Local economic development

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.


This paper provides a broad analysis of Local Economic Development in South Africa. This strategy is a prerequisite to linking profitable augmentation with poverty alleviation and mechanisms and is a precondition of The National Government in South Africa, to influence the citizens of our country in realization of economic growth. The Local Economic Development framework perceives the emancipation of sustainable development through local economies.


The practice of LED principals in its planning methodology is resolute to the evolution through the adaptation of international ordinance operating recognising the human settlement and economic aggregate. The program encapsulates an outcome for socio-economic fortitude through its design, in attending to spatial reconfiguration methodologies of 52 Municipal regional locations within South Africa.

This aggregate is divided into three spaces.

  • The metropolitan area.
  • Declining cities and towns
  • Rural nodes, which I believe also require the adjective of 'dying'.

The propos of the LED is that it contextualizes the move to a 'New Institutionalism' upon SA's landscape, calibrating the distinction between the economies and deriving results of society attendances. Projection of the LED is that it attends to our economic indifference as has been described by SA's previous President, as a two tier system, paralleled to a double storey house. Excellent analysis describes the rich of SA reside on the top floor, whilst the lower floor, the poor, is without access to the top. Clearly this analogy supports the proposition to indicate a required common ethos between formal and informal sectors of our citizenship. The two economic markets in SA depict the rich in attendance of global aspirations and the secondary economy of the informal sector, requiring attention. Formulation of the LED has interpreted these two forces stating implementation of LED requires interpolation for;"The two policy thrusts are: Public Sector Leadership and Governance and Sustainable Community Investment Programs". It is important to farther acknowledge that direct or indirect composition to the formulation of LED has been influenced by:

  • The Constitution (1996)
  • White Paper on Local Government (1998).
  • Local Government. Municipal Systems Act (2000).
  • Policy paper on IDP (2000)
  • International strategies and instruments for LED basis.
  • Discussion Document for LED nationally
  • Policy guideline for implementation in SA. See (N.LED.F 2006).

LED as determined by Government is one of the Key Performance Areas (KPA), for a municipal sphere providing sustainability plans to its locality. See (Crane & Swelling 2007), as well as being one of five KPA's for the National Spatial Development Plan Framework for advance of SA, (NSDP). As a KPA this determines an outcome in requisite for municipal transformation an organisational development, in SA. See also (Muller, A. 2006). 'The framework promotes a strategic approach to the development of local economies and a shift away from narrow municipal interests focussed only on government inputs into ad-hoc projects.

The formulation of the LED is appointed to: 'The application of the National Spatial Development Perspective (NSDP), Industrial Policy, ASGI-SA and the Provincial Growth and Development Strategies (PGDSs) through joint action with municipalities institutionalised in IGR forums is the driving force for local and hence national economic growth and development'. See (N.LED.F 2006).


The LED National Framework in SA is set to encumber the process and determine the program as it demonstrates its fulfilment or failure. The propos to which ordinance deems the eventual analysis of the outcomes of LED as a platform of lessons learnt, is over a five year period from 2006 to 2011. The two drivers for the delivery of positive outcomes are determined in combination of the public sector leader's participation and cooperation by the local sphere of ordinance, Municipalities. Tuned to sustainable community development other strategies are integral for creation of sustainable development. These are lead by an equitable ideology of tourism development; see (DET 2006) of which tourism associate to the LED would foster the creation of projects in locations of social objectivity. Results are; for improvement of lifestyle quality, of that community and derive a philosophy for future projects attending to Human Settlement programs. (N.LED.F 2006).

International Background

Local Economical Development according to tabulation from the World Bank WB has its routes since 1960.Sugesting the process of LED has lapsed through three broad phases from inception. Rhetorically each of these phases implies a methodology to the practice of LED from a previous era, each particular phase, incident of its formulation, still in practice today. A summary indicates;

Phase 1 - 1960's to early 1980's - The Focus is open mobile manufacturing investment, attracting outside investors, and foreign direct investment, along with hard infrastructure investments. To achieve this cities provided colossal grants, subsidised loans targeted for internal investors, gave tax breaks, subsidised hard infrastructure investment, and deployed expensive industry recruitment techniques. see (online, World Bank 2010).

Assessing phase 1, it is determined that the terminology of open manufacturing investment occurred in countries that had established work force and transport infrastructure, such countries were more likely to attract new manufacturing corporations. Hard infrastructure investments include the incorporation of the necessitated bulk service and transportation infrastructure within the location of development. Usually this would entail the marketing for development along a transportation arterial corridor or deemed along a 'ribbon stretch' of an urban of semi urban loci. The conceptual model for development of manufacturing or plant location also depends/s on the evaluation of site state, local typologies and activities and site specific attributes. As outlined in (Dayton & Others 2006).

Phase 2 - 1980's to mid 1990's here the focus moved towards the retention and growing of local business with an emphasis of inward investment attraction. However this became targeted to specific sectors geographically. To achieve this cities local ordinance direct payment to individual business. Provision of business incubators, and offered advice for small and Medium sized business, SSME's. They additionally provided technical support, business start up support and contributed toward a portion of hard and soft infrastructure development.

Phase 3 - Mid 1990's onwards the focus then shifted from individual direct firm financial transfers to making the entire business environment more conducive to business. During this phase of LED the focus is upon soft infrastructure investments, public private partnerships (PPP) networking and leveraging of private sector investments for the public good, additionally a direct drive at inward investment with direct departure to create a competitive edge for the local areas. To achieve this cities are; developing a holistic strategy, as in the instance of South Africa our very own Integrated Development Plan, IDP. Create a competitive local investment climate. Support networking and collaboration of business. Encourage work force development and continued education. Target inward investment to support cluster growth, and support quality of life improvements.

Problem Statement

In SA the LED program is perceived with dilemma from the public sector as the objective to the LED is in creating economic clusters. Assessing that the LED program is now in its fourth year of tertiary implementation as was commissioned for a five year target in SA, 2006 to 2011; it is evident that whilst the virtue in application of LED is fortuitous, there has only been success in concentrated arenas where public participation has driven the outcome. See (N.LED.F 2006. P.45).

A year to completion of the five year assessment period in SA, we must determine its early failure of proposed initiatives, in what I would perceive is still a landscape of transitional democratization. Evaluating the intention and ethos it set out to perform. Though the sphere of local ordinance contends with lack of management abilities and poor implementation strategies, due to the quandary of a lack of moral values it will be difficult to determine the succession of the LED propos. Not negating that LED has established its routes and will tell of many successive projects in international boundaries of Developed Nations.


Paradoxically, the LED ideology, the purpose of attentiveness to economic action is in that supports healthy local competition proliferation. LED envisions that novel alliances realise sustenance to competitiveness in a Global New Economy. LED is poised to succeed on the principal in collaboration of two driving entities being the basis of all the participation alliances, under the banner of, (i.e. public sector and ordinance). The logical application to a sensible rationale for delivery seems to point as an obvious factor, that the public/ private sector should drive these projects for paramount succession. In a chapter by (Nel & Rogerson 2007), they anticipated short comings of the LED, what is interesting to note is the author's address the need of Local ordinance to position their domicile in order of negative reported aspects in attendance of resulting positively for the LED propos.


To analyse the LED Framework of South Africa, with an understanding to the historical background of international LED program. Specifically the project I had selected, was affiliate to emancipate the socio-economic of a remote rural people of our Nation the Namma people, or Khoi Khoi tribe, who are spread across various locations in the Northern Cape Region of South Africa.

The benefits of LED affiliate to the outcomes in combination of IK traditional knowledge, and acquire a thorough knowledge to the culture of the communities for engagement. The incentive of a LED proposition is to also substantiate the idea of the skills deployment through the communities' traditional knowledge or indigenous knowledge. Alternatively in determination of their IK and the application of this to productive activity outcomes provides a basis for an economical preferred stream of revenue to the collective efforts for production. However this assignment will not contend with an alternative to production analysis at this time.

The elected project placed in motion from the first chapter of the assignment a subsequent analysis of the opportunities from the program to diversify the communities IK with attendance into other spheres or activity typologies upon location. These include activities for local Tourism, agricultural benefits for the location and growth of the community location, an abandoned Asbestos mining location Kougas, bordering the Orange River, sixty kilometres from the rural town of Preska, Northern Cape in SA.


To discuss the parameters of LED principals and advocate the implementation to the project of the Namma people in manufacturing matted carpets for application to soil erosion or contribute this IK methodology to the growth in a regional environment, through tourism exploits, and determine other opportunities in attendance of sustainable development.

To understand the principals of an LED based program, per the SA Framework for LED there are: 'Four key strategies that emanate from the LED policy with deliberate actions, to implementation and funding approaches'. I debate these four strategies underpinning their current shortfalls affiliate to our contemporary landscape, as well as offer an alternative strategy for suited outcomes to these novel directives. (N.LED.F 2006).


The four key strategies for delivering a holistic approach to the LED propos are;

  1. Improving good governance, service delivery, and public and market confidence in municipalities.
  2. Whilst current ordinance continues to politically attest its motives unparalleled to their actions as reported in the lack of morals practiced, too displayed of certain ministerial departments, such behaviour will dampen any formation of good will evoked by ordinance, on the part of public and private enterprise. Secondly the service delivery of local ordinance continues to be a topic of grave concern in regional and urban locations, which equates to a loss in market confidence.

  3. Spatial development planning and exploiting the comparative advantage and competitiveness of Districts and Metros.
  4. Novel it appears to determine the outcomes of a competitive environment, of which commonly, healthy competition creates wealthy environs, so depicts a positive outcome to this adherence. However if a poor management ethos prevails in Local spheres of ordinance, it is logical the nett result would be austere.

  5. Enterprise support and business infrastructure development.
  6. Participants in the arena of support business and infrastructure development are what are largely perceived as Capitalist operations of a neo-liberalistic ethos.

    Without market confidence in ordinance it is difficult to create a spirit of cooperative support. Infrastructure development is the basis of the LED, though to create resolute management in Local municipalities who operate the LED, The need for emancipated education of these municipalities, through affiliations of SEEDAT, as emanated by our previous President, is a prerequisite. Larger construction companies in SA are prepared to bare the financial burden so many governmental projects bare. However this does not come without a healthy interest payout. Questioning if this practice is in aid of the 'people'?

  7. Introduce sustainable community investment programs focussing on organising communities for development and maximising circulation of public spend in local economies.
  8. It is in this arena that I perceive professionals and practitioners of Town and Regional planning could play a role in advisory capacity, providing respite to the outcomes of the initial three strategies for holistic success to the LED. I motivate this propulsion in the recommendations of the next chapter. Extrapolated from (N.LED.F 2006).


For town planners the code of conduct to the LED, is to adhere to the principals as an ambassador of South Africa in Private Capacity of professional management provision to delivery of 'Sustainable Development' both novel & upon improving in regional and urban situations, creating value to spatial arrangements for cohabitation.

To be the management arm of professionals who share the societal vision and are grouped for synergetic turn key developments, for delivery of LED propositions. That includes practitioners and University academia in the arena determinative of cohabitation spatial arrangements for improvement of the communities in Human Settlements of South Africa.

Synergies must include delivering services for Research and Development in an appropriate sector, be this environmentalist studies, projects that are collaborated on by Architects, Urban Designers, Town & Regional Planners, Engineers, , Quantity Surveyors, through a provision of Project Management, and Development implementation for release of interrelated typologies pro a working combination of LED & PPP (Public Private Partnerships), for increase of LED outcomes toward sustainable Human Settlement programs.


Planners must seek to become a primary denominator and facilitator of LED development outcomes and implement strategies for an evolving 'Sustainable Development Landscape' with tenure from a theoretical & academic basis to one of practicality. Off this platform planners are able to establish founding corporations from which global entities akin to the formulation of 'Fiduciary Agencies' for national and international monetary operations for the various stakeholders. This role for planners combined synergistically with built environment practitioners would create an avenue for discovery of new ideologies and contribute with revolutionary methods towards the implementation of LED based programs and that of 'Sustainable Development. Novel & improved projects based upon the regional and urban core ethos to spatial co-habitation of planning and various typologies determined feasible to its application on a project, would emanate community engagement, their sustenance and provide, through the collaborate cohesion a formula which with the (IDP), Integrated Development Planning propos, would revolutionize the current hazardous LED landscape. Planning should be perceived not only for its delivery of regional and urban attendance by solid education of university curricula but also as an Entrepreneurial Management practice that engages in the sphere of re-engineering development practices for existing , Greenfield and Brownfield's projects, with adaptation and providing direction for specific LED proposals.

Literature Cited

  • Crane, W & Swelling, M 2007. From led to sled? Local government and the politics of sustainability. Briefing written, unknown location of expose'.
  • Dayton M, Mc Namara L and Garrett 2006. An application of Spatial Poisson Models to Manufacturing Investment Location Analysis. Journal of Agricultural Economics Association. Vol 38, (01 April 2006): pp. 105-121. Indiana, USA.
  • Nel, E & Rogerson, M 2008. Evolving Local Economic Development Policy and Practice in South Africa with Special Reference to Smaller Urban Centres. Department of Geography, Rhodes University. Volume 18, NO.2 June 2008. Publisher Springer Netherlands.
  • National Frameworks.

  • N.LED.F 2006. National LED Framework. Author unknown.
  • DET. Department of Environment and Tourism. (2006). Planet-Prosperity-People: A Strategic Framework for Sustainable Development in South Africa. Pretoria: Government Printer. Republic of South Africa:
  • Online Resources

  • Online 2010. World Bank. Local Economic Development.
  • Unpublished Articles

  • Muller, A. (2006). Sustainability and Sustainable Development as the Making of Connections: Lessons from Integrated Development Planning in South Africa. Planning Africa Conference. Cape Town: Unpublished.