Promoting Local Economic Development Through Strategic Planning: Local Economic Development (LED) Series
Promoting Local Economic Development Through Strategic Planning: Local Economic Development (LED) Series
Promoting Local Economic Development Through Strategic Planning: Local Economic Development (LED) Series
ISBN 92-1-131726-6
HS 738//05E Promoting Local Economic Development
Strategic Planning — Volume 1: Quick Guide
92-1-131721-5 (Series)
DISCLAIMER
Cover photocollage photographs by: Panos Pictures - Aerial view of urban sprawl in
Mexico © Mark Henley / Community organiser with calculator in Mali © Crispin
Hughes / Crowd in Indonesia © Mark Henley / Black market money change in China
© Mark Henley / Coal power plant pylons in Mongolia © Mark Henley
The publication of the Local Economic Development Series was made possible
through the financial support of the Dutch Government.
Published by:
and
iii
thank in the achievement of this training series: from the funding agencies –
the Canadian International Development Agency (CIDA) and the Dutch
Partnership Programme, to the contributing members of the “virtual round
table”, to the dozens of trainers and members of local government, private
sector and civil society. Their wisdom and pragmatism permeate the
documents in this series. Due acknowledgement must also go to Gulelat
Kebede and the Training and Capacity Building Branch (TCBB) team of
UN-HABITAT who guided and contributed to the project while bringing it to
fruition. Final gratitude is reserved for principal author William Trousdale of
EcoPlan International, Inc. (EPI), as well as to the many co-authors who
undertook the challenge of articulating this innovative training series.
IV
Preface
v
Training Series uses case studies and real world examples to encourage the
evolution of learning-by-doing. The ultimate success and realization of these
outcomes however lies on the creativity of local establishments and actors -
local authorities, training institutions, informal sector operators, businesses,
and civil society organizations-in adapting the tools to the realities on the
ground and using this series as a living document, keeping it enriched
through new insights, knowledge and experience.
Gulelat Kebede
LED Project Coordinator
Training and Capacity Building
Branch, UN-HABITAT
VI
Acknowledgements
vii
For our work in Zambia, we would like to acknowledge the funding
support of CIDA, as well as the facilitation and methodological input of
Wassala Nimaga. Great thanks go to our partner organization, the Local
Government Association of Zambia, and the significant contributions of Dan
Longwe, Maurice Mbolela and Colonel Kenneth Kabungo. The field-testing
was greatly facilitated by the assistance of Josephine Muchelemba and
Pierre-Paul Perron at the CIDA Project Support Unit in Lusaka. However, the
substance came from the Zambian and Zimbabwean participants, and
heartfelt thanks go to Josephine Chimbwali, Mbwainga Mbwainga, Daniel
Mapulanga, Patrick Katoti, Godfrey Musonda, Lilo Marohn, Mpataji
Namumba, Ephraim Belemu, Joyce Chimbila, Ronald Daka, Prof. Peter
Lolojih, Joseph Zulu, Morgen Gomo and Jonathan Simbeya.
We recognise the work done earlier by EcoPlan International, Inc.
manual, coauthored with Karen Peachey, which was part of international
project work completed with the Canadian Urban Institute, with the financial
assistance of the Canadian International Development Agency. This local
economic development training series has evolved from this earlier work.
Finally, we would like to offer our special thanks to the Canadian
International Development Agency (CIDA). Their support allowed for the
original manual development. CIDA also actively participated in the Virtual
Round Table process and supported the field-testing for this manual.
William Trousdale
Principal Author
VIII
Table of Contents
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iii
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .v
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
ix
Introduction
T his document, Volume 1: Quick Guide, is the final document in the Local
Economic Development Series - Promoting Local Economic
Development through Strategic Planning. It is a companion piece to the
documents described below:-
❑ Volume 2 – Promoting Local Economic Development through
Strategic Planning – Manual: concepts and process is an
approach to LED in a 10-step framework
❑ Volume 3 – Promoting Local Economic Development through
Strategic Planning – ToolKit: Support Tools provides tools to
facilitate each step in the framework
❑ Volume 4 – Promoting Local Economic Development through
Strategic Planning – Action Guide: Ideas and Case Studies
supplies practical action ideas and case studies.
1
Overview
2 P R O M O T I N G L O C A L E C O N O M I C D E V E L O P M E N T T H R O U G H S T R AT E G I C P L A N N I N G • Q U I C K G U I D E
What is Strategic Planning?
Started
2 Assessment
1 3
ERE
ARTICIPA
E WE ARRIVED?
IC P TI
BL
DO
Adjust
4
ON
Visioning
PU
& Modify
WE WANT
10
EW
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O
I N F O R M AT I
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8 6
?
HO E?
WD
O W E G ET THER
O V E RV I E W 3
Business-enabling Environments
1 Favouritism (appointed positions, jobs, contracts) to unqualified friends rather than qualified individuals or firms.
2 Favouritism (appointed positions, jobs, contracts) to unqualified family members rather than qualified individuals or firms.
4 P R O M O T I N G L O C A L E C O N O M I C D E V E L O P M E N T T H R O U G H S T R AT E G I C P L A N N I N G • Q U I C K G U I D E
development. Inclusive means recognising formal as well as informal
economies.
In the formal economy, specific actions might include targeting
business expansion aimed at jobs for the poor, targeting the poor as an
unskilled labour force for training and placement assistance, and through
micro-enterprise/micro-credit programmes.3 Programmes might also target
the informal economy. In addition to reducing poverty, formalising the
informal economy might form a long-term goal for health and safety reasons,
better public management or increased revenues through taxation. However,
abrupt attempts to regulate the informal economy prematurely might lead to
more poverty and marginalisation. Rather, local authorities might want to
consider actions that tolerate and support the informal economy while they
seek to strengthen the skills and resources of people engaged in the informal
economy (see Training Resource Link 2: The International Labour
Organisation (ILO) Course Guide on Local Employment in the Informal
Economy at www.ilo.org/seed/ppp).
3 See Promoting Local Economic Development through Strategic Planning - Vol 4 - The Action Guide.
O V E RV I E W 5
the other, not everybody has been able to take advantage of the benefits,
bringing the subsequent income inequalities and adverse impacts into sharp
focus. Yet, poverty is caused by many factors and attributing the problem to
globalisation can be seen as externalising a problem and limiting the options
available. Just as market economics is not a zero-sum game (somebody has
to lose for somebody to gain), this manual approaches poverty alleviation as
more of a challenge in improving democracy by incorporating the poor in the
development process. It encourages a pragmatic approach to addressing
globalisation and poverty reduction through research into markets, fair
trade, information sharing and responsive governments that incorporate
participatory planning into the decision-making process.
Procedural Substantive
6 P R O M O T I N G L O C A L E C O N O M I C D E V E L O P M E N T T H R O U G H S T R AT E G I C P L A N N I N G • Q U I C K G U I D E
Module 1: Where are we now?
The very first task in planning for the future is to decide whether or not to take
a strategic approach to economic development planning. A strategic planning
approach moves beyond ad-hoc decision-making and allows a local area to
both create and respond to economic challenges and opportunities. Success
usually requires a local champion. This champion will play an instrumental
role in initiating and maintaining the process, sustaining commitment and
resources, and ensuring that the planning process is open to stakeholders in
the local area; this requires an organisational and institutional capacity. The
five tasks below outline how to prepare for the process.
7
understanding of strategic planning and LED. If a structured group decision
process is attempted under circumstances of hostility and disrespect, the
results can be alienation and confusion, leading to a sub-optimal process at
best, failure at worst. The role of the facilitator is critical in these processes.
Their purpose is to create an environment for constructive and co-operative
interaction and to maximise productivity of group work and participation.
Because much of the success or failure of a LED process depends on the
skills of the individual(s) managing or facilitating the process, sufficient
resources should be put towards training someone on staff or finding an
appropriate person to undertake this responsibility.
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How to Incorporate Participation in the Planning Process
There are four key tasks to incorporate participation in the planning process:
Financial Capital
Natural Capital
Physical Capital
Technology, Machines, Tools, Factories: Plant, factory and business technology assessment
Built Environment and Infrastructure: Geographic, Buildings and Infrastructure (roads, sewer and
water, utilities)
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Module 2: Where do we want to go?
Step 4: Visioning
What is in a Vision?
Visions are an important way to harness the power of the mind. By imagining
an ideal future while considering the current reality, tension is created. As
human beings, we respond to this tension with an impulsive desire to close the
gap. A clearly articulated vision statement provides a continuous point of
reference to keep closing the gap and keep the process heading in a desirable
direction. As a general expression of values, visioning provides an opportunity
for the local area to think in broad terms about the future. Developing the vision
also provides the opportunity for dialogue, learning, relationship building and
awareness raising. Finally, insight from the visioning process supports
development objectives, the decision-making framework (discussed in Step 5).
There are many ways to generate a vision statement, and the five tasks below
describe one method:
Task 1: Review the SWOT Analysis and other work done previously.
Task 2: In a workshop setting, with focus groups or through surveys
(a good chance for public participation), ask the following:
❑ What would you like the local area’s future to become?
❑ What are the most important economic aspects of the
desired future (e.g., jobs, income, poverty reduction, etc.)?
❑ What is different about your vision of the future from
what you see today?
Task 3: Collect and group similar ideas.
Task 4: Get agreement on themes and have someone from the group
‘wordsmith’ one or two vision statements for approval at later
workshops/meetings.
11
Use this process as a launching point into an issues analysis and
objectives formulation.
While a vision makes an effective way to begin a process (e.g., as an
“icebreaker”), be careful not to use too much of the participants’ energy and
time, or your budget, on this step. It is easy to get sidetracked here, and then
not have enough resources or participant enthusiasm for the more concrete
decision-making steps discussed in Steps 5-8. In some situations, it might be
helpful to examine objectives and actions before or during the visioning
process. Doing this helps to ground the local area’s vision for the future from
the beginning.
Objectives are the framework of the LED Strategy. They define priorities
for economic development and are the basis upon which actions are
ultimately decided. Objectives guide the design of strategy options, allow
for evaluation of those strategy options and provide a basis for making
tradeoffs and building real consensus – the core of decision-making. After
all, actions are taken to achieve objectives, so it is wise to be clear about
what your objectives are.
12 P R O M O T I N G L O C A L E C O N O M I C D E V E L O P M E N T T H R O U G H S T R AT E G I C P L A N N I N G • Q U I C K G U I D E
Table 4: Examples of Strategic Objectives for Local Economic
Development
❑ Promote the Reduction of Poverty
❑ Maximise Natural Capital
❑ Promote Decent Work
❑ Support Existing Local Business Expansion
❑ Promote Economic Stability (critical for small businesses)
❑ Promote Business/Investment Attraction
Setting objectives might take longer than expected. However, here is where
time should be spent to ensure that objectives are complete, concise and
controllable. Well-constructed objectives will not only provide direction for
decision-making but also a framework for monitoring and evaluating how
well- chosen actions fulfill the local area’s vision of the future (described in
Step 9). The following six tasks define how to set objectives:
M O D U L E T W O : W H E R E D O W E WA N T T O G O ? 13
Module 3: How do we get there?
Strategy options are the heart of strategic planning for LED. A strategy option is an
action or group of actions that, when implemented, can help realise the local area’s
LED vision and objectives. All the previous steps in the process have been designed
to allow the LED planning group to create good strategy options. This is perhaps
the most tangible point in the planning process – where thinkers and doers
connect, where specific actions are envisioned and where those with the greatest
promise are chosen. Table 5 below provides a list of 31 common LED actions that
could be taken alone, phased in over time or combined as strategy option.
Task 1. Generate actions for pursuing priority objectives (see Step 5).
Task 2. Refine and organise actions.
Task 3. Combine into strategy options, evaluate against LED objectives and
improve. Do the strategies promote the local area objectives? Do
they require tradeoffs and consensus building?
Task 4. Negotiate and redesign the strategies; agree on a strategy.
Initial Actions
Action 2. Stakeholder Once the plan has been agreed to, there needs to be an
Implementation Group organisational mechanism for implementing it. Either an
existing agency with an identified individual needs to take
the lead, or an implementing organisation needs to be
formed. Options for institutionalising LED include the
establishment of a Local Business Council or a Local
Economic Development Agency composed of public and
private institutions, representatives of political and
economic spheres, and civil society.
4 Additional Project headings can be found on the World Bank Local Economic Development Web site at:
http://www.worldbank.org/html/fpd/urban/led/implementing.html .
14 P R O M O T I N G L O C A L E C O N O M I C D E V E L O P M E N T T H R O U G H S T R AT E G I C P L A N N I N G • Q U I C K G U I D E
Action 3. Demonstration Projects Pilot or demonstration projects are small-scale, short-cycle
projects or test projects that prepare the way for replication or
expansion, and keep the momentum in a LED process going.
Action 4. Research and Analysis Nearly every action identified will have additional
information requirements (feasibility analysis). The LED
process might also have identified key data gaps where
spending time and money on additional research is
warranted (e.g. markets and opportunities, the supply
chain, value-added processing opportunities, import
substitution, salvage operations, remanufacturing, concept
testing/feasibility analysis).
Action 5. Study Tours Actually seeing what is possible helps to link concept and
ideas with reality. Having leaders in LED strategy visit other
communities or locations where LED actions have taken
place to see first hand how they work is a powerful
catalyst in mobilising activity.
Action 6. Local procurement and Local procurement is simply a commitment made by the
“buy local” campaigns local authority to buy and hire locally. ”Buy local”
campaigns are similar except they target consumers and
businesses, encouraging them to buy local products (e.g.,
local farmers sell to local restaurants).
Action 7. Simple upgrading of Sometimes simple actions, such as cleaning up an area,
local business areas adding plants and greenery or banners can build pride,
support local businesses, encourage infill development, and
reuse resources.
Action 8. LED Publications Some LED publications can be produced quickly and easily
with limited staff time and using information collected
during the LED process. Simple publications are useful ways
of getting existing businesses involved in the LED process.
Examples include a Local Area Brochure and Profile Letter;
Local Area or Economic Profile; and a Business Directory.
Advanced Actions
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Action 21. Co-operatives A co-operative is a democratically controlled enterprise
owned by its members to fulfill a financial, economic, social
or cultural need.
Action 22. Partnerships Partnerships between the public and private sector and the
local area represent an effective and efficient approach to
implementing LED strategies in local communities and are
essential in many LED actions.
Action 23. Institutional Cooperation For local areas, cooperating in a competitive world is a key
Mechanisms to success. Both formal and informal mechanisms exist for
promoting greater cooperation.
Finance
(also see Financial Co-op Local lending institutions and financial co-operatives.
Action 21)
Action 24. Micro-credit Micro-credit is the extension of small loans to
entrepreneurs who are too poor to qualify for traditional
bank loans.
Action 25. Local Currency or Local Local Currency (or Local Area Currency Systems) is a type of
area Currency Systems parallel currency system where a local area organises and
administers a system of exchanging locally produced goods
and services; it uses an interest-free currency whose
circulation is limited to a particular geographic area or
social group. The local currency operates alongside the
conventional national currency of the country.
Investment
Action 26. Foreign Direct Investment This involves attempting to attract foreign direct
investment from outside the local area. Once a LED
strategy is in place, the goal is to attract investment that is
responsive to the local area values.
Action 27. Domestic Inward Investment Domestic inward investment is an attempt to keep local
money in the local economy. Often, money is put into
banks that invest outside the local area or investors seek
opportunity outside the local area. Local credit unions,
community credit/debit cards and other investment
strategies can be developed to locally reinvest money
earned in the local area.
Broad-based Actions
Action 28. Support for the Informal The informal economy is comprised of economic activities
Economy not recorded and not subject to formal rules of contract,
licensing, labour, and taxation. Informal economies often
contribute directly to poverty reduction by providing for the
livelihoods of large portions of the population. By
supporting the informal economy, other important social
development issues can also be addressed including gender
equity, cultural preservation, child labour, and public health
and safety.
Action 29. Sustainable Tourism Sustainable tourism is often pursued because it is not so
Development dependent on financial capital or major infrastructure, and
is therefore an entry sector that can achieve quick results,
especially important for poorer areas. It is also seen as a
win-win option, designed to mitigate the economic needs
of a local area and to protect the cultural and natural
environment. However, balance is never an easy task to
obtain.
Once a group of actions, known as a strategy option, has been designed and
agreed to by the LED planning group, it must be operationalised. It is one thing
to get agreement on a broad strategy, quite another to detail it, maintain the
commitment and secure the required resources. Action planning is simply a way
to clearly establish what must be done, the date by which it will be done, and who
will be responsible for doing the work. Action plans need to be “do-able” within
the existing limitations of time, budgets, administrative capacity and political
resources. Good action planning offers a chance to double check the strategy
option to make sure the strategy is practical and can be implemented. Specifying
tasks allows for clear budgeting and a realistic appraisal of the work ahead.
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no clear leader, no funding or other key resources identified,
capacity limitations).
Task 5. Reconfirm commitments of each partner.
Task 6. Agree on a coordination mechanism.
Task 7. Agree on a monitoring mechanism (Step 9).
The best LED strategic planning document is brief and easy to use. The LED
strategic planning document will be unique in content, but will likely contain
the same summary information – information derived from the Ten Steps of
Planning Excellence process. A typical LED strategic document will contain
the following chapters:
Chapter 4: How are we This is the strategy and the action plan. It
going to get there? represents priority programmes and
projects for implementation. Here is where
coordination of funding sources and
partnerships/organisations for economic
development are highlighted.
Following Through
New ways of thinking about LED and utilising a participatory approach will
take time to be understood, accepted and routinely applied. Research
indicates that the full impact of implementing a LED will also take time,
especially if institutional adaptations and adjustments are required.
Developing new organisations or adapting existing ones are two possible ways
to institutionalise and sustain the LED effort. For example, LED could be
institutionalised by giving an existing staff member responsibility for LED, or
by creating a new position within an existing department. Another way is
through the establishment of a Local Economic Development Agency (LEDA),
composed of public and private institutions, representatives of political and
economic spheres, and civil society (see Training Resource Link 6). LEDAs
have demonstrated their effectiveness, especially in institutionally poor
environments. In institutionally rich environments, some kind of ‘officialised’
LED forum might be more appropriate, ensuring continuity in consultations,
dialogue, strategic planning as well as monitoring and evaluation.
20 P R O M O T I N G L O C A L E C O N O M I C D E V E L O P M E N T T H R O U G H S T R AT E G I C P L A N N I N G • Q U I C K G U I D E
Task 5: Develop skills necessary to support and routinely apply the
LED process (information collection, negotiation, facilitation,
strategy formulation, action planning, monitoring and
evaluation).
Task 6: Modify legal and administrative frameworks to enable a
procedural framework for smooth and effective functioning of
institutions.
Task 7: Provide funds to support expenditure and equipment for
capacity-building and sustaining the framework, primarily
through public budgetary provisions or allocations.
Task 8: Maintain knowledge support and a learning process, for
example, through documenting and evaluating lessons of
experience and building collaboration with local research or
consulting establishments.
22 P R O M O T I N G L O C A L E C O N O M I C D E V E L O P M E N T T H R O U G H S T R AT E G I C P L A N N I N G • Q U I C K G U I D E
complete refocusing of strategic objectives can then be made to ensure the
economic development plan remains useful over time. Ongoing monitoring
and evaluation should result in the gradual evolution and upgrading of the
strategic plan, taking the local area closer and closer to its envisioned future.
M O D U L E F O U R : H AV E W E A R R I V E D ? 23
Web Links
UN-HABITAT www.unhabitat.org IADB (Inter American Development Bank),
EcoPlan International, Inc. www.ecoplanintl.com sustainable development department
www.iadb.org/sds/index.htm
World Bank
www.worldbank.org ICLEI (International Council for Local
Environmental Initiatives)
International Labour Organisation (ILO) www.iclei.org
www.ilo.org
IEDC (International Economic Development
Canadian Urban Institute: Council)
www.canurb.com www.iedconline.org/
CIDA (Canadian International Development INED (International Network for Economic
Agency) Developers)
www.acdi-cida.gc.ca/index.htm www.ined.org
CFED (Corporation for Enterprise Development) IULA (International Union of Local Authorities;
www.cfed.org Local Government Associations & Association
CUED (Council for Urban Economic Development) Capacity Building)
www.cued.org/ www.iula-acb.org/iula-acb/
Department of Local Government, South Africa NCCED (National Congress for Community
www.local.gov.za/DCD/dcdindex.html Economic Development)
http://www.iula-acb.org/iula-acb/
DFID (Department for International Development)
http://www.dfid.gov.uk/ OECD (Organisation for Economic Cooperation
and Development, Local Economic and
EDAC (The Economic Developers Association of Employment Development)
Canada) http://www.oecd.org/home/
http://www.dfid.gov.uk/
KPEL (Partnership on Local Economic
EPA (Environmental Protection Agency), Development)
economics topic page http://www.parul-led.or.id/introduction
http://www.epa.gov/ebtpages/economics.html
UNIDO (United Nations Industrial Development
ESRC: Cities Programme Organisation)
http://cwis.livjm.ac.uk/cities/fs_overview.htm www.unido.org/
EURADA (European Association of Development USAID (United States Agency for International
Agencies) Development)
http://www.eurada.org/ www.usaid.gov
HUD (Housing and Urban Development), Office of
Economic Development, Community Planning and
Development
www.hud.gov/offices/cpd/
24 P R O M O T I N G L O C A L E C O N O M I C D E V E L O P M E N T T H R O U G H S T R AT E G I C P L A N N I N G • Q U I C K G U I D E
Without strong local institutions and motivated staff, decentralization and
human settlements reform will not deliver the desired development
outcomes. Yet, many local authorities and civil society organisations lack
the human resources required to meet urgent needs. Training and capacity
building is therefore a wise investment into the future sustainability of our
cities. The Training and Capacity Building Branch (TCBB) of UN-HABITAT
supports national training institutions to build their capacity to implement
innovative programmes, focusing on local governance and sustainable
human settlements development. Typical activities include training needs
assessment, development of manuals, training of trainers, and impact
evaluation. TCBB products have been successfully adapted and translated
into over 20 languages.
ISBN 92-1-131726-6
HS 738//05E
Promoting Local Economic Development Strategic Planning —
Volume 1: Quick Guide
92-1-131721-5 (Series)