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Strategic Localism & Civic Entrepreneurship

by Jeffrey Roy

A territorial order that could assure the bases of sound economic and social development in the 21st century must therefore be built simultaneously and synergetically, from the bottom-up, in firms and communities...

{Storper 1997, p. 300}

1) Introduction

Strategic Localism is an attempt to capture the essence of a rapidly changing socio-economy - one in which high-technology localities are important laboratories for understanding the new and interlinked processes of competition, learning, and collaboration. The subsequent objective for all sectors engaged in local development strategies is a form of integrative governance. We define integrative governance as an effective alignment of the policy priorities and instruments of each government (level) with the three types of synergistic components - Market Linkages, Knowledge Infrastructure and Community Culture.

 

At the nucleus of this system is a localized set of socio-economic actors, rooted and connected by territorial proximity and collective determinants. Consequently, local government's action is unique, as it emerges from within these fluid boundaries. Integrative governance creates a new and very different set of challenges for local government, as it attempts to maximize the synergistic-based, positive externalities derived from its interventions within a multi-sector setting. In the past, interventions would be taken to be connected to industrial policies, often formulated and delivered via federal actors. Today,  new forms of action are required locally.

 

Traditional approaches to local economic development emphasized a limited set of policy instruments linked largely to planning (internal) and promotion (external). While these elements remain significant in what Best [1990] first described as the new competition, local states must also be viewed as catalysts and strategic agents engaged in new processes with changing, and more complex objectives. To quote Stoker, "governance, with its bringing together in partnership of governmental and non-governmental forces, makes the simple prescriptions of public administration unsustainable" [Stoker 1998, p. 48].

 

With respect to new processes, then, local government will be increasingly engaged in multi-sectoral forums - the result being a heightened interdependence with industry and civic actors. In this emerging economic development and governance context, a critical dimension of government action is the manner in which it both interacts with other socio-economic sectors, and the degree to which it prioritizes such interactions. These new processes also imply a new division of tasks between local actors, as government turns to networks and partnerships in search of more creative and collaborative arrangements to achieve local objectives.


 

The case of civic entrepreneurship is illustrative here. These new types of associative mechanisms appear to be much more capable than traditional public sector actors of effectively engaging business, leveraging private sector resources and commitment, and undertaking collaborative-based projects. In this scenario, the according challenge for the local state is to engage and partner with civic associations in order to ensure that such activities co-evolve within forums sensitive to both market forces and democratic accountabilities. The resulting focus illustrates the converging conditions encompassing local development strategy [Storper 1997], associative democracy [Cohen and Rogers 1995] and distributed governance [Paquet 1997]. 

 

These types of strategies require a redefinition, and expansion of economic development as a public sector focus. This point is particularly relevant locally, where despite a growing empowerment of local systems, and potential enabling roles played by proximity, local governments have been slow to respond directly with strategies designed to target synergistic governance and new types of mainly concerted action.

 

A key variable is the mind set of many local politicians and officials for whom economic development often remains associated  with traditional processes such as land zoning, official planning, hard infrastructure, and the like. While these elements do not disappear in the new type of economic development emerging from the synergies and interdependencies of more synergistic forms of governance, they are no longer the primary sorts of local advantages.

 

The new and different objectives, though more difficult to articulate in a precise fashion, bring us closer to the specific policy challenges of local governments as they formulate both policies and priorities. The remaining discussion is devoted to building a response from the preceding analysis, although its relevance extends to any local example shaped by socio-economic forces tied to local action and bottom-up solutions[1]. The key message is that good local governance [should] provide a capacity for integrative local action [Stoker 1996].

 

 

2) Context

 

Internationally, there is a flourishing literature on industrial systems and technology strategies from a local perspective. Terms such as industrial and technology districts, and Local Industrial Systems (LIS) have been used to denote subnational entities, their patterns of coordination and learning, and their main determinants of  socio-economic development [Saxenian 1994].

 


Their rising profile has generated a widening stream of literature that reviews the experiences of European and North American subnational localities - where development has been the result of forces increasingly separate from national systems. Thus, a set of examples, including but not limited to The Third Italy, The Four-Motors of Europe, Sophia-Antipolis in France, and Silicon Valley in California become fertile testing grounds for the localization of technology and innovation policies, and socio-economic governance [Hilpert 1991]. Their growing importance is a consequence of a broader transformation of the international political-economy, and the role of the nation-state - shifts which Ahollow out@ national systems and empower local ones@  [Jessop 1993, p. 10].

 

Localities with a high degree of technological innovation and knowledge activity are at the forefront of socio-economic transformations due to a number of factors. Such factors include a rapid degree of innovation and change, and a simultaneous importance of globalizing organizations and market spaces which, paradoxically, empower local processes and bottom-up strategy [Jessop 1993; Naisbitt 1994]. The result is an emphasis on subnational units such as cities and municipalities, and a de-emphasis of national jurisdictions (and accompanying national industrial strategies from corresponding governments). These forces underscore the empowerment of local governance systems, and they raise new questions about the actions and capacities of state actors within them.

 

The search for a new symmetry between government - the democratically-accountable set of decision-making structures and organizations, and a variety of new forms of multi-sectoral governance - mechanisms which comprise the formal or informal participation of organizational actors from more than one sector, represents a key challenge today. The fluidity of the relationships between sectors today also provides an important focal point in this study - namely the way in which the public sector adapts to these new conditions, and the relative strength of its capacities for policy-making, political leadership, and partnering.

 

The separate rules, norms and accountabilities in each sector determine the separate structures and strategies of public, private and civic organizations. Today, of course, we continue to witness an increasing amount of experimentation with initiatives and processes designed to partner across these sectoral boundaries in search of new forms of governance  - often more multi-sectoral, fluid and relational - in terms of participants and processes [Paquet 1997]. These interdependencies conjure ecological analogies which are relevant to the synergistic forms of governance systems examined in this study. The dynamics of learning and adaptation, central to the complexities of ecological systems are increasingly used as an analogy to governance relations between sectors in a knowledge and technology intensive environment.

 

Bahrami and Evans [1996] point to processes of flexible recycling and high-technology entrepreneurship in Silicon Valley - underscoring that in much the same vein as a natural ecosystem, Silicon Valley's growth and success can be attributed to the incessant formation of a multitude of specialized, diverse entities which feed off, support, and interact with one another. Moore [1996] directly extends the same analogy to collaborative-based management which he views as the need for business to manage its interdependencies, balance competition with cooperation, and forge a set of formal and informal linkages which comprise its own ecology.


Within both the international contours of a new political-economy and the confines of governance locally, Saxenian's Local Industrial System will provide a useful application which integrates much of the research literatures reviewed in the subsequent chapter. Consistent with notions of co-evolutionary governance, and shaped by attributes of a particular collaborative ecology, her conceptualization is both local and multi-sectoral in attempting to capture the critical features of decision-making, coordination and adaptation with a system denoted by spatial boundaries (i.e., Silicon Valley and Route 128).

 

This importance of interdependent relations between market-based and non market-based organizations, particularly those operating in close proximity, creates an emphasis on partnership. A literature survey of this field in the mid-1990s confirmed this shift, demonstrating the evolution of local economic development into a complex mixture of economic, social, and cultural factors: i) economic - the development of local resources through numerous innovations of products, markets, actions, and organizations; ii) social - local partnerships, negotiation, and the formation of new relationships; and iii) cultural - initiative and responsibility, citizenship, creation, innovation, solidarity and self-confidence at both individual and group levels [Fontan 1993; Fortin 1995]. This third stream has been the most influential as of late - and is worthy of elaboration.

 

Collaboration Matters:

 

As the emphasis on partnerships drives concertation, this latter, cultural dimension augments the importance of a socio-economic capacity to collaborate. The mix of competition and cooperation characterizing the new governance is based on a deeper recognition of interdependence - between individuals, organizations and sectors. For Putnam, social capital is a measure of the underlying civic tissue, and the propensity of people to form organizations that are not based on kinship, but rather processes of more spontaneous socialibility [Putnam 1993; Fukuyama 1995].

 

Putnam and Fukuyama both underscore how culture is at the nexus between glocalization and community on the one hand, and the central importance of collaborative ties on the other. The so-called new competition therefore emerges as a simultaneous set of competitive and cooperative relations, the latter shaped by cultures of trust [Best 1990; Sabel 1993; Putnam 1993; Fukuyama 1995]. For Saxenian [1994], this view of local culture, shaped by both formal and informal institutions is similar to Moss Kanter's linking of the efficacy of market-based organizations (firms) and their connectedness to the surrounding community [1995]. This socialization of competitive behaviour underscores both the interdependency and connectivity between individual entrepreneurs, sectoral organizations and local institutions.

 


Accordingly, civic entrepreneurs emerge as new and central catalysts, both in forging alternative (non market, non state) organizations and shaping local culture in ways that aim to generate civic-based capacities for collaboration across sectors [Henton and al. 1997]. Foreshadowing somewhat the more recent rise of civic entrepreneurship in North America, Johannisson distinguished between the autonomous entrepreneur and the civic entrepreneur. Whereas the former considers the community as a means to personal goals, the latter concentrates on the development of community as a primary goal [Johannisson 1986].

 

Johannisson's territorial strategy is an integrative set of processes and actors that coalesce around local mobilization. These three, interdependent sectors are the following: i) the market - and the need for intrapreneurship within the local context; ii) the state - and the importance of a decentralized public sector capable of partnering (i.e., shifting to governance); and iii) society - including the social entrepreneur and a catalyst for cooperative revival to bring together different interests from across the community [Johannisson 1986]. This latter component is the basis of community action and collaborative culture. The primary resource that the social entrepreneur mobilizes is non-material - the strength of local identity, and the creativity of community members. These works provide many elements of the conceptual foundation for Saxenian's LIS, and the specific role accorded to local culture.

 

 

3) The Strategic Localism Template

 

In order to help us situate how local government can make a difference in a dynamic governance context, it is necessary to identify the synergistic forms driving local systems of multi-sector governance. The literatures on local and regional systems reveal three potential forms of a local advantage.

 

i) Competitive Advantage (Market Linkages) - Two of Saxenian's three components are closely aligned with the logic of an industrial cluster (industrial structure and corporate organization). Models of industrial competitiveness point to the strength of market forces within clusters [Porter 1991]. While both competition and cooperation play roles in economic governance today, Market Linkages stress the former [Best 1990; D=Cruz and Rugman 1992; Moore 1996].

 

ii) Innovative Advantage (Knowledge Infrastructure) - The role of both knowledge flows and innovation capacities is central to local governance in a high-technology setting. This infrastructure includes knowledge-generating institutions such as universities, colleges, research institutes and laboratories, and various consortia or partnership arrangements among them. The infrastructure also includes the local labour pool of human resources and skills, a critical determinant for technology-intensive industries.

 

iii) Collaborative Advantage (Community Culture) - The notion of Community Culture provides a basis for the institutionalization of shared practises and beliefs that emphasize connectivity and reciprocity between members. These norms and values underpin collective capacities for both institutional adaptation and socio-economic inclusion. Civic entrepreneurs are organizations with a mandate to build collaborative capacities, particularly in the form of new and innovative initiatives joining socio-economic sectors.


Strategic Localism - Scope for Public Sector Action

 

 

In the template below[2], the three synergistic components are identified, along with each of the three levels of government.

 

 

Level of Government

 

 

National      Provincial       Key Zone for

Jurisdiction Jurisdiction    Local Advantage

 

    (*)                           

 

 

 

national

framework

   

 

 

provincial

strategy

  

 

 

local clusters

& networks

   (*)

 

 

Market

Linkages

 

research

infrastructure

   

 

training &

education

   

 

innovation processes

   (*)

 

Knowledge

Infrastructure

 

 

indirect

 

 

indirect

 

 

 

 

learning & collaboration

   (*)

 

 

Community

Culture

 

 

 

 

 

(*)        key area of investigation to both explain new patterns of local governance                                                 and examine the response by local government (for this study, we limit our

focus on local government to economic development functions at the municipal

level - either as internal departments or separate agencies)   

 


Nurturing Local Advantages:

 

In terms of guidling principles, public sector action must first be mindful of what it can realistically accomplish in attempting to strengthen the three synergistic components driving socio-economic development and local governance - Market Linkages, Knowledge Infrastructure and Community Culture. At the same time, in undertaking specific actions local government must also understand how to properly align itself, and its resources, in a fashion conducive to these new challenges of integrative governance.

 

This point means that public sector agencies must devise strategic actions by leveraging their own competencies (as well as an understanding of what these competencies are), as well as those of private and civic partners. The following guideposts are proposed as the basis for more specific local government actions - in terms of how the public sector organizes itself, the manner by which it engages with other socio-economic partners, and the underlying priorities in pursuing such engagements.

 

 

 Socio-economic boundaries - Much like areas such as Silicon Valley and Canada's Technology Triangle, it is critical to create the basis for governance around socio-economic realities, overcoming more fragmented political boundaries.

 

Common and shared identities - Closely connected to the preceding point, a shared identity is fundamental for external promotion and recognition, as well as basis to cultivate coordination and collective action internally.

 

Multiple initiatives and many mechanisms - Synergy-based governance implies (and embraces) a multiplicity of initiatives, coordinated in a non-centralized and networked fashion. Coordination supercedes centralization.

 

Entrepreneurship is private, public and civic-rooted -The concept transcends sectoral boundaries, suggesting an openness to input and engagement from catalysts across public, private and civic sectors.

 

Focus locally and leverage abroad - Mindful of the opportunity cost, global marketing should be largely channelled and leveraged through provincial and federal programs (with local action and resources inwardly directed).

 

 

The central challenge to local public authorities is first to adapt to a more synergistic-based governance environment (i.e., Strategic Localism), and then facilitate the formation of a multi-sector strategy that builds on these guiding principles.


Market Linkages (competitive Advantage):

 

From both the conceptual underpinnings of clusters and the evidence in our most recent  cases, we know that local government's role here is indirect. Nonetheless, as every cluster model denotes, government's role remains pivotal - in setting the stage for the necessary socio-economic conditions which enable competitive clusters of firms to thrive.

 

These broadly defined conditions are relevant at the federal, provincial and local levels. Clearly, however, in the latter case, proximity facilitates a greater opportunity for local state actors to overcome potentially negative externalities associated with imperfect information, a lack of trust, inefficient planning and the like. Consequently, local action within Market Linkages should include the following points:

 

 

a) Interacting and engaging sectoral networks - this central premise of Porter, D'Cruz and Rugman, and Saxenian is necessary to foster strong Market Linkages;

 

 

b) Promote (but not necessarily organize) exchange - public agencies can facilitate local networking by engaging private and civic partners in common interests;

 

 

c) Communication - narrowing the knowledge rift between local politicians and officials, and the private sector is key to facilitate cooperative planning and learning;

 

 

d) Information - improving socio-economic data and information sources is crucial to underpinning local decision-making; and

 

 

e) Specialization[3] - the preceding points should be applied to a select group of established and/or emerging clusters with demonstrated potential.


Knowledge Infrastructure (innovative advantage):

 

The growing importance of human capital and the Knowledge Infrastructure is widely recognized. Despite provincial and federal jurisdictions, this focus will occupy a growing segment of local attention, particularly in those localities well-endowed with centres of research and education.

 

We can say that if the scope for local action and public policy is indirect, it is much less indirect than in the preceding component. The local pool of human skills and ideas is the critical driver within the new economy - and the need for local catalysts to raise awareness, convene actors and facilitate action is acute.

 

Thus, local strategy within Knowledge Infrastructure should be based on the following points:

 

 

a) Connectivity and accessibility - a priority for local agencies must be greater connectivity and accessibility to new knowledge sources and learning technologies;

 

 

b) Civic and private partnership - facilitating the preceding point, local government's convening role and public leadership is key to local partnering;

 

 

c) Entrepreneurial support  - public resources can facilitate a socializing of risk and resources for better innovation and commercialization capacities;

 

 

d) Public exhortation and leadership - local officials can mobilize awareness regarding the importance of human capital and innovative advantage; and

 

 

e) Inter-governmental partnering - mindful of provincial jurisdictions, municipal officials are critical intermediaries between local actors and provincial decisions. 


Community Culture (Collaborative Advantage):

 

If intellectual capital and the Knowledge Infrastructure are key drivers of the new economy, Community Culture shapes local capacities to foster civic engagement and socio-economic trust (and resulting ties across sectors), key lubricants for enabling dynamic efficiencies. These elements are likely to grow as distinguishing factors in enabling and sustaining local capacities.

 

With a convergence of proximity and connectivity, local government's relative capacity (compared to provincial and federal levels) to nurture conditions for collaboration is central. Thus, while Community Culture is based on a mix of civic entrepreneurship, private engagement and public action, government's role can be a positive determinant. Cooperation between local government bodies themselves is an important indicator, as is receptivity to civic partners.

 

Strategies better able to accommodate private, public and civic networking will be required to foster the socio-economic ties necessary to underpin the adaptive capacities of a locality. Collaborative advantage will therefore be rooted in the following elements:

 

 

a) Collective projects - prioritizing collective action and collaboration is a key cognitive foundation for synergistic governance;

 

 

b)Open and inclusive processes - within a shared direction, local processes aim to both encompass a multitude of initiatives and overcome unfamiliarity;

 

 

c) Tangible Investments in civic entrepreneurship - an array of civic mechanisms is required to mobilize private sector participation and leverage public resources;

 

 

d) Public direction - government alone cannot create a culture of engagement, though its action can heighten recognition, importance and acceptance; and

 

 

e) Trust and connectivity - collaborative capacities require trust which is fostered by open and inclusive local forums with state, market and civic representation.


4) Observations and Challenges

 

A well-crafted role for local government can prove to be a positive determinant. Efforts to foster integrative governance, with connectivity between Market Linkages, Knowledge Infrastructure, and Community Culture must be based in forums of democratic, market and civic engagement. Such forums must, in turn, offer the potential for broad participation and support.

 

As these urban and local forums continue to evolve into key venues for choices and debates on all aspects of socio-economic development, local government's role will primarily be to mobilize its own resources and competencies, as well as assist in their alignment with those from other sectors.  Yet, the shift from government to governance, and the balance between them, must be embraced cautiously, and with a nuance. The new governance means reconfiguring the state and public sector action. Within a local environment in transition, the most central area for public action may be that of collective capacity-building.

 

The main priority for guiding public sector action here is that of choosing coordination before centralization: the corresponding policy issues then focus on the types of associational partnerships and their purpose in undertaking them. The logic here is that the most strategic action of public sector actors locally should be to devise processes and forums that leverage the energies and resources of other sectors in collective mechanisms. 

 

Public resources and public direction are key factors in shaping the complex and multi-sector governance patterns emerging today. The opportunities and constraints of this assertion must be recognized. The prospective opportunity is to develop local capacities that matter: the recommendations to attempt to measure and benchmark performance, even in those areas deemed intangible, are a case in point. At the same time, such capacities must proceed in a manner that respects the premise that local governments can devise ways to be accepting of both interactive and interdependent relations with other sectors - much more so than is the case with higher-order government levels.

 

To become effective capacity-builders, public sector agencies must begin from such a starting point, and look to foster means to strengthen local components of governance where attention is most warranted. As a key example, our findings point to various elements of Community Culture where the values, identities and forums across different sectors must be joined by both common purpose and collective action.

 

While this cultural notion often remains intangible (like so much of what is valued in the new economy) localities will be increasingly forced to understand these new variables and demonstrate their importance through operational measures or indices. The growing sustainable city movement, across Europe and North America, and similar initiatives closer to home, present a case in point[4].


A complementary perspective comes from broader considerations of what is deemed to be the quality of life factor in a locality which emphasizes not only traditional indicators of industrial output, but also a broader discussion and assessment of what it means to achieve and preserve local prosperity. The glocalization parameters around this investigation suggest that this type of discussion is increasingly relevant to local governance.

 

 Moreover, public sector agents at that level must play instrumental roles in designing discursive forums. Through ongoing dialogues the issues associated with competition, innovation and collaboration may be translated into a strategy for local development that wrestles openly with the need for a new mix of market promotion, civic engagement, and public accountability. Public direction and support can play a key (but not exclusive) role, as can the leveraging of such support with civic entrepreneurs who, in turn, provide a potentially useful mechanism to foster linkages to business. While statistics and benchmarks and other metrics may well prove rough gauges of what are, at the very least, partially intangible performance features, there is also truth to the managerial mind set that what gets measured - gets managed.

 

The purpose of evaluative mechanisms and local scorecards on these fronts is to provide clearer parameters to widen and guide the set of issues under consideration and review. Such forms of local initiative underline the need for empowered civic partnerships, as a basis to create non-governmental mechanisms likely to be more flexible and apt to experimentation, and better connect them with the private sector in collective projects.

 

In terms of division of tasks, local government might view its role as broadly directive and educational. Civic actors (perhaps assisted at the outset by limited public resources) could then assume delivery functions in a synergistic sense. In the case of Community Culture, this approach would see public leaders prioritizing collaboration and a better understanding of its importance. Accordingly, strategically sponsored civic partners could undertake local programs aimed at inter-sectoral partnerships - leveraging private resources to do so.

  

There is also a close relationship between the existence of collective capacities and other components of local governance. Public resources and direction are key determinants of local performance through the positive externalities produced from synergistic interactions translating into concrete programs and initiatives. A necessary strategy for the public sector is to find progressive ways to design new governance mechanisms that leverage private resources and civic energies in collaborative efforts which further the collective interest.


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[1]  This point re-invokes the work and message of Marcel Cote in the 1980s (Part I). For him, Growing the Next Silicon Valley, rather than implying that all localities will produce computer electronics and software, makes the point that local entrepreneurship, innovation, and governance are common and necessary challenges to all.

[2] This template is adapted from the initial version developed jointly as part of a collaborative research project with MITEL Corporation [Roy and Wilson 1996/1997].

[3] This point may not be clear cut, as there is a tension between specialization on the one hand, and diversity on the other. These tensions will be discussed, and the two views might best be viewed as end-points along a continuum where the challenge is to strike a workable and progressive balance.

[4]  A variety of local initiatives, like those in Silicon Valley and Route 128 are emerging in cities such as Seattle and Calgary to gauge quality of life and overall collective performance. In Ontario, the Social Planning Network engaged a variety of local partners to produce similar report cards on the quality of life of localities across the province. There remains, however, a real distinction between their focus and the efforts to measure distributive trends linked specifically to industry composition, and a technology emphasis in particular. When one is present without the other, obviously the critical next step is to link the two and integrate the result within local development strategies that must be multi-sector.