Attachment B: Methods for Regional Economic Development

Mainstream Industries: Methods which have reportedly been successful in USA in achieving high value results from regional economic were the subject of a DEDT seminar by Collaborative Economics on 25/7/97. This suggested that:

• the benefits of actively engaging participants in an industrial cluster, rather than producing a paper analysis.
• the importance of private sector leadership (in partnership with government).
• the dependence of economic progress in regions with similar assets, on how interactions occur amongst sectors. Success results from collaboration (particularly amongst business, universities and government) on specific projects -. For example, the Joint Venture: Silicon Valley Network worked on the practical task of reducing regulatory approval times.
• 'Civic entrepreneurs' are the key factor in building such linkages.
• industry cluster development is similar to total quality management - whose principles are: listening to customers; adjusting processes to suit customers; and repeating the process.

First principle involves community willingness to take responsibility, ie: not wait for saviour; stop looking for scapegoats; aspire to higher standards; think globally and act regionally.

Second principle is that industry clusters drive regional economies.

Clusters are interdependent firms in related industries. Clusters can be seen as sets of competencies, as well as groups of firms.

This approach differs from traditional practices in starting with existing firms as means to encourage new firms and attract investment. It also recognises that while most growth results from small business, only a very few firms make most of this contribution.

Low costs are not the key to a region's economic success - productivity is more important

steps include: analysis of clusters to identify players; organising players (with need for three specific groups - community leaders, members of clusters, and project team). Then need to initiate ideas, refine and implement them - with tightly controlled results oriented process.

While there is a different business culture in USA to Australia, the USA is no longer dominated by large firms as it once was. Florida, with the same characteristic as Queensland of rapid growth in low value added sectors, has been turned around by a group of 'civic entrepreneurs' who focused on the quality of the economy and the quality of jobs

Rural / Regional Development: The new economy is more than an 'information economy' but (like capitalism) is based on creative destruction. It also depends on: changing role of agriculture and small business; and the rise of new technologies, telecommunications and global trade. Managing chaos / innovation is essential (needing a strategic not a static viewpoint). Innovation is alive in small towns (eg in value adding to agriculture). Small firms create most jobs, and are flexible in niche markets. Entrepreneurism is a key factor. The most important new technology is telecommunications. Technological advance allows trade in the global village. Jobs lost overseas are returning based on: quicker design to production cycles; higher quality and customer services. The role of government is changing. Citizens are disillusioned with politics, and turn to self help. Economic development is everyone's business. Changes in government include: civic leaders are replacing government; local institutions are most important; government plays a responsive / support role; market pressures impact on government; and public private partnerships are frequent. There are obstacles to government being partner and enabler. Top down government programs are of little value. Government needs to be cheerleader, providing hope. Economic and community development must now be seen as interdependent - breaking down traditional separation of task of increasing size of pie, and distributing it. Successful communities (and leaders) are not limited to a few activities. New paradigm for small town development involves: integrated approach; broad range and different mix of indicators; realism (top down programs by government agencies traditionally make it hard for communities to make any use of the help offered). The structure of urban system is changing, with networks of urban centres connected together which promote rural vitality; rather than simply being concerned with processing of its hinterland's resources. The advantages traditionally enjoyed by centralised places are declining (Centre for the New West, Overview of Change in America's New Economy, March 1992)