Step Five: Economic Development - Collaboration with the private sector


Over the past thirty years, the responsibilities of most local governments have moved from being providers of property-related services, captured in a simple expression of ‘roads, rates and rubbish’, to being increasingly involved in the provision of social services, such as health, recreation, sport, arts as well as the active promotion of local economic development. 

 

Despite economic development now being a core function of local government, there is a lack of clarity regarding the role of Council providing economic development services, with some viewing the role as supporting business and creating wealth, while others are encompassing generic community development and sustainability principles.

 

Now, more than ever, local government needs to partner with local businesses and employers to understand the needs and operational requirements of various economic sectors, in order to understand:

  • the region’s comparative locational advantage;
  • potential new or existing market opportunities for businesses; and 
  • obstacles to business expansion, creation and investment.

We believe that understanding locational advantages and opportunities, identifying new or existing market opportunities and local governments’ role in reducing cost and barriers to investment are fundamental importance in enabling businesses to flourish in competitive markets.

 

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Understanding locational advantage and opportunity
Tenants, landlords and developers assess the cost-effectiveness of location to inform where to locate their business activities or invest in property. From a government perspective, understanding the cost-effectiveness of location for various industry sectors can assist the public sector to:

  • target high value industries/sectors,
  • identify cost reductions through infrastructure investment
  • identify supply chain gaps,
  • attract investment.

Acting as a conduit to the market and local government, Colliers International Strategic Advisors are strongly positioned to identify a local region’s comparative locational advantages for all asset classes and major industry sectors.
Coupled with a comprehensive assessment of the economic base, industry significance, specialisation and regional competitiveness factors, allows for the identification of regionally competitive, growing and emerging sectors. 

 

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Identification of new or existing market opportunities

Supply chain clustering analysis, or consideration of cross-sectorial upstream and downstream supply chain relationships, informed by locational advantages, assists to:

  • identify significant or competitive sectors with opportunity to grow,
  • gaps in supply chains by way of industry sector or infrastructure, and
  • development opportunities providing comparative locational advantage.

Market sounding should be continuously undertaken to refine and prioritise actions to identify those with the greatest return on investment and highest probability to be implemented.

 

Reducing cost and barriers to investment

Once the locational advantage and market opportunities of an area are understood, local government should develop and implement an action orientated economic development strategy that clearly defines the governance, roles, benefits and actions to facilitate greater investment attraction. There are a range of tools available to councils to reduce the time and cost of doing business, however, those with a meaningful impact on the feasibility of investment benefiting target industries and sectors should be implemented.

 

Successful mechanisms often relate to streamlining assessment processes, reducing reporting requirements, discounting taxes and charges, sharing relevant data and analytics and marketing and promotion of locational advantages. The right mix of actions will be unique to each local area based on a comprehensive understanding of locational and comparative advantage, supply chain gaps and relevant costs of operational needs of business.

 

As we enter the recovery phase of the COVID-19 pandemic, local governments are tasked with the responsibility of ensuring their economic development strategies and processes remain relevant, are fit for purpose and target those sectors that propel economic recovery and community wellbeing. Colliers International Strategic Advisory is here to assist local governments integrate market needs with regulatory processes to reduce risk and attract investment. Call our experts now to gain access to our market leading data, spatial analytics and investor relationships to expedite your recovery efforts.

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5-Step Strategic Property Playbook

Colliers International Strategic Advisory is pleased to present a 5-Step Strategic Property Playbook to help owners, occupiers, investors and Government property decision makers maximise value and reduce risk.

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