>Comments: Authenticated sender is <[EMAIL PROTECTED]> >From: "vivian Hutchinson" <[EMAIL PROTECTED]> >To: "The Jobs Letter" <[EMAIL PROTECTED]>, > "The Jobs Letter" <[EMAIL PROTECTED]>, > "The Jobs Letter" <[EMAIL PROTECTED]> >Date: Thu, 25 Mar 1999 11:14:48 +0000 >X-Distribution: Moderate >MIME-Version: 1.0 >Subject: Feature from The Jobs Letter No 97 ( 25 March 1999) Sean Bevin o >Reply-to: "The Jobs Letter" <[EMAIL PROTECTED]> >Priority: normal > >F E A T U R E >------------------ >from >T H E J O B S L E T T E R 0 9 7 >a subscriber-based letter >published in New Zealand 25 March 1999 >------------------------------------- > >LOCAL ECONOMIC DEVELOPMENT >-- some lessons from the USA > >SEAN BEVIN of the Napier City Council last year travelled to the South >Eastern US States of Florida, Georgia, and Tennessee to study their >approaches to local economic development (LED). His report on the US >trip, given to the NZ Society of Local Government Managers (SOLGM), >outlines many valuable lessons for both national and local economic >development policy in New Zealand. > >The three States which Bevin visited are among the fastest >growing parts of the US, and also have virtually "full employment". >Their successes in job creation are especially significant when >considered in the light of their history as relatively impoverished >agricultural States. Since World War II, however, job creation has >been the primary focus of a local economic development strategy >underpinned by new industrial growth. > >Bevin believes that the successful job creation track record is >mainly due to the sustained commitment given by these States to >local economic development. Bevin: "The obvious success of the >three states in generating major employment increases over time, >demonstrates the wisdom of maintaining a high policy priority on this >economic objective - and should be a timely lesson for NZ economic >policymakers ..." > >* Bevin says that the fundamental goal of LED is to >improve the overall "quality of life" of a local community. This >approach acts as an umbrella to such factors as employment >opportunities, economic growth and standard of living. LED is a >process to achieve these goals and is not necessarily an end in >itself. > >Bevin: "LED is essentially about maximising spending injections >(exports) into a local economy and minimising leakages (imports) from >the economy. From a business development perspective, this translates >into retaining existing businesses, encouraging their expansion and >attracting new businesses to the area. LED is not an "overnight >sensation"... it involves a deliberate, planned and long- term >approach to building community capacity for new economic activity ..." > >* The LED initiatives in the South-East States are very >much a community-wide effort. State governments lead the way in >providing specialist economic development departments, financial >assistance and access to a variety of tax incentives, specialist LED >agencies and support to develop the labour force. > >Private sector involvement includes the extensive LED work of >regional Chambers of Commerce, corporations, public utilities and >economic development consultancies. > >The LED agencies provide a wide range of equally important >programmes and activities: > >-- the provision of land and buildings for industry development, > >-- the provision of advice and assistance to smaller businesses, > >-- the provision of financial assistance and access to financial >incentives, > >-- area marketing and promotion, labour-force development, > >-- business sector visitation/consultation (70% of net job >creation is from existing businesses), > >-- provision of economic information, analysis and performance >monitoring. > >* While job creation is a driving motivation for the LED >work, Bevin reports that the local governments have not reduced >their commitments with the recent achievement of near "full >employment" and relatively high rates of economic growth. The focus >for LED in these States now is on increasing the range and quality of >jobs, labour-force education and training, and income growth. > >* One important player in the region is the Georgia >Power Company which provides a pro-active facilitation involvement in >all LED activities in Georgia. This is driven by its desire to see net >job creation from existing and new businesses - and the consequential >revenue generation from new electricity sales. > >For example, the power company's "Community Resource >Manual" is a publication which provides a basic range of information >about a local community, or an "executive summary" for prospective >business investment. It includes: key assets/strengths of the >community, basic information on local authorities, taxation details, >transportation, utilities and communication linkages, financing >opportunities, incentives, education, 'quality of life' features, >labour- force characteristics, research facilities, available >industrial sites, and support services. > >Bevin says this is a good example of a constructive private >sector 'investment' in the LED process, and a model that New >Zealand power and other utilities could profitably study. > >* Also of interest to NZ agencies is the use of a >computer software package that measures the economic impact of >local economic development policies. The "LOCI Advantage Local >Impact Model" assists local government and economic developers in >evaluating the community economic impacts of, for example, fiscal >incentives, new infrastructural developments, major industry start- >ups and tourism sector developments. Bevin believes this model could >be readily adapted for the NZ scene. > >* The overall lesson for Sean Bevin is that local >government in NZ has a critically important leadership, facilitation >and infrastructural role to play in the LED process. If local >government establishes well led, resourced and focused LED policies, >it can have a significantly positive impact on the performance of >local economies. > >Local government also has an important role in mobilising the >energies of all the key sectors - public, private, education, >utilities, industry associations, sports, tourism and the community - >in the LED process, co-ordinating their involvement and encouraging >collaboration. > >* Sean Bevin's study report "Local Economic >Development Practice in the USA - the South-Eastern States >approach" is available from the Napier City Council. > >Sean Bevin was the 1998 recipient of the SOLGM Study Award. > > >"Local economic development involves much more than >developing land and creating jobs and revenue. The ultimate goal is >not to build "this project" or attract "that company"; rather the goal >of economic development is to improve the standard of living and >quality of life of our citizens. > >" As such, economic development is a process, not an end product. It >is a long-term approach to building community capacity. It involves >the co-ordination of a variety of activities: infrastructure, >employment training, business retention, the identification of new >markets, the development of alternative industries, and the transfer >of knowledge. > >" Economic development seeks to create higher incomes, >more and better jobs, more productive enterprises, a stronger tax >base, and the opportunity to alleviate poverty. Successful economic >development initiatives are derived from and build on a locality's >inherent strengths ..." > >-- from "Concept 2010 -- A General Plan for Nashville and >Davidson County, Tennessee State" > > >SEAN BEVIN ON LOCAL ECONOMIC POLICY, GROWTH, AND >EMPLOYMENT CREATION > >* Economic development policy in the US is largely the >responsibility of State and other "local" jurisdictions. In New >Zealand, economic policy is highly centralised and "captured" by a few >and, as a result, considerably insensitive to the circumstances and >needs of individual local economies. > >In contrast to the US position, formal economic policy in New >Zealand neither includes, nor acknowledges the credibility of, the LED >approach. In my view, there is a need for this situation to change, in >order that a more balanced and effective overall economic development >policy in New Zealand can be achieved. > >* In the South-East US States, State government plays >a lead role in the LED process. This is consistent with the high >priority accorded to the process in these areas. State governments >undertake an economic overview role, as well as being actively >involved in the delivery of economic development and employment >programmes out in the field. > >In contrast, successive New Zealand governments, since the >advent of de-regulation in the mid 1980's, have increasingly >withdrawn themselves from an active and direct economic >development involvement, other than assisting in maintaining an >appropriate broad macroeconomic environment. The latest in a long list >of examples of this was the recent removal of the Government's >Business Development Board programme. > >I believe that a key reason for the success of LED policies in the >South-Eastern US States is the major involvement and support of State >governments. Their contribution is not only for purely economic >reasons but also for important allied social considerations such as >reducing unemployment, greater income equity, environmental >enhancement and improving the overall "quality of life" of people. > >* Another important strength of the US approach to >LED is the preparedness of State governments to allocate significant >levels of direct financial assistance for economic development >purposes, with the objective of, among other things, increasing their >long-term tax-base. This includes the use of incentives to either >attract new business or encourage expansion of existing enterprises. >Given the far greater understanding in the US of the benefits of LED, >the community is prepared to accept such state government support >policy. > >In New Zealand, Government economic policy appears to have >long forgotten the important principle of "investing" in new economic >development. Instead, central government has become almost myopic >about containing or reducing public expenditure and costs generally, >rather than implementing policies to expand the demand side of the >equation. > >* In one area, economic policy in New Zealand is >consistent with the US and that is in relation to facilitating labour- >force development, that is, education and training. However, the >contexts are very different. > >The South-East States have virtually full employment and are at >the forefront of technology development and use. The emphasis of LED >policy has now changed from purely job-creation to increasing the >range and quality of jobs, as well as earnings levels. > >By contrast, New Zealand has an enduring major unemployment >problem and the achievement of higher levels of formal qualifications >does not necessarily guarantee employment opportunities. > >* In the South-East States, there has been a clear and >unequivocal commitment to economic growth and employment >creation, and all the evidence that I obtained during my study visit >points to considerable success in achieving these fundamental >objectives. > >In New Zealand, these traditionally important components of the >overall economic policy objectives package appear to have been >dispensed with, along with most of the other macroeconomic >objectives. Price stability and fiscal surpluses appear to be the only >explicit objectives of Government economic policy. > >The US experience would seem to suggest that its successful >economic and employment record at the local level is strongly >related to its major economic (and social) commitment to >employment and growth. > > >C R E D I T S >------------------- >edited by Vivian Hutchinson for the Jobs Research Trust >P.O.Box 428, New Plymouth, New Zealand >phone 06-753-4434 fax 06-759-4648 >Internet address -- [EMAIL PROTECTED] > >The Jobs Letter -- an essential information and media watch >on jobs, employment, unemployment, the future of work, >and related economic and education issues. > >The Jobs Research Trust -- a not-for-profit Charitable Trust >constituted in 1994 to develop and distribute information that will >help our communities create more jobs and reduce unemployment and >poverty in New Zealand. > >Our internet website at > > http://www.jobsletter.org.nz/ > >contains our back issues and key papers, >and hotlinks to other internet resources. > >ends >------ >The Jobs Letter >essential information on an essential issue >[EMAIL PROTECTED] >phone 06-753-4434 fax 06-759-4648 >P.O.Box 428 >New Plymouth, Taranaki, New Zealand > >visit The Jobs Research Website at >http://www.jobsletter.org.nz/ >
