LOCAL ECONOMIC DEVELOPMENT

 

The purpose of local economic development is to build the capacity of a local area to improve its economic future and the quality of life for all. LED is implemented by a process through which public sector, private business and non-governmental partners work collectively to create better conditions for economic growth and employment generation.

The success of a city depends on its ability to adapt to the changing and increasingly competitive local, national and international market economies. Strategically planned interventions are a means for strengthening the economic capacity of an area, improving its investment climate and increasing the productivity and competitiveness of local businesses. The ability of communities to improve the quality of life, create new economic opportunities and fight poverty depends on understanding the forces of economic growth and then acting strategically to maximize their comparative advantage and strengths.

Local economic development is central to the broader USAID development agenda because all aspects of development depend to a greater or lesser degree on a country’s ability to achieve a strong and growing economy. Assistance programs may promote development in a wide variety of fields – education, health, the environment, and democratic governance – but if the economy fails to develop, efforts in other fields are unlikely to be sustainable.

LED is one approach to promoting economic growth by (1) incorporating important, cross-cutting development issues and working to integrate them in collaborative ways, (2) promoting participatory decision-making through strategic planning, and (3) emphasizing the economy of a locality and the role of the local government in promoting economic growth.

LED does not take place only within the geographic confines of a municipality, nor are the economic boundaries of LED rigidly defined. However, the more obvious the boundaries, the more cohesive and clearly defined LED activities can become. While LED programs and strategies grow out of particular local opportunities and needs, their primary feature is the ability to bridge issues and bring together resources in a productive way. LED is a process that brings together resources from within and outside the community to address challenges and promote local economic growth in a systematic and organized manner.

LED emphasizes the potential of a community and strives to enhance it through public, private, and non-governmental sector collaboration. An LED project focuses on building local capacity to improve the economic vitality of a community, and has the ultimate goal of improving the quality of life for all.