Local Government and Local Economic Development and Globalisation: expenditure or investment

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Local Government and Local Economic Development
and Globalisation expenditure or investment?

• Greg Clark
• AUT, Economic Development Forum
• Auckland New Zealand
• Feb 2004

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Who is this?

• Practitioner Exchange.
• Londoner, Economic Development since 1987.
• British Refugee Council.
• London Municipality, one of 33.
• Local Economy Think Tank/Centre.
• London Docklands Development Corporation /
• London East Training and Enterprise Council.
• London Office to the EU in Brussels. European LED
  Networks.
• USA, American approaches to LED and Urban
  Regeneration.
• Greater London Enterprise.
• London Enterprise Agency.
• One London.
• London Development Agency.
• Since 1994, a growing number of peer reviews
  for OECD, World Bank, and British Gov. Now 40 of
  my time peer reviews and 60 LDA. 100 Cities
  and Regions visited in past 10 years.
• Does this ring any bells?

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London Development Agency

• The Mayors Agency for Business and Jobs
• c 300 staff, 15 person Board, 300 million pa,
  major land owner.
• London, 7.5 million, 250 billion GDP, 3.5
  million jobs.
• 6 Drivers of Regional Productivity.
• But, controls less than 5 of the resources.
• Strategic frameworks for partnership and
  leverage.
• Sectors, Areas, and Regional Promotion.

4
UK system for LED

• Not a system, a lose network.
• London, 33 municipalities, 5 LSCs, 1 RDA, 1
  Business Link, 42 Universities, 60 FE Colleges,
  30 business and trade associations, 17 enterprise
  agencies,..c 500 orgs.
• UK 9 English Regions plus Scotland, Wales,
  Northern Ireland
• 5 Departments of national government.
• 4 DGs of the European Commission.
• Does this ring any bells?

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Tomartoes or Tomaytoes?The anglo-american
lexicon of economic/workforce development
initiatives.

• USA
• PIC
• WIB
• UDC
• EZEC
• SBIC
• CDFI
• BIDs

• UK
• TEC
• LSC
• UDC
• EZ
• RCVF
• CDFI
• BIDs

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Economic Development Workforce
DevelopmentRegional economic goals with a
workforce dimension.

• Productivity raise GVA per worker.
• Innovation product/process improvements
  commercialisation of knowledge.
• Employment participation rates.
• Unemployment sustained reductions.
• Investment attraction, retention, expansion,
  and institutional. Talent.
• Enterprise business formation
• Regeneration improve local incomes
• Skills average levels, demand
  responsiveness, range

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EU Role

• 15 members states to 22.
• Structural Funds.
• Enterprise and Employment Initiatives.
• Transnational Collaboration.
• EIB/EIF.
• ESDP.
• Trans European Networks.
• EURADA.

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OECD Role

• 30 Member Statesincl NZ.
• LEED Programme since 1982.
• LEED Directing Committee.
• Evaluations, Reviews, and Investigations.
• Partners Club of other organisations.
• 4 Fora Social innovation.
• Entrepreneurship.
• Partnerships and Local Governance.
• Cities and Regions.
• Network of Local Development Centresgt
• Trento
• Cuenevaca
• Others to come.. Auckland

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International Collaboration.

• Growing issue for International Orgs
• OECD, EU, World Bank, ILO, UN, IMF, WTO.
• Practitioner Networks.
• eg INED.
• CUED, EURADA, EDAC.
• EDANZ, BURA, OECD, Clusters Asia Pacific.
• Potential is very significant.
• Learning not copying.

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Explaining City and Regional Successes

• Some apparently similar cities/regions are doing
  better than others.
• Cities and regions are renewed as units of
  competitiveness and productivity.
• But, are all equally or sufficiently capable of
  promoting themselves and developing their
  economies. What are the variables?
• City/Regional economic development is about
  positively managing and accessing the new
  economy at the local level, not about creating an
  alternative economy.
• Management of resources, change, risk, assets,
  and relationships are key.
• Requires capable territorial management capacity.

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Practitioner Perspective.

• Learning from other practices.
• Implementation the key variable not policy.
• Factors that promote effective implementation.
• Factors that inhibit effective implementation.
• Focus on means to achieve ends, not just ends.
• Avoid copying policies from elsewhere without
  understanding what makes them work.
• Good strategy and policy is very important but
  meaningless without implementation.
• Good implementation occurs even without good
  strategy and policy occasionally.
• Focus on the reality of how to get things done.

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Globalisation and Economic Development

• Globalisation and the New Economy
• Trade and Economic Integration, Industrial
  Restructuring, Demographic mobility, ICTs, Public
  Sector Reform, De-centralisation.mobility,
  change is possible.
• Globalisation, Cities and Regions opportunities
  and challenges
• Functional roles, hubs and nodes, clustering,
  high demand for effective locations,
  cities/regions reinvent their role.
• But,
• Social, spatial,and economic variations within
  and between cities and regions.
• Globalisation alone insufficient for social and
  economic justice.
• Regional and Local development capacity a
  critical ingredient.
• New National, Federal, and Multi-national roles
  in promoting local development capacity.
• Different contexts for private investment and
  partnership.

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Economic Development A Distinctive task of
local and regional government

• ED is not like most public services or functions.
• Influencing and shaping market based processes.
• Not a (local or regional) government monopoly.
• New organisational forms partnerships, JVs,
  companies, and development agencies.
• New rationales and roles for public sector.
• Risks, costs, tasks, priorities, strategies..have
  to be shared.
• Outward looking customer focused, wide range of
  clients and stakeholders.
• 80/20.
• Public and Private Sectors have to be well
  organised separately and together.

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Good Governance and Modernisation

• Functional economic areas/regions are the site.
• Need to align economic geography and political
  geography where feasible.
• Unintended consequences
• Spillovers.
• Displacement.
• Substitution.
• Competition between neighbours (bidding wars).
• Dangers of zero sum or negative aggregates.
• ED is a strong driver of metropolitan/municipal
  reform.
• Metropolitan economic development alliances and
  organisations often lead the way. Public and
  Private together drive change.

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New National, Federal and Multi-national Roles.

• Not the death of the national state, but a more
  precise set of roles within a more complex
  canvass.
• Urban Policy Reviews and Regional Policy Reviews
  in last 10 years
• (UK, Japan, Canada, Germany, Italy, Mexico,
  Portugal, Poland)
• Cities and regions re-established as focus for
  national policy and support- seen as key to
  prosperity and social justice.
• Multi-national organisations see cities and
  regions as essential for national economic growth
  and as sites for future investment. (World Bank,
  EIB, EBRD, IADB, etc)
• Economic development has become more aligned with
  national and multi-national policies
• Need to know more about sub-national economies.
• Expansion in the range of agencies getting
  support.
• New metropolitan government.
• Goals of economic development have broadened.

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Changing Practices of Regional Economic
Development

• Changes to focus and goals
• Sites and buildings to firms, people, and skills.
• Hard to soft infrastructure.
• FDI to diverse regional economies and talent
  attraction/retention.
• Changes to organisation
• Regional and Municipal departments to corporate
  programmes.
• New geography/ new economy.
• Wide range of partnerships/Special purpose
  vehicles.
• Changes to tools
• Grants to funds.
• Incentives to credits.
• Land use zones to development companies.
• Influence and advocacy.
• Changes to skills needed
• Generalists to professional specialists.
• Wide range of training now available.

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Key issues and questions

• Defining, identifying, and popularising the
  region.
• Empowering all regions or helping the worst off?
• Supporting the leading regions effectively.
  Leading regions supporting others effectively.
• Making national policies effective at regional
  level.
• Cities and regions working together.
• Metropolitan change and re-organisation.
• Leadership and reform of regional governance.
• New strategies and plans.
• Audit assets and resources.
• Create effective tools and instruments.
• New forms of investment and infrastructure.

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Development Agencies and Organisations.

• Huge expansion (now about 20,000) with many
  variations.
• Special Purpose Vehicles.
• Rationales are key why an agency?
• Adding value of flexibility, focus, partnership,
  tools, skills, processes, risk/cost sharing,
  independence etc.
• 12 possible reasons (not mutually exclusive).
• Working relationships are essential.
• Private sector is both client, target, and
  partner.

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Investing in City and Regional Economic
Development.

• Private sector co-investment is an important
  quest.
• Role of regions and cities to make key
  initiatives investable and investment-ready.
• Reduce risks and costs, improve returns, help to
  build steady flow of propositions.
• Economic Development Strategy as Investment
  Prospectus.
• Good for Cities and Regions.
• Good for Private Sector.
• Key roles for national and multi-national
  organisations.
• Build partnership with investment sector.

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Opportunities and Dilemmas?

• Understanding different patterns of development.
• Set-up to fail, design faults in the system.
• Regional coherence of local actions.
• Time/Geography , Political/Economic.
• Supporting elected leaders.
• Centralised versus de-centralised systems.
• Honesty versus promotion.
• Leadership versus partnership?
• Up skilling busy people.
• Learning from bad practices.