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Opinion piece: Get serious about economic development outcomes – get an independent implementer

By Janine Espin, Managing Director at Economic Development Solutions

When it comes to the design and delivery of economic development efforts, companies’ earnest desire to make a positive impact is often stymied by the complexity of dealing with public service entities and other stakeholders, all of whom have their own priorities, loyalties and agendas. Independent economic development partners can provide the neutral ground needed to get the greatest benefit for the most important beneficiaries – the community.

Economic development is mandatory for organisations – especially those like mines, renewable energy and construction companies whose operations have a big impact on the community within which they are established. These companies need to meet government-imposed requirements in terms of community upliftment to ensure their operations add value to the community and are sustainable. Getting it right is critical.

Failure can mean penalties or even revocation of the company’s license to operate. However, there is also a deeper threat – if the community fails to thrive, it’s unlikely that the company will.

Effective interventions can rarely be defined without the input of the municipality and other public service entities directly responsible for infrastructure and community services in addition to wellbeing. Nor can interventions be successful without the buy-in of the community. Moreover, there is little value in duplicating the efforts of other companies investing in economic development outcomes.

What is beneficial is a clear understanding of all the factors creating the context within the community and of the real opportunities to make or contribute toward making a measurable impact in the area of development selected – be that skills, infrastructure, community health or other development. Yet, to get to this point, companies need to be able to enter into and maintain a well-defined relationship with the correct government entities and other stakeholders. The goal needs to be working toward an agreed outcome, with all parties held accountable for meeting agreed inputs. For this, the correct processes and procedures need to be adhered to. It is especially important to meet the formal project audit requirements of government’s economic development programmes.

Too often, when the development effort is headed up by the sponsoring company, relationships within the company (e.g., a dispute with workers or a strike) can cloud decisions and interactions with the community. In addition, ethical boundaries can be overstepped if company’s in-house teams are unaware of gifting or other policies, or unscrupulous individuals take the opportunity to exploit situations to their advantage.

Key points of failure occur when there is no transparency, parties are unclear on legislation, there is communication failure, or the responsibilities and accountability of various parties is not spelled out.

The benefits of using independent economic development specialists are fourfold:

  1. With the independent specialist given a limited mandate from the sponsoring company (i.e., only the authority) to conduct business related to the economic development programme, it is difficult for public sector or other stakeholders to engage on topics that are out of scope.
  2. Independent specialists often have established relationships in the community, with public sector and with other stakeholders (other companies investing in the same development area). This improves:
    1. The opportunity to identify economic development interventions that will have real impact and lasting value for the community.
    2. The potential for fruitful collaboration to the collective benefit for all contributors and the community.
  3. A focus on meeting all the stipulations of the government’s economic development requirements means all the boxes are ticked on every engagement, from taking an attendance register to monitoring and reporting progress.
  4. With responsibility for progressing the programme and achieving identified outcomes, independent economic development specialists make sure outputs are delivered according to specification and funds go to the intended recipients – i.e., builders, suppliers, beneficiaries – and as a benefit, they can ensure that no payment delays occur when having to deal with small local suppliers.

Get serious about economic development outcomes – get an independent implementer.

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