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Economic competitiveness

[ Summary ]




This part of the series on the economic competitiveness of rural areas - defined as the ability to create and retain value added - is based on experience of the LEADER Initiative. It aims to bring into the analysis the characteristic differences between rural areas.

The rough “typology of situations” sketched out in Chapter 1 reveals that economic competitiveness not only differs from one type of area to another but, even more importantly, the form it takes depends on the various situations existing within an individual area (e.g. dynamic micro-areas existing alongside declining areas).

This raises a number of questions: can a certain developmental balance be achieved throughout the entire LEADER area or, on the contrary, are there parts of the area that are doomed to decline and neglect? Is an approach that integrates intangible aspects (e.g. identity, support for collective projects, inter-institutional and public/private consultation, etc.) more likely to lead to a new balance and new opportunities? The lessons from LEADER demonstrate the importance of “proximity” to the success of such an approach, even where an area has suffered years of neglect.

In general, obstacles to (or weaknesses in) economic competitiveness arise at three levels:

  • upstream of production - the right infrastructure and services for local production and the possibilities for producing inputs, intermediary products and technologies to strengthen the various sectors may not be available;

  • during production itself - product quality/quantity may be insufficient and there may also be more serious underlying structural problems, such as a predominance of traditional mono- production that has no multiplier effect in terms of business- and skill-creation;

  • downstream of production - there may be problems with linking markets to consumers, and producers may be unable to organise themselves in order to achieve appropriate economies of scale; there may also be problems with creating new products based on the area’s own resources and, above all, on its distinctive image.

Nor is it possible to analyse an area’s economic competitiveness without taking into account the relationships that exist among the various public institutions, as well as between public institutions, citizens and interest groups. Indeed, there may also be obstacles in the relationship with public institutions, particularly in implementing measures/consultations to stimulate the growth of “key” economic sectors, to create new opportunities and to strengthen the structures needed to support long-term local development.

Examples of LEADER intervention strategies for the different types of area and situation (Chapter 3) suggest a number of ideas on how to recreate levers for economic development, even in areas that are “marginal” or undergoing a process of restructuring. In the long term, such strategies, supported by the LEADER Initiative, can be consolidated only by reinforcing an area’s consultation capabilities, harnessing all its available resources and creating appropriate structures that rely on the commitment of local, public and private players.

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