Local Economy Development Training Module (LED-TM)

Local Economic Development (LED) is an approach towards economic development which allows and encourages local people to work together to achieve sustainable economic growth and development thereby bringing economic benefits and improved quality of life for all residents in a local municipal area.

As a programme, LED is intended to maximise the economic potential of all municipal localities throughout the country and, to enhance the resilience of the macro-economic growth through increased local economic growth, employment creation and development initiatives within the context of sustainable development. The “local” in economic development points to the fact that the political jurisdiction at a local level is often the most appropriate place for economic intervention as it carries alongside it the accountability and legitimacy of a democratically elected body.

LED Programmes provides support in the following areas:

• Development and review of national policy, strategy and guidelines on LED;
• Providing direct and hands-on support to provincial and local government;
• Management of the Local Economic Development Fund;
• Management and Technical Support to Nodal Economic Development Planning;
• Facilitating coordinating and monitoring of donor programmes, and
• Assisting on LED capacity building processes.

1. Through these interventions, resources, local role-players and interest groups are mobilized for the sake of achieving economic growth and creating jobs to reduce poverty.
2. Integrated Development Plan (IDP) is a process by which municipalities prepare 5- year strategic plans that are reviewed annually in consultation with communities and stakeholders. These plans adopt an implementation approach and seek to promote integration by balancing social, economic and ecological pillars of sustainability without compromising the institutional capacity required in the implementation and coordinating of actions across sectors and spheres of government.

In recent years regional and local economies have had to face increasing challenges. The process of globalization is rapidly altering the economic status quo and presenting new economic opportunities and risks for cities, regions and nations all over the world.

In this changing context, national and local governments, as well as enterprises and other organisations have to rethink development strategies in order to cope with and to take advantage of existing transformations.


As opposed to traditional development policies, Local Economic Development strategies:

• empower local societies and generate local dialogue. People living in areas of the world that have until recently had little say or control over the economic activity taking place in their territory, begin to adopt a more proactive stance with regard to their own future;
• help to make local institutions more transparent and accountable and contribute to the development of the local civil society;
• make economic activity dependent on the specific economic conditions and comparative advantages of a defined territory, generate sustainable employment in firms more capable to withstand changes in the global economic environment;contribute to a general improvement in the quality of jobs as a result of the involvement of local stakeholders and of the rooting of economic activity in a territory.

Training Module

A. Defining Local Economic Development (LED)

• an approach for development, pooling all the stakeholders

Purpose:

• to build up the economic capacity of a local area to improve its local economy and thereby improve the quality of life for all.
• It is a process by which public, business and nongovernmental sector partners work collectively to create better conditions for economic growth and employment generation.
• It focuses on enhancing competitiveness, increasing sustainable growth and ensuring that growth is inclusive.

LED encompasses a range of disciplines:

• physical planning,
• economics
• marketing.
• environmental planning,
• business development,
• infrastructure provision,
• real estate development and finance.
• economic development

B. LOCAL ECONOMIC DEVELOPMENT STRATEGIES

• different geographic scales.
• for the benefit of local government’s jurisdiction,
• individual communities and areas within a local government's jurisdiction
• Such approaches are most successful if pursued in partnership with local government strategies.

Local communities respond to their LED needs in many ways, and a variety of approaches can be taken that include:

• local investment climate is functional;
• small and medium sized enterprises;
• formation of new enterprises;
• Attracting external investment (nationally and internationally);
• Investing in physical (hard) infrastructure;
• Investing in soft infrastructure (educational and workforce development, institutional support systems and regulatory issues);
• Supporting the growth of particular clusters of businesses;
• Targeting particular parts of the city for regeneration or growth (areas based initiatives);
• Supporting informal and newly emerging businesses;
• Targeting certain disadvantaged groups.

Local Economic Development strategies:

• empower local societies and generate local dialogue.
• help to make local institutions more transparent and accountable and,
• contribute to the development of the local civil society;
• make economic activity dependent on the specific economic conditions and comparative advantages of a defined territory,
• generate sustainable employment in firms more capable to withstand changes in the global economic environment;
• contribute to a general improvement in the quality of jobs as a result of the involvement of local stakeholders and of the rooting of economic activity in a territory.

C. Participatory Development for Local Empowerment

• promotes a participatory development process. It encourages partnerships between the main private and public stakeholders and enables the joint design and implementation of a common development strategy. The overall objective is to base economic activity on social conditions and local resources, rather than vice-versa.

D. The main aim of local economic development (LED)

• encourage local participation and consensus building to determine economic and social welfare initiatives for the locality and the community.
• The concept of local economic development is based on promoting local approaches that respond to local needs and conditions.
• The importance of local ownership of the development process is however central to most local economic development approaches, which simultaneously views development within the context of governance and civil society at all levels.

E. LED Strategic Planning

• The development of an LED strategy will be an integral part of a broader strategic planning process
• Effective strategic planning ensures that priority issues are addressed and limited resources are well targeted.
• The five-step planning process detailed should be tailored to complement, and correspond with, other local planning processes. The process is not prescriptive and should be adapted to meet the needs of the individual community.

The five-step planning process

Stage One: Organizing the Effort

• identifying the people, public institutions, businesses, community organizations and other groups with interests in the local economy.
• The skills and resources that each of these stakeholders bring to the strategy process provide a critical foundation for success.
• A resource audit is a necessary input to the strategy, and should include the identification of financial, human and other capital resources that can contribute to the LED strategy.
• Working groups and steering committees can be established to ensure that both formal and informal structures are in place to support strategy development and implementation.
• Other issues that need to be tackled in the early stages include establishing LED staff teams and appropriate political processes

• Establishment of a Steering Committee

• The Steering Committee should include key stakeholders from all sectors including the local authority. The local authority will usually provide institutional support for this committee. This provides them with a degree of control that may be needed in the early days of establishing the LED strategy and partnerships.

• Establishment of a group within the local authority to oversee the LED process.

• This group should include people from across the various local authority departments that are likely to have an interest or professional, technical, political or financial responsibility for matters affected by the LED strategy. Membership should be at both Elected Member and at officer levels. There should be terms of reference and a formal reporting system for the group. Transparency and public access to information used or generated by the group is important to its credibility.

Stage Two: Conducting the Local Economy Assessment

• The aim of the local economy assessment:
• to identify the community's strengths and weaknesses
• human resource capacity,
• local government's 'friendliness' to all types of business activities from corporate to informal,
• the opportunities and threats facing the local economy.

The goal:

• ECONOMIC PROFILE
• comparative and competitive advantage in relation to neighboring communities and other regional, national or international competitors.

Stage Three: Developing the LED Strategy

• a shared economic vision for the community
• goals, objectives, programs, projects and action plans will be developed.
• ensures that all major stakeholder groups are given the opportunity to define:
• what is to be achieved,
• how it is to be achieved,
• who will be responsible and
• the timeframes associated with the implementation of the LED strategy.
• the staff resource capacity to carry them out,
• as well as the budgetary constraints.
• Ultimately, the strategy's action plans should be incorporated into the work and budgetary program of the local authority
• The aim is to leverage strengths, overcome weaknesses, exploit opportunities and deal with threats.

Stage Four: Implementing the LED Strategy

LED action plans.

• Ongoing monitoring is provided through the formal structures identified and created in step one, and
• evaluation of specific project outcomes ensures that the strategy continues to lead to the achievement of the LED vision, goals and objectives.
• In undertaking strategy implementation, it is important to identify and establish the appropriate institutions to carry out the plans.

Stage Five: Reviewing the LED Strategy

• Good monitoring and evaluation techniques help to quantify outcomes, justify expenditures, determine enhancements and adjustments, and develop good practices.
• This information also feeds into the review of the complete LED strategy.
• The LED strategy should be reviewed at least annually to ensure that it remains relevant. It may be that conditions have changed or that the initial assessment was incorrect to the local conditions.
• The LED strategy should evolve continuously to respond to the ever changing competitive environment