Early COVID-19 - Opportunities for Supporting Local Economic Development
I was lucky enough to have an opportuntity to contribute to a national conversation with Australian innovation leaders that focussed on how local governments and innovation ecosystems (including start-ups, co-working spaces, chambers of commerce, incubators and accelerators) may support their communities and economies in this time of rapid change.
My piece focussed on identifying five opportunities for innovation leaders and governments to be impactful in the early phases of the COVID-19 crisis. This recognised that these early phases (discussed here) require a focus on providing both an underlying buffer to local communities and economies as they endure inital economic and health shocks, and best ensuring conditions for recovery in later phases when the time is right.
This conversation followed an intense period where federal, state and local governments underpinned the economies through a range of broad brush-stroke measures such as income support and cost reduction via removal of taxes, fees and charges. These were taken as assumed.
Nothing is novel here - but hopefully it is of use to some.
Early stage COVID-19 - Five opportunities for local economic support
Below is a brief description of the rationale for each identified opportunity, with some examples of where local economic development champions, including innovation leaders and local governments, may work together to realise impact.
Opportunity 1. Re-empower local communities and economies
Rationale
The early stages of the COVID-19 crisis have been incredibly disempowering times for many Australian communities and enterprises. Federal and State Governments have made major decisions that have intentionally contracted economic activtiy in an effort to stop the spread of the virus. This has had huge rammifications for workers, enterprises and communities who are feeling the impacts of decisions way outside of their own control. Responses to this lack of agency include:
Intentionally ignoring the situation and underplaying its impact;
‘Hiding under the bed’ and waiting it out (a temptation I fight at least a couple of times a day); or
Acting in unproductive ways to assert some sense of control over the situation e.g. hoarding groceries.
These responses are rational to individuals, but have significant negative impacts individually, socially and economically.
We need to urgently support our communities, including workers, enterprises and entrepreneurs, in becoming empowered in this new context if they are to realise any of the other opportunities dicussed below.
Potential focus areas
Act as currators, content generators and promoters to provide timely, useful and accurate information including:
Available support;
Positive/constructive activities/behaviors that are working elsewhere; and
Data to support stakeholders to make better decisions.
Re-engage with democracy:
Everything is suddenly out of date/redundant - including democratic mandates. Decision-makers must get a rapid understanding of what communities need/desire, and a mandate to do what is necessary; and
Traditional local communications channels are failing/being distrupted (e.g. local newspapers). How do we communicate outside of traditional channels and reach all of those that we need to? How do we ensure this communication is 2-way, with timely, accurate and useful feedback being recieved by decision-makers?
opportunity 2. facilitate and optimise local trade
Rationale
Major state, national and in international supply chains are being disrupted, may remain disrupted for some time, and may never be quite the same again. In the absence of these supply chains, how can we facilitate trade within, and between, local economies?
Potential focus areas
Facilitation of linkages between locally distrupted supply chain participants and consumers who may no longer be able to access their usual good and services (see the Shire of Murray’s local food initiative in the seminar mentioned above);
Development of alternative supply chains that can take advantage of surplus local goods and services (e.g. downstream manufacturing); and
Development of alternative marketplaces that provide goods and services to newly localised markets via novel channels, product bundles and solutions.
Opportunity 3. capture and retain local value
Rationale
Globalisation has meant that many major export activities are often largely or completely bypassing local economies - with benefits of economic activity acruing elsewhere. This has been offset in some cases by industry contributions to local infrastructure and initatives but in the current economic climate, these constributions may be constrained or not available. Meanwhile travel and supply chain restrictions mean that local goods and services may now viably substitute ‘imports’, representing opportunities for local enterprise.
Potential focus areas
Active engagement with major industry to understand where bottlenecks/supply issues may be occurring, and where there may be opportunitirs for local enterprise to solve these bottlenecks;
Identification, profiling and promotion of surplus local production/local economic capacity to local producers;
Development of trading schemes and purchasing policies that prioritise local production capabilities; and
Utilisation of technologies to facilitate transactions, local credit/bartering, and data tracking of value creation resulting from local economic development activity.
Opportunity 4. do we do more with what we have
Rationale:
All local economic development partners, including governments, agencies, businesses, community enterprises, entrpreneurs and consumers are experiencing a period of scaricty, as revenues decline and costs remain or rise. Despite this, there will exist excess capacity in each local economy that could potentially be leveraged for local benefit. This might include:
Underutilised talent;
Infrastructure with surplus capacity; and
Funds allocated to projects that are no longer relevant.
Potential focus areas
Identify and communicate excess capacity to local supply chains, enterprises and entrepreneurs, with support in place to develop, pivot or scale initatives to take advantage of this capacity;
Optimise decision-making technologies (e.g. machine learning and data collection technoligies to support decision makers in making more efficient, timely, accurate and/or impactful decisions;
Adapt and utilise excess capacity to meet the needs of community members that may not traditionally have been focussed on/served (e.g. disadvataged populations, entrepreneurs, SMEs); and
De-risk initatives that may take advantage of excess capacity, through removal of unnecesary regulation, financial support, partnerships, etc.
Opportunity 5. Ensure that stimulus benefits our communities
Rationale
‘Stimulus’ initatives to date have focussed on underpinning economic activity during the health shock that is beginning to be experienced in communities across Australia. As this shock is managed, there will be a need for further initatives focussing on waking economies up from their hibernation. Local champions and decision makers need to be prepared with programs of investible initiatives that are targeted to the needs and priorities of their local economies.
Potential focus areas
Work with economic development stakeholders to develop a clear understanding of priorities, including identification of transformative initatives that may underpin new economic activity;
Develop programs of initiatives (rather than a bagful of stand-alone projects) that will collectively realise significant impacts over the short, medium and long term;
Identify regional and cross-regional partners with common agendas, and develop joint advocacy programs that promote joint opportunities and impacts;
Collect and collate data relevant to potential future economic development programs for use in advacy and business cases; and
Develop pitch materials that succinctly descibe opportunities and the investment proposition to public and private sector investors.
Again, nothing is new or novel in the above, but the current circumstances suggest a different level of urgency. The economic development community has the opportunity to make a lasting difference to the prosperity of each of our communities, but this will require us to be innovative, creative, courageous and effective in the coming months. I can’t wait to witness the positive change that we will collectively realise.