Journal article

Innovation and institutional strategies for local enterprise development

Regional planning Economic development Local government Innovation Australia
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The impact of globatisation processes on regional and rural Australia is of increasing concern to policy makers and analysts (Botsman and Latham 2001). The idea, for example, that'the Australian government needs to provide incentives for economic investment in the poorest parts of the nation, just as it offers incentives for Australian business to trade and invest overseas' (Botsman and Latham 2001, p. 29) drastically alters our thinking about the way in which regional and rural communities relate to each other. Latham's suggestion that 'the things which work globally need to be applied locally'(2001, p. 29) is both provocative and realistic in his assessment of the way Australia currently responds to the changing global economy.

This paper reports on preliminary research into successful regional and rural economic development strategies which reflect initiative and the broad thinking advocated by Botsman and Latham. This research is part of a wider body of research being jointly undertaken by the three authors on the nature of economic and community development in regional and rural Australia. As Daly (2000, p. 195) notes 'local government in Australia and especially in regional and rural Australia is deeply troubled'. This has come about, he argues, because of the decline in the overall number of local governments and the increasing responsibilities passed on to them by state governments, often without commensurate financiaI assistance. Their'troubles' are also exaggerated by the impact of globalisation and deregulation on the ruraI economies that traditionally sustained these communities.

There are many commentaries on the validity, or appropriateness, of the intervention strategies advocated to deliver genuine locaI economic development (see for example John van Tiggelen's article 'Staging a Recovery' in The Age 5 May 2001, pp. 18-23). While there are many such strategies, there is much less interest in conceptualising about the advantages and disadvantages, or appropriateness of these different frameworks. This paper provides a conceptual framework for doing this and takes its lead from Reich's (2000) notion that it is the way the creator and the organiser, the entrepreneur and the marketer, come together that determines the likelihood of economic success.

ln particular, the objectives of the research reported in this paper are threefold. The first is to enquire into the relationship between locaI government agencies' innovation process, and the organisationaI structuring of enterprise development activities. Where the'innovative process' is the'accomplishment of innovative activities (action) [that] depends on the mediations constituting the contingencies of the institutional setting (structure)' (Edwards 2000). The second objective is to document this relationship after enquiring into the way innovative local governments have enhanced local economic and community development. Preliminary findings are provided by two cases. The third objective is to outline a typology for sustainable locaI enterprise development, which identifies the key roles of both individual innovators and local institutions. 

The focus is on regional and ruraltowns where local councils can play a key role as facilitators of economic and community development. The role of institutions, such as the local councils, and the capacity of their leadership are central to the success of economic and community development. This, however, is not an easy task as local governments in regional and rural Australia believe they have been placed in a difficult role as the deliverer of state government regulated services, with decreasing resources to do so.

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