of the empirical findings of the Tasmanian case. But first I will set out my theoretical framework.

6. Regional economic development in a global economy
The production of goods and services is organised through networks of firms and non-firm institutions – multi-nationals have a key role in shaping them
Place-based assets matter – physical, financial, social, political, cultural, natural capital
Regions develop if assets complement the strategic needs of firms (strategic coupling):
Economies of scale (concentrations of knowledge, skills and technology)
Economies of scope (broader spectrum of activities due to collaboration and spillovers)
I utilised a Global Production Networks perspective to situate regional governance within a broader political economy. The GPN perspective argues that regional economic development is dependent on the coupling of production networks with regionally based assets.
These networks are mediated through:
firms (with multi-nationals playing a key coordinating role); and
non-firm institutions (such as governments, trade unions and not for profit organisations).
Although these market dynamics are global – these organisations are also embedded locally, and they draw on place-based assets to produce value (human, physical, social capital etc). These dynamic processes are defined as “strategic coupling” and sustainable growth can be achieved if regions are able to stimulate:
Economies of scale (e.g. encouraging the concentration of particular activities such as finance and insurance, food manufacturing, tourism, biotechnology)
Economies of scope (e.g. promoting innovation, value adding, and creation of more specialised activities).
These processes do occur organically but this is also essentially what many governments try to stimulate through regional economic development strategies.

7. Partnerships and regional economic development
Partnerships bring institutional actors within a locality together to undertake joint strategic planning and to monitor the implementation of agreed actions
Effective partnership working is dependent on networks that generate:
Collective efficacy = Confidence to work together
Political capital = Common objectives and influence.
These resources enable coordinated approaches to priority setting and resource allocation.
The second element focuses on the particular value-add of partnerships in organising the delivering of regional development strategies.
At their most basic level place-based partnerships bring organisations and interests together. These interests include:
government departments and local councils
community organisations, business associations and universities
Each of these ‘institutional actors’ bring different interests, ideas, networks, and resources to the table
I developed a proposition that place-based partnerships generate networks amongst participants, and this network formation creates two kinds of resources amongst these actors:
collective efficacy – generates the confidence to work together
political capital – mobilises ideas, interests and resources around common objectives
These resources enable more effective coordination of priority setting and resource allocation amongst institutional actors who have the resources and means to influence regional development outcomes.

8. North West Tasmania
Population 110,000 – stagnation and decline since 1970s
Settlement concentrated in Devonport and Burnie
Comparative advantages – low business and living costs, high quality transport infrastructure, fertile soil, mild climate
Industrial strengths – agriculture, mining manufacturing, and tourism
Strong regional identity – but also local parochialism!
I selected this region because it met my criteria as a place that had experienced the uneven distributional effects of economic change.
The region had experienced significant industrial restructuring – with the decline and restructuring of heavy manufacturing, and efficiencies in food manufacturing, agriculture and forestry. This led to issues such as higher unemployment, population loss, lower incomes and declining asset values that became critical in the 1990s.
It is also a place that has significant advantages – particularly related to its natural environment and related industry strengths in agriculture, food manufacturing and tourism.
However, there was fragmented governance and no way of effectively coordinating a response to these issues.
By the end of the 1990s local civic and business leaders came to a view that a regional approach was needed to address these risks and take advantage of emerging opportunities.

9. Cradle Coast Authority formed to help position the region for the future
Formed by 9 Councils in 1999 to be more representative of regional interests and establish priorities for future development of the region
Three components:
Shareholder group - Councils
Board – business, university, civic leaders
Chief Executive and work team
Development of an Annual Plan with joint strategies on issues such as:
Participation in education, employment and training
Land use planning
Value adding of traditional industries – Food processing
Natural Resource Management
Family and Business Migration
Climate change adaptation
The Cradle Coast Authority was established in What makes this governance arrangement different from past forms of regional cooperation was the inclusion of other interests (business, community, university) at arms length from the Councils. Its governance structure is made up of:
Board of management (Business, education, Council, community reps)
Shareholder Group (a Council CEO’s and Mayors)
Chief Executive and Work Team (Tourism, Natural Resource Management, and Education and Training).
The role of the partnership has evolved over time in response to changing issues and funding opportunities (refer to priorities on the slide).

10. Enhancing collective efficacy
Formation and strengthening of a leadership network that generated the confidence to work together
Improved flows of information and intelligence about regional development
Key factors:
Structural position - mediating between levels of government and competing interests of nine Councils
Authority, interests and skills of board members
Brokering role of the Chief Executive
When I began to analyse this evidence a common pattern of ‘opportunistic’ partnership behaviour emerged:
responding to external threats and opportunities
negotiating a view amongst powerbrokers about how to proceed
actions such as seeking a policy change or attracting resources etc.
Over time the cumulative effect of these actions were stronger networks and common understandings amongst the key institutional actors and firms in the region. This didn’t significantly broaden out decision making – but it created some new relationships, and certainly strengthened pre-existing institutional relationships.
This network formation generated a resource that allowed participants to overcome coordination problems by giving them the confidence to work together. This collective efficacy improved flows of information and intelligence amongst key institutional actors. This was shaped by the:
Structural position of the Authority (mediating between the 9 Councils, State and Federal Governments)
Authority, interests and skills of the Board
Brokering role of the Chief Executive.

11. Building political capital
Enabled the development of a shared narrative about the regions strengths and weaknesses:
Industrial decline
Environmental capital
Human capital.
Opportunistic approach to setting priorities and accessing resources.
Key factors:
Economic change and restructuring
Tensions and trade-offs amongst Councils
Government funding rules
Deliberation of the board
Analytical skills of the Chief Executive.
In addition to enhancing collective efficacy the partnership also allowed participants to develop a common narrative about:
weaknesses in the regional economy (declining competitiveness of traditional industries, and lack of human capital)
opportunities presented by the regions environmental capital (through tourism and high value agriculture and value adding)
Collaborative actions that were necessary to build regional competitiveness (such as a focus on education and training pathways, and managing supply chains).
This ‘political capital’ was usually developed through a regional plan, which became a mechanism to negotiate and make trade-offs about how to best position the region for the future (again evidence of an opportunistic approach).
Key factors shaping the formation of this political capital was:
Economic change and restructuring (e.g. broader structural factors such as competitive strengths and terms of trade)
Funding rules set by Federal and State Government
tensions, conflicts and trade-offs amongst the 9 Councils
deliberation of the Board (e.g. setting evidence-based criteria)
Analytical and communication skills of the Chief Executive (e.g. the ability to synthesise large amounts of quantitative and qualitative information, and having regular access to strategic information from government).

12. Conclusion and policy implications
Regions develop if their assets meet the strategic needs of firms in a global context (public policy issues arising from this are complex and cut across traditional organisational boundaries).
Partnerships are an important way of organising regional development strategies because they generate networks that:
Enhance collective efficacy
Build political capital
…And these resources help overcome coordination problems amongst institutional actors.
Policy choices to further strengthen regional partnerships:
Greater flexibility and integration in government funding and support
Incentives/ rules to include a broader range of interests and organisations in regional planning.
Good evidence base and an engaged university
Broker who has strong communication, analytical and decision making skills
Board with strong leadership capabilities that is representative of regional interests.
If I could also finish on two points in terms of future research and policy implications coming from the research.
In terms of future research I am interested in the idea of collective efficacy and its relationship to resilience and innovation. So the idea that collective efficacy is an important pre-condition for successfully adapting to change and promoting economic development. I think this will be important as we manage the distributional outcomes of future market adjustments, demographic shifts and climate change.
The second is the benefit of long term sustained commitment to helping localities and regions adjust to economic change. Without these policy mechanisms deep and inter-generational forms of disadvantage can emerge which disrupts lives and wastes resources. These processes are generational and regional development policies require long term bipartisan commitment.
Thank you for your time and the opportunity to speak at this event.