Local Economic and Employment Development (LEED)

ISSN :
1990-1097 (online)
ISSN :
1990-1100 (print)
DOI :
10.1787/19901097
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A series of reports from OECD’s Local Economic and Employment Development Programme (LEED). The LEED Programme identifies analyses and disseminates innovative ideas for local development, governance and the social economy. Governments from OECD member and non-member economies look to LEED and work through it to generate innovative guidance on policies to support employment creation and economic development through locally based initiatives. See also OECD Reviews of Local Job Creation under Related Reading.

Also available in: French
 
Organising Local Economic Development

Organising Local Economic Development

The Role of Development Agencies and Companies You do not have access to this content

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Author(s):
Greg Clark, Joe Huxley, Debra Mountford
Publication Date :
06 Apr 2010
Pages :
496
ISBN :
9789264083530 (PDF) ; 9789264060814 (print)
DOI :
10.1787/9789264083530-en

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Development processes occur within a wider geographical area than local government, and in some cases encompass a broader scope than provincial or national governments. Thus substantial inter-governmental co-operation and public-private partnership are needed. This book identifies how development agencies and companies work, what they do and what constitutes success and value added. It explores international practices in a variety of locations and contexts, and defines both the success factors and the challenges associated with economic development agencies and companies.

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    Foreword
    The OECD Programme on Local Economic and Employment Development (LEED) has advised governments and communities since 1982 on how to adapt to global trends and tackle complex problems in a fast-changing world. It combines expertise from America, Australasia and Europe into pragmatic task forces that provide rapid responses and targeted advice on specific issues. It draws on a comparative analysis of experience from some 50 countries around the world in fostering economic growth, employment and inclusion.
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    Preface
    I’m delighted the UK Government is supporting publication by the OECD Programme on Local Economic and Employment Development (LEED) of this groundbreaking global review of economic development companies and agencies. I’m also grateful to the development companies and agencies around the world who’ve made it possible, through their financial support and providing case studies and observations from practice.
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    Executive summary
    The search for the best organisational arrangements to promote local economic development has been a significant task for municipal governments and their partners for several decades now. This book examines the contribution that has been made by agencies, companies, and corporate boards which have proved to be a consistent choice of local government leaders for pursuing local economic strategies.
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    An introduction to development agencies
    Following a clear introduction to what local development is and why it is significant, this chapter outlines the importance of effective organisational arrangements for the planning and delivery of local economic development, and of the particular role that development agencies can play. Through a review of the literature the case is made that, despite their proven success and growing prevalence, understanding and appreciation of these flexible, innovative and pragmatic tools for local development are less than what they should be. The chapter concludes suggesting that by drawing on a core evidence base of case studies of 16 agencies in 13 local economies to answer a number of key questions the publication will review how development agencies have contributed as leaders in the local development system.
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    The history and diversity of development agencies
    This chapter uses an overview of the historical evolution of development agencies and a short profile of each of the 16 development agencies (DAs) which form the core evidence base of this book to introduce how these development organisations compare and why they vary. One consequence of the mix of different factors in the establishment of development agencies is some very basic differences in the purpose, role, structure, scale, shape, size, and resourcing of the agencies. At the same time, while many development agencies are "comprehensive", engaging directly with a wide range of interventions in labour markets, property markets, external investment markets, and with enterprise and innovation drivers, many are more focused, concentrating more on one or two of these activities. Having identified and explained this diversity, the chapter distinguishes five predominant development agency types: development and revitalisation agencies; productivity and economic growth agencies; integrated economic agencies; internationalisation agencies; and visioning and partnership agencies. It concludes that this diversity is evidence of the flexibility of DAs and the different needs of local development systems. The fact that the mandate of each can be tailoured to contribute optimum value to the local development agenda makes them a powerful potential tool for local leaders.
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    The value-added of development agencies
    Given their unique characteristics, development agencies can offer much to local leaders. This chapter links the theoretical discussion of how and where development agencies add value to local development systems to practical examples of the impact of these organisations on the ground in a variety of operating environments. First, the functions of development agencies are divided into eight categories, which range from branding and international promotion to human capital development and social or green initiatives. Then, key performance indicators are used from agencies in each of the five typologies identified in Chapter 2 to demonstrate the depth and breadth of the practical contribution development agencies can make to the local development process.
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    Development agency creation, evolution, performance and review
    This chapter assesses when and how a development agency should be set up and how it should be reviewed and encouraged to evolve. It is in the nature of development agencies that they deal with dynamic contexts and constantly changing activities. They must therefore be highly adaptive organisations. Successful agencies continuously evolve and adapt and do not remain rigid, so mechanisms for shaping how they evolve and adapt are essential. Through its discussion, this chapter provides answers to other important issues such as which tasks a development agency should undertake, how to review performance, when to enlarge or contract an agency’s roles and activities, how best to deal with process and timing as well as what can go wrong.
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    The role of the local development system
    This chapter describes how development agencies can lead, shape and facilitate the effective operation of the local development system and are in turn led, shaped and facilitated by it. It defines these systems as networks of public, business and nongovernmental sector partners which can work collaboratively within defined areas to create better conditions for economic growth, social cohesion and employment generation. Evidence from the 16 development agency case studies is used to show that local development systems are tightly or loosely organised, precisely orchestrated to deliver a local development strategy, or rather imprecisely oriented. The chapter proceeds with a discussion of how to build a seamless and co-ordinated system giving particular attention to key work streams, key players, features of success and the role of development agencies within it.
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    The roles, tools and relationships of development agencies
    This chapter addresses what development agencies actually do and the tools they use. A summary of core activities of development agencies is presented and the argument is developed that while what these agencies do is obviously essential, how it is done is equally important. It is established how these activities are done by categorising the roles that a development agency might play in a local development system. It is underlined that without a thorough consideration of both what activities are undertaken and how they are undertaken, the contribution of development agencies to sustainable local development may be misunderstood. The chapter begins with an overview of some of the approaches used to categorise development agency roles, and concludes by detailing the roles played by development agencies in the formulation of local development strategy.
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    The operational features of development agencies
    Operational features of development agencies are fundamental to their success. This chapter identifies key trends and choices that support organisational effectiveness. Because development agencies are usually not organisations that are statutorily mandated, there are many choices about how they are internally structured, what tools they use, and how they operate. This chapter seeks to illuminate some of these choices giving reference to the 16 development agency case study evidence base. Some of the key issues illustrated in particular include: development agency boards and leadership; organisational structures; financial strategies; resource and asset management; accountabilities; performance review and best-practice sharing.
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    Learning from international development agency experience
    The final chapter in this book makes the case that although development agencies of all kinds have become a global phenomenon, there has been limited international exchange on how and why such organisations work. It explains that though the codification and sharing of practice is inherently difficult, the purpose of this book is to attempt to bridge part of that gap and promote understanding within a shared framework and the learning of precise lessons across borders. To conclude, a series of development agency strengths and constraints are defined and illustrated which inform the OECD LEED Programme’s ten principles for development agencies.
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  • Expand / Collapse Hide / Show all Abstracts Annex A. Sixteen development agency case studies

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      Abyssinian Development Corporation New York
      Abyssinian Development Corporation (ADC) is a locally based, non-profit community development corporation dedicated to building the human, social and physical capital of the area of Harlem in New York. ADC offers services to the community through five community development initiatives: (1) affordable housing development; (2) social services; (3) economic revitalisation; (4) education and youth development; and (5) civic engagement.
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      AucklandPlus Auckland
      AucklandPlus is the Auckland region’s economic development agency, which specialises in investment promotion and facilitation, including brand building and major project development. AucklandPlus works collaboratively with local, regional and national organisations and business leaders to further develop Auckland’s competitiveness. The aim is to increase overall living standards and opportunities, as well as economic performance.
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      Barcelona Activa
      Barcelona Activa is the local development agency (DA) of Barcelona City Council and was created in 1986. Initially conceived as a business incubator with 14 projects installed, the agency is now the main actor in developing entrepreneurial activity, innovation, professional and career development and employment creation within Barcelona. Each year Barcelona Activa coaches more than 1 400 new business start ups, and more than 350 existing companies are given further consolidation and growth support (European Commission, 2006). The agency is a municipal limited company; a private company, funded and 100% owned by Barcelona City Council.
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      Bilbao Metropoli-30 (The Association for the Revitalisation of Metropolitan Bilbao)
      The Association for the Revitalisation of Metropolitan Bilbao – "Bilbao Metropoli- 30" – was established in 1991. It is primarily concerned with strategic planning, research and promotion and is involved in those projects which aim to encourage the recuperation and revitalisation of metropolitan Bilbao. The association was recognised as a "public utility entity" by the Basque Government in June 1992. Both public and private bodies who work within metropolitan Bilbao can become members of the project as founding, full or associate members. In essence, Bilbao Metropoli-30 is an "umbrella organisation" which consolidates and co-ordinates the actions of a disparate range of bodies which operate across the public and private realms, and across broad spatial scales.
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      BiILBAO-Ría 2000
      BILBAO-Ría 2000 is a non-profit-making, inter-institutional company which is responsible for large urban regeneration initiatives in the Bilbao area, playing a major role in facilitating land consolidation and development.
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      Build Toronto and Invest Toronto
      In 2008, Toronto Mayor David Miller initiated reviews of both the city’s economic development efforts and the use of its own asset base to leverage investment and maintain fiscal health and a strong balance sheet. Through the Agenda for Prosperity, the city has embarked upon a programme to become a successful global player, and some of the city’s most recent policies articulate this as a vision for Toronto to become a global business city, a hub of environmental innovation, a beacon of diversity and cohesion, and a centre for global education and training. Although by no means a large city region by international standards, Toronto is becoming a leader in the sectors that are increasingly coming to define the 21st century – sustainability, medical innovation, financial services and education.
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      Cape Town Partnership
      The Cape Town Partnership (CTP) was established in July 1999 by the City of Cape Town and key private sector partners to manage, promote and develop the Cape Town Central City. The Partnership’s vision is of an "inclusive, productive and diverse city centre that retains its historic character and reflects a common identity for all the people of Cape Town." A city centre management vehicle, the Central City Improvement District (CCID) was launched by the Partnership in November 2000, as an integrated operation within the CTP, but with a separate board and financing mechanism (CTP, 2006).
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      Creative Sheffield
      Creative Sheffield was the first of the United Kingdom’s new local economic development delivery vehicles – the city development companies and economic development companies (CDCs/EDCs) – to be set up. It was officially formed on 1April 2007 and was designed to "substantially enhance Sheffield’s capacity to develop and deliver economic strategy" (Kerslake and Taylor, 2004). It is a company limited by guarantee, with a high-level board composed of a mix of private and public sector representatives, and is owned by Sheffield City Council and the regional development agency, Yorkshire Forward. Creative Sheffield has consolidated the city’s previously disparate set of development bodies and, as such, incorporated "Sheffield One", the investment agency "Sheffield First for Investment" and the "Knowledge Starts in South Yorkshire" project.
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      HafenCity Hamburg GmbH
      The area known as "HafenCity" is Europe’s largest inner city urban development zone (HafenCity Hamburg GmbH, 2009a). In 1998, the Free and Hanseatic City of Hamburg entrusted HafenCity Hamburg GmbH (formerly GHS Gesellschaft für Hafenund Standortentwicklung mbH) with the development of HafenCity. Hamburg is one of very few German cities undertaking major urban redevelopment. Unlike many city development agencies who act at the city-wide or metropolitan scale, HafenCity Hamburg GmbH focuses only on a highly specific district – the old port area. HafenCity Hamburg GmbH has been tasked with leading the redevelopment through buying back land and buildings in the project area which are not owned by public authorities and relocating companies from the area to other areas in the city, as well as being responsible for developing the necessary physical infrastructure and required amenities so that new spaces (office, residential, shopping, restaurants, culture and leisure) are developed. It oversees the entire development of the area (Bruns-Berentelg, 2009).
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      Johannesburg Development Agency
      The Johannesburg Development Agency (JDA) is a wholly-owned agency of the City of Johannesburg Metropolitan Municipality (CoJ). The JDA stimulates and supports areabased economic regeneration and development initiatives throughout the Johannesburg metropolitan area.
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      Liverpool Vision
      Liverpool Vision was established in April 2008. It brought together the activities of three companies – Liverpool Vision (a pre-existing organisation of the same name), Liverpool Land Development Company and Business Liverpool – and integrates economic and physical development, investment and business and enterprise support within a delivery-focused, private-sector-led company. The establishment of a single economic development company for the city was spearheaded by Liverpool City Council following consultation with business. As well as its support of the business community, the organisation plays a strong role in the domestic and international positioning of Liverpool in conjunction with regional and city regional partners.
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      Madrid Global (Office for International Strategy and Action)
      Madrid, the capital of Spain and the largest Spanish-speaking city in Europe, has established Madrid Global as a special office to take forwards its international relationships and positioning through municipal diplomacy, co-ordination of international projects and initiatives, and leverage of international activities by leading Madrid-based institutions and companies, including global firms, universities and research centres, and inter-governmental and non-governmental bodies.
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      Milano Metropoli
      Milano Metropoli is the Agency for the Promotion and Sustainable Development of the Metropolitan Area of Milan and aims to promote economic and social development in greater Milan. It was formed in early 2005 when the corporate purpose and structure of Agenzia di Sviluppo Nord Milano (ASNM) (North Milan Development Agency) were redefined. It is, however, not only the name which has changed. ASNM was essentially an urban redevelopment agency for the North Milan area, while Milano Metropoli’s work not only encompasses a broader geographical area – the metropolitan area of Milan – but also has a wider remit, focusing on territorial marketing and promotion, supporting strategic economic sectors and carrying out reindustrialisation, urban regeneration and development projects.
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      New York City Economic Development Corporation
      The New York City Economic Development Corporation (NYCEDC) is "responsible for promoting economic growth throughout New York City through real estate development programmes, business incentives and more" (NYCEDC, 2009a).
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      Prospect Leicestershire
      Formally launched on 8 April 2009, Prospect Leicestershire is a new economic development company (EDC). Prospect Leicestershire was set up by the Leicester City Council and Leicestershire County Council to simplify the current economic development arrangements and to drive forward economic growth across the urban area of Leicester and its surrounding county. The new governance arrangements are underpinned by a GBP 1.36 million revenue budget with GBP 250 000 contributions each from the Homes and Communities Agency (HCA), the City and County Councils, GBP 125 000 from the districts and GBP 485 000 from East Midlands Development Agency (EMDA) (I&DeA, 2009). The organisation will primarily be focused on delivering regeneration, economic development and inward investment initiatives, as well as having steering functions. Prospect Leicestershire takes over the responsibilities of the Leicester Regeneration Company (LRC) and the inward investment arm of Leicester Shire Promotions. The majority of board members are from the private sector and legally the EDC is a company limited by guarantee whose founding members are the City Council and County Councils (Economic Development Company for Leicester and Leicestershire, 2008).
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