SECTION I 7.21.1.14 Policy
4.2 THE ANALYSIS OF THEORIES AND APPROACHES
4.2.1 The common corporate centre approach
4.2.2 The alternative approach;
4.2.3 The performance management approach; and
4.2.4 Integrated Development Planning approach, which will be dealt with in 4.4a and be highlighted in 4.5 i.e. LED and Integrated Development Planning processes.
4.2.1 The common corporate centre approach
The common corporate centre approach emphasises growth and real estate development, particularly in the central business district. It focuses on the demand side of the labour market by attempting to create a favourable investment climate. The creation of jobs for local residents is viewed as an indirect outcome of this approach. In contrast, "the alternative economic development policy approach" involves more direct efforts to generate benefits for local residents. Although this method also tends to stress real estate
development, it balances that emphasis with additional emphases on human resource development and other labour supply and distributional considerations designed to ensure that local residents (especially economically disadvantaged residents) benefit from economic development activities.
Consequently, the policy approach followed by any particular administration will probably consist of a combination of elements from the corporate-centre and alternative approach.
This approach primarily seeks to improve local opportunities for capital investment.
Often it emphasises the attraction of advanced services establishments and other growing sectors along with the reshaping of urban space, especially in central business districts.
(Hill 1986) refers to this approach as the "corporate-centre-strategy" and describes it as follows:
In Detroit, as in all large US cities today, the logic shaping investment priorities and practical application of development plans is the corporate centre strategy. Overall investment priorities are to transform this aging industrial city into the modern corporate image: a financial, administrative, and professional service centre for auto and related industries; a research and development site for new growth industries (e.g., robotics, new auto materials and components technology, leisure related activities); an emphasis upon recommercialization, rather than reindustrialisation, and an orientation toward luxury consumption that is appealing to young corporate managers, educated professionals, convention goers, and the tourist trade.
This approach operates under strong private sector leadership. It tends to emphasise the importance of private sector market decisions in determining economic development outcomes. Relatively little attention is devoted to ways in which the public sector can influence these decisions to generate outcomes that are consistent with specific economic development goals. The primary role of the public sector is assumed to be the creation of an economic and social environment conducive to increased private investment (Robinson 1989:285).
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The economic development goals pursued under this approach emphasise econonuc growth and tax base expansion. Even public sector officials who stress the importance of job creation as a means of addressing the needs of the chronically unemployed tend to believe that these needs can be met only by a strategy that focuses on increased investment. Under this approach, goals focusing on the demand side of labour market are dominant. Even when goals like the creation of jobs for local residents are included, they tend to be linked to demand-side strategies.
Henig (1982) argues that under this approach the planning processes are relatively insulated from the influence of the low income and ethnic minority residents. Often participation in negotiations concerning specific privately sponsored projects is limited to government and business representatives. The justification is that such narrow participation increases the likelihood that an agreement acceptable to all parties involved will be reached. (Robinson 1989:286).·
In some cities, major economic development planning issues, such as the formulation of goals, are addressed by quasi-public economic development corporations, which usually do not allow for broader-based participation (RichI982).
The public sector interventions that take place under this approach also reflect the emphasis on economic growth. In most economic development projects, the provision of public resources is an important component of public intervention. Under this approach public resources serve as a means of accommodating the interests of large private investors by, for example, filling the gap between the level of resources which investors are willing to devote to projects and the level required for project implementation.
Relatively, few significant efforts are made to link the provision of public resources to the production of specific economic development outcomes, such as the training or hiring of economically disadvantaged residents. Instead, interventions are mainly in policy areas that are widely viewed as stimulating growth, such as the attraction of businesses from outside the city, while policy areas addressing the distribution of the benefits of growth largely go ignored (Rich 1982).
The targeting of economic sectors, establishing types, geographical areas, and labour needs seems to result from implicit assumptions concerning the nature of the economic development process. The assumptions are that economic growth and economic development are synonymous, and that growth in and of itself generates benefits for "the city as a whole" (Peterson 1981), including economically disadvantaged residents. The areas and activities selected for targeting are viewed as obvious choices, so they tend not to be critically assessed in relation to other areas and activities that could be targeted instead.
The targeted areas are usually advanced services, high-tech activities, and tourism. White collar and highly skilled workers constitute the primary labour categories benefiting from this approach, although the high-tech and tourism sector also generate significant numbers of jobs requiring only low skill levels. Few efforts are made to co-ordinate job creation with the upgrading of the skills of the local labour force, although in some cases jobs not requiring high skill levels are reserved for city residents. The geographic emphasis favours central business districts and their surrounding areas. Headquarters and branch on capital investment usually win out over locally owned and worker-owned establishments.