What does Local and Regional Economic Development Involve? Functions and Activities
Access this course module's slides and a briefing document via the links below:
Introduction
Local and Regional Economic Development (LRED) is a multifaceted field dedicated to enhancing economic prosperity and quality of life in specific geographic areas. This briefing outlines the core functions and activities of LRED, highlighting its significance and the key areas professionals engage with daily. Understanding these interconnected functions is crucial for effectively addressing local economic challenges and opportunities.
Why Local Economies Matter
The UK exhibits significant disparities in economic growth and job creation across local areas, with economic output per head varying dramatically. These inequalities, evident in GVA per capita, productivity, and job growth rates, underscore the necessity of place-based interventions to complement national economic policies.
Industrial restructuring, particularly the loss of 3.3 million manufacturing jobs in the 1970s and 80s, has been a major driver for LRED. This transformation led to persistent high unemployment and economic decline in formerly prosperous industrial regions, necessitating economic diversification, new growth sectors, and workforce reskilling. These challenges highlight the universal need for robust local economic development capacity.
Core LRED Functions
Intelligence and Strategy
Being well-informed about the local economy is vital for strategic decision-making. This involves conducting one-off studies, regular comprehensive reviews, and deep-dive research on specific subjects like industries, technologies, and demographic trends. Robust analysis is crucial for attracting investment and securing funding.
Industrial Development and Sector Support
LRED organisations support existing industries, facilitate sector development, and encourage diversification to address industrial restructuring. Strategic industrial development can transform economies, as seen in countries like South Korea.
Enterprise and Entrepreneurship Support
This function encourages economic diversification, creates employment, addresses economies dominated by large employers, and builds innovation. Support ranges from basic advice and grants to accelerator programmes and assistance for international trade.
Foreign Direct Investment (FDI) Attraction
A traditional but challenging LRED function, FDI attraction requires clear vision, benchmarking against competitors, product development, marketing, dedicated teams, and incentive negotiation. Success hinges on a credible proposition.
Innovation Promotion
Central to many LRED programmes, innovation promotion involves commercialising university strengths, building science parks, linking research to entrepreneurship, and supporting SMEs in proving concepts.
Labour Market Interventions
These interventions aim to help people into work, remove employment barriers, and improve transitions from education to work. Understanding dynamic labour market conditions is essential.
Skills Development
Public sector intervention is crucial for building the skills base, as market forces alone may not adequately address needs. Coordination between employers, education providers, and workers is vital.
Addressing Poverty and Inequality
LRED activities address inequalities through minimum wage initiatives, employer charters, local labour schemes, and programmes for the long-term unemployed, ensuring inclusive growth.
Place-Based Regeneration
Historically focused on land and property development, regeneration now encompasses creating attractive, liveable neighbourhoods that support diverse lifestyles and working patterns, influenced by concepts like the "15-minute city."
The Green Economy
This involves fundamental societal and economic changes, including energy-efficient buildings, zero-carbon transport, sustainable consumption, and clean energy. LRED practitioners must develop clear roadmaps for this complex transition.
Institutions and Organisational Structures
LRED functions are delivered by diverse institutions operating in politicised environments, managing complex relationships and funding. Structures must align with local needs and political contexts.
The Interconnected Nature of LRED Functions
These functions are deeply interconnected. For example, skills development supports FDI attraction, innovation promotion requires enterprise support, and place-based regeneration creates business growth opportunities. Effective LRED adopts integrated approaches, with strategic intelligence informing all activities to maximise impact.
Key Principles for LRED Practice
Strategic Focus
Prioritisation is essential, aligning choices with local context, assets, and challenges.
Evidence-Based Approach
Robust economic intelligence underpins informed decision-making.
Collaborative Working
Partnerships across public, private, education, and community sectors are fundamental.
Integrated Thinking
Recognising interdependencies and developing integrated approaches delivers better outcomes.
Long-Term Perspective
Economic development is a sustained effort requiring patient, persistent work.
Conclusion
LRED encompasses a diverse toolkit for addressing economic challenges and improving quality of life. The stark regional disparities in the UK underscore its importance. Effective LRED requires strategic focus, evidence-based approaches, collaborative working, integrated thinking, and a long-term perspective to build prosperous, resilient, and inclusive local economies where all residents can thrive.