New Organizational Arrangements in Local/Regional Economic and Employment Promotion: The Role of a  Local Economic Development Forum

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There are different ways of running LED initiatives. In some places, local government is the driver. In other places, the private sector is the driver. In yet other places, companies (for instance utilities) are the main drivers. However, the best way of running a LED initiative is by joining the forces and competencies of these and other stakeholders. An appropriate way of governing an LED initiative is by creating a local economic development forum (LEDF) which brings the different stakeholders together on a biweekly or monthly basis.

A LEDF is a gathering of organisations and individuals involved in local economic development. The purpose of a LEDF is to share information (co-ordination), to share and pool resources and experiences (leveraging), and to solve problems which come up in the course of LED projects (troubleshooting). An LEDF is not an executive body which is itself implementing LED projects.

Let us look at these points one by one. To start with, what is a LED project? LED projects are activities which create business opportunities, employment and income. They are not by themselves business ventures; business ventures are executed by individuals or companies who have spotted an opportunity to make a profit. A typical purpose of an LED project is to create conditions which then stimulate business ventures or create conditions for business ventures to emerge. Usually, business ventures are launched and executed by individuals or companies who perceive an opportunity. However, it is not rare to find that a given business opportunity is judged to be too risky by the individual or company, even though if successful it might create many jobs and a lot of income. Consider business opportunities whose success depends on complementary activities. A typical example is tourism: various complementary activities (accessible scenic attractions, recreational activities, accommodation, transport) must be in place to create an attractive business opportunities. For a large tourism corporation it is possible to take care of all these complementary activities. But it is a different story for small businesses. Accordingly, in a typical LED project LED promoters would facilitate the co-operation between various small tourism businesses.

Taking up this example, an obvious question would be: Is it the LEDF's task to organise a tourism initiative which consists of a variety of complementary small businesses? The answer is No. To explain this answer, let us look at the composition of the LEDF. Its members will usually come from a variety of organisations: public, private, community and business, and here from a variety of business sectors. Sticking to our example, it is likely that many of the members of the LEDF are not particularly knowledgeable in tourism. They should be aware that some activities are going on in the tourism sector, but they should not be bored with extensive details and organisational challenges of a tourism initiative. Therefore the LEDF should not run a tourism initiative. It should rather set up a tourism committee which takes care of this initiative and which reports back to the LEDF.

This leads us to another observation regarding the proper organisation of an LEDF: There should be a number of thematic sub-committees or working groups which pursue specific LED project ideas, and which report back to the LEDF. For a number of reasons, such a smaller group is the appropriate place to organise a specific LED project: Since it is smaller than the LEDF, there is less risk of engaging in endless disagreements. As a group it shares concerns for a given sector and, furthermore, can share resources towards the development of a given sector - not just money but also information, know-how and other non-tangible resources.

Is there a standard blueprint regarding the structure of sub-committees or working groups? Again, the answer is no. There is no exact optimum organisation of sectors in a local economy. The number and profile of sub-committees or working groups of a given LEDF rather depends on two factors: The structure of the local economy and the presence of champions who are dedicated to keeping their respective committee alive and working. Moreover, the number and profile of sub-committees or working groups is not static. They may merge or subdivide: merging if the stakeholders in different groups feel that complementary projects should be organised jointly, dividing if the stakeholders in the group sense that the working capacity of the group is being overstretched by too many, too diverse projects. New groups will be created as new opportunities arise or new stakeholders want to get involved in the process.

How then does this all feed into the LEDF? To start with, it is important to acknowledge that the status and mandate of a LEDF is unclear, as it is neither a clear part of the executive nor of the legislative branch of government. Instead, it overlapswith both of them, but without a clear democratic legitimacy. It is a consultative body whose function is basically to assist the legislative and executive branches in doing their jobs more effectively and efficiently. A LEDF will normally do three things:

Co-ordination: Representatives from the executive report on changes in legislation and upcoming government projects, including national and provincial/state-level initiatives. Members from the various sub-committees or working groups report back to the LEDF on the state of their respective initiatives. In this manner, it can be avoided that parallel initiatives to tackle the same issue are launched.

Leveraging: Stakeholders in the LEDF share resources (financial, know-how, information) and experiences. For instance, it will often occur that a given committee is seeking specialised know-how and is considering to hire an expensive external consultant, and at the LEDF it is discovered that this expertise is available locally at hardly any cost at all. Another example would be a committee which has identified a sponsor who is willing to support more activities and is just waiting for viable proposals - which may then be generated by the LEDF.

Troubleshooting: LED-projects usually run into problems - legal and bureaucratic obstacles, conceptual confusion, infighting between competitive stakeholders, lack of funds, and others more. The LEDF is the place where stakeholders from sub-committees or working groups can draw on the know-how and experience of the larger group to overcome these problems.

Last but not least, it is important to note that the LEDF itself may be a sub-committee - namely of a local development forum. Local development involves many more issues than just economic ones. Therefore, a local community may decide to create a Local Development Forum, and the LEDF is then in turn a sub-committee of the LDF. The basic logic is very similar: The LDF is the place where stakeholders from different groups - the LEDF, the Community Development Forum - gather for the purpose of co-ordination, leveraging and troubleshooting.

One final point: What about strategy? Should the LEDF be the place to discuss and elaborate a local economic development strategy? The answer is yes and no. In the early phase, when most stakeholders have little or no experience with LED, the answer is clearly no: Practically speaking it is usually not quite clear what LED is about in the first place, so instead of wasting time on an abstract, theoretical effort to elaborate an overall strategy it is much more important to experiment with different practical approaches. At a later stage, as stakeholders gain a clearer idea about LED, and why an overarching framework would be useful for a variety of projects and initiatives, they may decide to engage in the effort to formulate an explicit strategy.

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