The economic perspective
From an economic perspective, it is rather pointless to draw a clear line between local and regional economic development. Instead, it is useful to develop a number of criteria, most of which involve transaction and/or opportunity cost, which help in determining to what extent the implementation of a given promotion activity should be devolved.
Proximity
There are some development activities which require proximity, since otherwise the transaction and opportunity costs would quickly become prohibitive. This will tend to qualify them as rather local activities. Typical examples would be:
Entrepreneurship promotion. Potential and actual start-up entrepreneurs tend to be extremely busy with starting their business, so that they would rather not spend big chunks of time to meet geographically distant advisory agencies.
Business mentoring. Since this is usually based on the voluntary, not remunerated involvement of the mentors, it would be unrealistic to expect that they regularly travel major distances to see their mentee. Moreover, the motivation of the mentor is often "to give something back to the community", and this would normally be the local community.
Business contacts. In this case it much depends on the specific type of activity. Informal get-togethers of start-up entrepreneurs would tend to be quite local, whereas events to stimulate business contacts will often be national or even international (think, for instance, of Europartenariate events).
Economies of scale
Economic promotion activities can involve economies of scale, which may militate against implementation at the local level. Some obvious examples:
Business incubators. A business or technology incubator needs to have a certain size to be economically viable. In smaller locations, it may be questionable whether a sufficient number of start-ups will be available to fill the minimum efficient sized incubator, so that it would attract start-ups from neighboring or even more distant locations.
Skills development. Similarly to the incubator, there is a minimum efficient size for a quality skills provider.
Critical mass
There are some promotion activities which only make sense if there is a critical mass of customers, which again may militate against implementation at the local level. Some examples:
Specialized skills development. It does not make sense to offer very specific courses if you have only a number of customers in your location, but the course may be viable if you cater for a larger region.
Networking and cluster initiatives. The rationale of such initiatives is to get together companies which derive a mutual benefit from interaction, be it business transactions or soft issues such as joint learning, and which would get in touch otherwise, especially because there is a huge number of companies present and for each individual company it involves a high transaction cost to identify possible partners. In smaller locations, or in locations where only a handful of companies of a given sector is present, networking or cluster initiatives may not be viable, whereas at the regional level they may make a lot of sense.
Visibility
The issue of visibility is most relevant in the context of investment promotion. When the objective is to attract companies from within the country, it may make sense for each locality to have its own investment promotion scheme. However, when it comes to competing with locations in the supra-national region or worldwide, the visibility of individual localities is usually low. In this case, it is essential that a larger region tries to "sell" itself.
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