Local Economic Development Strategic Planning in 8 Steps

1
Local Economic Development Strategic Planning in
8 Steps

• Community-Based Economic Development Strategic
  Planning Process Overview

2
Strategic Planning as a Systematic Process

• It is not ONLY about projects
• Where we are now?
• Where do we want to be?
• How do we get there?
• To improve allocation of limited resources
• To establish priorities of action

3
Strategic Planning

• systematic way to manage change and build a
  community-wide consensus and shared vision of the
  municipalitys economic future
• creative process to identify critical issues and
  agree on credible goals, objectives and tasks
  which, when implemented, will address those
  issues

4
Community-based EDSP

• The community all the citizens is the source
  of empowerment. Local leaders, both government
  and private, must reach consensus on a preferred
  economic future and then cooperate in doing what
  is necessary and practical to create that future.

5
Basic Principles of EDSP

• 2 equally important parts planning and
  implementation
• Permanent partnership between public and private
  sector is essential
• Where will the money and human resources come
  from to implement the Plan? - Plan must be
  realistic and credible
• Plan if implemented will result in positive
  changes improving the competitive position of the
  municipality

6
History of Strategic Planning in CE

• Berman methodology developed in US (1989-1995)
• USAID sponsored projects in Czech Republic
  (1995), Poland (1999), Slovakia (2001), Serbia
  (2002), Romania (2003)
• 8 steps methodology of community based economic
  development strategic planning adopted
• Wide use of methodology AFTER the USAID projects
  in towns, cities, microregions and regions
• Experience of the BermanGroup with strategic
  planning (facilitation of almost 100 plans
  special studies and analyses performed)

7
Strategic Planning in 8 Steps

• Step 1 Getting Organized
• Step 2 Environmental Scan
• Step 3 Critical Issues and Vision Statement
• Step 4 SWOT
• Step 5 Action Plans
• Step 6 Strategic Plan
• Step 7 Implementation
• Step 8 Monitoring and Updating

8
Economic Development Strategic Planning

• Step 1 Getting Organized

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STEP 1 Getting organized

• City / microregion / region
• Community based / Expert / Internal resources
• Strategic development Commission (SDC)
  leadership
• Involvement of the most busy persons in the town
• beginning date and ending date
• list of all meetings, including dates
• SDC orientation meeting

10
SDC members

• Mayor, council members, political opposition
• Most important companies (production, service)
• Financial institutions
• Education institutions
• City Hall administration
• SME representatives
• NGO representatives
• Local specifics (tourism, health care, library,
  Zoo, theater)

11
Role of SDC

• Leadership role in strategic planning process
• decision making about critical issues
• studying and approval of analytical documents
• creation and adoption of Action Plans
• setting priorities among objectives
• recommendation to implementation
• presentation to City Council
• nominating implementation committee

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Economic Development Strategic Planning

• Step 2 Environmental Scan
• Community Profile
• Business Attitude Survey

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What is Community Profile (CP)?

• Not only book full of numbers
• description - analysis of community
• hard data, statistics, trends
• common objective information
• common basis for decision making

14
What is the Profile used for(in strategic
planning process)

• Comprehensive description of geographic area
• definition of problems - critical issues
  selection
• reference document for SWOT (mainly for S W)
• basic information for Goals, Objectives and Tasks
• entry data for quantification of Projects
• reference data for evaluation of implementation
  of several parts of Action Plans

15
Contents of Community Profile(structure)

• Introduction, regional role of the city
• Population, demography, education
• Households and housing
• Employment and unemployment, incomes
• Local economy, large employers
• Utilities and infrastructure
• Social infrastructure (schools, health care,
  culture)
• Environmental issues
• Local government and institutions
• Specific issues tourism, environment, other
  plans,

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Business Attitude Survey

• Why are we interested in businesses?
• Attitudes and opinions
• SDC members involvement

17
Business Attitude Surveys in Czech, Slovak and
Romanian cities

• Questionnaire with 20 25 stabilized questions
• Over 75 cities and regions in 1999 2004
• 2000 companies in CR, 250 in Slovakia, 800 in
  Romania
• Objective data employees number, salaries,
  export, investments
• Subjective data evaluation of local government
  services, barriers of development, labor force
  quality
• Changes and development in time frame

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Sales and salaries
19
Barriers of development 2003 results
20
Quality and availability of the workforce

• Relatively high unemployment rate (8 15)
• Massive attraction of FDI into towns with
  population 15 30,000 (focus ONLY on jobs)
• Social system does not motivate people to work
• Profile of (high) school graduates
  attractiveness of certain professions
• Ability to react on needs of employers
• Competences, time of response

21
Business support

• More financing into the city, region state, new
  customers, public tenders
• Local government approach, information provision,
  organization of relationships between businesses
  and LG
• Interest in traditional companies, not only new
  investors
• Combat with black (grey) economy
• Competencies local vs. national

22
Offer of sites for business

• Greenfields, brownfields, shops, workshops,
  offices, administrative buildings, speculative
  buildings
• Technical infrastructure
• Conflicts of interests
• Businesses vs. Citizens (NIMBY syndrome)
• Businesses against each other (privatization vs.
  ownership, principles of rents)
• Businesses vs. Government (interventionist public
  policy causing market price distortions etc.)

23
Transportation

• Roads reconstruction, new roads
• Parking city center housing estates parking
  fees
• How to get through the city crossings, traffic
  lights
• Public transportation (number of lines, bigger
  area)
• Geographical limits, financial limits, property
  owners

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Why is BAS important?

• Key issues are identified and articulated
• Companies informed about the strategic planning
  process
• Business leaders interested and involved in
  process results
• Analytical and benchmarking tool for the city
  comparison to competitors

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Economic Development Strategic Planning

• Step 3 Critical Issues
• and Strategic Vision

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What are critical issues?

• Priority areas which limit future development
• selective decision making process
• broad versus narrow definition
• must be consensus based
• must provide direction for Action Plans
• relation to economic development jobs,
  investments, infrastructure etc.
• What are typical critical issues of cities in
  Ukraine? Why?

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Examples of critical issues

• SME development
• infrastructure for business development
• organization of economic development
• attraction of investors
• environment
• work force quality
• quality of life
• image

• city - center of region
• tourism development
• transportation
• Etc.

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Building consensus about critical issues

• Techniques to identify the right critical issues
• Activity based Facilitated participatory
  brainstorming
• Fair-share based each SDC member must say one CI
• Consultants assist the selection by
• Encouraging the use of CP or BAS to support
  arguments for specific critical issues
• Limiting the number of critical issues to 3 - 4
• Showing linkages allowing combination of related
  issues
• Organizing voting with ballots

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How to define the selected critical issues?

• Consultants must establish a common understanding
  of the CI SDC must be identified with CI
  definitions
• Name of critical issue clear and short statement
• Critical issue description elaboration of the
  main problems and issues to be dealt with
• Further direction for internal analysis (SW)
• Basic input document (SoW) for work Task Forces
  in their work with Action Plans

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What is Strategic vision?

• SV is a simple (1 3 paragraphs)
  non-controversial text based on consensus of SDC
  members
• SV is a mutually shared vision of the future of
  the City, specifically in relation to the
  selected critical issues
• SV is a motto of the entire SP process
• SV is the competitive differentiation slogan for
  the city (to general visions are useless, too
  specific visions
• SV will be reached by implementation of the
  Action plans

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Strategic vision statement structure

• strategic vision
• - usually brief text
• - general statement answering question Where
  do we go?
• global goals
• - track according to critical issues
• - several sentences answering generally How
  to get there?

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Olomoucko Strategic vision 2000

• Greater Olomouc will become a regional
  agglomeration
• Of European importance building on the best of
  its heritage reacting and also generating new
  incentives both inspired and inspiring
• Strengthening its position in Central Moravia
  being both good neighbor and partner
• With high level of education, providing the
  highest standard of quality of life to both
  citizens and visitors
• With attractive business climate and growing
  local economy interlinked with international
  business new economic engine of Moravia
• Open and accessible crossroads of people, goods
  and ideas.

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Economic Development Strategic Planning

• Step 4 SWOT analyses

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What are the SWOT Analyses?

• Internal Analysis (competitive positioning)
• Strengths
• Weaknesses
• External Analysis (cities must deal with results,
  but cannot influence causes)
• Opportunities
• Threats

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Typical Issues of Internal Analysis

• Geographic location, transportation access
• Quality and availability of work force
• Infrastructure
• Sites and buildings for business
• SME development
• Financial resources available
• Relations to City Hall

36
Typical Issues of External Analysis

• How do you see the following issues?
• EU and NATO entry
• Change of legislation, tax system
• FDI shift from Western to Eastern Europe
• Restructuring of traditional industries
• Change of lifestyle, population aging
• Development of information technology

37
Use of SWOT in Strategic Planning

• Fit the Plan to local needs and potential
• Correct weaknesses
• Build on strengths
• Be prepared to use opportunities
• Create conditions to reduce negative effects of
  threats

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Economic Development Strategic Planning

• Step 5 Action plans

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Action Plans - overview
Many issues

Critical Issue 1
Critical Issue 2
Critical Issue 3
Task Force 1
Task Force 2
Task Force 3
? Action Plan 1
? Action Plan 2
? Action Plan 3
40
Action Plans - structure
Critical Issue
definition
Goal 1
Goal 2
Goal 3
Objective 2.1
Objective 2.4
Objective 2.2
Objective 2.3
Task 2.2.1.
Task 2.2.2
STRATEGIES

Task 2.2.n
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Task Forces

• Chair and Vice-Chair
• manage and host task force meetings
• invite members to meetings
• serve as liaison between members and consultants
• New members from specific areas relevant to the
  Critical Issue to
• enlarge knowledge base
• bring new resources to the process
• increase credibility of the process
• develop support for adoption of the plan
• start to form implementation momentum

42
Goals

• Brief description of where we want to go, very
  similar in many cities
• Adopted by consensus
• Internal structure of critical issue
• Transportation (internal, external, parking)
• Tourism (product, infrastructure, marketing)
• FDI attraction (sites, work force, marketing)
• SME development (institutional support, property
  development, financial support)
• Quality of life (housing, leisure-time,
  education)

43
Goals

• Provide both existing and new-coming investors in
  automotive and electronic industries with well
  educated labor force
• Address the internal transportation problem, to
  eliminate transit transportation and increase
  transportation capacity of the city.

44
Goals

• Provide new housing in the city for its current
  and new residents
• Develop system for assistance to SMEs that will
  provide for technical and managerial information
  as well as information on the financial resources

45
Objectives projects (SMART)

• core of the action plans
• 2-5 objectives to reach each goal
• 4 basic principles
• competence resources
• specific result
• short term (start within 3 years)
• community must want it

46
Objectives - samples

• Objective 1.1. New Housing in Green Meadow
• City Hall to prepare land with technical
  infrastructure in the area of Green Meadow and to
  offer it for private housing construction.
• Institution responsible activities
• City Hall (urban planning ownership
  infrastructure)
• Measure
• Number of lots prepared

47
Typical objectives

• FDI attraction Industrial parks, marketing
  campaign, technical infrastructure
• SME development Information center, Business
  Incubator, training and retraining, privatization
  of municipal property
• Housing small apartments, infrastructure, old
  peoples pension build-in apartments
• Transportation parking and garage, traffic
  lights, road reconstruction, lobbying

48
Objectives problems to avoid

• Be specific enough, no more general statements!
• Conflicts of interest existing vs. new
  businesses main street vs. outskirts business
  vs. city hall
• Low willingness to contribute by other
  institutions too many objectives to be
  implemented by too few organizations (e.g. only
  by City)
• Wish list - overly ambitious objectives,
  unlikely to be accomplished

49
Tasks- what are they?

• What exactly will be done (outputs, description)?
• 600 m of sewage line
• Who will guarantee it (person)?
• Head of investment department
• When will it be done?
• March 2005
• How much will it cost and Who will provide for
  financing?
• 300,000 75 city budget 25 utility company
• Others cooperation, specific notes, personal
  involvement of IMC members

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Economic Development Strategic Planning

• Step 6 Strategic plan

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Prioritizing objectives

• Why prioritize? Lack of resources transformation
  of wish list into strategy
• How to do it? SDC ranks objectives using
  evaluation sheet (0-3 points per criterion per
  objective)
• Criteria
• Impact on jobs and investments
• Feasibility (usually double weight)
• Time of completing
• Influence on other objectives
• Private sector participation
• Impact on goal

52
Strategic plan adoption

• Public hearing
• Meeting with political parties
• Plan presentation in media
• Information and communication campaign
• City Council meeting SDC to present the Plan

53
Economic Development Strategic Planning

• Steps 7 8 Implementation and Monitoring

54
Implementation Management

• Strong political leadership and willingness, plan
  MUST be adopted by City Council
• Implementation and Monitoring Commission
• Implementation Manager
• Financial resources available
• Well organized city hall economic development
  department
• Take plan seriously

55
How to evaluate implementation?

• Two levels of evaluation
• Review and Inspect
• Were the tasks completed?
• Evaluate
• Did the project reach its goal?
• Are the planned objectives still relevant?
• What did we receive back from resources put into
  the project?

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Implementation results

• Tangible
• new industrial sites
• Roads, parking lots
• Upgrade of infrastructure and technology
• Reconstruction of buildings, new housing
• cultural, sports and social activities and events
• More companies located in the community, higher
  revenues, new jobs created etc.
• New LED organizations, services, professionals in
  the community

• Non-tangible
• change of attitudes
• economic development becomes institutionalized as
  part of the City Hall landscape,
• business leadership and public officials work
  together to prepare a blueprint for the best
  economic future for the municipality,
• a permanent, public/private partnership is
  created,
• responsibilities for managing the partnership and
  implementing the blueprint are agreed upon

57
Implementation Survey - summary

• March 2003 by University of Pardubice and
  BermanGroup
• 170 out of 470 Czech towns interviewed
• 90 have strategic plans, 42 have other type of
  plan
• Projects for 10 billion Czech crowns implemented
• Different approach to plan preparation,
  implementation and monitoring

58
Was approved by Council?
59
of projects implemented
60
Problems with lack of resources?
61
How to update the Strategic Plan?

• IMC to monitor implementation
• IMC to prepare update of the Plan
• Mayor to call SDC to meet again
• SDC to revise the Plan and adopt changes proposed
  by IMC
• Strategic planning process starts again by
  environmental scan after 3-4 years