A thorough local economy assessment provides the foundation for successful LED strategy development. |
 LED Information To develop a LED strategy, the community must be fully informed about their own town or city, their own region and their national economy. Conducting a local economy assessment involves collecting strategically important information and then analyzing it strategically. Some useful types of information are:  Demographic information, i.e., information about the people in the community, what they need and what they are capable of. Economic information. This information will provide an understanding of the local economy. Investment climate information. This will inform on how the local government treats its business community. Hard Infrastructure information. This will inform about the status of water, electricity and wastewater provision. The focus should be on economic areas. Regional and National information, to gather information on what is happening in other areas that impact on the community.
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This table shows examples of the types of information that can be collected in each of the categories.  Local Economic Development Information | | Demographic | Population : By size, age, growth rate, projected growth rate, household size, population density. This could include a poverty mapping exercise to identify demographic characteristics by subdistricts in the city.
Employment : Employees by industrial activity -- compare regionally and nationally, and note changes over time, if possible Age structure of the employed and the occupation breakdown of employed and unemployed Structure of employment (full/part-time/male/female) -- compare nationally and over time Average gross weekly earnings by gender and full- and part-time employment Unemployment figures, by numbers, age, duration Numbers and other information on people and activities in the informal sector
Education: Numbers and types of schools, numbers of teachers (full-time equivalent) and class sizes Further and higher education establishments by type and numbers attending. Educational attainment levels by numbers and types -- compare nationally
Training: | | Economic | Numbers and sizes of firms, broken down by sectors numbers of full-time equivalent employees, in time series, if possible Number and type of recent (e.g., last 10 years) firm closures, by size, sector and date Number of inward investments, foreign and domestic (both Greenfield and existing companies) by employee size, sector and date Number of new business startups, by size, sector/activity and longevity Number of companies that export/to where/ by what sector/company size Top 50 (or so) companies by size -- employment and/or turnover -- by sector and named Business tax income Rental/purchase costs for vacant industrial and service sector units, by time series and size groupings Vacancy rates of industrial and commercial space by size, location, absorption rates Port/airport/rail cargo/passenger statistics
| | Investment Climate Infrastructure | Taxation of businesses Amount of 'red tape' and the ease of getting through red tape Existence of supporting business networks, such as Chambers of Commerce. Local authority economic development support Access to funding Assessment of local government capacity to carry out economic development
| | Hard Infrastructure | Condition of water, electricity and wastewater provision in areas of economic activity Assessment of provision of land, real estate/office space for economic development activities (including markets) and CBD's
| | Regional and National | What neighboring cities are doing in terms of their local economies How neighbors are competing How they are, or could, collaborate What is happening at the national level Opportunities available through the national government Opportunities and threats presented by regional government
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 Data collection can be ongoing forever and can sometimes consume the entire LED budget. Successful cities are often strategic about the TYPE of information that they collect. When collecting information it is useful to ask 'What will this informational material be used for?' If there is not enough budget for a thorough data analysis, then focus groups with researchers, the chamber of commerce and other knowledgeable people can be a useful option. |
 Analysis of the Information
The information collected provides the basis for an assessment of the community's economic situation. It should also begin to point to the projects and programs that are (i.) required and (ii.) possible.
There are various strategic tools that can be used to analyze the information. One of these is the SWOT (strengths, weaknesses, opportunities and threats) analysis. The important part of this process is that ALL aspects are considered. Several levels of SWOT analysis can occur.  §         First, a SWOT of economic conditions of the "community" can occur. This will focus on the strengths, weaknesses, opportunities and threats to the economy. It will assist in pointing out what the focus of a strategy should be. §         Second, a SWOT of the community can occur. It will assist in pointing out what is possible in the strategy. §         Finally, a SWOT of the local government hard and soft infrastructure can occur. This will point out what is possible in the strategy and also point to the facilitative role that government should be playing in the LED arena. The linked documents below contain a more detailed discussion on what a local economy assessment is, methodologies and tools for conducting a local economy assessment. At a more practical level, the city of Cali has also recently collected economic information towards a local economy assessment. (See link for Cali's terms of reference, as well as the first round of economic data). Notice that the Cali report is descriptive; the analytical SWOT is not included. The Durban local economy analysis has taken this one step further. Their report (see link) tries to present the data in a succinct form aimed at drawing out their comparative advantages; this forms the basis of decision making in the city.   Back to top
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