Local growth through community economic development

What are the prospects for places that are considered peripheral?  The solutions for places faced with a difficult growth environment? This is a focus for my PhD, and this week Localise West Midlands reported on the results to date of their new research, funded by Barrow Cadbury, which argues that part of the answer may lie in using community economic development.

They argue that economies which are based on localised and community economic activity appear to deliver better outcomes in terms of job creation, accessibility to job opportunities and quality of life.

The research to date suggests that community economic development is not about simply a ‘nice to do’ activity but actually constitutes a very effective way of strengthening the local economy. Why? Because it can be used to harness the resourcefulness of the private, public and third sector players and make an area more resilient in the face of economic change.

With the Heseltine – ‘No stone unturned in the pursuit of growth’ – Review hot off the presses, it’s a perfect time to be exploring the potential for more localised approaches which challenge formulaic responses to economic development.  Here are some of the ideas I took from the event:

  • THINK SUPPLY CHAIN RATHER THAN BUSINESS:  Often we think about businesses individually rather than as part of a wider supply chain. But diversity and complexity are important. The interactions and flow of capital and labour from one business to another are what underpin the economy and may even contribute to a place’s sense of identity. Supporting business means supporting supply chains through an abundance of networking, discussion and sharing of ideas and views.
  • RECONNECT PEOPLE WITH THEIR ECONOMY: One of the frustrations that prompted the development of this report was that the economy feels remote to the everyday life of people who live in an area. Patterns of retail in particular are often controlled by larger multinational organisations which call the shots. Local people have little input other than as consumers. But why not involve people, not just as consumers, but as local investors, owners, and entrepreneurs. Perhaps an environment which reconnected people into the economy might be more conductive to the development of new business ideas and enable those ‘wilful individuals’ keen to effect change to emerge.
  • LOCALLY-BASED BUSINESSES HAVE A GREATER INTEREST IN PLACE SHAPING. Localise West Midlands in their research argue that locally based businesses, including those who may be part of a larger national franchise, are more likely to feel a sense of allegiance to that place and community.  They have an interest in supporting the area and as a result may be less likely to disinvest in the midst of economic turbulence.  Footloose companies that lack that local ownership are more likely to flit from one area to the next with little attachment to place.  The question for local authorities is how to build on these connections and challenge these feelings of loyalty and sense of place into positive economic and social outcomes.

If you are looking for ideas as to how to implement this approach in your own area, the report provides a number of case studies which demonstrate how a community economic development approach can be realised including:

  • ECONOMIC GARDENING IN LITTLETON, COLORADO. Littleton faced widespread unemployment and redundancy as a result of major employers closing down and moving elsewhere.  Littleton decided not to base its future economic strategy on encouraging more inwards investment in the future, but instead, chose to concentrated on trying to support the indigenous economic growth of businesses including existing businesess start-ups, SMEs and microbusinesses. To do this, Littleton focused on creating a positive environment for entrepreneurs in the area including high quality of life, good education and facilitating networks and conversations between existing businesses, the state and think tanks.
  • REVERSING DECLINE IN MONTREALRESO is a Montreal-based local economic development organisation founded firmly on socio-economic goals in an area of major industrial decline.  Throughout the organisation has maintained a commitment to ‘reaching those hardest to reach’ and an emphasis on local ownership and community involvement. Whilst the case study does not attribute direct causality to RESO, the scheme looks to have been a major factor in reversing the area’s decline by developing a strong local economy.
  • The Localise West Midlands research is still work in progress and a final report on the research is due in December/January.


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Fernando Centeno
Fernando Centeno
11 years ago

All interesting material to analyze critically – thanks! My U.S. experience tells me that we should fight for a healthy private sector – competitive, properly regulated, and innovative, and, for a competitive, accountable public sector. Best outcomes are most likely when both sectors do their best work.

Having an over-weening public sector constantly calibrating business-economic outcomes seems over-wrought, even in the U.S. I see too much intrusion from both sectors. After all, failure rates are also healthy indicators, so long as the body politic stays strong and vibrant.

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