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Local Economic Development “Sustainable Success Stories”

Local Economic Development “Sustainable Success Stories”. IMFO Western Cape Symposium 7 th June 2011 Douglas Cohen dcohen@salga.org.za. Points of Departure:. Job creation: Government cannot do its work alone Need to taking Local Economic Development (LED) more seriously

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Local Economic Development “Sustainable Success Stories”

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  1. Local Economic Development“Sustainable Success Stories” IMFO Western Cape Symposium 7th June 2011 Douglas Cohen dcohen@salga.org.za

  2. Points of Departure: • Job creation: Government cannot do its work alone • Need to taking Local Economic Development (LED) more seriously • Partnerships hold the promise of inclusiveness, dialogue and shared responsibility for development

  3. New Growth Path 5 million jobs by 2020 http://www.businessday.co.za/articles/Content.aspx?id=145000

  4. “SA must create 13600 new manufacturing businesses alone to meet the government target of creating five million jobs by 2020” • Neil Rankin, founding director of the African Micro-Economic Research Unit at Wits University Source: Sunday Times (March 27 2011)

  5. New Growth Path: The Highlights

  6. New Growth Path: Implications for Municipalities • There are some clear areas of the NGP that have relevance to municipalities making local government a key partner to achieve this national vision. • Municipalities as part of Government, will to varying degrees, respond to specific drivers identified in the NGP

  7. New Growth Path: Priorities for 2011/12 • Increase local procurement – regulations gazetted • Ensure 30-days’ payment for SMMEs • Impact of Rural development strategy • IPAP2 implemented as pillar of NGP • Metros and secondary cities to minimise delays and improve co-ordination of regulations that affect businesses • Regular reports on employment impact of state activities

  8. “Together we Need to Take LED More Seriously” • Yunus Carrim, Deputy Minister of Cooperative Governance and Traditional Affairs Source: Progressive Business Forum Cape Town (22 April 2010)

  9. Taking LED More Seriously • What is LED? • What is the municipal role in LED? • Why are the success rates in LED so low? Strategies not executed? What are the root causes?

  10. The Constitution mandates municipalities to play an important role in the socio-economic development of their local communities. This can be achieved in two ways: • Municipalities should provide some relief for the poor. • Municipalities have indirect and direct influence over local economic development (LED) in their areas and therefore need to work in partnership with local business to improve job creation and investment.

  11. Urban Form Safety & Security Transport Skills Urban regulation Efficient Services CONDUCIVE ENVIRONMENT FOR INVESTMENT Council Account Mgmt Infrastructure Land use Application Mgmt INCREASED EFFICIENCY OF INVESTMENT NEW INVESTMENT Sector support Area support SMME support Accelerating activities MORE TAX REVENUE Investment facilitation JOBS Taking LED More Seriously: The Theory Source: Joburg 2030 Strategy

  12. Taking LED More Seriously: More Direct Job Creation… • Create 2m jobs through labour intensive construction though EPWP • Direct government support to SME’s • Strategic Sourcing & Procurement • Promote key national/provincial priorities in LED strategies • Greening: re-orientate municipal services in sustainable activities (eg labour intensive recycling)

  13. Taking LED More Seriously: Shifting Behaviour • Getting the right type of LED to “work” is critical to the sustainability of any city or town • There are a number of challenges to be overcome first. • raising the profile of LED within a municipality, • Identifying areas for improvement, and • identifying good LED practice. • Ultimately we want to shift behaviours towards LED that works Source: Adapated from RED-X LED Maturity Tool

  14. LED Strategy Development • Simplified, sustainable and locally-owned • It should not be a planning type / needs based strategy • Positioning of LED “section” and reporting • Ideally the LED section should be placed directly under the Municipal Managers Office • Capacity Constraints • LED Strategy Appropriateness • LED strategies need to speak to local conditions and challenges Taking LED More Seriously: Principle Lead Approach Source: SALGA LED Position Paper (2009)

  15. Economic Intelligence Requirements • Stakeholder relationships • LED Roundtables to connect with business stakeholders especially, around concrete business enabling tools such as red tape reduction, business retention & expansion etc. • Acknowledging the Informal Economy as part of the local economy • Monitoring and Evaluation Taking LED More Seriously: Principle Lead Approach Source: SALGA LED Position Paper (2009)

  16. Mbombela: A CLGF Good Practice Scheme Case Study • Creating the right environment for LED • Reposition LED’s role • Four Objectives: • 1 Stakeholder Engagement • 2 - Support the unemployed residents / smme dev. • 3 – Long term strategy development • 4 - Economic & investment incentive policy See the SA LED Network for full details of this and other LED case studies, knowledge and networks. www.led.co.za Source: http://led.co.za/sites/led.co.za/files/clgf_rt_presentation_mbombela.pdf

  17. “We have to do something differently. It requires recognition that employment is an outcome, not an objective you start with. You have to depend on firms – not the firms you wish you has, or the workers you wish you had, but the firms and the workers you’ve got.” • Michael Spicer, CEO of Business Leadership SA Source: Sunday Times (March 27 2011)

  18. Unlocking the value from partnerships • In South Africa, it is a municipality’s responsibility to provide basic services and address the developmental needs of communities • Partnerships of different kinds are one way in which municipalities can fulfill these responsibilities

  19. Adapted from Source: The state of partnerships in mining depended municipalities in SA. Prof. C. Rogerson (2010)

  20. Concluding thoughts • The issue of LED is going to become much more visible this year and next, as government pushes much harder to ensure job creation • This new era requires more responsive and accountable local institutions and accountable capable leadership • Take ownership of LED and see that it is done well • Need for Partnerships - “Mobilise an “army” of stakeholders to continuously improve the local economy

  21. www.led.co.za Role / Activities of SALGA in 2011/12 • SALGA councilor induction and training • Councillor leadership on LED and Job Creation • NGP, municipal incentives, job creation priorities & reporting • Donor alignment, capacity building & support • LED Maturity Tool Assessment • Informal Economy / Economic Intelligence • Identifying, capturing and sharing good practice www.lgict.org.za

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