Most local economic growth is generated by small and medium-sized businesses that are already established in the community. Encouraging local business growth involves providing advice, support and resources to enable these existing local businesses to grow. These strategies are sometimes called business retention and expansion strategies. The range of initiatives to support local businesses is vast. Some can be expensive, but others are not. Some projects include: Business retention visits and surveys:
Visits and surveys of existing firms can be used to help identify problems and determine how the business is performing, from where it sources its inputs, whether it is expanding, etc. These visits can be used to encourage local businesses to source more inputs locally, identify and finance training and skills needs, and contribute to LED strategy development. An important role these visits can have is to identify factors that might forestall a business leaving the area. Technical assistance to business:
This can include broad-based management and marketing programs, quality and environmental standards training and advice, through to more specialized export training or research and development support. The focus here should be on providing accredited, demand-led, technical assistance, paid for on a fee-for-service basis, if possible. Often these services are provided through one-stop business service centers and frequently these are provided by the private sector. Financial advice and assistance:
One of the hardest issues for businesses is to access capital. An appropriate financial support program will be able to give | | Further Information | (While we hope you might find the links below of interest, please note the World Bank is not responsible for the content of the following links)
Municipalities and Business Development. This paper was presented by Professor Miroslav Glas, Ph.D., University of Ljubljana, at a workshop held in Bosnia Herzegovina, organized by the Southeast Europe Enterprise Development (SEED) Facility. The workshop was aimed at giving municipalities insights into how they could improve the competitiveness of their local economies through developing local economic development strategies and action plans. This paper is presented with the kind permission of SEED and Professor Glas. Managed Workspace and Business Incubators: A Good Practice Guide for Local Authorities. |
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advice and training on financial planning, access to capital and credit, etc. In some cases it may be possible to establish small grant or loan programs to encourage, for example, investment in modern technology. Great care should be taken with these to ensure fairness; these schemes should always be transparent. Often these are provided at national/state level rather than at local level.
Public procurement policies and 'buy local' campaigns:
These are local, business friendly policies where the local government, public sector organizations and larger local businesses make their contracts more accessible to local companies. This can be done within fair-practice laws. Initiatives could include adjusting the size of contracts so that smaller companies may bid, encouraging and accepting bids from groups of local companies, holding procurement events for local businesses, publishing local business competency directories and so on. It can also be done by facilitating more interaction between firms (network facilitation) and by supporting local supplier development programs with local industry associations. Provision of sites and premises:
Since local authorities and the state are often the owners of industrial and commercial land and buildings, they can use these to encourage business investment and expansion. A good understanding of the local property market should enable a local authority to plan for growth. Funding such infrastructure investments is a challenge, however, rents and sales should provide a market return for the authority. The option of private sector delivery or partnership should always be examined to ensure best use of local authority resources. Export clubs:
These are a good way for businesses to share experiences, marketing efforts, etc. They are often undertaken in the private sector and ‘enabled’ by the public sector. A program to help informal businesses establish legal operations and gain access to the corresponding benefits (e.g. support services, capital markets, training grants etc.) can unleash significant local sources of capital and fiscal revenues that otherwise remain hidden. Case Studies
(While we hope you might find the links below of interest, please note the World Bank is not responsible for the content of non-World Bank websites) Bosnia-Herzegovina -- (This is an example of comprehensive LEDA overview and encouraging local business growth). Indonesia -- (This is an example of encouraging local business growth, investment in soft infrastructure). Indonesia -- (This is an example of encouraging local business growth and promoting domestic inward investment). Mozambique --(This is an example of encouraging local business growth and new enterprises). Slovenia, Sezena -- (This is an example of encouraging local business growth and new enterprise). South Africa, Harrismith -- (This is an example of encouraging local business growth). South Africa, Johannesburg -- (This is an example of encouraging local business growth and investment in hard infrastructure). South Africa, Khayelitsha -- (This is an example of encouraging local business growth and investment in hard infrastructure). South Africa, Mhala -- (This is an example of encouraging local business growth and new enterprise). South Africa, Various -- (This is an example of encouraging local business growth and investment in soft infrastructure). Vietnam, Haiphong -- (This is an example of area targeting, encouraging local business growth as well as investment in hard and soft Infrastructure). |
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