Community Economic Development (CED) is the process of creating a locally owned and managed economy which utilises the unique combination of local people and resources to improve the quality of life of all members of the community. CED is carried out by community members for community benefit with the focus is on wealth creation, sustainable use of resources and social justice rather than simply on maximising profits. In CED, the concept of wealth is based on quality of life rather than on numbers of goods consumed.
CED runs parallel to other economic development strategies such as regional and national level programmes developed by regional development boards and government departments. International factors such as trading blocs, tariffs and trade agreements affect many rural communities. Policies made by the World Bank and International Monetary Fund, as well as other United Nations bodies, affect local economies in Australia. A sustainable local economy will help to insulate communities from the effects of those policies. Realistically, a community can only influence a fraction of its economy. However CED activities are small-scale, cheap and often easier to implement than large-scale smokestack type projects. They can be developed and implemented quickly to address social needs in the community.
As community involvement in initiating CED projects is essential, they are a way to improve the entrepreneurial skills in people who don't have the confidence to set up in business on their own. CED can utilise people's unrecognised skills and mobilise resources, through donations or loans, to which private individuals would have no access.
Community Enterprises are created by a community group or private individuals becoming directly involved in creating an economically viable business. The enterprise normally has a community benefit component such as creating employment or providing an unavailable service. Community enterprises have included food and housing co-operatives, community childcare centres and welfare services such as Meals on Wheels, Blue Nurses or Guide Dogs for the Blind which many people would not recognise as 'enterprises'. While aiming to create jobs with adequate wages and conditions, community enterprises are usually not-for-profit. Profits, known as surpluses, are usually re-invested in the community or in extending the services provided by the enterprise.
The process of CED aims to create a sustainable community with adequate employment opportunity and access to services. It involves gap filling and/or modifying failing enterprises rather than competing with existing viable ones.
The enterprises may be chosen to be part of an overall plan for local economic development. Profits from the enterprise may be invested in projects, such as street beautification, which bring no immediate financial return, or in projects which immediately meet strategic objectives such as a food processing plant. Community based strategic planning is often carried out by Community Economic Development Organisations or Community Trusts. These bodies then promote suitable community enterprises which will further their strategic plan.
Community Economic Development activity has many social as well as economic advantages. The process of developing a community economy focuses attention on the interactions within the community, making people think, often for the first time, about how they relate to the rest of their community. This awareness of economic interactions naturally leads to an awareness of social interactions. The underprivileged members of the community become visible and other community members often develop a better understanding of the structural reasons for their position. They may then also become more supportive of community based initiatives to assist the underprivileged.
Community Economic Development activity develops a community identity which can be an important factor in reducing vandalism and juvenile crime. A vibrant community economy can service many local needs thus making it less reliant on outside sources of funding and resources. It can afford to run small scale enterprises which require little outside capital or skills by being able to utilise skills and resources which are hidden from outside bodies such as government departments. Hidden skills include those of retired people, the handicapped and homeworkers.
Community Economic Development encourages attitudes and skills which promote self-reliance. These skills are learnt when communities are able to plan and implement their own development strategies, rather than those imposed from outside. Regional and State level planning is still necessary to co-ordinate and facilitate the initiatives at the local level but should be firmly based on participation from local communities.
Self-reliant communities are better able to represent their interests to governments and outside agencies as they have clear ideas about their own priorities, skills and capital bases. These articulate local communities can assist governments in prioritising the distribution of infrastructure and funding more efficiently.
Self-reliant community economies are able to respond quickly to changes in the local environment as changes will often become visible to locals well before they show up on census or other statistical data. They can then take steps to avert problems or to adapt to changes.
Community economic development involving the creation of enterprises thus has benefits for the individuals involved, the community as a whole and the public sector.
The capital of the community is all those resources which are available for use in creating its economy. These are the raw materials which are combined skillfully to create enterprises. A capital audit is carried out by assessing the community's resources: whether they are under- or over-utilised and whether they are available for use by the community.
The capital audit information is gathered from local councils, landcare or catchment management groups, progress associations, community service directories, tourist brochures and reports of government departments such as the Departments of Primary Industries and Natural Resources, and from financial institutions.
Paul Ekins states that there are five types of capital which need to be maintained within a community before it can create a sustainable economy: ecological, human, social/organisational, manufactured and financial.
1 Ecological capital
The Helidon land system also contains significant areas important for biological conservation. The Heifer Ck sandstones form an important aquifer recharge zone. The upper areas contain areas of high scenic amenity.
The Gatton land system is an important water catchment for the neighbouring Lockyer Plain system.
The Woodland land system in the south of the valley is the on the mid slopes of the valley. This land system has suffered under inappropriate land use and needs work to halt and reverse salinity, weed invasion and erosion. Ecologically, sandstone systems are generally dry and infertile, they are slow to regenerate and because of the geology quick to erode once exposed. These systems are inconsistent with heavy cropping or biomass extraction.
The remaining two land systems are Mt Mistake and the Lockyer Plain. The Mt Mistake system is associated with basaltic soils and the Scenic Rim. The system is generally on steep land and upper slopes. It has a high biodiversity and high scenic amenity. This land system is the main source of soil replenishment for the Lockyer Plain land system.
The Lockyer Plain land system is the major agricultural wealth of the valley. The soil/water combination is outstanding and this land system is a resource of national significance.
2 Human capital
3. Social/organisational capital
4. Manufactured capital
5. Financial capital
CED is a process of harvesting skills and capital to create enterprises, create meaningful sustainable employment and provide the goods and services required by the community. Skills and Capital Audits will illuminate underutilised skills and resources which can then be used to create enterprises and identify job opportunities.
The process of harvesting involves gaining access to these skills and resources for use by the community, rather than them remaining underutilised. Resources can be made available through loans, sponsorship, gifts and donations, grants, or support in kind. Skills can be made available by motivating people; developing an enterprising culture in the community; and by setting up the legal and organisational structures which allow participation by skilled people.
1. Identifying a community enterprise idea
Are there any people interested in undertaking the enterprise? The enterprise plan will contain a list of the skills required. The next step is to find the people who have those skills, or to find those prepared to be retrained.
Where do you find them? The pool of people where staff could be found include both the unemployed and the underemployed. Unemployed people can be approached through CES, Skillshare, hobby groups. People with specific skills can be contacted through industry associations, trade unions, existing enterprises, advertising in local papers. Underemployed people can be contacted by advertising for part-time or casual positions in papers and local notice boards. Craft groups and other social organisations can be contacted to see if members are interested in assisting the venture.
As well as those who are motivated by the prospect of employment, other people may become active in community economic development to improve their community. Existing community groups could broaden the range of their activities. Some groups such as Service Clubs already undertake community development projects such as improving parks and playgrounds - their projects would need to be co-ordinated with the overall strategic plan developed by the community. Social Welfare and Environment or Landcare groups are increasingly realising the importance of economic factors in solving the problems they are addressing and could be persuaded to support community enterprises. Bioregional organisations and Regional Economic Development Corporations could provide an umbrella to smaller community initiatives.
There may however, be a need for a specialist community economic development organisation (CEDO) to facilitate and promote local economic activity. Chambers of Commerce and various industry sector organisations are usually perceived as too sectoralised by the rest of the community to be able to undertake this role. A CEDO be able to ensure participation from as many sectors as possible.
Government departments at all scales, from local to global, have an effect on the community's economy. Local government planning and infrastructure provision determines part of the capital available within the community. They have traditionally not become involved in enterprise creation, although recently economic development officers have been appointed by many councils. State government departments such as Departments of Industry or Regional Development and Education are involved in provision of grants, loans and other assistance in starting enterprises and in improving the skills base. Similarly Federal government departments such as DEET, CES and NEIS assist in monitoring and improving skills.
Attwell, P. (1990)'What is skill?' in Work & Occupations Vol17 No 4 Nov 1990 p399-421
Blakely E.J. & Bowman K. (1986)Taking Local Development Initiatives: The local development planning process Australian Institute of Urban Studies, Canberra.
Bolles R.N. (1991)The 1991 What Color is Your Parachute?Ten Speed Press, Berkeley, California.
Wildman P. (1992)Community Economic Development Series No.1-5
Prosperity Press, PO Box 74, Nundah, Qld 4012.
Wildman P., Moore R., Baker G. & Wadley D. (1990)Push from the Bush: Revitalisation strategies for smaller rural towns Urban Policy and Research Vol. 8 No. 2 p51-59
Links to related articles on this site
Capital Audits
'Nature's productive resources and waste disposal capabilities.'
Soils, mineral reserves, air ,water, native flora &fauna, climate and landforms.
Ecological capital is by identifying and measuring the available natural and biological resources of the distinct land systems in area. Information on the region's ecological capital needs to be updated and expanded over time. Geographic Information Systems (GIS) maintained by councils and community groups could facilitate this process and make the information more accessible. An increasing number of government departments are providing information on their websites.
Research available from the LWMA indicates that there are 6 main land systems in the Lockyer Valley: Lockyer Plain, Gatton, Woodlands, Heifer Ck, Mt Mistake & Helidon. These land systems are largely based on distinct geological formations. Four of the systems are associated with sandstones, the Helidon, Woodlands and Heifer Ck systems. The Helidon sandstones are a valuable source of building stone.
Once a generalised land systems analysis such as this is completed, it forms the framework for the collection of more detailed information about natural capital. A detailed conservation & preservation register of specific sites or areas needs to be compiled. This register should cover sites of geological, vegetation, heritage & educational significance. It will identify sites excluded from the land use of the surrounding land system, that is resources not available to the community economy, as well as those which can support a different use to that in the rest of the land system. For example, the Helidon mineral water springs can support a bottling plant and tourist facility in a predominantly agricultural and conservation area.
'Skills, knowledge, health and motivation'
Each person in the community has a fund of knowledge and skills obtained through education, training and experience. A skills audit is described on another page of this site. The overall level of health of the community will also effect what it is capable of achieving. For example a community with severe levels of malnutrition will be unable to undertake activities requiring manual labour. The motivation of communities will vary from those with vibrant community life and entrepreneurial spirit, to those which lack the motivation to undertake any projects. A lack of motivation sometimes results from prolonged downturns in the economy or recurrent natural disasters such as droughts or floods, or both in the case of the Lockyer Valley.
'The productive social relations between people and the institutions which structure them.'
Each community will have it's own social structure and community organisations, often defined by history and location. Organisations which have lost their original focus may be able to be adapted to community economic activities e.g.. the Country Womans Association may undertake cottage industry training courses. Primary schools are often the focus of community life in rural areas as they are the only public institutions in the area. The Parents & Citizens group may be able to set up community based enterprises such as a childcare service or sports coaching. The Yellow Pages listings for Organisations and Shire Service Directory listings are sources of information about the social and organisational capital.
'Infrastructure, tools and equipment, buildings.'
Infrastructure such as roads, rail, telecommunication systems, electricity & gas supply, water supply, sewage and waste disposal system is available for use by the community. Some types of infrastructure may be a limiting factor on enterprise development e.g. poor roads or inadequate water supply. However, a lack of infrastructure can also provide a niche for an enterprise e.g. if the waste disposal sites are close to full, a recycling enterprise can be used to reduce the waste stream. Tools and equipment that are under-utilised may be able to be rented or shared when not in use by the owner e.g. a commercial kitchen at the local hotel may be available to a pickle making enterprise on weekday mornings. Vacant buildings, school premises on school holidays, packing sheds on the off-season may all be available.
'Credit available within the community, savings, loans, grants, local trading system'
Banks and other financial institutions are the main source of finance for CED. Federal and state funds are available for individual projects and regional programs but most of this money is directed at developing and assessing the viability of ventures rather than providing funds for the establishment of ventures. Because of the scarcity of development finance, the community needs to use already available resources as effectively as possible to minimise financial input requirements. Ethical Investment funds and community- controlled financial institutions such as a friendly societies, LETS systems or saving and loans circlesare more likely to lend the capital for not-for-profit enterprises.
Creating Community Enterprises
The criteria for choosing a community enterprise are:
2. Assessing the enterprise
Once an enterprise idea has been selected , its feasibility is studied. At this stage the enterprise planners are trying to judge whether it will work in their community, before doing a complete costing and cashflow projection necessary to implementing the idea. The list below is used to quickly assess a number of ideas before choosing those to investigate further.
The list refers to audit activities described in theSkills Auditpage of this site.
3. Feasibility Study Checklist
Community Economic Developers
Basic Needs Analysis
Basic Need How met now Possible Enterprises
Food
Clothing
Shelter
Medical Care
Education
Transport
Communication
Energy
Security
Healthy Environment
Creativity
Identity
Autonomy
Togetherness (Solidarity)
Participation
Self Fulfilment
Meaning
References
SkillsAudits
Home Life Earth Air Fire Water