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The Higher ED Blog: What’s new in economic development research (fall 2016 ed.)

Michelle Madden / September 26, 2016

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The Higher ED Blog: What’s new in economic development research (fall 2016 ed.)

The Higher ED Blog publishes a quarterly economic development research roundup that shares new research practitioners might find useful. The series draws from Economic Development Quarterly, Regional Studies, the Journal of Rural Studies, and other reputable peer-reviewed academic journals.

The drivers behind university-region engagement

Many economic developers are looking for ways to spur innovation, fill skill gaps, and make the most of local assets. Meanwhile, universities are increasingly expected to engage with their regions and provide value to them.  There is more interest than ever in encouraging university-region engagement but there is less clarity in what this engagement should look like, and how to create more of it.

A recent study from Germany pursued these two questions. Their first goal was to create a classification scheme for regional involvement so that they could understand the scope. They then surveyed nearly 2000 professors to find out what motivates them to engage with their community.

The classification exercise resulted in four broad categories:

  • Research, development and transfer-oriented activities (i.e. research and development or consulting in partnership with outside organizations);
  • Activities related to facilitating external access to university facilities (such as laboratories or equipment);
  • Teaching-related activities (including graduate theses with external partners); and
  • Activities related to regional engagement and leadership (a broad category covering often small events targeted at local residents, like information events and general contributions to social life).

Regarding motivations, their overarching conclusion was that the decision to engage in regional activities largely rested in the individual motivations of academics, rather than any top-down directives from university managers. Academics who engaged were driven by a wide range of factors, but the opportunity to increase their visibility, reputation, and networks in the region were very important.

The level of engagement is also influenced by type of university and the characteristics of the region. Teaching-oriented universities are less likely to engage in the first category (research), but more likely to contribute to the fourth. Interestingly, there was a ‘U’ shaped relationship between a region’s wealth and the first, second, and fourth categories. Engagement was more common in regions with either a low or high GDP per capita.

Read more: Universities’ Regional Involvement in Germany: How Academics’ Objectives and Opportunity Shape Choices of Activity. Regional Studies, 50(9).

Two-tiered banking hinders economic mobility

A geographical study on the city of Toronto found that banks and credit unions are leaving areas with low household incomes while ‘fringe banks’ like payday lenders are proliferating in them.

This is a concerning trend because it creates a two tiered banking system that reinforces inequality. Low income residents in these neighborhoods are getting less access to services that facilitate saving, borrowing, wealth accumulation, and financial literacy. As they depend more on the fringe banks, they also spend more on banking, as fringe banks charge more in fees and interest than traditional banks.

Online banking may mitigate some of the effects of losing a local branch, but only if residents have adequate access to the internet and are inclined to use online services.

Read more: Dynamics of the Location of Financial Institutions Who Is Serving the Inner City? Economic Development Quarterly, published online.

What leads a business owner to diversify—or not?

Diversification is often lauded as the solution to boom and bust cycles, which peripheral regions and those dependent on resources are often subjected to. In fact, we’re hosting a seminar on economic diversification next month to help communities navigate this tricky transition. As you could imagine, shifting a local economy or sector in new directions is a complicated challenge that depends heavily on the actions of individual business owners.

A researcher from the University of Portsmouth recently explored how fishermen in the English Channel fishery have been responding to regulatory and environmental changes affecting their livelihood. He interviewed 22 fishermen and used their insights to create a framework to better understand their decision process.

The framework starts by acknowledging the context before diversification, categorized into external, business, and individual.  The external context is beyond the control of the fisherman, such as quota allocations, operating costs, fish prices, and the labour market. The business context includes things like vessel length/type/location, crew structure, and the financial status of the business. The individual context factors in age, experience/qualifications, entrepreneurship, job satisfaction, household composition, and even identity (fishing tends to be seen more as a way of life than an occupation). All of the factors above, and how they intersect, will influence a fisherman’s response.

In this study, most of those interviewed opted for ‘intra-sectoral’ strategies –like increasing their hours, fishing new species, reducing costs, or increasing value—rather than diversify into different sectors like tourism. Tourism is requires the fisherman to be in the right location, have the right vessel type and size, and the interest and ability to engage with the public. Getting into more niche activities can be financially lucrative, but also risky for both the fisherman and their household.

While this is just one study focused on one sector, owners in all sectors are affected by their external, business, and individual contexts. Economic developers hoping to influence diversification decisions will need to keep all three in mind.

Read more: Exploring How Fishermen Respond to the Challenges Facing the Fishing Industry: A Case Study of Diversification in the English Channel Fishery.  Regional Studies, 50(10).

 

About the author

Michelle Madden is the editor of Higher ED. She is also the Outreach Manager for the Economic Development Program and a graduate of the University of Waterloo’s Local Economic Development master’s program.  She has authored many Higher ED articles sharing information relevant to economic development practitioners. She has published several of her own blogs on economicdevelopment.org as well. Follow her on Twitter at @michelle_mad.

About the series

Higher ED: Insights for the Next Economy is a platform for students, guest speakers, staff and faculty of the University of Waterloo’s professional and graduate economic development programs to share knowledge with the field at large. The series takes works destined for an academic audience and reworks them into a fresh, easy-to-digest blog article.

Established in 1988, the Local Economic Development program is the only master’s program in Canada devoted solely to local economic development. It offers a balance between theory and practice by combining coursework, a major research paper, an internship, and weekly seminars featuring guest speakers. Students are prepared for careers in local, community, or regional economic development.

The Economic Development Program is a nationally-accredited provider of professional training. It delivers certification programs and seminars that offer a deep understanding of the Canadian context in a convenient block format. Peer learning is combined with informative lectures and practical case studies to provide dynamic instruction that is beneficial for junior and senior-level practitioners.

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