Why mainstream community economic development? Because it works

March 8, 2013

NOTE: Images in this archived article have been removed.

This guest blog is from Karen Leach of Localise West Midlands, who has just completed some important research which helps grow the evidence base for community economic development. We are already referring to this work in our Economic Evaluation work. Here’s a summary of the findings and a link to the summary report.

Image RemovedLocalise West Midlands (LWM) has just completed some research which we wanted to share with those interested in the REconomy project. It is closely related to REconomy thinking, and we hope (have to hope) it has potential to increase how “reconomics” can be integrated into mainstream economic development.

The UK economy is one of the most centralised in Europe. Like the REconomy project, LWM has long seen that in a more localised, place-based economy, more people have more of a stake, which redistributes economic power and resilience, reducing disconnection, inequality, and vulnerability to economic failure.

Like REconomy, we see that this contributes to sustainable development through its social outcomes, its focus on community-scale economic power and resilience, meeting local needs through local enterprise, and reducing travel distances and dependence on cheap fossil fuels. It frames economic development within the context of local resources, increasing awareness and efficiencies in how these are used, with local and global environmental benefits.

Realities of resource scarcity obviously cannot be divorced from social justice and wellbeing, or even from traditionally measured economic success, but as we all know this is still understood by few people. To most of the world right now, the crisis in economics is about either GDP or injustice.

It seems to me that gaining a recognition of the economy’s social functions – that it has to work better for more people, and how localised economies can help – can often be a first step in bringing people to a greater understanding of our biggest, environmental, crisis, and the need to solve that crisis in an equitable way. So in looking at the benefits of localised economies our focus has been on social and economic outcomes of which there is widespread institutional understanding.

In some other countries this type of locally focused development is called Community Economic Development (CED). In our work we’d identified that although many localised approaches existed, these are seen by decision-makers as ‘nice to have’ irrelevances. With what I hope is commendable optimism, we wanted our research, Mainstreaming Community Economic Development, to explore how they could integrated into the mainstream economy, making our core economic activity more closely centred on places, people and local resources.


Key findings

Our research has found strong evidence that local economies with higher levels of SMEs and local ownership perform better in terms of employment growth (especially disadvantaged and peripheral areas), the local multiplier effect, social and economic inclusion, income redistribution, health, civic engagement and wellbeing than places heavily reliant on inward investment where there are fewer, larger, remotely owned employers.Image Removed

CED economies also support local distinctiveness and diversity, which we see as positives because of their contribution to economic resilience, economic options to suit a diversity of people, sense of place and belonging, area quality, added interest and richness of experience.

It found that a local economy largely controlled by ‘absentee landlords’ – distant private and public sector owners with little understanding of the local area – is a recipe for economic failure. Locally-inappropriate decisions and ‘footloose’ businesses leaving the area for better economic conditions seem to combine to weaken local businesses and create a self-reinforcing cycle of decline and exclusion.

This signals a need to revalue how we balance and integrate more localised approaches with those of inward investment and economic centralisation. We set out proposals for a strategic approach centred on local supply chains and control, in which local people participate as owners, investors, purchasers and networkers.

Strategies would support partnerships and networking, recognise the collective importance of the small scale, take a long-term perspective, and understand local resource flows.

These approaches can be developed locally by communities, but we also need local authorities and national governments to take them seriously and understand their place in the mainstream economy. Changing conventional economic mindsets, finding ways for people to start accepting sustainable development for the better world it brings, has to be a priority.

We need a rational, evidence-based debate around the comparative economic and societal benefits of localised and centralised economic approaches. Could mainstreaming CED provide a more widely-appealing political and civil society point of interest around creating a better economy?

Here’s the project webpage which has links to the reports. We welcome your comments.Image Removed

Karen (right) has been Coordinator of Localise WM since 2002. She worked on the Mainstreaming CED research project with LWM associates Jon Morris and Paul Cobbing, and is responsible for the organisation’s strategy and management.

Formerly she was Campaigns Support Worker with Birmingham Friends of the Earth, with interests in planning, trade and local food. She travels by bicycle, and likes gardening and fixing things.


Main photo credit: Lifeboat, www.steveatkinsphotography.com

Tags: local economic development, policy, regional economies