Our Experience and Approach to Local Economic Development (LED)

ME&A specializes in developing and implementing programs in Local Economic Development. Why? Because finding the answers for sustainable development of underdeveloped or developing nations and peoples requires a thorough understanding of the impediments to and potentials for economic development, so that creative solutions can be designed and delivered. LED is an important, perhaps the most important, key to sustainable growth, the reduction of poverty, the elevation of indices of well being of a people and society. But first some definitions:

What is Economic Development? Jane Jacobs, the venerable urbanist and economist says that development is “significant qualitative change.” Economic development then is qualitative change in the economy.

Local Economic Development (LED) is the process by which public, business and non-governmental sector partners work collectively to create better economic conditions for a locality and its region. The objectives of the LED process can be economic growth, business creation, employment generation, or combinations thereof. The key to the process is the public-private partnership between local governments, private businesses, business associations, NGOs, and other stakeholders.

ME&A and its principals have a long tradition of involvement in local economic development, and the related fields of community development, strategic planning, firm-level business development, local government, competitiveness, community outreach and public awareness.

Here are some examples of the kind of projects ME&A has completed or is currently carrying out:

• Albanian Local Government Development. As a significant part of the USAID-funded Public Administration Program for Albania (PAPA) project, pilot cities were assisted in the creation of local economic development commissions, local economic development strategic plans were designed and implemented, and capital improvement plans were completed in support of LED strategies.
• In Poland, the “Fabrykat 2000” project assisted in the creation of technology transfer programs and the development of technology transfer institutions in Warsaw, Krakow, Lodz and other cities. Emphasis was placed on manufacturing extension with the purpose of helping Polish firms develop their international competitiveness as they approach EU accession.
• In Macedonia and Albania, ME&A trained local government officials and members of the private sector in entrepreneurship, business management and local economic development on behalf of the Albanian American Trade & Development Association.
• In Ukraine, ME&A successfully completed a local economic development activity in the Kharkiv Region, working with municipalities to develop local economic development strategic plans and implementing business extension services. An industrial sector study was also completed and a report issued for use by public and private interests in making investment decisions.
• In Moldova, ME&A implemented a nationwide public awareness campaign on behalf of the Ministry of Privatization so that citizens understood the privatization process, fundamentals of a market economy, and the rights and responsibilities of private company ownership.
• In the South Balkan Region, ME&A staff is assisting the AATDA in directing the implementation of the “Local Economic Development Along Transportation Corridor VIII” project, a Trans-Balkan initiative involving Albania, Macedonia, Bulgaria and Kosovo. The project is designed to help prepare localities to take advantage of anticipated new business opportunities associated with highway, rail and pipeline links. Project elements include network development, advocacy, LED, and cross-border project development among network partners.
• In Macedonia, ME&A is participating with Booz Allan Hamilton and On The Frontier in an effort to identify key industrial clusters for further development of an internationally competitive economy for the country. ME&A is providing a public awareness campaign which is critical for full involvement of government and private sector stakeholders.

Focusing on local economies in development work is crucial because local economies are the only “true” economies. In contrast, a national economy is a macroeconomic generalization, defined as the sum of a nation’s production of goods and services, that is a useful one for purposes of public policy development, measurement, and to design economic interventions. But changes in national economies only happen as the economies of cities and their regions change. “A national economy is the sum of a nation’s city economies and the past and current secondary effects of city economies upon the economies of towns, villages and wildernesses,” again, according to Jacobs.

Who Makes Local Economic Development Happen? In a market economy, the engines of economic development are primarily private businesses that create wealth and jobs. But the private sector cannot succeed without favorable business conditions in which to thrive and grow. Local governments and other public sector actors have a major role to play in helping to establish and maintain those favorable business conditions so that firms in the city’s region can compete successfully with firm’s from other regions.

What are some other advantages of a focus on Local Economic Development?

• A focus on LED fosters efforts towards decentralization and is antithetical to government centralization which is prevalent in many developing nations.
• LED supports civil society development. LED is a tangible process through which local government, private businesses and their interests, NGOs, labor interests and private citizens can work together collectively to develop their economic environment.
• LED supports democracy building because it places mayors and other locally elected officials at the center of economic development policy-making for the community, where they belong.
• LED relates to community development programming and essentially all development programs related to infrastructure, public facility and social program delivery. All either contribute to or are affected by the local economy.

Our Approach to Local Economic Development
For a locality or region that is new to Local Economic Development, the first steps to take concern organization (who is involved and how is it staffed), followed by completion of a community or regional profile and competitiveness (SWOT) assessment; development of an LED strategy; implementing that strategy; and finally, a monitoring and evaluation system for continual feedback on the effectiveness of the strategy so that corrections to it can be made as it unfolds. Emphasis is always on making the process a participatory one, with inclusion of all significant stakeholders in the community or region.

Normally, training is an important ingredient in the initial phase of assistance, so that key persons and institutions fully understand the concept and process, as well as their particular role and the roles of other stakeholders. Organizational development includes a review of alternative models for LED organization and selection of the one that best meets community needs. Hands-on assistance follows to facilitate the assessment phase, and based on the results, implementation of the strategy.

For more information on our approach to LED, please contact us at meainfo@engl.com.

LED Reference List

Here are some references to books, manuals, papers and other resources related to our approach to LED that can be helpful localities interested in developing their own LED strategic plan:

Belton, Hugh, “Becoming an Entrepreneur: A Handbook for Assessing Business Opportunity" (1996) An ME&A manual for business development

Blair, John P., “Local Economic Development—Analysis & Practice”, Sage Publications, 1995

England, Thomas C., “Strategies for Creating Public Private Partnerships for Local Government—The Role of the Mayor (1990). Presentation at the 4th Great Cities of Americas Conference, Buenos Aires

Fairbanks, Michael, and Lindsay, Stace, “Plowing the Sea: Nurturing the Hidden Resources of Growth in the Developing World,” Harvard University Press (1997)

ICMA, “Building Citizen Involvement—Strategies for Local Government” (1995) A training handbook.

Jacobs, Jane, “Cities and the Wealth of Nations,” Random House, 1984

Jacobs, Jane, “The Economy of Cities,” Random House, 1969

Jacobs, Jane “The Nature of Economies,” Random House, 2000

Kemp, Roger L., (editor), “Strategic Planning in Local Government—A Case Book,” American Planning Association (1992)

Nichols, J. Hugh, “A Strategic Economic Development Planning Process for Local Government in Albania, “ USAID Project (1996)

Peirce, Neal R., “CITISTATES—How Urban America Can Prosper In A Competitive World,” Seven Locks Press (1993)

National Council for Urban Economic Development, “An Introduction to the Economic Development Process,” (1980)

Porter, Michael E., “Competitive Strategy: Techniques for Analyzing Industries and Competitors,” Free Press (1998)

Porter, Michael E., “The Competitive Advantage of Nations,” Free Press (1998)

Rusk, David, “Cities Without Suburbs,” Woodrow Wilson Center Press (1993)

Timmons, Jeffrey, with Smollen and Dingee, “New Venture Creation: Entrepreneurship In The 1990’s,” Irwin (1985)

The Urban Institute, “The Community Builder’s Handbook, “ Urban Land Institute (2000)

Urban Development Unit, The World Bank, “Local Economic Development: LED-- Quick Reference,” The World Bank, 2002