The success of a community today depends upon its ability to adapt to the dynamic local, national and international market economy. Strategically planned Local municipal economic development (LED) is increasingly used by communities to strengthen the local economic capacity of an area, improve the investment climate and facilitate an increase in the productivity and competitiveness of local businesses, entrepreneurs and workers.
An understanding of the principles and practices of strategic LED planning will position communities to be able to improve their quality of life, create new economic opportunities and fight poverty. Globalization increases both opportunities and competition for local investment. It offers opportunities for local businesses to develop new markets but also presents challenges from international competitors entering local markets.
At the national level, macro-economic, fiscal and monetary reforms have directly impacted the economy at the local level. National regulatory and legal frameworks such as tax reform, telecommunications deregulation and environmental standards directly influence the local business climate, either enhancing or reducing the potential for local economic development. In many countries, national government functions continue to be decentralized thereby increasingthe responsibility of municipal governments to retain and attract private industry.
Communities within and between regions often compete to attract external and local investment, however, opportunities exist for communities to collaborate with each other to help all their economies grow. An association of local municipalities or regional governments working together can serve to facilitate LED efforts by acting as an intermediary between national and municipal governments.
