action led pre-field testing draft

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UN-HABITAT

PRELIMINARY FIELD TESTING DRAFT

VOLUME III: IDEAS &

CASE STUDIES

ACTIONS

STRATEGIC PLANNINGFOR

LOCAL ECONOMICDEVELOPMENT

Training

Series

A Resource GuideFor local governments andcivil society organizations

Compiled and Written by:

William Trousdale, EcoPlan International, Inc.

Samantha Andersen, Jason Emmert,

Gerrit McGowan, Maria Olascoaga

April 20


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ACTIONS -- Being Strategic About Local Economic DevelopmentUN-HABITAT AND ECOPLAN INTERNATIONAL, INC.

Table of Contents

INTRODUCTION 1

LOCAL GOVERNMENT 9

ACTION 1. POLICY AND REGULATION 9

INITIAL ACTIONS 13

ACTION 2. STAKEHOLDER IMPLEMENTATION GROUP 13

ACTION 3. DEMONSTRATION PROJECTS 14

ACTION 4. RESEARCH AND ANALYSIS 15

ACTION 5. STUDY TOURS 16

ACTION 6. LOCAL PROCUREMENT AND BUY LOCAL CAMPAIGNS 2

ACTION 7. SIMPLE UPGRADING OF LOCAL BUSINESS AREAS / STREETSCAPE

ENHANCEMENT 2

ACTION 8. LED PUBLICATIONS 2

ADVANCED ACTIONS 4

KNOWLEDGE MANAGEMENT AND MARKETING 4

ACTION 9. KNOWLEDGE MANAGEMENT 4

ACTION 10. MARKETING 4

ENTREPRENEUR AND SMALL BUSINESS SUPPORT 6

ACTION 11.

INCUBATORS 6

ACTION 12. SKILLS TRAINING CENTER 9

ACTION 13. MICRO AND SMALL-SCALE ENTERPRISE (MSE) DEVELOPMENT 12

ACTION 14. SMALL BUSINESS DEVELOPMENT CENTERS 17


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PHYSICAL REVITALIZATION, INFRASTRUCTURE AND LAND PLANNING 20

ACTION 15. PHYSICAL INFRASTRUCTURE INVESTMENT 20

ACTION 16. CLUSTERS 25

ACTION 17. (ECO) INDUSTRIAL / BUSINESS / SCIENCE PARKS 31

ACTION 18. TOWN CENTER / BUSINESS AREAS ENHANCEMENT 33

ACTION 19. DEVELOPMENT LINKING 34

ORGANIZATIONAL DEVELOPMENT FOR LED 35

ACTION 20. CREATING LED ORGANIZATIONS 35

ACTION 21. CO-OPERATIVES 40

ACTION 22. PARTNERSHIPS 43

ACTION 23. INSTITUTIONAL COOPERATION MECHANISMS 48

FINANCE 49

ACTION 24. MICRO-CREDIT 49

ACTION 25. LOCAL CURRENCY OR COMMUNITY CURRENCY SYSTEMS 54

INVESTMENT 58

ACTION 26. PROMOTING FOREIGN DIRECT INVESTMENT 58

ACTION 27. LOCAL INWARD INVESTMENT 60

BROAD-BASED ACTIONS 61

ACTION 28. SUPPORT OF THE INFORMAL SECTOR 61

ACTION 29. SUSTAINABLE TOURISM DEVELOPMENT 66

ACTION 30. URBAN-RURAL LINKAGES 71


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PART 2: FULL CASE STUDIES 75

APPENDIX 76


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Actions-- Strategic Planning for Local Economic DevelopmentUN-HABITAT AND ECOPLAN INTERNATIONAL, INC.

1

Field Testing Draft November 2003

Introduction

NOTE: THIS DOCUMENT IS CONSIDERED A WORK IN PROGRESS TO BE COMPLETEDAFTER THE FIELD TESTING PHASE.

MANY NEW ACTIONS HAVE BEEN ADDED SINCE THIS DOCUMENT WAS FIRSTDEVELOPED AND MANY OF THESE ARE STILL UNDER DEVELOPMENT.

IT IS ANTICIPATED THAT PART 2 WILL RESULT FROM ADVANCED FIELDTESTING AND HAS NOT BEEN COMPLETED.

This document,VolumeIII:Actions, is the third document in the Local Economic Development TrainingSeries. It is a companion piece toVol. I:THEMANUAL, Vol. II:The ToolkitandVol. VI:THEQUICK GUIDE.Vol. III focuses on Ideas and Case Studies. It has been developed to identify common LED actions andillustrate what other communities around the world are doing to promote local economic development. TheACTIONSdocumentis geared for two target audiences. First, facilitators can utilize appropriate case studies to

draw out key points as they help a group move through the participatory planning process. In particular,ACTIONSprovides support for training Module 6 of THEMANUAL. Second, practitioners in the field, such aslocal government staff and municipal leaders can find pragmatic examples of what is happening in othercommunities. The hope is that these action ideas will spark creativity and adaptations to the local context.

Part Iprovides a summary overview and description of common LED actions the descriptions should alertLED professionals to the range of LED opportunities available in order to create a LED strategy. However,most actions will require additional process more in-depth research, analysis and implementation.Therefore, where to go to get further information and resource links are provided. Similarly, the case studiesprovided are brief, providing an introduction of how an LED action was implemented, and then providinglinks where additional information can be obtained. The combination of actions and case studies are dividedinto four subsections:

Local Government: Policy and Regulation Initial Actions, Advanced Actions, and Broad Based Actions.

Local Government: Policy and Regulationsis the first section. It is provided as the initial section becausealmost every LED action will, or should, involve the local government to some degree. This is because theyare deeply involved in local business activity as suppliers of infrastructure, as tax collectors, through servicedelivery, resource allocation and as regulators of land, buildings and activities. Therefore, nearly every actiondescribed in this document will need to consider the role of the local authority.

Because many communities will want to see visible and tangible results quickly, and/or may not have the

financial capital or governance capacity to tackle big projects right away, this document is arranged so that thebasic ideas and actions are presented first. These Initial Actionsrepresent the starting points for localeconomic development and may be good first steps in getting a strategy moving forward. These, by and large,do not require significant financial capital, infrastructure requirements or organizational capacity. Examples ofInitial Actionsinclude formalizing the stakeholder group, committing to buy-local and implementingdemonstration projects.

TheseInitial Actionsare then followed by Advanced Actions, which require more technical know-howand organizational capacity, experience and money. In fact, most of these will require additional research,


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specific expertise and more time than initial actions. Of course, scaled down versions might be possible andimplemented as demonstration projects (seeAction3). Depending on your approach, theseAdvancedActionsmay be one part of larger LED strategic plan, or in some cases, may be all that the local communityis capable of implementing. Examples ofAdvanced Actionsinclude: constructing physical infrastructure,establishing incubators, or organizing co-operatives.

The final sub-section looks at larger action programs that the guide refers to as Broad-based Actions.These are more comprehensive approaches, or sector theme specific alternatives, that incorporate many ofthe previously outlined actions in an integrated program. Although they can be more expensive andcomplicated to coordinate, broad-based alternatives generally bring significant results given theircomprehensive and integrated nature. Examples of Broad Based Actionsinclude: informal economy,sustainable tourism and urban-rural linkages.

For each, asummaryis provided to explain the action, simple steps formakingtheaction workare outlined, itscommunity benefitshighlighted and itschallenges and obstaclesdiscussed.With the overlap and inter-relation between many of the actions, the sub-sections also highlightrelated actions.Finally, given some of the complexities involved in implementing some of the actions and developing thebroad-based action programs, casestudiesfor each of the actions and, finally, resourcelinksare provided.

Part 2provides (one? two?) examples of a completed LED strategy. The first example is from a smallmunicipality that has recognized its limited capacity as well as a need for capacity building and LED. Thesecond is a district in mega-city.

GRAPHIC HERE


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Links

Designing a LED strategy is exciting. There are many options and combinations that can bepursued. And each option can be designed to meet the priority objectives of your LED strategy(revisit Modules 5 and 6). For example, it is possible to develop a skills training center that is

targeted at the urban poor or at the community in general. Similarly, physical revitalization couldfocus on business areas or in slums as part of upgrading. Some of the actions are alsocomplementary to each other. For example, quite often a business incubator is including in a clusterstrategy or a micro-credit is part of a micro-enterprise project. The matrix below highlights some ofthe more prominent linkages.

Clusters

Cooperatives

Incubators

LocalCurrency

LocalGovtPolicy

LocalProcurement

Micro-credit

MSEDevelop

ment

Organisationa

lDevelopment

Partnerships

PhysicalRevitalisation

SkillsTraining

SmallBusines

sDev.Center

SupportoftheInformalSector

SustainableTourism

Urban-RuralL

inkages

Clusters Cooperatives Incubators Local Currency Local Govt Policy Local Procurement

Micro-credit MSE Development Organisational Development Partnerships Physical Revitalisation Skills Training Small Business Dev. Center Support of the Informal Sector Sustainable Tourism Urban-Rural Linkages


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Table 1: Overview of possible LED Actions

Local Government

Action 1.Policy andRegulation

Local governments should be involved to some degree in localeconomic development planning. Policy and regulation mechanismscan affect local business activity through infrastructure, taxes, andregulation of land, buildings and activities. Creating business andentrepreneur enabling environments depends on clear and stablepolicies and regulations.

Initial Actions

Action 2.StakeholderImplementationGroup

Once the plan has been agreed to, there needs to be an organizationalmechanism for implementing it. Either an existing agency with anidentified individual needs to take the lead, or an implementingorganization needs to be formed. One option for institutionalizing LEDis through the establishment of a Local Economic Development Agencycomposed of public and private institutions, representatives of politicaland economic spheres, and civil society.

Action 3.Demonstration

Projects

Pilot or demonstration projects are smal l-scale, short-cycle projects ortest projects that prepare the way for replication or expansion, and keep

the momentum in a LED process going.

Action 4.Research andAnalysis

Nearly every action identified will have additional informationrequirements (feasibility analysis). The LED process may have alsoidentified key data gaps where spending time and money on additionalresearch is warranted (e.g. markets and opportunities, the supply chain(business survey), value-added processing opportuni ties, specificconcept testing/feasibility (eco-industrial parks)).

Action 5. Study Tours

Actual ly seeing what is possible helps to link concept and ideas withreality. Having leaders in LED strategy visit other communities orlocations where LED actions have taken place to see first hand howthey work, is a powerful catalyst in mobilizing activity.

Action 6.

Local

procurement andbuy localcampaigns

Local procurement is simply a commitment made by the local authority

to buy and hire locally. Buy local campaigns are similar except theytarget consumers and businesses, encouraging them to buy localproducts.

Action 7.

Simpleupgrading oflocal businessareas

At the early stages, simply cleaning up an area, adding plants andgreenery or banners can make a difference.

Action 8.LEDPublications

Some LED publications can be produced quickly and easily with limitedstaff time and using information collected during the LED process.Simple publications are useful ways of getting existing businessesinvolved in the LED process. Examples include: Local area Brochureand Profile Letter; Local area or Economic Profile; and The BusinessDirectory.


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Advanced Actions

Marketing and Knowledge Management

Action 9.KnowledgeManagement

A tremendous amount of information from best practices to lessonslearned to business matching depends on good knowledgemanagement. Collection, access and organization of information and

data in a usable way are important. Developing information portals(web-based) is one way to manage and use knowledge.

Action 10.Marketing andPromotion

Marketing is a process and a product that uses information to identifycustomers, position a local area, and sell the local area and/or itsproducts. Promotion is part of marketing. Marketing strategies combineother actions (publications, upgrading, knowledge mng.) in a strategicway for specific market purposes.

Entrepreneur and small business support

Action 11. IncubatorsAn incubator consists of a building or set of buildings where officespace is rented out to fledgling businesses at below market rents tohelp minimize their overhead.

Action 12. Skills TrainingCenter

A skills training Center is a facili ty that works in partnership withbusinesses and the local area to provide access to education and

training in various fields, conduct programs to assist the creation ofemployment opportunities and make available a job bank network forthe local area .

Action 13.

Micro and Small-Scale Enterprise(MSE)Development

Micro and Small-Scale Enterprise (MSE) development planning at thelocal government level aims at creating linkages and networking amongdifferent stakeholders and sectors of the local economy, and typicallyincludes business support, training and micro-credit.

Action 14.Small BusinessDevelopmentCenters

Small Business Development Centers (SBDC) are places designed toprovide a range of support for prospective and operating entrepreneursto develop their capacity to run a small enterprise effectively andprofitably. Like MSE, they seek to create linkages and networks, andoften include links to business support, training and financing.

Physical revitalization, infrastructure and land planning

Action 15.Physicalinfrastructureinvestment

Investments in physical or hard infrastructure projects are done toimprove the built environment. Often these projects are done toimprove economic efficiency (transportation) and/or quality of life(water, sewer, power), which makes the local area more livable andattractive for business retention, expansion and attraction of newbusinesses. Physical infrastructure can be implemented by governmentor partnerships.

Action 16. Clusters

Clustering refers to firms or entrepreneurs (including farmers)engaged in similar economic activities locating in one area and workingtogether to advance business opportunities and add value. Relatedconcepts are growth nodes and investment corridors.

Action 17.(Eco) Industrial /Business /Science Parks

The idea is to set aside or zone a significant area of land (a park) wherespecific activities will take place. Eco-industrial parks (or eco-clusters)

have been promoted and are basically the same concept, except theyintentionally try and attract businesses that can cooperate to improvetheir environmental and economic performance through more efficientuse of raw materials, reducing outputs of waste, conserving energy andwater resources, and reducing transportation requirements.

Action 18.Town center /business areaupgrading

Town Center Enhancement typically involves partnerships and caninclude physically upgrading the area (building renovation, banners andflags, greenery, daily street cleaning), targeting investment, etc.


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Action 19.Linking ofpermits

Development linking is when the concept of spatial planning (bringingpeople and jobs closer together to reduce travelling times and costs) isexpanded by linking profitable growth with redistributive development concurrent with permitting real estate developers to build in profitableareas, local governments require complementary investment in moreimpoverished neighbourhoods.

Organizational Development forLED

Action 20.Creating LEDOrganizations

Local economic development organizations are devoted to theimplementation and on-going planning of LED actions. They include:Business Improvement/ Development Associations (BIA, BDA); Localarea Development Corporations (CDC); Municipal Government LEDDepartment, Chambers of Commerce and many more.

Action 21. Co-operativesA co-operative is a democratically controlled enterprise that is ownedby its members to fulfil a financial, economic, social or cultural need.

Action 22. PartnershipsPartnerships between the public and private sector and the local arearepresent an effective and efficient approach to implementing LED

strategies in local communities and are essential in many LED actions.

Action 23.InstitutionalCooperationMechanisms

For local areas, cooperating in a competitive world is a key to success.Both formal and informal mechanisms exist for promoting greatercooperation.

Finance

(see Act io n 21) Financial Co-op Als o see co-operative for f inancial co-operat ives

Action 24. Micro-creditMicro-credit is the extension of small loans to entrepreneurs that aretoo poor to qualify for traditional bank loans.

Action 25.

Local Currencyor Local areaCurrencySystems

Local Currency or Local area Currency Systems are a type of parallelcurrency system where a local area organizes and administers asystem of exchanging locally produced goods and services using aninterest free currency whose circulation is limited to a particulargeographic area or social group. The local currency operates alongsidethe conventional national currency of the country.

Investment

Action 26.Foreign DirectInvestment

This involves attempting to attract foreign direct investment fromoutside the local area.

Action 27.Domestic InwardInvestment

Domestic inward investment is an attempt to keep local money in thelocal economy. Often, money is put into banks that invest outside thelocal area or investors seek opportunity outside the local area. Localcredit unions and other investment strategies can be developed tolocally reinvest money earned in the local area.


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Broad-based Actions

Action 28.Support for theInformal

Economy

The informal economy is comprised of economic activities not recordedand not subject to formal rules of contract, licensing, labor, andtaxation. Informal economies often contribute directly to povertyreduction by providing the livelihoods of large portions of the

population. By supporting the informal economy, other important socialdevelopment issues can also be addressed including gender equity,cultural preservation, child labor and public health and safety.

Action 29.SustainableTourismDevelopment

Sustainable tourism is often pursued because it is not so dependant onfinancial capital or major infrastructure, and is therefore an entry sectorthat can achieve quick results for poorer areas. It is also seen as a win-win option, designed to mitigate the economic needs of a local area andto protect the cultural and natural environment. However, balance isnever an easy task to obtain.

Action 30.Urban-RuralLinkages

Creating improved urban-rural linkages is a key component for ensuringthe sustainability of both rural and urban areas. By connecting thehuman, financial, and manufactured resources in urban areas with thecommunity-managed natural resources in rural areas, the rural peoplesdesire for direct access to end users of rural products and the urban

need for more affordable and better quality products can be facilitatedthrough more cooperative networks.


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TRAINING CASE STUDY

Case Study 1: Pilot Project in Networking for Local Economic Development,

Slovakia

Members of the Slovak City Managers Associations asked the Local GovernmentDevelopment Center (LGDC, a small NGO focused on training, institution building and internationalcooperation) to help with better understanding of the concept of local economic development formunicipalities. Their proactive request was based on daily problems they have had to solve,significantly influenced by overall transition processes in Slovak society and its economy.LGDC prepared a pilot project called Networking for Economic Development, funded by the USEmbassy in Slovakias Small Democratic Grant scheme. Eight cities put together teams of fourrepresentatives each one from local government, one from district state administration, one fromlocal business and one from NGO. The pilot was designed as a series of five workshops.

The first two workshops focused on soft skills gaining skills on how to better communicate together,

how to build teams, solve problems, negotiate, and make decisions. A third workshop asked aneconomic development practioner from a US municipal office to lead a workshop on: What is workingfor us. The fourth and fifth workshops were focused on situational analysis and action planning. Eachcity put together some ideas how to follow on setting LED approach in their community, whom toinvolve and how to start.

The most important impact of the project was that cities started incorporating LED into the way theydo business by changing their organizational chart, creating a position of economic developmentofficer. Several municipalities started to work on projects using a new approach that included involvinga wider group of stakeholders and promote public communication and involvement in LED

Contact: Local Government Development Center, Slovak Republic www.crs.sk


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Local Government

Local Government: Policy and Regulationsis the first section. It is provided as the initial sectionbecause almost every LED action will, or should, involve the local government to some degree.Local government is deeply involved in local business activity as suppliers of infrastructure, as tax

collectors, through service delivery, resource allocation and as regulators of land, buildings andactivities. Therefore, many actions described in this document will need to consider the role of thelocal authority.

Action 1. Policy and Regulation

Summary

Local government policy and regulation iscomplex and far reaching. A few examples oflocal government involvement in LED

include (but are not limited to) the following:

Land and Property:o Land Titleo Property rights-enforcemento Property Registrationo Zoningo Expropriation

Planning and DevelopmentControl / Permitting

o Real estatedevelopmentpermits, improvements

o Buildingplans (newandimprovements)

Taxes, User Fees and Collectiono Propertyo Infrastructure

Infrastructure Provision andMaintenance

o Transportation (roads, rail,ports)

o Electricityo Water and sewero Garbagecollection

Regulations and Licensingo Businesso Health and safety

(environmental standards,occupational health)

Promotion and marketing Services

o Policing,o Fire, etc.

Communicationo Internal - operations and

procedureso External - public

information Public involvement

As much as the local government can supportLED, it can also hinder it. Recent researchindicates that local government can play anactive or passive role in LED, depending onpolitical philosophy, but in every case creatingbusiness-enabling environmentsis critical.Assessing how to streamline the complexityand cost of government bureaucracy withstakeholders, and then evaluating options forimprovement, should go hand-in-hand with

evaluating options for using these governmentpowers to promote the LED objectives.

Making Local Government Policy and

Regulations Work

Ensurepolitical commitment

It requires political commitment, desireand vision to effectively work with thelocal area to bring about long-termdevelopment and change.

Establish clear decision rules and procedures ingovernment

For example, effective business codes andland use zones that promote long-termplans and a clear and stable economic'playing field' are important.

Createa political environment that is safe


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Poor economic policies and weakgovernment systems can seriously impactefforts for local economic developmentby raising risks and increasing productioncosts. For example, risks and production

costs are affected when investmentopportunities and key government postsare given to unqualified friends andrelatives of the political party in power;when bribes are extorted from businessesand entrepreneurs, holding them hostageto politicians; and when tax rates orregulations are uncertain and change witheach new administration. For manyinvestors, consistency, predictability andclarity of government policies and

regulations are as important as a businessenvironment with few restraints.

Createenablingenvironments that havea higheaseof business entry and efficient regulation-enforcement

Jurisdictions with heavy regulation andweak enforcement have higher rates ofcorruption, a larger informal economy, areless democratic and are more likely to bepoor.

Enhancelocal property and real estatemanagement capacity

Fostering LED through local governmentpolicy development and implementationoften requires a land use planningdepartment that is real estate developmentsavvy and able to work effectively andefficiently with private sectordevelopment companies.

Updateadministrativesystems and procedures

Revised tax valuations and updatedproperty registers, better datamanagement are important. Localauthorities also need control overdetermining how land should be managed(e.g. enforceable zoning regulations), as

well as procedures for changes to legaland legislative frameworks.

Combinegovernancewith culture

In order for institutions and strategies to

gain respect, legitimacy and acceptance ofthe local citizens is required.

Community Benefits

Facilitates equitableand appropriateinvestmentand development

Local governments can help smallerbusinesses gain more equitable access toland and property through grantprograms, zoning initiatives, landassembly and other price controlprograms.

Local government can also encourageeconomic development that reflect thevalues of the community.

Encourages moreappropriate, community-baseddevelopment of thecity or municipality

Land use planning can help define thelocation of many city activities andindustries to ensure a more livable city

with a good balance of accessible jobs,community services, housing andinfrastructure.

Stimulates thecreation of small- and medium-sized enterprises

A local government is often able tooffer strategic property tax incentives,offer reduced cost services (e.g., water,sewer, electricity, etc.), provide grants orassist in other ways to make it easier toestablish small and medium-sized

businesses.

Obstacles and Challenges

Corruption and capacity

Perhaps one of the most pressingchallenges in LED is implementation andadministration of both process and actions.


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Beyond simple lack of capacity and follow-through are the devastating effects ofcronyism, nepotism and corruption. Strongand appropriate institutions are alsonecessary.

Lengthy implementation period

It can take a great deal of time to developand implement supportive localgovernment policies which can lead to anLED planning process losing momentum.Often municipal bureaucracy is a factor in

slowing and sidetracking LED initiatives.

Case Study 2: Land Titling Project, Laos

The Peoples Democratic Republic of Lao has suffered with informal and unclear landownership, titling and valuation methods which combined to make property development projects andassociated LED projects difficult to undertake in Lau. To resolve these issues and develop a clear landtitle system, the national government decided to develop an efficient property development system andmarkets by creating a system of clear and enforceable land use ownership rights, and by developingland valuation capacity. The seven year US$28.4 million project is being administered by the WorldBank.Under the project, about 258,500 parcels of land corresponding to an equal number of families will be

registered. This will benefit about 1.3 million people in urban and peri-urban areas most of them low-income land holders. They will have secure tenure against unfair land acquisition, the opportunity to sellland rights at fair prices, and the ability to use land as collateral. This will reduce conflict over landrights.

The main components of the project included:

Completion of the policy and legal framework for land management and administration;

Implementation of an accelerated land titling program;

Improvements in the infrastructure, facilities and systems for land administration;

Improvements in land valuation;

Support for project management and implementation, and institutional strengthening;

Studies on community land tenure and registration, definition of forest boundaries, costrecovery, land rights issues on nationalized lands and socio-economic impact of land titling.

The project has also been careful to respect and incorporate gender issues. Registration of propertyrights would reflect women's traditional rights to property (example, land owned by a woman prior toher marriage remains her individual property.) The Lao Women's Union has been included as a memberof the Project Oversight Committee at provincial level; provision made for gender a wareness training;provision to monitor gender statistics of land registration. The socio -economic benefits of land titling areillustrated by the success of the First Thailand Land Titling Project, completed in 1991. Impact surveysshowed that:

farmers with land titles increased their borrowing from institutional sources by 27 percent;

borrowers using land as collateral received 75 to 123 percent more institutional credit;

farmers with land titles had higher agricultural output and performed more land improvements

than those without;

titled land was 75 to 192 percent more valuable than undocumented land; and

revenues from land-related taxes increased 500 percent over a ten-year period, to US$1 billion.

Further Information:

www.finnmap.laopdr.com/

www.wds.worldbank.org


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Resource Link 1: Governance, Policy and Regulation

UN-HABITAT: Urban Governance Toolkit Serieshttp://www.unhabitat.org

World Bank:http://www.worldbank.org/urban/city_str/cds.htm,http://www.worldbank.org/urban/re_dev/red_body.htm

Cities Alliance:http://www.citiesalliance.org/

Case Study 3: Small enterprises to solve environmental problems and create jobs, Dar es Salaam

Collection and transport of solid waste in the city of Dar es Salaam has been the source of more than1,500 jobs, with women and youth being the first beneficiaries of the new-style privatisation that the

City Council has adopted with ILO support since 1997. Additional benefits include extending wastecollection to previously unserviced low income areas.

An important institutional innovation resulting from this experience has been that the community-based enterprises have entered into contracts with the local authorities. The public-privatepartnerships clearly specify the rights and obligations of both parties; the community groups and localauthorities. This represents an important step towards the formal recognition and empowerment ofinformal service providers. These franchisees, about 70 in all, are private enterprises, associationsand community organisations. Sensitisation campaigns, neighbourhood meetings and support fromthe local, elected ward leaders were crucial in ensuring fee payment by the serviced households andbusinesses. These fees make up a living wage for the waste collectors and cleaners. Moreover, theofficial recognition and praise they are receiving all round has altered their self-esteem and feeling ofbelonging to the local economy. They have recently formed the Dar es Salaam Waste ManagementAssociation (DAWAMA), officially registered in April 2001. Recycling and safe and healthy working

conditions are key concerns. WHO and UNDP/LIFE have donated small safety equipment to theworkers.

After the evaluation of the project confirmed the relevance and effectiveness of the approach, manyother municipalities in Tanzania want to follow the projects lead. Also neighbouring Kenya andUganda, as well as authorities in Zambia and Lesotho, have asked the ILO for assistance to tap thehuge potential o f jobs in making their cities clean.

Source: ILO and UN-HABITAT


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Initial Actions

Because many communities will want to see visible and tangible results quickly, and/or may nothave the financial capital or governance capacity to tackle big projects right away, this document isarranged so that the basic ideas and actions are presented first. These Initial Actionsrepresent the

starting points for local economic development and may be good first steps in getting a strategymoving forward. These, by and large, do not require significant financial capital, infrastructurerequirements or organizational capacity. Examples of Initial Actionsinclude formalizing thestakeholder group, committing to buy-local and implementing demonstration projects.

Action 2. StakeholderImplementation Group

Summary

Once the plan has been agreed to, there needs tobe an organizational mechanism for implementingit. Either an existing agency with an identifiedindividual needs to take the lead, or animplementing organization needs to be formed.One option for institutionalizing LED is throughthe establishment of a Local EconomicDevelopment Agency composed of public andprivate institutions, representatives of political andeconomic spheres, and civil society. Establishingagencies is one way to help institutionalize LEDand give it meaning beyond the time or tenure ofan enthusiastic individual, political leader or party.

Making LED organizations work

Community Brochure or Economic Profile

Community Benefits


Case Study 4:

Resource Link 2:


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Action 3. Demonstration Projects

Summary

Pilot or demonstration projects are small-scale,short-cycle projects or test projects that prepare

the way for replication or expansion. They showin practice how a specific problem may beaddressed. These projects are a good idea when alocal community is thinking about doingsomething new or innovative and there is greatuncertainty about the actual benefits andoutcomes. These are especially useful when socialprocesses, behavioral changes and institutionalreform may be required.

These projects are also valuable where individualcapacity may be low and could be increasedthough a small project, or when there is a need tocaptivate interest and keep momentum going inthe LED project, typically at the beginning of aparticipatory process. For example, if a clear andsimple project presents itself early in the planningprocess, pilot projects can be implemented whilethe more difficult planning work goes on. Usedthis way they are a good way to keep thoseparticipants who are action oriented engaged whilethe planning work continues.

Making Demonstration Projects Work

Good designConsider thematic area in relation to priorityconcerns. Spatially, they should be in small, welldefined areas. The project cycle should be short.The beneficiaries should be well established,focusing on poverty reduction. Local ownershipof the project is essential, including strong localparticipation. Getting commitment from all

stakeholders as is essential and having goodorganization.

FeasiblefinancingThe way demonstration projects are financedoften has implications for their feasibility of theup-scaling and replication. Seed funds, smallgrants or cost sharing are common ways tofinance demo projects.

MonitoringEffective monitoring, including use of clear andreadily measured indicators must be put in place.A clear pre-project baseline situation must also beestablished to give the information meaning.

Community Benefits

Visibleearly results of an LED process

Opportunity to beinnovative

Lowrisk

Learning


Poor monitoring

Financingfor up-scalingor replicating

Poor Design

Case Studies

Links

Case Study 5:

Resource Link 3:


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Action 4. Research and analysis

Summary

Nearly every action actions identified will requiredfollow-up work. This may include detailed projectdesign, detailed research (e.g., specific costestimates), project level impacts assessments,consultation (open houses, community surveys),and more precise analysis. It also may includefilling key data gaps that were identified during theLED planning process. Additional research onmarkets and opportunities, the supply chain(business surveys), or on specific concept (e.g.,eco-industrial parks) may be identified. These are

project actions in themselves and should betreated as such. They are also actions that can andshould be done before significant capital is used.Local learning institutions and schools could beinvolved in this action.

Making research and analysis work

Community Benefits


Case Studies

Case Study 6: Specific Research Value Added Coconut By-products,

Sulawesi (Indonesia)

In 2001, several economic development and poverty alleviation programs inIndonesia were merged to create the Partnership for Local Economic Development (KPEL), aprogram developed by the Government of Indonesia, UNDP and UN-Habitat. One of KPELsfocuses has been to identify clusters of economic activity and to provide support to improvethe performance of the cluster.

In North Sulawesi region, coconut farmers were confronted w ith extreme fluctuations in theprice of dried coconut. Based on the fact that diversified clusters perform better than singleproduce or service clusters, KPEL commissioned research into the opportunities for derivativeproducts and brought in an expert from Sri Lanka, a world leader in coconut production. Theresearch identified derivative opportunities nata -de-coco (a local sweet), charcoal, coconut oiland husk fibre. Training sessions were then held where 65 women learned to produce thedifferent coconut-based products. Households attending training sessions have improvedincome by 78% on average. All derivative products are sold locally. The second diversificationstrategy pursued was to plant corn, an alternate crop that grows in similar conditions tococonut.


Wiranto, Tatag. Partnership for Local Economic Development (KPEL): Experiences and Lessonsfor Poverty Alleviation.Paper presented at the Urban-rural Linkages Workshop UN-Habitat andESCAP. Cambodia September 2002

Visit: http://www.kpel.or.id

Resource Link 4:


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Action 5. Study Tours

Related Actions:

Summary

Actually seeing what is possible helps to linkconcept and ideas with reality. Having leaders inLED strategy visit other communities or locationswhere LED actions have taken place to see firsthand how they work, is a powerful catalyst inmobilizing activity.

Making research and analysis work

Community Benefits


Case Studies


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Action 6. Local procurement and

buy local campaigns

Related Actions:Local government Policyand Regulation, Local Currency;Organisational Development for LED,Physical Revitalisation/ Infrastructure, SkillsTraining

Summary

Local procurement is simply a commitmentmade by the local authority to buy and hirelocally. Buy local campaigns are similarexcept they target consumers and businesses,encouraging them to buy local products.Actions, such as developing a local businessdirectory (Action 8) are very helpful inimplementing this action.

Local procurement is particularly important tomunicipalities, as they are often majoremployers and contribute significantly to localeconomies. Municipalities can therefore actas leaders to the rest of the community buyingand hiring locally. Municipalities, operating asthey do on local taxes, should consider itimperative to reinvest that money in the local

economy. Adjusting the size of localcontracts so smaller firms can compete andawarding municipal contracts to localbusinesses will increase local job creation andit will also help improve the skills andexperience of local businesses. Localcompanies will also become morecompetitive, and more able to generatebusiness from the private sector, reinforcingthe economic dynamism of the area.

Likewise, any business or communityorganisation dedicated to improving its localarea should be committed to spending andhiring locally. It is often more difficult toconvince individuals to support localbusinesses as they may be more concernedwith price, convenience, or the prestige ofbuying imported products, or they may simply

think that their spending is so insignificantthat it does not matter. However, retainingmoney in an economy can make a hugedifference: the economic success of Japanand the Asian tiger economies had as much to

do with their populations buying their ownproducts as with their success at exporting.

Making Local Procurement Work

Develop a transparent tenderingprocessMunicipal contracts should be openlyadvertised and submitted to a fairtendering process with clear selectioncriteria to permit the hiring of the the bestlocal company for the job.

Such a process will help smaller, localcompanies compete against larger nationalor multinational companies that may havemore resources to produce more attractivebids. It should be noted that simplybecause a company is small or local doesnot mean that it will necessarily do apoorer job than a larger company. Largercompanies are, however, more able to puttogether impressive marketing materialswhen bidding for contracts.

Maintain expectationsLocal companies should still be held tohigh standards for fulfilling a contract andshould never feel that they can submitshoddy work or will receive preferentialtreatment simply because they are locallybased. If they are held to high standards,the quality of their business will alsoimprove.

UpgradeskillsIf local companies do not have the skillsnecessary to compete then localprocurement policies needs to becombined with other LED strategies, likeskills training or incubation programs, withthe understanding that those companies


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that complete these courses will performbetter in future tender processes.

Promotelocal productsSometimes there are mental barriers to

buying locally or hiring local companies.People either believe that local productsare inferior or they do not realise theimpact that their purchases can make ontheir community. A marketing campaignpromoting local businesses might beeffective in convincing residents that wherethey spend their money does matter, andthat supporting local businesses meansmore jobs and prosperity for everyone inthe end. The municipality, Chamber of

Commerce or local Business ImprovementAssociations might be interested inproducing such a campaign.

Community Benefits

Generates local jobs and promotes localinvestmentBy building demand for local productsand services, local procurement caninduce the generation of new jobs whichbring more money into the local

economy. The new or expandedcompanies will also provideopportunities for local investment.

Keeps money in thecommunityLocal procurement helps keep money inthe community rather than shipping it tooutside communities.

Builds local capacityLocal procurement can improve

community business skills, services andproducts.


Local companies may not havetheskills to fulfil acontractIt is possible that local companies may nothave the skills to compete for municipalcontracts.

Local products may not beavailableThere may be no local products orsubstitutions available, particularly formore specialized products.

Accusations of unfair competitionCompanies from other places (eithernational or international) may complainthat selection criteria favour localcompanies over outsiders and are unfair.Municipalities should make themselvesaware of any trade agreements their nationhas signed that may expose them tosanctions for favouring local companies.

Larger, non-local companies may producemorecompetitivebids than local onesMunicipalities, other organisations andindividuals may want to consider usinglocal companies even if they do not

provide the most competitive bid or thecheapest goods (within reason). The long-term benefits of developing the localeconomy may outweigh immediate cost-saving measures of going with thecheapest. Municipalities, however, mustmake sure their motives are clear, as theymay be accused of being fiscallyirresponsible.

Case Study 7: Sarajevo Housing Project, Sarajevo (Bosnia and Herzegovina)

During the civil war in former-Yugoslavia, 80% of the housing stock in the old town ofSarajevo was damaged. Many residents were living in one room or the cellars of their damaged


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and displaced persons occupying other peoples homes would be able to move into otheraccommodation. Norwegian Peoples Aid set up the housing project, in partnership with theMunicipality of Sarajevo, non-governmental organisations, and the residents of the seven districtsthe Municipality had identified as most in need of attention. Public consultations occurred throughoutthe entire process and included weekly meetings with representatives from the municipality,residents and contractors.

Residents were expected to provide much of the labor, but in situations where residents were unableto do so (because of age, infi rmity, or where the damage was too extensive) local private enterpriseswere hired. Self-help groups learnt from skilled workers, improving their own skills as well asreconnecting with neighbours. Building materials were purchased through local companies withcriteria being cost, quality and local products. The use of local products also helped preserve thearchitectural heritage of the old town. Demolition rubble was also re-used, allowing more resourcesto be committed to the project.

In the end, 603 houses were built, 103 more than the originally planned. The purchase of localmaterials and use of local contractors helped generate jobs and stimulated the production of buildingmaterials. All the companies hired as contractors are still in business and some have expanded theiroperations. Many residents were also able to establish small businesses in their rebuilt houses andwere able to take out loans on their improved properties.

Local economic development does not need to be kept in isolation from other municipal or

community goals. By emphasising the need to keep in mind local products and supporting localbusinesses while engaged in the provision of shelter, this project also led to economic development.LED can and should be integrated into all the objectives of a community.

F u r t h e r I n f o r m a t i o n :

Program CoordinatorNorwegian Peoples AidStorgt.33aP.O.BOX 8844YoungstorgetN-0028 OSLO.Tel: +47 22 03 76 46

Fax: +47 22 20 08 70

Resource Link 5:


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Action 7. Simple upgrading of local business areas / streetscape enhancement

Related Actions:Physical infrastructureinvestment, partnerships, also see townCenter business area upgrading for more

advanced upgrading

Summary

At the early stages, simply cleaning up an area,adding plants and greenery or banners can make adifference.

Making local upgrading work

The nature of urban areas, particularly unplanned

settlements, but other areas as well, is that they areliving and working areas. Up-grading must becarried out in the context of the community livingin the area and the businesses operating in thatarea

Community Benefits


Case Studies

Case Study 8:

Resource Link 6:


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Action 8. LED Publications

Summary

Module 3 (Situation Assessment,)of the LEDprocess suggests that research and analysis of thelocal business environment should be completed.Besides providing a basic understanding of theeconomic environment and businesses that existin the defined area, this information can be usedto generate publications. From simple leaflets thatare photocopies and used as a communicationstool for developing networks to providing basicinformation for new businesses that areconsidering locating in the community, thesepublications are useful tools in LED.

They are included as initial actions because they

can be done quickly and easily with limited stafftime. They are also useful ways of getting existingbusinesses involved in the LED process.However, they can also be expensive and timeconsuming if glossy brochures, magazines andother types of publications are developed. Below,three types of publications are discussed:

Community Brochure and Profile Letter, The Community or Economic Profile, The Business Directory.

Making LED publications work

The Business Directory

The business directory is essentially a listing ofbusinesses in the LED area, and informationrelated to those businesses. Ideally, it iscompiled on a computerized database, so thatit may be sorted by any criteria contained inthe database. It is usually used for businessto business contact information, so it isuseful if LED objectives include keepingmoney in the local economy longer andsupporting local businesses. However, it hasmany uses, including checking for thepresence of competing businesses,supplier/purchaser contacts, employmentsearches, and potential partnership/ co-operation arrangements.

Information commonly found in businessdirectories include:

names of businesses, listedalphabetically

names of businesses listed by type, (inNorth America, Standard IndustrialClassification codes are commonly used)

address, phone, fax, e-mail, web siteaddresses

key contacts main products or services number of employees years in business sometimes contains notes regarding

export activity, investmentopportunities, or other needs

sometimes contains all employers,regardless of economic activity (forexample, governments, educationalinstitutions, etc.)

a list of the largest employers

Community Brochure or Economic Profile

The community or economic profile is thefacts and figures publication that moreconcretely describes the LED area and mayprovide comparable data for other cities. Itspurpose is to provide specific informationthat the reader may require to aid in decision-making, such obtaining preliminary marketinformation, investing in the city, or apotential move to the city. Community

brochures and economic profiles are usefultools to have if attracting businesses into thecommunity is an economic developmentobjective. A properly designed booklet willhave additional value if used in concert withother communication methods.

Much of the data for the profile would havebeen obtained during a strategic planningprocess if the LED area undertook such anexercise:

location, climatic and geographic

information - distances and locationswith respect to other major urbanareas and a brief history and heritagedescription of the LED area,

a socio-demographic profile, a general description of the structure

of the local economy, an employment profile, and a

description of each major group of


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economic activities (primary,manufacturing, construction,wholesale & retail trade, education,etc.),

education and labor forcecharacteristics,(employment/unemployment,employment by occupation, laborforce participation rates, wages &salaries, etc.),

communications infrastructure, transportation infrastructure, utility infrastructure, financial support infrastructure /

resources, business professional resources:

financial, accounting, consultingresources,

natural resources, academic resources, tourism and cultural resources, foreign investment and trade, a description of the quality of life in

the LED area and its components(living standards, health care, socialinsurance, environment, etc.)

the legal business, organisational resources, such as

chambers of commerce, and economicdevelopment organisations.

Community Profile Letter

A community profile letter offers analternative or complementary approach forcommunities with prospective businesses. Acommunity profile letter is a personal lettersent directly from the city manager, townshipsupervisor, and/or economic developmentcoordinator to the chief executive officer ofthe prospective business. They send it as apersonalized business letter printed on aletter-quality word processor. This letter

contains all the information about thecommunity in which the business hasexpressed interest, or which the community

leaders feel the business could use in makingits decision. This information should becontinuously updated so that each printedletter has the latest information.

A community brochure may also be includedwith each letter but the brochure has apurpose different from that of the letter. Theaim of the brochure is not to transmit specificinformation. Rather, it communicates animage of the community as a quality place tolive and work.

Community Benefits

These publications are tools to help localbusinesses promote themselves to otherbusinesses both locally and outside the LED area,to tourists and assist with attracting newbusinesses to the LED area.


They can be expensive to produce (costof including images, printing on high-quality paper, and professional binding)and difficult to keep current as infor-mation constantly changes (note:community profile letters areinexpensive to produce).

They may be impersonal.

They are very common, therefore theirimpact on prospective businesses isreduced.

They often present an artificiallypositive image of a community.

They may contain irrelevant informationand businesses find it difficult to extractthe data they need.

Case Study 9: LED Publications


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Resource Link 7:

Advanced Actions

These first steps are then followed by Advanced Actions, which are more detailed andtechnical actions that will either require considerable organizational expertise, experience andmoney. In fact, most of these will require additional research and/ or specific expertise.Depending on your approach, these may be one part of larger LED strategic plan, or insome cases will be all that the local community is capable of initiating and following throughwith. Some of these actions include, establishing incubators, small business developmentcenters, co-operatives, community development corporations (CDCs), micro-credit andbasic infrastructure.

Knowledge Management and Marketing

Action 9. Knowledge Management

Related Actions:

Summary


Community Benefits


Action 10. Marketing

Related Actions:

Summary


Community Benefits


Case Study 10: Joint Marketing Initiative (JMI), Cape Town South Africa


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The JMI was launched in April 2001 as a joint initiative by the Province of the Western Cape and theCity of Cape Town in an effort to bring a single-minded focus to promoting the Western Cape andthe City of Cape Town to national and international markets to attract trade, investment and tourism.

The joint project markets the start of a new era of co-operation in which both spheres ofgovernment will dovetail their economic objectives. As the manager of the process explains Wewant people beyond our borders to identify the province and the city as an efficient, world-classdestination with a common commitment to providing excellent service in all areas. It makes perfecteconomic sense to bring all our efforts under one umbrella with a single marketing approach.

The five key sectors embraced by the JMI are: Tourism (including leisure, conferencing, membership, information and special projects)

Major events Film

Investment promotion

Trade and export promotion

The objectives of the JMI are: To clarify strategic focus in relation to the marketing of tourism and the promotion of trade and

investment. To avoid duplication and overlap between spheres of government and the private sector.

To achieve synergy, alignment, rationalisation and leverage for economic growth anddevelopment.

To create a coherent, multi-disciplinary and effective marketing strategy which is driven bycustomer needs.

It should be stressed that the intention of the JMI is not to create a new one-size-fits-allbureaucracy. The intention is to achieve success through alignment of strategies and structures. Based

on a partnership the aim is a single-minded, united focus to promote the region and the city andthrough this economic upliftment, job creation and a better life for all.

The following 7 steps are seen as part of developing the brand.Step 1: Vision and GoalsStep 2: Resource AnalysisStep 3: Market segmentation and target marketsStep 4: PositioningStep 5: Capabilities for successStep 6: Marketing mix and tacticsStep 7: Organisational design and implementation

The challenge is ensuring the Cape is translated into a single brand which shapes domestic andforeign perceptions of the region as a desirable place in which to do business, invest and visit.


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Entrepreneur and small business support

Action 11. Incubators

Related Actions:Physical

Revitalisation/ Infrastructure; Skills TrainingCenters;Small Business DevelopmentCenters

Summary

An incubator is an organisation committedto helping new entrepreneurial firms succeedby providing them with managerial supportand skills training. Normally, an incubatorconsists of a building or set of buildingswhere office space is rented out to fledgling

businesses at below market rents to helpminimize their overhead. Often thebuildings are old warehouses, factories,office buildings or retail space that wouldotherwise be sitting vacant and unused.

Incubators typically provide secretarialsupport staff and office infrastructure, suchas equipment, photocopiers, telephones,office furniture, and conference rooms thatare shared by tenants. Incubators may be

house industrial, manufacturing orcommercial businesses, or sometimes amixture of business types.

Incubator managers review incoming firmsbusiness plans and guide them instrengthening their business so that they cangraduate from the incubator and moveout within two to three years. Normally, theincubator will select only those businessesthat will benefit most from participating inthe incubator. Managers also help

incubating businesses with such things asnavigating government regulations,obtaining business licences, and preparingincome tax returns.

Incubators can be set up by not-for-profit orfor-profit organisations, and may be run by a

number of agencies and organizations,including city governments, chambers ofcommerce, private corporations or

economic development corporations.Incubators can also be operated by aconsortium of partner agencies andorganizations.

Making Incubators Work

Ensurequalified managerial supportKey to the success of an incubator isstrong managerial support provided bythe operating organisation. Thisincludes having enough staff to give

adequate time to all the participatingfirms. Managers should be competentand experienced business leaders whoare able to provide client businesses withtechnical assistance on accounting, taxes,marketing, financing, labor issues andthe like.

Provideaccess to financingand seed capitalTo help ensure financial stability andviability, incubators often work with

micro-credit programs to provideventure capital to participating firms.Seed capital can be either debt or equitycapital and varies in amount dependingon the nature of the small business, itsneeds and the risk involved.

Accept only firms with good business plansAn incubator program is only assuccessful as the number of businesses itgraduates. Successful graduates of theincubator may be required to provide in-kind services in future years, such assharing their experiences with newparticipants.

Comm uni ty Benef i t s

Protects and nurtures start-ups


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Incubators help small firms throughtheir most vulnerable time, and canmean the difference between successand failure

Improves local economies and providelocal jobs

by creatingsuccessful small businessesIn the US, numerous studies havedemonstrated that the overwhelmingmajority of incubator graduates are stillin business. One 1997 study found that87% of incubator graduates were still inbusiness. The new businesses providelocal jobs, strengthen the localcommunity and help diversify the localeconomy.

Physical revitalisation and heritagepreservationIncubators often locate in underused orvacant commercial buildings which theyconsequently renovate. Their presence

can help animate previously depressedneighbourhoods and, if the incubator islocated in an older building, can assistwith community heritage preservation.


Lack of managerial support, training,marketingand business contactsSometimes incubators only providecheap rent for small businesses.Although even this can be helpful whena business is just starting, incubators thatgraduate more successful businessesoffer strong managerial support andskills training, marketing assistant andbusiness contacts.

Case Study 11: High-tech Incubators (China)

China opened its first high-tech incubator in 1988. Since then, China has builtmore than 200 high-tech enterprise incubators. The incubators are nursing over5,290 enterprises, in addition to 1,900 plus enterprises which have matured. In 2001, thecombined annual revenue of these enterprises was over US$2.6 billion and they provided164,000 jobs.Most of Chinas incubators are non-profit organizations coordinated by the Ministry of Scienceand Technologys Torch High-technology Industry Development Center. Although the

incubators are government-run, the participating firms are almost all private.

Chinas incubators normally consist of one or several floors of a publicly-owned office building,and focus on biotechnology, microelectronics, software and telecommunications marketspecializations. Rents are initially 50% or more below market and rise over a three to fouryear period to encourage firms to become self-sufficient. Incubator staff provide participatingcompanies advice on management practices and loan applications as well as low-cost or freelegal and accounting services. There is also limited access to venture capital. Although loanstend to be small, they are important in China where venture capital, especially for smallentrepreneurial firms, is still difficult to come by.

The major problems that Chinas business incubator program has encountered mainly relate tomanagers with little relevant business expertise and incubator understaffing. The lack of staffhas resulted in some businesses receiving very limited support and assistance.

In 2001, Chinas Ministry of Science and Technology decided to earmark US$2.4 millionannually to support the construction and development of high-tech enterprise incubators over10 years. The construction of incubators is not limited to high-tech development zones, butwill also extend to universities, scientific research institutes and State-owned enterprises.


NEED CONTACT INFO HERE


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Case Study 12: The Entrepreneurial Center at the University of

Technology, Kingston (Jamaica)

The Entrepreneurial Center at the University of Technology in Kingston, offers business

services to start-up companies either operating from home or located at the university.Services for at-home businesses include use of Extension Center's mailing address, postaldelivery and out-going mail handling, office reception and telephone answering services andaccess to the Universitys resource library. The extended program allows the entrepreneur tobe physically based at the Center, providing a cubicle, access to conference rooms and otherbusiness services.

The Business Center is now planning to transform its entrepreneurial Center into a TechnologyInnovation Center. The facility will nurture start-ups and facilitate the development of early-stage enterprises into stronger and larger companies by providing essential business services,consultation, training and flexible working space. As part of the new direction, a new 1500 mwill be constructed.

The decision to refocus the business Center as a technology-focused Center is intended to helpkeep graduating students with sought after technical skills the opportunity to launch their

business careers in Jamaica rather than out of country. It also highlights the major challengefaced by both the business Center and the new innovation Center face in keeping skilledworkers in-country.


www.utechjamaica.edu.jm/entrep/default.htm

www.cidajamaica.org.jm/privsec.htm

Resource Link 8

The National Business Incubator Association

This is a non-profit American association dedicated to providing information and resources onincubators. The Association focuses on U.S. examples with a few from other developed economies.Nevertheless, the website offers considerable information on incubators and is a good resource.

Visit www.nbia.org


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Action 12. Skills Training Center

Related Act ion s:Informal Sector, Micro-credit, Partnerships, Small BusinessDevelopment Center

Summary

A skills training Center is a facility thatworks in partnership with businesses and thecommunity to provide access to educationand training in various fields, conductprograms to assist the creation ofemployment opportunities and makeavailable a job bank network for thecommunity.

Making Skills Training Centers Work

Linkingskills trainingto Job PlacementMatching skills training to the needs ofthe marketplace, through job placementassistance is key to making Centers work.

Identify trainingneeds and develop anappropriateplanThe Skills Center must match local labormarket training needs. Communitytraining needs need to be identified (i.e.,

in what areas and sectors doescommunity capacity need building) inaddition to the development of trainingplan designed to meet the identified need.

Identify partners and takecommunity contextinto accountHuman, technical and financingresources must be identified. Althoughthe local authority should play a leadingrole, especially in the financing, other

community players and organizationsshould be involved. The social, cultural,religious, economic and political contextof the locale must also be identified andincorporated in the Centers developmentplan.

Monitor and evaluateCenter successContinuously monitor and evaluate theperformance, quality and results achievedand adjust Center training programsaccordingly.

Community Benefits

Strengthens theskills and abilities of thecommunityThrough the dissemination ofinformation and training programmes,the Center will help build local capacity,skills and education levels which willhave positive spin-off effects on thelocal community.

Provides a venuewherethebusiness community

to hirelocallyBusinesses can help develop Centertraining programs to help meet theirown employment needs. Businesses canalso hire program graduates to work intheir firms.

Promotes social development and givepeoplebetter opportunitiesSkills Centers promote socialdevelopment and can lead to increased

entrepreneurial activity in the localcommunity.


Increasedivisions within thecommunityTraining might only help individuals andnot the community as a whole. Thus, itcould increase disparity of the membersof the community.

Promotes exclusivity

Center training programs should notonly focus on some areas or members ofthe community to the exclusion of otherprograms and community members, inparticular youth and women.


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Case Study 13: Women's Empowerment Program (WEP), Nepal

To help improve the welfare of women in rural Nepal, a government sponsoredinitiative developed the Womens Empowerment Program (WEP) to empowerwomen through an innovative program integrating literacy, micro-finance and micro-enterprise training and an understanding of legal rights and advocacy.The objective of the WEP is to develop well-managed, transparent savings and credit groupsthat enable women to borrow from their savings groups to develop micro-enterprises on theprinciple of women learning from women, and to increase women's self-confidence, decision-making power, and leadership skills.

WEP however offers no seed money, matching grants or subsidised interest rates. Womenmust own the program by creating their own group policies, paying fees, buying books,providing facilities and supplies, and finding literacy volunteers. WEP assumes that the poorwill pay for the services they need. It requires all members to be literate, understand thebanking process and know how to form and operate a business.

As a result, women's in-kind contributions are estimated at $260,000. 240 NGOs work as

partners for implementation. WEP also encourages financial independence and for every tenWEP group they work with, the NGO receives less than $5 for administration. As a result, in-kind contributions from supporting NGOs are estimated at $100,000 to date.

The program uses an approach that was developed in Nepal and encourages women to bui ldon their strengths to overcome obstacles. This approach teaches an organization to learn andimplement a major program in a transparent and accountable manner, to adopt low-costmethods to promote literacy and economic participation in order to reduce dependence onexternal funding: In conclusion, the program instills a sense of self-reliance.

WEP has also produced a four-part book series called, Women in Business. The first bookteaches basic literacy and numeracy as well as principles for forming strong groups. Thesecond book teaches basic math skills to track the growth of savings. The third book teachesresponsible lending and borrowing, and basic bookkeeping, with the goal of enabling the groupto function as a self-sufficient village bank. The final book teaches entrepreneurship. The

simplified books enable newly literate women to teach each other basic skills. Within a fewmonths they start putting them to use in ways to ensure skill retention.

Overall, the program has clearly demonstrated that women can teach themselves the skillsthey need to improve their lives, to save money and start small businesses. The Programreaches 123,000 women in nearly 7,000 economic groups in Southern Nepal.

Further Informat ion:

http://www.pactworld.org/initiatives/worth/worth_model.htm

Resource Links


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Case Study 14: Tomaszow Enterprise Incubator Foundation (Poland)

Tomaszow is a former industrial located in Poland that is home to significantunemployment. To improve the local and reduce unemployment situation andlocal vocational training capacity, a coalition of vocational training organizations called theEmployment Forum was organized to co -ordinate vocational training programs and to develop

new training schemes for the unemployed.The Employment Forum was made up of representatives of training organizations, publicofficials from the City of Tomaszow and surrounding counties, local employers andunemployed persons.

As a group, their first undertaking was the preparation of a community needs assessmentwhich involved surveying 6,000 local employers to assess their training needs and hiring plansfor the next three years. The survey was conducted with the assistance of unemployedcommunity members. With this information, the Forum then built a data base on local trainingneeds, training capacity and training graduates to improve local information flow, developbetter training courses and bring together newly trained individuals with potential employers.To date, three new training programs have been developed to meet specific local labor marketand training needs.

The Employment Forum has also worked with the local government to develop and incorporate

employment generating policies and programs in the City's planning processes.Representatives of large local companies also played a key role in formulating an employmentstrategy later incorporated into the long-term municipal economic development plans.

In addition to helping with the development of new local policies and a municipal economicdevelopment plan, the Tomaszow Enterprise Incubator has achieved a high success rate fortrainees, with 65% of trainees finding jobs or continuing their training education.

The program is currently being expanded to include another four cities in the PiotrkowProvince, and the cities of Opole and Zyrardow.

For more information visit: www.bestpractices.org

Resource Link 9: Skills training center

Worth womens empowerment program:Visit http://www.pactworld.org/initiatives/worth/worth_model.htm

World Bank Education Sector Strategy:Visit: http://www1.worldbank.org/education/strategy.asp

Best Practices:Visit http://www.bestpractices.org.

ILOs Small EnterprisE Development or SEEDVisit the ILO at: http://www. ilo.orgThe main training product of SEED is The Start & Improve Your Business (SIYB) program. It is a management-training

program with a focus on starting and improving small businesses as a strategy for creating more and better employmentin developing economies and economies in transition.


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Action 13. Micro and Small-Scale

Enterprise (MSE) Development

Rela ted Act ions :

Micro-credit, Informalsector, Incubators, Partnerships, Small

Business Development Centers

Summary

Micro and Small-Scale Enterprise (MSE)development planning at the localgovernment level aims at creatinglinkages and networking among the localagencies concerned with differentcomponents of micro-enterprisedevelopment as well as buildingsustainable partnerships among

government organizations, localgovernment bodies, private sectorinstitutions, non-governmentalorganizations and communities in orderto ensure continuing support to micro-enterprises to grow, sustain and expandtheir businesses. The graphic belowillustrates the MSE concept.

What Makes MSE Work?

Nurtureand support micro-entrepreneurs

New and existing micro-entrepreneursfrom poor families need to be linked tothe local market, based on the marketpotential, so that their enterprise expandsand family income increases, taking intoaccount the market potential and thespecial needs of women and theimpoverished.

Provideand harness micro-creditSuccessful Micro-credit componentsneed: (seeMicrocredit)- Entrepreneurs who know their

markets but need loans for workingcapital with terms less than one year.

- Streamlined lending and monitoringprocesses to minimize administrativecosts. Credit decisions should be

based on eligibility rather than onbusiness appraisal.

- Lenders using special techniquessuch as negative sanctions or peerreview, to motivate borrower

repayment.- A strategy for long-term financial

viability. They should be designedfor cost-effectiveness andsustainability.

Providetechnical assistanceTechnical Assistance includes businessand financial management capacitybuilding, business counselling,accounting and bookkeeping. Other

initiatives include:- Prototype development of productsand processes

- Quality control and testing ofproducts/services

- Identification of alternative rawmaterials, equipment, etc.

- Product design and development- Improvement of packaging,

labelling, etc.- Identifying "know-how" and

adapting appropriate technology- Upgrading technical skills to match

new developments (seeSkills TrainingCenters)

Develop Small Business Development Centers(seeSmall Business Development Centers)BDCs are designed to build capacityand offer support to entrepreneurs.Successful BDCs offer:- A centralized organization Center

for business development

- Capacity-building (business planwriting, credit referrals, managementtraining)

- Support for existing enterprisesimprove their business with

- Training in new technology,management, and marketing


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- Training in business ethics and practicesthat benefit the community

Establish micro- and small enterprise-boards(MSE)

Establish community-based MSE toprovide an institutional and regulatoryframework for implementation ofgovernment policy for MSEs. Theboards can also advise and monitor theimplementation of the governmentpolicies, recommend marketingstrategies and coordinate education,training, technology and researchinitiatives.

Establish a marketingstrategy

Marketing strategies for MSEs include:- Research of market opportunities- Development of sector specific

information systems- Participation in trade shows and

missions at all economic levels- Building of organizational capacity

for promotion- Development of linked marketing

arrangements among MSEs- Cyberspace and web marketing- Improvement of marketing skills of

individual MSEs.

Develop incubators (seeIncubators)Incubators support fledgling businessesby providing inexpensive rental officespace and support services (e.g.,managerial support, secretarial, printing,

etc.) during their first few years ofoperation.

Community Benefits

Creates employment at thelocal level

MSE is specifically intended to helpgenerate and sustain communityemployment.

Facilitates poverty reduction with low-incomefamilies and womenThrough targeted services andprograms, MSE can createemployment in certain sectors of theeconomy and with key communitygroups, including women and youth.

Builds capacity of micro-enterprisedevelopment servicesBy providing business training anddevelopment counselling,, MSEbuilds capacity for local delivery ofdevelopment services.


Lack of capitalMSE requires start-up andoperational funding and capital in itsstart-up years.

Limited market for products and servicesGood market analyses are critical toMSE success. Business plans forsmall- and medium-sized enterprisesshould pay careful attention tomarketing concerns and issues.


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Case Study 15: Product Design and Development Center, Nairobi (Kenya)

action led pre-field testing draft

Documents