Local Economic and Employment Development (Leed) Organising Local Economic Development: The Role of Development Agencies and Companies

497 Pages·2010·5.67 MB·English

by  Oecd Publishing

Organising Local Economic Development
Organising Local
Economic Development
THE ROLE OF DEVELOPMENT AGENCIES AND COMPANIES
Local economic development can offer significant far-reaching benefits. Unlike conventional local
THE ROLE OF DEVELOPMENT AGENCIES
public services which provide a specific service to a well-known population base within a defined
geography and a given timeframe, local development functions within wider governmental spheres AND COMPANIES
and markets. Aspects of local development have greater impact beyond the reach of local and
regional/provincial governments.
O Greg Clark, Joe Huxley, Debra Mountford
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Development processes occur within a wider geographical area than local government, and in some g
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cases encompass a broader scope than provincial or national governments. Thus substantial inter- n
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governmental co-operation and public-private partnership are needed. Consequently, the effects of in
local development are usually achieved within the same timeframe as business cycles (12-15 years) g
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rather than government electoral cycles (3-4 years). o
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Given these factors, economic development could best be co-ordinated as a partnership activity l E
between public, private and institutional sectors, with substantial vertical and horizontal collaboration c
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within the public sector. It requires a long-term strategy that includes realistic and measurable short- n
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term goals and outputs addressing both the customer and the investor. It should also be supported m
by the appropriate organisational vehicles such as development agencies and corporations. ic
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This book identifies how such development agencies and companies work, what they do and what v
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constitutes success and value added. It explores international practices in a variety of locations lo
and contexts, and defines both the success factors and the challenges associated with economic p
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development agencies and companies. e
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Related reading TH
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Local Development Benefits from Staging Global Events (2008) R
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Making Local Strategies Work: Building the Evidence Base (2008) L
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Investment Strategies and Financial Tools for Local Development (2007) O
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The full text of this book is available on line via these links: N
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www.sourceoecd.org/development/9789264060814 C
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www.sourceoecd.org/regionaldevelopment/9789264060814 M
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Those with access to all OECD books on line should use this link: A
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84 2010 02 1 P
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Local Economic and Employment Development (LEED)
Organising Local
Economic Development
THE ROLE OF DEVELOPMENT AGENCIES
AND COMPANIES
Greg Clark, Joe Huxley, Debra Mountford
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
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This work is published on the responsibility of the Secretary-General of the OECD. The
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views of the Organisation or of the governments of its member countries.
ISBN 978-92-64-06081-4 (print)
ISBN 978-92-64-08353-0 (PDF)
DOI 10.1787/9789264083530-en
Series:Local Economic and Employment Development (LEED)
ISSN 1990-1100 (print)
ISSN 1990-1097 (online)
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3
FOREWORD –
Foreword
The OECD Programme on Local Economic and Employment Development (LEED)
has advised governments and communities since 1982 on how to adapt to global trends
and tackle complex problems in a fast-changing world. It combines expertise from
America, Australasia and Europe into pragmatic task forces that provide rapid responses
and targeted advice on specific issues. It draws on a comparative analysis of experience
from some 50 countries around the world in fostering economic growth, employment and
inclusion.
The work of LEED since 1982 to the present day has played a major part in
establishing and gaining acceptance for the notion that local action, local policy flexibility
and new forms of local governance in economic development are both desirable and
essential. Development agencies and companies have played a fundamental role in the
delivery of local economic development since the end of Second World War and they
have been an essential partner to the LEED Programme since 1982.
The first development agencies were established in Europe as a response to the place-
based crises caused by war damage, industrial decline and dereliction. Development
agencies were given the initiative to redevelop devastated districts and regions. They
were initially seen as a short-term response to an emergency and even today, closures of
major local facilities (such as a defence base, a major factory or a port) can trigger the
establishment of a new development agency. Whilst they have become an increasingly
popular organisational vehicle for shaping and pursuing development strategies at the
sub-national level, there is no common understanding, or rigid formula, of what a
development agency is. Nor has there been a global census of there numbers but there are
probably now more than 15 000 agencies world wide, with more being created every
month. They vary in size, scale, and function and have arisen from different starting
points.
As the first international comparative study of development agencies, this book
provides unique insights drawn from 16 rich and varied case studies and will be a
valuable resource for national policy makers, local practitioners, politicians and
stakeholders involved in delivering local economic development. The book draws on
27 years of experience and co-operative action by the LEED Programme Directing
Committee members and LEED Partners. It is a collaborative effort between national and
local governments, OECD member and non-member countries and global practitioners
and stakeholders.
ORGANISING LOCAL ECONOMIC DEVELOPMENT: THE ROLE OF DEVELOPMENT AGENCIES AND COMPANIES © OECD 2010
4
– FOREWORD
We wish to thank Debra Mountford, Senior Policy Analyst who has led this work
stream on behalf of the LEED Programme; Greg Clark, Chair of the OECD LEED Forum
on Development Agencies and Investment Strategies and lead author of this book;
Joe Huxley, researcher and contributor; Helen Easton, Sheelagh Delf, Lucy Clarke and
Elisa Campestrin of the LEED Secretariat; and Julie Harris, who copy-edited and
prepared this book for publication. The book would not have been possible without the
generous support of the Department of Communities and Local Government (United
Kingdom); AucklandPlus (New Zealand); Creative Sheffield (United Kingdom); Invest
Toronto and Build Toronto (Canada) and all the contributing agencies that dedicated their
time, resources and experience – they are duly thanked.

Sergio Arzeni
Director of the OECD Centre for Entrepreneurship,
SMEs and Local Development
ORGANISING LOCAL ECONOMIC DEVELOPMENT: THE ROLE OF DEVELOPMENT AGENCIES AND COMPANIES © OECD 2010
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TABLE OF CONTENTS –
Table of contents
Preface ...................................................................................................................... 11
Executive summary ................................................................................................. 13
Chapter 1. An introduction to development agencies ........................................... 21
The nature of local development ............................................................................... 22
Local economic development in practice: what is required? .................................... 24
A review of the development agency literature ......................................................... 25
Methodology ............................................................................................................. 33
Terminology .............................................................................................................. 33
Key questions ............................................................................................................ 34
References ................................................................................................................. 36
Chapter 2. The history and diversity of development agencies ............................ 39
The original development agencies ........................................................................... 40
Waves of local economic development and waves of development agencies........... 40
Development agencies as a response to local development challenges .................... 41
The core evidence base.............................................................................................. 41
An introduction to the core evidence base of 16 development agencies ................... 43
The range and diversity of development agencies .................................................... 70
What is the link between local development agendas and
development agency diversity? ............................................................................... 75
Development agency typologies ............................................................................... 76
Conclusion ................................................................................................................. 79
References ................................................................................................................. 79
Chapter 3. The value-added of development agencies .......................................... 83
What do development agencies add value to? ........................................................... 84
How do development agencies add value? ................................................................ 86
How and why is the added-value of development agencies measured? .................... 89
References ............................................................................................................... 100
Chapter 4. Development agency creation, evolution, performance
and review ........................................................................................... 103
Setting up development agencies: why and when? ................................................. 104
Start-up: when and how to start a development agency .......................................... 106
The mandates for development agency creation ..................................................... 111
What resources does a start-up process require? ..................................................... 113
Reviewing development agency performance ......................................................... 115
ORGANISING LOCAL ECONOMIC DEVELOPMENT: THE ROLE OF DEVELOPMENT AGENCIES AND COMPANIES © OECD 2010
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– TABLE OF CONTENTS
Outcomes and change as a result of the review process .......................................... 121
Where and how to evolve development agencies .................................................... 123
What can go wrong and the closure of development agencies ................................ 126
References ............................................................................................................... 127
Chapter 5. The role of the local development system .......................................... 129
Introducing the local development system .............................................................. 130
Building a seamless and co-ordinated local development system ........................... 131
The role and positioning of development agencies within the
local development system ..................................................................................... 136
Features of a successful local development system ................................................ 137
Conclusion ............................................................................................................... 147
References ............................................................................................................... 149
Chapter 6. The roles, tools and relationships of development agencies ............ 151
Categorising the roles of development agencies ..................................................... 152
The roles of development agencies in local development strategy ......................... 158
Development agencies as catalysts for collaboration .............................................. 160
Identifying development agencies’ critical relationships within the
local development system ..................................................................................... 162
References ............................................................................................................... 166
Chapter 7. The operational features of development agencies:
governance, operations, resources and accountability .................... 167
Governance and leadership ..................................................................................... 168
Operations ............................................................................................................... 172
Staff size, composition and quality ......................................................................... 174
The relationships between the operational teams and the board within
development agencies............................................................................................ 179
Development agency resources ............................................................................... 180
Accountabilities ....................................................................................................... 188
Key performance indicators and responding to change........................................... 189
Sharing best practices .............................................................................................. 193
References ............................................................................................................... 196
Chapter 8. Learning from international development agency experience ........ 197
Development agency strengths, constraints, opportunities and
challenges analysis ................................................................................................ 198
Lessons .................................................................................................................... 206
Conclusion ............................................................................................................... 207
References ............................................................................................................... 208
ORGANISING LOCAL ECONOMIC DEVELOPMENT: THE ROLE OF DEVELOPMENT AGENCIES AND COMPANIES © OECD 2010
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TABLE OF CONTENTS –
Annex A.Sixteen development agency case studies ............................................. 209
Abyssinian Development Corporation .................................................................... 211
AucklandPlus .......................................................................................................... 225
Barcelona Activa ..................................................................................................... 247
Bilbao Metropoli-30 ................................................................................................ 265
BILBAO Ría 2000 .................................................................................................. 281
Build Toronto and Invest Toronto ........................................................................... 293
Cape Town Partnership ........................................................................................... 315
Creative Sheffield .................................................................................................... 343
HafenCity Hamburg GmbH .................................................................................... 359
Johannesburg Development Agency ....................................................................... 379
Liverpool Vision ..................................................................................................... 403
Madrid Global ......................................................................................................... 427
Milano Metropoli .................................................................................................... 443
New York City Economic Development Corporation ............................................ 461
Prospect Leicestershire ............................................................................................ 479
Tables
0.1. Development agency functions ............................................................................. 15
0.2. Development agency typologies............................................................................ 16
0.3. Development agency strengths in selected development agencies ....................... 17
0.4. Development agency constraints in selected development agencies ..................... 18
1.1. Development agencies profiled in this book ......................................................... 33
2.1. Development agency diversity: the size, age, spatial scale and annual
budget of selected development agencies ............................................................. 72
2.2. Typical development and revitalisation agency mission statement ....................... 77
2.3. Typical productivity and economic growth agency mission statement ................. 77
2.4. Typical integrated economic agency mission statement ....................................... 77
2.5. Typical internationalisation agency mission statement ......................................... 78
2.6. Typical visioning and partnership agency mission statement ............................... 78
2.7. Development agency typologies............................................................................ 78
3.1. Functions and outcomes of selected development agencies .................................. 85
3.2. Development agency impact examples by theme ................................................. 86
3.3. Signature projects and programmes from selected development agencies ........... 90
3.4. Key performance indicators of the Johannesburg Development Agency ............. 91
3.5. Key performance indicators of Barcelona Activa ................................................. 92
3.6. Key performance indicators of the New York City Economic
Development Corporation .................................................................................... 93
3.7. Key performance indicators of Madrid Global ..................................................... 94
3.8. Key performance indicators of the Cape Town Partnership .................................. 95
3.9. Key performance targets for Prospect Leicestershire ............................................ 98
4.1. The strengths, constraints, opportunities and challenges of a start-up
development agency: Prospect Leicestershire .................................................... 115
4.2. The strengths, constraints, opportunities and challenges of a start-up
development agency: Invest Toronto .................................................................. 115
4.3. Summary of development agency performance review mechanisms ................. 117
4.4. Responding to change: the adaptability of development agencies ...................... 124
5.1. Drivers of local development success ................................................................. 132
ORGANISING LOCAL ECONOMIC DEVELOPMENT: THE ROLE OF DEVELOPMENT AGENCIES AND COMPANIES © OECD 2010
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– TABLE OF CONTENTS
6.1. Development and revitalisation agency example: Build Toronto’s role
in the Toronto development system .................................................................... 156
6.2. Integrated economic agency example: New York City Economic
Development Corporation in the New York City development system ............. 157
6.3. Productivity and economic growth agency example: Barcelona Activa’s
role in the Barcelona development system ........................................................ 157
6.4. Internationalisation agency example: Madrid Global’s role in the
Madrid development system ............................................................................... 157
6.5. Visioning and partnership agency example: the Cape Town Partnership’s
role in the Cape Town development system ...................................................... 158
7.1. Operational styles of selected development agencies, by development
agency type ......................................................................................................... 169
7.2. Board composition and size in selected development agencies .......................... 172
7.3. Internal communications between strategic and operational teams in
selected development agencies ........................................................................... 180
7.4. The financing and balance sheets of development and revitalisation
agencies .............................................................................................................. 183
7.5. The financing and balance sheets of productivity and economic
growth agencies .................................................................................................. 185
7.6. The financing and balance sheets of integrated agencies .................................... 185
7.7. The financing and balance sheets of internationalisation agencies ..................... 186
7.8. The financing and balance sheets of visioning and partnership agencies ........... 186
7.9. Development agency accountabilities and performance review mechanisms ..... 190
7.10. Key performance indicators for Barcelona Activa in 2008 ............................... 192
7.11. Key performance indicators for HafenCity Hamburg GmbH since
project inception ............................................................................................... 192
8.1. Development agency strengths in selected development agencies ..................... 198
8.2. Development agency constraints in selected development agencies ................... 203
Figures
4.1. The Invest Toronto start-up process: Phases 1, 2 and the future ......................... 108
4.2. Liverpool Vision’s performance monitoring framework .................................... 119
5.1. London’s local development system map ........................................................... 135
5.2. The position of the New York City Economic Development Corporation
in the local development system in New York City ........................................... 138
5.3. The position of Prospect Leicestershire in the local development system
in Leicestershire .................................................................................................. 139
5.4. The position of Bilbao Metropoli-30 and BILBAO Ría 2000 in the
local development system in Bilbao ................................................................... 140
5.5. The position of AucklandPlus in the local development system in the
Auckland City Region ........................................................................................ 141
5.6. The position of Barcelona Activa in the local development system
in Barcelona ........................................................................................................ 142
5.7. The position of the Cape Town Partnership in the local development
system in Cape Town ......................................................................................... 143
6.1. The Johannesburg Development Agency’s relationship with the
City of Johannesburg .......................................................................................... 163
7.1. The organisational structure of Prospect Leicestershire ...................................... 175
7.2.The organisational structure of the New York City Economic
Development Corporation .................................................................................. 176
ORGANISING LOCAL ECONOMIC DEVELOPMENT: THE ROLE OF DEVELOPMENT AGENCIES AND COMPANIES © OECD 2010