The road to evidence based applicable policies for regional entrepreneurial ecosystems

PurposeEntrepreneurial Ecosystems (EES) is among the fastest growing entrepreneurship research topics. With even greater vigour, the non-scientific world of economic development agencies, administrations and policymakers has adopted the construct and applies it widely “in the field”, often lacking a solid empirical foundation and pursuing sub-optimal approaches. Improving policy instruments for EES development requires a data driven approach to first understand an EES of a specific region before making any attempts to change it. The paper showcases an empirical approach to create empirically rooted EES policy implications, contributing to closing the gap for insight in regional EES data of sub-national regions.Design/methodology/approachExploring a mixed method design, utilising quantitative Global Entrepreneurship Monitor data and combining it with EES stakeholder interviews, focusing on dysfunctions, redundancies, power asymmetries and cut off elements as well as in-layer division and public organisation behaviour.FindingsOne finding is, that regional economic development agencies (EDA), as a main public instrument to foster regional entrepreneurial activity, seem to bring the potential of a negative impact on Entrepreneurial Ecosystems bottom-up development and the ability to become self-sustained if they assume the role of competitors towards private organisations and businesses.Research limitations/implicationsAs other work on EES, the approach used in this paper only sub-optimally covers temporal system dynamics.Practical implicationsThis paper contributes to future EES support policies being rooted in an empirical foundation.Originality/valueThis paper not only progresses the empirical basis for research on regional EES but also lays the foundation for specific policy implications for a sub-national level entrepreneurial ecosystem.

Local economic development agencies and peripheral small town development: Evidence from Somerset East, South Africa

The activities of Local Economic Development Agencies (LEDAs) represent a channel for place-based development. In South Africa national government has supported the expansion of LEDAs to improve the weak performance of local economic development planning, one of the cornerstones of the developmental state. This article investigates the evolution and operations of a small town LEDA which is situated in one of South Africa’s peripheral regions. The local development facilitation and project work undertaken by the Blue Crane Development Agency (BCDA) in the small town of Somerset East in Eastern Cape Province is discussed. It is shown that this LEDA was innovative in development initiatives which were launched during the period 2004- 2014 for Somerset East and its surrounds. In terms of the projects and operations of BCDA considerable effort was made to identify catalytic opportunities and to support the unlocking of projects in this small town through development facilitation and project management. Nevertheless, the evidence from this case study demonstrates that despite successes, development agencies in South Africa have a strong dependence on parent municipalities which can determine the future direction and sustainability of LEDAs.

Local economic development agencies and place-based development: Evidence from South Africa

Local economic development agencies (LEDAs) are increasingly important actors in place-based local economic development particularly in the global South. In South Africa there has been an expanded role for LEDAs in terms of the policy significance of local economic development. Although considerable research has been undertaken concerning the merits, challenges and contributions of LED in South Africa only limited material is available concerning the institutional and organisational arrangements to support the implementation of LED. Using policy documents, close engagement with the key national policy-making government departments and a national survey of the activities, operational challenges, and institutional constraints facing LEDAs, the findings from this investigation provide new insight into their role in place-based development. From the unfolding South African experience the strategic establishment of LEDAs potentially can contribute to maximizing the efficiency of place-based strategies. Arguably, key findings confirm the important contribution that LEDAs can make to locality development in the global South albeit that contribution is influenced by context realities.

Assessing the role of Local Economic Development Agencies in KwaZulu-Natal, South Africa

There is a growing recognition of the role of subnational institutions in addressing some of the foremost developmental challenges that South Africa is facing; however, subnational institutions have been mired in inefficiencies and capacity challenges in leading local development. This has led to the establishment of Local Economic Development Agencies as institutions which were expected to give impetus to local economic development and accelerate local government’s responses to unemployment, poverty and inequalities. Yet little is known about the efficiency of Local Economic Development Agencies in addressing the key failures of local economic development. This article employed a qualitative approach in which semi-structured interviews were undertaken with key gatekeepers. The article assessed the roles and functions of Local Economic Development Agencies in addressing key local economic development failings through a case study of three Local Economic Development Agencies in South Africa. The results indicate that while Local Economic Development Agencies do solve the implementation problem, their efficiency is undermined by the lack of coordination of roles and functions in the local government-led development landscape. Furthermore, the roles and functions of Local Economic Development Agencies are limited, constrained and do not necessarily adhere to the premise that led to their establishment. Local Economic Development Agencies thus lack the appropriate legitimate mandate to be the main economic development structure, due to their own inherent capacities.

The role of Local Economic Development Agencies in South Africa’s developmental state ambitions

South Africa’s Local Economic Development Agencies have emerged as appropriate institutional structures for advancing socio-economic development in the local government-led development landscape, due to the inability of local municipalities to lead local economic development. This shift signifies that South Africa is turning to local economic development strategies to address developmental challenges, such as poor socio-economic conditions (unemployment, poverty and inequality), by creating local development solutions and employment opportunities. This article utilises the developmental state theory to examine the role of Local Economic Development Agencies in South Africa’s aspirations of becoming a capable developmental state. While the developmental state literature is concerned with the central role of the state in economic development, this article extends the developmental state theory to the subnational level by arguing that the developmental local government is the local developmental state. In addition, the article locates Local Economic Development Agencies within the developmental state paradigm by showing that Local Economic Development Agencies were established as economic development coordinators at the subnational level to assist local government in addressing South Africa’s triple challenges. Although the roles and functions of South African Local Economic Development Agencies are aligned to the developmental state ideology, their developmental mandate is undermined by the lack of coordination within local institutions.