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Economic competitiveness

[ Summary ]

 

Chapter 1:
Background

 



1.2 Lessons learned from LEADER

 

Lesson one: LEADER has instigated an integrated development policy/learning approach in problem areas, by assuming the risk of experimentation.

    LEADER’s aim was to concentrate development support on micro-areas selected according to criteria of economic, environmental, cultural and other forms of cohesion. Drawing up a development plan (“business plan”) for each of the areas concerned, based on a “horizontal” partnership that includes local public and private players was, in principle, meant to avoid duplicating the same “development recipe” for all the areas concerned.

    This approach was designed, first and foremost, to allow economic, socio-cultural and environmental variables to be roughly integrated into the analysis of an area.

    However, an integrated view of an area can only be built up gradually, as “grass roots” measures progress. Where the situation is highly fragmented, it is rare for an overall view to emerge from a first analysis, even if it is possible to reconcile the various interests and viewpoints. However, this does not mean that the “endogenous” local development approach necessarily succeeds.

 

Lesson two: LEADER has demonstrated the pertinence of creating a flexible and effective structure, the “local action group” (LAG), to act as a catalyst and interface between the demands of local players and those of public and private entities.

    LAGs have gradually identified the fields of intervention most appropriate to their local situation by analysing market opportunities for local resources and structures. They have also shown that local development measures require the joint assistance of public entities as well as private organisations and structures operating in the area, in order to foster experimentation and the implementation of new means of economic development.

    In many cases LAGs have also enabled local administrations, particularly district councils, to play a social coordination role, by encouraging initiatives and exploiting any synergy that may exist between the interests of local socio-economic players and the rest of the local community. Such synergy is a key factor in the successful implementation of economic, social and other projects in disadvantaged areas.


      Example

      The Mugello/Val de Sieve LAG (Tuscany, Italy) is a broad partnership of numerous public institutions (15 district councils and a mountain community) and no less than 42 private entities. The partners include the district council of Firenzuola and eight private entrepreneurs working in the sector of “pietra serena”, a local grey stone often used in the past by Italian Renaissance artists but today confined to paving historic centres. The LAG therefore included in its priorities a measure aimed specifically at redeveloping the pietra serena sector. With the support of the LAG, Firenzuola district council and specialist advisers, the producers then embarked on a process of research and development to develop new products and uses for pietra serena. In parallel, Firenzuola district council backed the organisation of training and exchanges with specialised institutions, in order to reintroduce the ancient craft of stone cutting. This led to the identification of three new applications for pietra serena: urban furniture, interior decoration and the creation of various objects in pietra serena. The local action group and the district council played a key role in coordinating and guiding the project. The entire project represented an investment of EUR 224 000 from LEADER. Since the launch of the operation, there has been steady growth in the stone sector, in terms of both turnover (+60%) and jobs (34 new full-time posts, i.e. an increase of 20%). Over and above these economic results, we are also seeing far-reaching changes in the way entrepreneurs operate. Nowadays they cooperate closely with one another, so much so that today it is possible to speak not only of a sector being organised, but also of a real industrial cluster specialising in pietra serena being gradually created. This example demonstrates the importance and relevance of good links between the public and private sectors in problem areas.

 

Lesson three: the creation of LAGs has led to the gradual introduction of key elements for building an endogenous economic development model.

    Below are a few examples:


      Example 1:
      Collectively refining the relationship between local producers and end-user markets

      In 1993, the West Cork LEADER group launched a strategy to create a regional brand. The aim was to achieve better coordination between producers in order to market tourist products and local agri- foodstuffs. Following a series of training courses on quality control, the project resulted in the creation of the “Fuchsia Ltd” label, requiring compliance with a number of rules and quality criteria.


      Example 2:
      Building collaboration between entrepreneurs and other players

      Austria’s “Käsestrasse Bregenzerwald” (the Forest of Bregenz cheese route) is representative of the integrated form of local development of the Bregenzerwald region, a forested mountain area to the east of Bregenz, capital of the Land of Vorarlberg. Cooperating within the local partnership are 23 district councils and a wide variety of associations, as well as farmers, restaurateurs, tourist operators, agri-foodstuff producers, shopkeepers and craftsmen. The “cheese route” has become the flagship project of this territorial partnership, whose links have since been strengthened as a result of the multiple activities that have been organised as part of the project. Indeed, “constructing” the Käsestrasse is a continuous process that requires the active and sustained participation of a growing number of businesses, volunteers and public players.


      Example 3:
      Enhancing the economic culture through training and experimentation

      The inauguration of the “Stenfors Development Kitchen” in April 1998 at Robertsfors (Västerbotten, Sweden) was the result of a five-year process. Launched by five women farmers, the aim of the project was to set up a collective cooking workshop where local products cooked according to family recipes could be prepared for sale. By providing shared facilities for food preparation, packaging and storage, the workshop has created jobs and a new source of income for the 17 people currently using the facilities.


      Example 4:
      Seizing the opportunities offered by formerly untapped local markets

      The Ross & Cromarty LEADER group in the United Kingdom, which works in the Scottish Highlands, supported a small-scale organic horticulture project for supplying the inhabitants of the Applecross peninsula with fresh flowers, vegetables and fruit. Formerly, the inhabitants of this isolated region stocked up once a week with food products from outside the area, or else they would travel some 130 kms to buy their food at the nearest town! The creation of “Applecross Organics”, allowing them to buy fresh quality products all year long, particularly in the winter when road travel is difficult, has created a new local market. In Portugal, hunters from all over the country would meet in the Destèque LEADER area. On the initiative of the LAG, the region’s farmers have started to sell their local and farm products direct to hunters and their families.


      Example 5:
      Focusing the attention of businesses and local players on external developments and on their own ability to innovate

      “LEANOVA” is a programme for supporting innovation in small businesses from the Lauwersland and Noordwest Friesland LEADER areas (Friesland/Groningen, the Netherlands). The project calls upon the services of experts from a range of organisations (research and technology centres, large enterprises, etc.), which work with the SMEs in seeking solutions to the problems hampering their growth, especially their lack of product innovation. Devised by the University of Twente (Enschede), LEANOVA was based on a similar programme, “INNOVA”, which the university had implemented in another region of the Netherlands.

 

Lesson four: LEADER has highlighted the need for more information about the local economy to include products and know-how, as well as skills that are dying out.

    The problem of securing up-to-date statistics about the development of local businesses underlines the importance of LAG activities. By working jointly with organisations such as consular offices, business associations and local cooperatives, they are able to monitor local development.

    In addition to such monitoring activities, LEADER has also demonstrated the need to identify an area’s specific skills, which in many cases are either fast disappearing or have survived only in a local or family context. It is by highlighting such expertise that LAGs, together with local players, have been able to refine and develop differentiated products, organise relevant training and recreate the conditions for once again exploiting such skills. This has allowed numerous local products to be reintroduced onto the market.

    Nevertheless, the LAGs’ ability to monitor the local economy is often highly empirical. In only very few cases have systematic procedures for gathering statistics and carrying out research been organised to permanently monitor changes in the production structure (business creation/failure) and in know-how (traditional/new vocational skills). More work still needs to be done to standardise methods for collecting statistics and information in order to make comparative analyses on an area-wide basis and to ascertain the importance of each sector in relation to the others.

 

Lesson five: LEADER has come up with ideas for overcoming some of the handicaps of areas suffering the greatest problems.

    By focusing their activities at local level, LEADER has helped to gradually refine methods to overcome the special handicaps of marginalized areas.

    This has involved experiments to solve the following problems:


    a) Difficulty in ensuring the succession/take-over of farms and other local businesses


        Example

        “RELANCE” is a strategic project introduced by the Espace Cévennes LAG (Languedoc-Roussillon, France) for assigning to buyers activities, businesses and farms that would otherwise die out for lack of heirs. By setting up databases, the LAG, with the support of consular offices and other public organisations, can identify entrepreneurs interested in setting up in the Cévennes region. RELANCE then puts assignors and buyers into contact and provides them with individual guidance and support.


    b) Neglect or under-utilisation of the architectural and historic heritage and infrastructure

      Renovating monuments, buildings and other types of infrastructure has been one means to enhance the attractiveness of dilapidated areas. Restoring the heritage often involves the creation of new tourist facilities. Furthermore, measures to recover their neglected heritage have helped to enhance the inhabitants’ image of their cultural heritage.


        Example

        In the Ballyhoura LEADER area (Ireland), the revival of villages has led to the development of new businesses, chiefly restaurants. These have gradually been integrated into a collective quality approach (“QUEST” project) and have become magnets for locals and tourists who appreciate quality.


        Example

        In order to preserve abandoned mediaeval stone walls and terracing that are currently home to a rich variety of wild fauna and flora, a tourist route has been created in the Virgental area (Tyrol, Austria), with the support of local farmers. Under the slogan “Make all your senses count”, the route has been adapted for use by blind people. This product has become the cornerstone of the area’s tourism strategy. It has led hotelkeepers to adapt their service to meet the requirements of this new clientele. The project has also helped to promote the entire area as part of the campaign “Virgental, Valley of the Senses”.

      In many other LEADER areas, old railway lines, pilgrimage routes, farming or industrial installations, etc. have provided an opportunity to create original tourist facilities that conjure up forgotten traditions (e.g. former Celtic pilgrimage routes), which arouse a great deal of curiosity and bring in visitors from far and wide, something that was inconceivable in the past. Such redevelopment, in its turn, leads to changes in attitude, with inhabitants starting to see their own resources and reference models in a positive light.


    c) Population ageing and insufficient attractiveness and services to keep young people in the area

      It is rural areas suffering the greatest problems that lack appeal for young people. LEADER’s proposed solutions often form part of a wide-ranging approach to tackle a number of different issues at once, including social, economic and leisure factors, as well as the area’s image.


        Example

        Limited job opportunities, compounded by high unemployment, have prompted many young people to leave the villages of Llandysul and Point-Tywely, in the Teifi Valley (Wales, United Kingdom), to live in the towns. Worried at this socio-economic decline, a group of inhabitants organised a village audit in conjunction with the LEADER group. This led to the establishment of three panels on: social cohesion and quality of life; economic affairs; and tourism and the environment. This approach culminated in an integrated development plan that has led to numerous initiatives to make the two villages attractive again. This involved the creation of a youth centre, the conversion of a parish hall into a community centre, setting up a nursery in a disused commercial building, extending the boating facilities at Llandyssul to include accommodation for canoeing and kayaking groups, installing collection points for recyclable waste, etc. This project is all the more remarkable as the two villages come under different administrative authorities.


    d) A dispersed production structure that makes it difficult for the multiplier effects generated by public measures to emerge

      In cases like these, LEADER has often initiated an approach to group producers together to solve specific problems, e.g. innovation in the production process, compliance with standards, market access, etc. Approaches such as these have proved effective in a number of cases:

      • where producers all share the same specialisation;
      • where producers have complementary specialisations that can be pooled to create a joint product (e.g. the creation of thematic tourist routes).


        Example

        In the Magnoac region (Midi-Pyrénées, France), grouping farmers into a cooperative for pooling farming equipment has led to the creation of an abattoir and a cannery for foie gras, one of the area’s traditional products. Farmers have set up a collective working system that has enabled them to introduce European health standards and to penetrate the national market. A flexible technical and financial method of managing the facilities has been introduced to suit the requirements of each individual farmer member. Backed by LEADER, the “Maison du Magnoac”, which is a meeting place for inhabitants and tourists alike, also serves as a collective marketing outlet for six farmers, whilst 34 others sell their products direct from the farm.

 

Lesson six: LEADER has supported the development of support measures to secure long-term economic competitiveness.

    LEADER is as much a coordination instrument as a financial instrument. LEADER I was essentially a learning phase for LAGs, which in the main tended to focus on short-term measures. Gradually, as they acquired experience, LEADER II groups identified and developed instruments to suit their specific area, designed to guarantee longer-term economic competitiveness.

    Some of these instruments are still in the start-up phase, whilst others have already proved their worth and demonstrated their usefulness. Below are a few examples:


      Example 1:
      Creation of financial instruments to encourage banks to play a more active role in local development and forging a relationship of trust between small-scale producers and the financial system.

      The Anglona Monte-Acuto LEADER group (Sardinia, Italy) has created a “Guarantee and Loans-on-Trust Fund”. This cooperative fund, “LEADERFIDI”, aims to foster the creation and development of small local businesses by facilitating their access to credit, in a regional context where loans are expensive and would-be borrowers are not very creditworthy. The project also forms part of a bid to support initiatives beyond the term of the Local Action Plan formulated under the LEADER programme. An agreement between LEADERFIDI and the Bank of Sardinia provides local entrepreneurs, especially young business creators, with access to bank loans.


      Example 2:
      Creation of structures to support technological innovation for producers and small businesses.

      The Ötztal LEADER group (Tyrol, Austria) supported the creation of a wool-washing machine for use by sheep breeders within a wide radius. Run by a local entrepreneur, the machine not only incorporates state-of-the-art technologies but also complies with environmental standards. The machine was designed to meet the needs of local sheep breeders, who were formerly obliged to send their wool to be washed in Belgium as there was no wool-washing machine of the required capacity in the region. The use of this new machine has also helped to revive the Ötz valley traditions of sheep rearing and wool processing. LEADER has also encouraged mechanisms for transferring technology from universities and research centres. However, LAGs continue to encounter difficulties in developing transfer structures that meet the innovation needs of rural entrepreneurs. Furthermore, LEADER groups still lack the ability to support the creation of regionally- managed structures that are able to help a number of neighbouring areas, which would allow a local research and development strategy to be implemented.


      Example 3:
      Organisation of business service centres based on identifying the needs of local entrepreneurs and securing their participation.

      The “Honey Museum” in the Portodemouros LEADER area (Galicia, Spain) is much more than just a museum. First and foremost it is a multipurpose apiculture centre. It harbours a honey-producing company, provides technical assistance to beekeepers, organises training, hires out equipment and provides quality control services to ensure that the region’s bee-keepers package their honey in compliance with quality standards. With LEADER’s support, the Honey Museum is ensuring the survival of small-scale beekeepers that, without access to such services, would be doomed to extinction sooner or later.


      Example 4:
      Creation of vocational training structures

      LEADER has helped to arrange vocational training of varying levels to:

      • seize new economic opportunities for the area;
      • update local expertise and skills;
      • redevelop traditional occupations that are becoming obsolete.

      The Garfagnana Ambiente e Sviluppo LAG in Tuscany (Italy), concerned about the serious crisis in the forestry sector, has launched a policy to modernise the sector. It consists of re-gearing a number of forestry jobs and activities towards environmental protection rather than towards intensifying forestry itself. Retraining for 10 forestry workers is organised on work sites where bio-engineering techniques that favour the use of natural tree species and materials are applied. In order to meet growing demand for skilled labour from local forestry cooperatives, a second training course was later organised, this time for 20 young unemployed people.


      Example 5:
      Creation of consortia to market local products

      “Consorzio Garfagnana Produce” is the result of initiatives to develop three typical products from the Garfagnana area (Tuscany, Italy): Einkorn (triticum monococcum sensu lato, a form of wild wheat), honey and chestnuts. In order to organise the sector, the LAG has, as the result of a wide-scale coordination initiative, managed to bring farmers, processors and shopkeepers together into a single consortium. In 1996, with the support of local public organisations, Einkorn was granted the European Union’s Protected Geographical Indication label. Following the success of this initiative, two more consortia were created in 1998: “Consorzio del Farro della Garfagnana”, a consortium of Einkorn producers, and “Consorzio Castanicoltori”, a consortium of chestnut producers. Consorzio Garfagnana Produce has succeeded in representing the interests of all the area’s producers and tourist operators by creating a brand image and promoting the area Europe-wide.


      Example 6:
      Creation of “showcases” to promote and market quality products

      14 livestock producers from the Sonderjylland LEADER area (Denmark) grouped together to set up a training farm. Known as “Agripark”, the farm stocks numerous animals - cattle, sheep, deer, boar, etc. - the meat of which is consumed. In addition to its recreational function, the farm is a “showcase” for how quality meat production should operate. Its animals are raised humanely in compliance with ethical, health and feeding requirements. As a result, they supply very healthy meat which visitors are able to buy from the farm. Agripark is the fruit of a series of measures aimed at forging a working relationship between producers, whilst at the same time providing consumers with a better guarantee of quality. The project has had a direct demonstrative impact in terms of diversifying local farming activities, with the added long-term benefit of several new jobs.


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