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The Higher ED Blog: What’s new in economic development research (fall 2017 edition)

Meg Ronson / October 10, 2017

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The Higher ED Blog: What’s new in economic development research (fall 2017 edition)

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 QuarterlyRegional Studies, the Journal of Rural Studies, and other reputable peer-reviewed academic journals.

The influence of civil society on governmental collaboration between counties or regions

Local governments face diverse and evolving challenges arising from increasing or decreasing populations, rising service demands, and a need to coordinate developments within regions. In some cases, it can be advantageous for governments to collaborate with one another to deliver public services. At the same time, the local institutions as well as informal social groups that make up the ‘social capital’ of an area can have significant influence on economic development and local governments. Research on select American counties explored the extent to which their civil societies influenced intergovernmental collaboration for economic development purposes.

The researchers analyzed a combination of primary and secondary data to build indicators of civic participation and intergovernmental collaboration. They were able to determine which civic participation activities appeared to generate greater intergovernmental collaboration. Firstly, the greater the number of citizen input mechanisms that the county government used in building the county budget, the greater the intergovernmental collaboration. Secondly, greater pressure from citizens to increase county government service provision did increase intergovernmental collaboration, which suggests the latter is used to help governments improve their public service delivery.

Meanwhile, business involvement in county-level economic development seems to more directly influence collaboration, since the more businesses were involved, the more counties collaborated with one another. And structurally speaking, county governments with a land use planner in their staff were more collaborative than those without.

Read more: Collaborative Counties: Questioning the Role of Civil Society, Economic Development Quarterly, volume 31(3)

Community-led broadband initiatives bringing communities together

The issue of ‘digital divide’ addresses access to broadband internet for rural communities, as compared to that of urban centres.  Generally speaking, rural areas have a harder time accessing affordable internet services because private internet service providers cluster in densely-populated areas, urban centres being a much cheaper, accessible, and more lucrative market. Because of this, the public sector can and does intervene to correct this social inequality, but may have limited success depending on the area’s challenges.  Community-led broadband initiatives are another response to rural broadband challenges, and are grassroots programs that aim to provide access to high-speed internet to underserviced areas. Researchers in the UK examined two cases of community-led broadband initiatives to examine whether they foster greater social resilience. They describe social resilience as a community’s ability to leverage existing resources—physical, social, financial, or other—and develop new ones to respond to and thrive through change and disruption.

The success of the community-led broadband initiative was found to be very much linked to community identity: the community-based nature of the project was more of an enticement to participate than the service being offered. Community members were excited by the prospect of doing something locally-driven to ‘stick together’ more so than that of securing greater technological benefits. The initiative was also often understood by the community-members as an empowering counter-action against the incompetence or deviousness of private internet service providers. The community-members saw the project as inherently good because of its independence and localness.

The possibility of transposing the initiative to other rural communities was met with enthusiasm but also scepticism: the participants found that the program would only work in communities that already had a certain level of attachment and commitment to place and community, and also was made up of people who were enthusiastic about and interested in technology.

‘Digital champions’ proved to be a crucial aspect of the initiatives. These people are community leaders who feel a sense of responsibility for the community and its future. The leaders of the movements tended to crop up over time and largely organically through word-of-mouth and through the informal social networks of existing leaders. These leaders were in possession of the necessary skills and knowledge for moving the project forward, like network-mapping, grant-writing, and tech-savviness, but they were also great community motivators.

A community-led broadband initiative can also lead to some interesting side effects, such as inadvertently attracting internet service providers to the area through signalling their interest in the service, or inadvertently hampering the development of top-down solutions to the digital divide by creating the sense that rural communities are able and willing to fend for themselves in this space.

All-in-all, community-led broadband initiatives are an intriguing way to bring communities together as well as tackle a pervasive rural challenge.

(This video from news website Al Jazeera is an example of this initiative in the context of the Maskwacis First Nation reserve in Alberta.)

Read more: Community-led broadband in rural digital infrastructure development: Implications for resilience, Journal of Rural Studies, volume 54

Entrepreneurship: by choice or by force?

There is a nagging question in economic development research as to the relationship between unemployment and entrepreneurship—specifically, are people forced into self-employment when a weakened economy leads to higher unemployment? To what extent are unemployment levels lower than they should be, considering that those who are self-employed are pursuing that route because their more desired state—employment—is not an option? A recent study of this issue in the UK sheds new light on the debate.

From a theoretical perspective, there is much discussion on whether entrepreneurship increases due to a ‘prosperity-pull’ or ‘recession-push.’ While some posit that entrepreneurs might seek self-employment in periods of high unemployment because they may be able to channel their skills and abilities into higher returns than they could in the labour market, regional theories argue that low unemployment in a region is likely to lead to fewer opportunities for entrepreneurship by virtue of the region having a depressed economy—indicated by the higher unemployment.

The research underlines the importance of looking carefully at the regional data on self-employment to understand the motivations behind turning to self-employment. This is especially important in forming local and regional policies on entrepreneurial support. They examined inflows and outflows of self-employment rather than net to get a better picture of the sectors growth or decline.

The researchers explored the data of transitions between employment states between 2009 and 2013 in the UK to understand the post-recession employment flows. They found that improved unemployment and higher wages in a region tended to result in higher levels of self-employment, which seems to indicate a strong pull-factor. There was little evidence for a recession-push factor. Any recession-push influence on entering entrepreneurship appears to be offset by the rising unemployment and lower wages experienced by a region which make starting a new venture in that area much riskier and therefore less attractive.

The researchers conclude that it is very difficult to understand the extent to which the push or pull factors offset one another, but find stronger evidence for pull over push in their context. They also note that regional programs to encourage entrepreneurship, alongside other external incentives, were not examined in the study and likely do have strong effects of their own on the decision to enter self-employment.

Read more: The post-crisis growth in the self-employed: volunteers or reluctant recruits?, Regional Studies, volume 51(9)

 

About the author

Meg Ronson is the editor of Higher ED, Outreach Manager for the Economic Development Program and a Master of Economic Development and Innovation from the University of Waterloo. She specializes in research, capacity-building, and education in the Canadian co-operative sector, small business succession, and co-operative conversions. She has worked in partnership with such institutions as the Ontario Co-operative Association and the Atkinson Foundation, and was a 2017 runner-up winner of the Velocity Start Problem Pitch Competition.

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 1987, the Master of Economic Development and Innovation (MEDI) is one of the only graduate programs in Canada focused exclusively on economic development. Students learn economic development theory and practice, and are exposed to leading edge knowledge, tools, and approaches to address contemporary challenges in cities and communities across Canada and internationally.

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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