Improving the economy: the 6-I MODEL
Economies are developing at a higher speed than ever before. Sound, flexible strategies and actions are needed to cope with these changes. We think that to improve the economic status of a region the following topics are crucial:
- Interaction to get local support and enthusiasm
- Interdisciplinary approach
- Innovation to make a creative plan
- Inflexibility is a serious danger
- Incorporating culture and heritage
- Implementation (not just strategies)
All six aspects are somehow interrelated and are part of our way of working (Figure).
Figure: The relations between the different I’s
Interaction to get local support and enthusiasm
Local communities are to be engaged from the start of the planning process. There are many examples of economic development plans around the world where local knowledge is neglected, leading to remarks as “not invented here” and a lack of local and regional support. A second reason for engaging communities from the start of the process is that unexpected resistance by local communities is often annoying, mostly ill-timed and – more so – costly. Therefore one need to channel these energies to become part of the planning process and prevent delays.
Great plans and successful strategies are never created by one person. The interaction with stakeholders, civil servants and the various experts during workshops and interviews is the best way to come to optimisation.
Instead of working in a traditional way one has to advocate an integration of disciplines. Such a team of experts will work together and share ideas right from the start and will advise and research, or analyse different aspects. The members of such a team need to have team spirit and have to be able to operate flexibly!
Innovation to make a creative plan
Innovative ideas will help to establish that new economic perspective. These ideas can be very low key, such as the setting up of fishermen cooperative organisations, though the program also need ideas that – in this stage – look as if they are impossible targets, though can change the development dramatically. Think for example of a floating airfield at sea.
Inflexibility as a serious danger
A successful project has a firm foundation that consists of implementing all aspects of a sound development plan and approaching them in an integrated, well-balanced way. This can, to a greater or lesser extent, be taken for granted. Less generally recognised is the need for flexibility in the plan itself and the executing organisation. Local authorities and government agencies in particular have a tendency to do the opposite. Surveying, planning and decision making take place in stages, with the assumption that the earlier stages are carved in stone and cannot change. In today’s economy this will not work: flexibility has to be built in. This means keeping as many options open for future development for as long as possible. It means organising the plan so that opportunities can be combined right up to the last moment. It means that the executing organisation continually tracks developments that affect the plan, tests the foundation for stability and adjusts the plan if necessary.
Incorporating culture and heritage
It should be the aim of the the authors of the plan to create recognisable places by taking care of heritage and local culture; places where people like to live and work. Local authenticity should – where possible – with today’s and future needs with regard to living, working and building, forming a unique, durable and attractive homestead for people and businesses in a region.
Implementation (not just strategies)
There are numerous examples across the world of brilliant economic strategies that were not brought into practice. This is mainly caused by the absence of an implementation program, which is a vital part of the strategic plan. The final goal is to turn the economic strategy into reality. Therefore, during the process, one should constantly assess the possibilities for implementation of a strategy, before deciding on it. But here again, flexibility is key! Does everything need to be planned for, or dare we give room to the unexpected? Can we plan for a regional economic development that is dynamic, leaving space for new methods, shifting economies or future generations? Therefore, rolling plans can be an interesting alternative, because they are flexible: targets and actions can be revised as per the changing conditions in the region. In fact the review of a plan becomes a continuous exercise.
Conditions for economic development
Enhancing the regional economy is focussed on creating more employment, higher incomes and a stronger regional product. But these goals can never be reached if certain conditions are not met. It is unthinkable to look only at employment and its impact on income and wellbeing. To be able to boost a regional economy certain conditions have to be fulfilled. These conditions must meet the demand of companies, especially those that can stimulate the economy. These companies can be found in the sectors that have the best perspectives given regional circumstances and market perspectives, and in the sectors that are basic, that is to say: companies that export a lot of their services or goods and by doing so generate income for the region. This can be done by exporting products to other regions and countries, by adding value to products, and also tourism is a basic economic sector. Tourism services are a local product, the money that is generated comes from outside of the region. These basic companies are essential (the basis) for the other part of the economy: the so-called non-basic companies that produce goods and services for the basic companies.
To be able to attract or to retain companies, especially the non-basic industries, the region must fulfil the locational criteria of these companies. Most important are:
- good infrastructure: roads, airports, ports, (high voltage) electricity, (high speed) internet, et cetera;
- a well-educated work force;
- good locations to establish the company;
- incentives (subsidies, taxes, et cetera).
As is illustrated in Figure 2, education, physical planning (master plan) and regional policies are at the basis for creating an attractive business environment.
Figure: Shaping the right conditions for economic development
Creating a comprehensive and flexible plan
The figure shows how to establish a regional economic development plan. Based on information and statistics gathered, the current weaknesses and strengths of the region are described, and by confronting these with (external) relevant trends one can determine the opportunities and threats. Based on that two or three possible future directions / scenarios for development are created. These will vary in regard to employment growth, economic sectors that will prevail, locations where developments will take place, and the like. A framework has to be developed with several variables that help the stakeholders to make a choice for one of these future directions, or a combination of characteristics of different scenarios. The criteria are not only of an economic kind, but also include – for example – sustainability and physical aspects. The choice is not necessarily one of the scenarios; it can also be a combination of characteristics of different scenarios. The direction chosen is described in a strategic vision for the long term. This debouches in a number of strategic goals. Now the regional economic strategy is clear: what conditions have to be fulfilled, what sectors are we focussing on, et cetera? This has to be translated into an economic action plan for the mid-term or in a so-called ‘rolling plan’ that provides more flexibility because it continuously evaluated and can be adjusted every year. Again this will be done in close cooperation with all stakeholders. Each strategic goal has to be translated into one or more actions for the coming 4 – 5 years. Each action will be described: goal, lead partner, other partners, time frame (taking care of links with other actions), expected economic impact, costs of the action and financial resources (these last two issues in close cooperation with regional and national government). Later, in the organisational part of the study, recommendations will be made for the organisation of the implementation of these measures, the (yearly) evaluation of progress of the action plan and the like.
One has to keep I mind that changes in economy go faster and faster. At first sight it seems to be a good idea to put the strategy and action plan in a report that will be the guideline for the next five years. However, because of the ever changing and faster changing economy flexibility is needed. A strategy must be formulated in such a way that it can stand for several years, but the action plan needs that flexibility. Therefore, it might be better to present strategy and action plan on the internet site of the responsible government authority. It is accessible and it can be adjusted to ever changing circumstances.
The economist Gunnar Myrdal sought flexibility in so-called ‘rolling plans’. The concept was originally intended for developing counties, because of their ‘fluent economy’. Given today’s uncertainties, the economy of most modern western countries can also be interpreted as being fluent. The essence of a rolling plan is that at least every year the performance of the plan will be assessed and adjusted according the outcomes. This assessment is much more than just an evaluation, which (in its strict sense) only examines whether the program is on track. In a rolling plan new activities are added, others are removed. This is not without risks. For example, the continuous changes may lead to a situation whereby the long-term perspective is displaced to the background or is forgotten. A very strong management is needed.
Figure: The structure of the regional economic strategy and action plan
Communication and citizen participation
The success of the economic development plan is strongly determined by involving stakeholders and potential investors in the project. It gives a better idea of the need and the feasibility of strategic options. The identified economic opportunities along with their specific physical and human capital needs are laid out in a sustainable economic strategy and an action plan. This paves the road for public and private parties to invest in existing and new economic sectors, boosting the economy and employment.
No successful and sustainable development plan has been made without a thorough communication process. Local information, ideas, desires and support are all of essence in order to establish a successful plan. One has to start with communication right from the beginning, using an interpretation of the level of citizen participation(see Figure). Not all stakeholders are involved in the same way during the planning process.
To involve the ‘being informed’ category, newspapers, internet and billboards can help. The participants will play their role during workshops, interviews, et cetera. They can also play a role by informing their followers, the population, local entrepreneurs, institutions and the like. The way the decision makers are involved speaks for itself. Last but not least: the executors. At the end they really ‘create’ the development project and hence – if not already informed by fulfilling a role as participant or decision maker – they have to be informed by the responsible government organisations at the stage of implementation.
Figure: Levels of citizen participation