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Economic competitiveness

[ Summary ]

 

Chapter 3:
Implementing a strategy to boost economic competitiveness

 



3.3 Creating a collective dynamic that encourages a multiplier effect

 

It is not easy to create a multiplier effect in rural areas from publicly funded support measures such as LEADER (upstream, downstream, or job-creating measures), neither can this be achieved in the very short term. The fragmentation of businesses and the trend towards demographic decline do not, for example, help to create a positive impact upstream and downstream of the sector. Therefore in order to create a multiplier effect it is necessary to orchestrate a collective dynamic that involves many players who forge different types of links between themselves.

The creation of such a dynamic requires:

  • methods for integrating a growing number of players into publicly funded activities (including the public players themselves);
  • methods for risk sharing;
  • methods for managing conflict and opposition.


a) Integrating a growing number of players

    Even where a new measure for producing a multiplier effect is started up initially on a core group of “trail blazers” who agree to assume the risk, it very soon becomes necessary to involve further players in order to make the measure viable, especially where the measure is designed to redevelop an untapped resource.

    However, increasing the number of players is a long-term process. The type of coordination promoted by LEADER often plays a decisive role in this process.


      Example

      When re-introducing indigenous breeds of sheep into Austria, Belgium and Luxembourg, pioneer sheep producers launched the project and gradually brought in other producers, in order to “cement” the process. This multiplies the downstream impact: growing interest from the hotel and catering trade, tourist operators and wool processors who adopt the new raw material. Upstream it creates demand for specialised services to care for the unusual breeds.


b) Encouraging risk sharing

    How much support a project receives from entrepreneurs and other local players depends on a host of different factors. From an economic standpoint, the risk factor weighs very heavily, especially for innovative measures where the uncertainties are great.

    The effective participation of the players will, therefore, depend on what share of the risk is assumed by the public sector, as well as on the social environment of the project promoter/risk-taker. For example, in certain rural societies, risk-taking is quite naturally assumed by the family, whereas in others, risk-taking has to be organised by bringing in external elements. LEADER funding, which is by nature based on risk sharing, is used to develop potentially interesting, though risky, activities.


c) Fostering the resolution of conflict and opposition

    In many cases, social or cultural obstacles (lack of trust, local disputes, lack of promoters, etc.) prevent local players from participating in collective approaches. In such cases, economic competitiveness is limited by the lack, or inadequacy, of social competitiveness, so by building links, people are obliged to create consultation forums and seek “win-win” solutions [5].

     


    [5] See “Constructing a territorial development
    strategy in the light of the LEADER experience -
    Part 2: social competitiveness”, LEADER European
    Observatory, 2000.



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