EDA Journal Vol 14 No 3 | Page 19

BUILDING PROSPEROUS COMMUNITIES WITH PEOPLE- CENTRED ECONOMIC DEVELOPMENT

Patrick Fensham , Principal and Partner , SGS Economics and Planning
The COVID-19 pandemic has highlighted and exacerbated many of the challenges and inequalities experienced by disadvantaged communities . As governments continue to develop economic development and recovery strategies , an opportunity exists to drive change through a more equal and sustainable economic model centred on purpose and place : community wealth building .
Community wealth building ( CWB ) is a people-centred approach to local economic development , which looks to increase the flow of wealth back into local economies and places by giving more control to local people and businesses ( CLES 2020 ). It is a response to a broken , consumptive , extractive economy that has concentrated wealth in too few hands , marginalised and alienated communities , and wrought environmental destruction and collapse .
Recognising the limits of the current system , CWB is a maturing of economic development , with a core focus of growing social and environmental benefits into all economic activity .
Traditionally , the focus has been on the redistribution after wealth is created – whether it ’ s the idea of trickle-down economics or tax and transfer systems of the modern state – they are either failing or are not sufficient . CWB shifts this paradigm by considering pre-distribution , during and before wealth is created .
ANCHOR INSTITUTIONS AND ‘ STICKY ’ CAPITAL ARE VITAL FOR BUILDING COMMUNITY WEALTH Anchor institutions have a significant role in CWB . These public , and sometimes private , organisations are bound to or fixed in place and often have a special role as service providers in local communities .
Their capital is ‘ sticky ’, which means money is often sourced from and expended in local communities . Anchors have a special obligation to seed sustainable activities and local economies – they are crucial to CWB because of their significant local budgets , land and assets , and their role as purchasers and employers .
In the Australian context , anchors include local government , police , hospitals , housing providers , business and community anchors , education providers , community sports clubs , water authorities , universities , TAFEs , public and private schools , Aboriginal corporations and land councils .
This article explores the potential for anchor institutions in Australia to adopt a community wealth building approach , looking at the five key principles of community wealth building ( CLES 2020 ):
1 . Plural ownership spreading wealth and democratising it by supporting SMEs , and local businesses and encouraging a flourishing cooperative and employeeowned business sector .
2 . Making financial power work for local places by increasing investment flows within local economies by harnessing the wealth that exists locally .
3 . Fair employment and just labour markets working with anchor institutions to engage disadvantaged and
ECONOMIC DEVELOPMENT JOURNAL VOL 14 NO 3 2021 19