Introduction to LED
What is meant by Local Economic Development - LED?
LED aims to enhance peoples’ economic opportunities and quality of life through a process in which public, private and civil society actors work collectively towards improving the competitiveness and employment prospects of a defined territory..
The approach developed as a result of dissatisfaction with the results of top down, supply side, economic development policies in generating economic growth that is equitable and sustainable. Such policies have often achieved considerable success in increasing economic growth but their results are usually disappointing in terms of dealing with stubborn inequality trends between people and between places.
This is because top down policies cannot by themselves ensure that investment flows into more labour intensive productive activities or into the poorest regions. This is particularly the case in African countries where the poorest regions suffer from major constraints in levels of infrastructure, finance, technology and human skills, discouraging potential domestic and foreign investment.
LED is an innovative bottom up approach to generating economic growth that is equitable and sustainable through unleashing the economic potentials of every territory. LED is based on the concept that every territory has comparative advantages whose potentials can be enhanced if actions are taken to tackle the bottlenecks currently inhibiting their success.
These actions need to be taken through a partnership between local governments, private sector actors, national ministries, public sector agencies, and non-governmental organizations who all contribute in different ways to the promotion of LED.
- Focuses on a specific geographical area
- Is based on a partnership between the public, private and civil society sectors
- Is based on market principles and promotes international competitiveness
- Is based on promoting productive sectors and value chains in which the area has or could have comparative advantages
- Is based on making comprehensive investments which tackle the obstacles facing priority productive sectors or value chain