Australia's National Local Government Newspaper Online

Local Government's role in economic development

By John Noronha*

In an increasingly competitive global market it has never been so important for Local Governments to prepare effective economic development strategies. Sustainable economic growth at a local level is vital to generate ongoing employment opportunities and to support improvements in infrastructure and community services. While market forces and external factors are the primary influences on local economic conditions, Local Government can also play a major role in ensuring sustainable economic growth.

Although objectives for economic growth vary from area to area, they are often focused on practical actions to retain and expand existing industry, attract new businesses to the area and manage declining or sunset industries. Often, however, community and business expectations of what Local Government can achieve are unrealistic given its limited sphere of influence, competing demands on financial and human resources, and the ever increasing need to balance economic growth with environmental and social priorities.

So what can Local Government realistically be expected to deliver in the area of economic development today? A review of recently completed economic development strategies, prepared by local authorities in Australia and overseas, highlights a number of areas where Local Government may take a proactive role. These include:

• improve the attractiveness of the local area to stimulate population growth and leverage investment
• create a regulatory environment which provides certainty and direction for business
• identify sites to accommodate new investment
• manage and maintain existing infrastructure
• facilitate the provision of new or upgraded infrastructure
• assist education and skills training which is targeted to support local business
• undertake research to identify new markets, regularly review local market conditions and assess broader economic indicators
• undertake marketing and promotion that builds on the existing attributes and opportunities
• develop networks between private business, public institutions and all levels of government
• lobby private and public sector stakeholders to secure funding.

While a range of responses are required to achieve these actions, Local Government would appear to have three pivotal roles, these being:

• leadership
• facilitation
• partnership building.

These roles can be challenging given the range of stakeholders and complexity of relationships involved; however, success in these areas is critical to creating the positive economic environment in which investment thrives and employment opportunities are maximized.

*John Noronha is an economist with Essential Economics Pty Ltd.

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