Urban/regional development

In many ways, the disciplines of urban and local economic development intertwine. The development of real estate for industrial purposes, the building and maintenance of roads and the upgrading of markets are all examples of urban development activities having a direct bearing on local economic development and the creation of jobs. As has already been outlined in the second triangle, some of these activities fall under the category of tangible and others under the category of intangible vocational factors.

Among these, real estate development is the most essential one. Without the availability of real estate, an entrepreneur will hardly consider starting a new venture or expanding and existing one, even if all other aspects favoured an investment. Real estate is not "pure" land. In order to become a valuable asset for local economic development, many issues need to be tackled and clarified: residential and industrial zones need to be separated and appropriate real estate development plans have to exist in order to avoid the existence of amorphous spaces. Also, the land needs to be connected to the sewerage and freshwater system, there has to be access to electricity, it has to be cleaned up from any contamination and so on (see also Real Estate Development).

Other "classical" aspects of urban development relate to infrastructure issues. An adequate transport (roads, rails, water, air), communication, energy and water infrastructure is vital for many companies (see for a more detailed discussion section Tangible Factors). Whereas no one would doubt the importance of infrastructure, the big challenges in this respect are funding and control.

There are infrastructure projects that really surpass local government financial capabilities. In the past, local governments opted for accessing provincial or national government funds or, wherever they were entitled to do so, approached external donors for funding. In recent years, another option emerged: Public-private partnerships. These partnerships can have many forms (see also Public-Private Partnerships). One relates to the financing of infrastructure, whereby, for example, a certain share of the investment capital and the operating know-how comes from a private investor, whereas the other part comes from local public sources. In turn, the private partner receives a part or all fees collected from the users of the service. In these partnerships, the public partner is supposed to defend public interests (for example "Does this bus transport route also serve the needs of the poor?"). This option cannot be considered a cure for all ills but is worth taken into account as an additional possibility of sourcing funds.

The other aspect is control over the companies active in the provision of infrastructure. Especially in the 1990s, waves of privatisation swept over many countries. These involved also public utility companies (provision of water and electricity) and the telecommunication sector. In some countries, municipal authorities became (or still are) to varying degrees stakeholders in these companies, giving them a certain control over their operations and investment decisions. But in many other countries this is not the case, and especially where decentralization processes are new, local authorities are not in a position to exert a lot of control over the providers of public goods. Nevertheless, there are still options available:

• Local authorities may invite representatives of utilities active in the region to roundtable discussions, presenting their concerns to them and listening to the points of view of the other side. Ideally, the decision-takers of the utilities would incorporate some of the local concerns into their activities.

• Another option is playing the political card and trying to influence either high-ranking politicians or the media in order to exert pressure in favour of the local area. In general, the better the image of the local area is and the better the cooperation with other neighbouring communities is, the more leverage one may exert.

top