20140718 mesopartner lred giz#2 short
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Transcript of 20140718 mesopartner lred giz#2 short
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Local and Regional Economic Development
Lessons learnt and new opportunities ofthe LRED approach
2014, July 18th
Global Retreat 2014 of the GIZ-Division Economic Development and Employment
Ulrich-Harmes Liedtke
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IS THERE SUCH A THING AS IS THERE SUCH A THING AS ONE LRED APPROACH?ONE LRED APPROACH?
The LRED approach
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In many places local economies grow and evolve naturally.
So why is an LRED approach necessary,what are we trying to achieve?
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The LRED approach emerged ina specific context
Development context
Builds on economic success and promotion activities in industrial countries
Became popular in the 90s as an antidote to this very strong top down approach
Highlights the endogenous potential for growth
LRED Hexagon 1st Triangle
EntrepreneursInvestors
Existing firms
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Systemic Competitiveness highlights targeted interventions to overcome market failure
Macro levelThe sphere of economic
framework conditions, defining incentives through laws, institutions and generic policies
Meta levelThe sphere of societal
framework conditions that guidedecisions about fundamental economic alternatives
Micro levelThe sphere of allo-
cation through markets, hierarchies & networks
Meso levelThe sphere of targeted
interventions to address temporary and persistent market failure
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Different entry points to LRED
Sou
rce:
IDB
-MIF
(20
14)
The
mat
ic s
tudy
on
RE
D
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First conclusions
Approach
LRED is an overarching umbrella or meta-approach to intervene in economies at the territorial level
Motivations Economic problems (poverty,
unemployment, etc.) concern local and regional government
Decentralization affects economic policies
Success stories of thriving cities and regions encourage decision makers
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WHAT HAVE WE LEARNED OVER THE LAST TWO DECADES?
Lessons learnt
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Strong social or human institutions and physical infrastructure
Weak social or human institutions and physical infrastructure
Main
sec tors
with
sust ain
ed
gro
wth
Mai
n s
ecto
rs i
n
in s
tag
nat
ion
/ o
r d
ecli
ne
Declining region Thriving region
Marginalized region Emerging region
Different types of territories
There is no one-size-fits all approachTerritory and context mattersPrinciples of LRED stays the same, but
the priorities differ
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Local knowledge, participation and ownership are critical
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Combine bottom up and top down: Need to manage polarities
Top downBottom up
•Leverage of endogenous potential
•Local ownership•Greater diversity of territorial experiments
•Lack of scale for broader development
•Local power structures persist
• Interventions are generic
•Scale is possible• Integration in general policy•Disseminate best practices•Broad visibility• Political priority• More funds
• Interventions do not meet local needs
•Prioritization of large scale interventions
• Ignorance of local self-help
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Territorial development connects fragmented policy approaches at the territorial level
SM
E P
rom
otio
n
En
tre
pren
eur
ship
pro
mo
tion
Inve
stm
ent
pro
mot
ion
Exp
ort
pro
mot
ion
Ski
lls d
evel
opm
ent
Em
plo
ymen
t pr
omot
ion
Ag
ricul
tura
l dev
elop
men
t
Res
earc
h an
d d
evel
opm
ent
Tec
hnol
ogy
exte
nsio
n
Territorial Development
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Political environment has changed
An active role of state is no taboo anymore,
but new industrial policy is not necessary bottom up
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Beyond competiveness
Porters diamond Sustainability
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LRED (often) eludes linear planning
Local economies are complex adaptive systems and require a more explorative approach to support resilience
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WHAT’S NEXT?Challenges and opportunities for the future
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The environment of LRED has changed dramatically
As knowledge becomes more readily available globally, specific tacit knowledge in locations becomes more valuable
Industrial policy is back (active role of the state in economic development broadly recognized)
Climate change and planetary boundaries require more environmental sensitive approaches
Need for more inclusive business modelsNew players entering in the field of economic development
(private donors, emerging countries, etc.) Information Technologies and Communication provide
new opportunities for interaction
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The Future of LRED builds on past experience
Sou
rce:
IDB
-MIF
(20
14)
The
mat
ic s
tudy
on
RE
D
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Key questions for a New LRED Wave
How to make territorial approach more relevant?– How to make impact visible?– How to scale up?
– How to become more complexity sensitive?What could be the future role of GIZ in LRED?
– How to become a thought leader in a new LRED wave?
– Which levels to intervene?– Which concepts to disseminate?