Document: LED Investment Actions: A Guidance Note for Local Government

The purpose of this guidance note is to highlight the wide range of LED investment tools and ideas, which are available to and have indeed been implemented by local governments throughout the world. It is almost impossible of course to come up with an exhaustive list of investment ideas, as best practice is always emerging. The aim of this note is therefore to introduce the numerous types of interventions that fit within a desirable role for local government, according to their mandates and in line with the international LED approach. Further reading would be useful to guide implementation on the tools and ideas found to be appropriate for the local context.

This note is structured in line with Rodriguez-Pose’s (2001) framework, dividing LED investments under the four pillars of:

• 1) Economic infrastructures
• 2) Supporting local firms
• 3) Upgrading labour skills
• 4) Attracting inward investment

It should be emphasized here that while any of the investments outlined in this note may have a positive impact on the local economy, for them to achieve optimal impacts they need to be consistent with the locality’s comparative advantages and undertaken as part of a comprehensive package balanced across the four pillars above. It is also paramount that investments are prioritized through a participatory LED strategizing process that involves public, private and civil society sector actors. This process needs to be based on a rigorous assessment of the local economy and the major obstacles it faces. In this way, the investments made are more likely to tackle the major obstacles facing local economic sectors and value chains and contribute to unleashing their potential. It is important, therefore, to start with a vision for what the locality wants to be in 5-10 years time and which economic sectors could be competitive and create further economic growth and employment opportunities. Investments should then be prioritized according to those which would have the greatest impact in unleashing the potential of these sectors.