Hanoi, April 2012

What is Local and Regional Economic Development?

Christian Schoen

www.mesopartner.com

1 / 11

Definitions of LRED: GIZ

Local and Regional Economic Development (LRED) is a process to mobilize stakeholders from the public and private sectors as well as from civil society, to become partners in a joint effort to improve the economy of a defined subnational territory and thus increase its competitiveness.

Source: GTZ (2006), Local and Regional Economic Development (LRED), Experiences from Asia, November 2006

www.mesopartner.com

2 / 11

Definitions of LRED: World Bank

LRED is the process by which public, business and non-governmental sector partners work collectively to create better conditions for economic growth and employment generation. The aim is to improve the quality of life for all in the community. "Community" is here defined as a city, town, metropolitan area, or sub national region.

Source: World Bank (2002), Local Economic Development - A Primer, December 2002.

www.mesopartner.com

3 / 11

Definitions of LRED: UN-HABITAT

LRED is a participatory process where local people from all sectors work together to stimulate local commercial activity resulting in a resilient and sustainable economy. It is an approach to help create decent jobs and improve the quality of life for everyone, including the poor and marginalized.

Source: UN-Habitat (2004), The Quick Guide, Strategic Planning for Local Economic Development, June 2004.

www.mesopartner.com

4 / 11

Definitions of LRED: The ILO

LED is a participatory development process that encourages partnership arrangements between the main private and public stakeholders of a defined territory, enabling the joint design and implementation of a common development strategy, by making use of the local resources and competitive advantage in a global context, with the final objective of creating decent jobs and stimulating economic activity

www.mesopartner.com

5 / 11

What are other fields of development?

Livelihood development is the participation of poor families in economic growth, above all in rural areas, through income generation, production of marketable surplus, access to markets, information and know-how. It is based on a flexible combination of market development principles, social mobilisation and minimum subsidies and often applies group delivery mechanisms

www.mesopartner.com

6 / 11

What are other fields of development?

Community development involves an effort to organize and empower poor groups. It tries to activate their selfhelp potential and their ability to advocate their interests vis--vis government and other societal groups. The objective of community development is to improve the standard of living of poor groups, both by raising their income and by directly addressing social issues

www.mesopartner.com

7 / 11

What are other fields of development?

The Enabling Environment for businesses is shaped by the whole range of government-created factors, from generic and sector-specific laws and regulations to service delivery by government including generic services (e.g. infrastructure, training) and development services (e.g. start-up promotion). Value chain development is the enhancement of competitiveness and innovation along a sequence of economic activities from raw material supply to final consumption with a final customer focus.

www.mesopartner.com

8 / 11

More specifically: What is Local and Regional Economic Development (LRED)?

A sequence of activities conducted by municipalities or local government local business associations local companies other stakeholders (e.g. chambers, universities, NGOs ...) alone or even better - in close collaboration which remove bureaucratic obstacles for local firms tackle market failures strengthen the competitiveness of local firms create a unique advantage for the locality and its firms
www.mesopartner.com 9 / 11

Again: What is and isnt LRED?

MSME promotion

is an important element of an LRED process, but LRED also involves large companies Industrial policy symbolizes top-down approaches, not local, bottom-up initiatives Urban/infrastructure is related to LRED process, makes planning LRED easier Community development follows a different logic, though there is some synergy may be a medium-term result of an Strategic planning LRED process, not the starting point may also be a medium-term result of an Creating a LED agency LED process
www.mesopartner.com 10 / 11

Key principles of LRED

Market- and demand-orientation Focusing on potentials/opportunities rather than bottlenecks Participation of local actors from all relevant societal groups (public, private, civil society) Bottom-up approach Competitiveness of enterprises and the locality Using available structure, not building parallel structures Subsidiarity Trust building and collaboration seeking Ownership: design and implementation of LRED at local level
www.mesopartner.com 19.04.2012 11 / 11