EDA Journal Vol 14 No 1 | Page 7

FIGURE 1 . MODEL OF THE REGIONAL ECONOMY

At the regional level

Enablers of economic competitiveness / growth

At the firml level

The regional economy employment , income and output multipliers

Injections of income Leakage of income

Source : SGS Economics & Planning Pty Ltd

Anybody charged with writing policy for local economic development could do worse than applying this framework to assemble an action plan for jobs and investment . Nevertheless , it is increasingly evident that it is no longer fully satisfactory for this purpose , if it ever was .

For one thing , while all of the drivers and enablers shown in Figure 1 have a spatial and local dimension , not all of them are within the agency of Councils , as shown in Table 1 .

One could almost say that the trickle down model saddles local governments with an approach to economic development which does not appreciate the essential strengths and competencies of Councils . These strengths lie in place making , integrated (‘ non-silo ’) policy making and an intimate knowledge of the local community , including businesses .

A DIFFERENT CONCEPTUAL LENS Many aspects of the exports driven model are still worthwhile ; it is important not to throw the baby out with the bathwater . But it is now clear that past economic development strategies have not put enough emphasis on curating , sustaining and building the existing business community in local areas . Regrettably , it has taken the COVID 19 crisis for many to realise just how important local businesses are to local wellbeing .

TABLE 1 COUNCIL ’ S KEY ECONOMIC LEVERS

Economic development tools and policies Skilled migration programs Access to skills in particular locations Education and training Taxation regimes Competition policy Efficiency of capital markets Innovation system and incentives Clustering / networking of businesses Small business support Agglomeration economies City shaping infrastructure Quality and cost of structural and follower infrastructure Livability and place quality Cultural vibrancy Marketing and investment recruitment Source : SGS Economics & Planning Pty Ltd

A ‘ bottom up ’ approach , focussing on growth from within and strengthening the local community is warranted as the opposite bookend to the exports driven approach .

This requires a different lens in analysing local economies – one that puts as much value on ‘ domestic businesses ’ as ‘ export heroes ’. A model for this is shown in the chart below . This distinguishes between 3 interacting economies within a region or municipality , each of which has different assets and impacts and each of which offers different opportunities for local wealth building and job creation .

Council ’ s influence Low Moderate Low Low Low Low Low High High Moderate Moderate High High High Moderate

The three core economies include the household services sector or ‘ consumption economy ’, the caring and learning economy which incorporates educational , health and allied organisations in a district and the exports economy , discussed above . All three of these economies are underpinned by various forms of infrastructure and support services , including the construction sector , shared assets in transport , water cycle management and telecommunications and businesses which provide strategic , legal and brokerage services .

ECONOMIC DEVELOPMENT JOURNAL VOL 14 NO 1 2020 07