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A Summary of PACAA Summary of PACA
Christian Schoen
Jörg Meyer-Stamer
Stimulating Local and Regional Economic Development
Types of initiatives to stimulate Types of initiatives to stimulate local/regional economic local/regional economic developmentdevelopment
improvisation / fragmentation of activities conducted by various organizations
one big project = fixed ideastrategic planningParticipatory Appraisal of Competitive Advantage
(PACA)
What is Participatory Appraisal of What is Participatory Appraisal of Competitive Advantage (PACA)?Competitive Advantage (PACA)?
Participatory
Appraisal of
Competitive Advantage
Involve local stakeholders Motivate local stakeholders to take an
active role in an LED initiative Transfer know-how to local stakeholders
and businesses
Do a quick scan of the local economy Assess and refocus ongoing local
economic development activities
Identify strengths, skills, talents and opportunities
Identify business and LED opportunities
PACA is an activity ...PACA is an activity ...
... which seeks answers to a critical question: how can the local economy, by means of collective action, create a competitive advantage?
What is a local economy? For What is a local economy? For instance, it may be like this:instance, it may be like this:
An integrated furniture cluster
A garmentcluster
A large metal-working company
Regional service providers:• Health care• University• Wholesale trade
Farmers and small food processors
Local producer services:IT, transport, construction, ...
Local consumer services:Retail, beauty, ...
Government
Wood valuechain
Textile + garmentsvalue chain
Global buyers
Traininginstitutions
Businesspromotion
Financeinstitutions
What is Local Economic What is Local Economic Development (LED)?Development (LED)?
Activities by local government local business associations local companiesother stakeholders
which remove bureaucratic obstacles and transaction
costs for local firmsstrengthen the competitiveness of local firmscreate a unique advantage for the locality and its
firms
How does local economic How does local economic development relate to other development relate to other activities?activities?
Local development
Infrastructure
Transport
Energy
Technology
Health
Schools
Water / sewage
Community development
Employmentcreation
Poverty alleviation
Housing
Education
Urbanization
SMMEpromotion
Local economicdevelopment
Investmentpromotion
Skillsdevelopment
SMEdevelopment
Leading principles in local Leading principles in local economic promotioneconomic promotion
Creating a specific locational advantageStrengthening strengths, dynamizing existing
potentials -- instead of fruitlessly addressing the biggest possible challenges
Networking among local firms and between firms and supporting institutions to create collective efficiency and effective markets
Active integration into international value chains
Build on locally available resourcesDo something instead of writing a strategy documentGo for quick, visible impact
What is the objective of PACA?What is the objective of PACA?
Identify, with a rapid appraisal, the main strengths and weaknesses of the local economy and its main sectors (duration: 1 - 2 weeks)
Identify options for practical activities to strengthen the competitiveness of firms -- Criteria:– feasible with local resources– quickly implementable (starting next week)– quick, visible results (with 3 months)
Who is involved in a PACA?Who is involved in a PACA?
A “Champion” who suggests and coordinates the PACA– provincial or local government agency,
Chamber, NGO, somebody elseOther local organizations who take an active role
– financing– making staff available for the PACA Team
The PACA TeamVarious local stakeholders who participate in the
kick-off workshop, interviews, mini-workshops and the presentation
What is the PACA Team?What is the PACA Team?
1 - 2 external consultants who are familiar with the PACA method and LED– to introduce a fresh view at the local reality– to transfer their know-how to local members of
the team3 - 5 local members
– for instance: professionals from the local business promotion agency, the local Chamber, the local university
– not too young, too junior– with experience in economic promotion and in
dealing with private business
What is the sequence of activitiesWhat is the sequence of activitiesin a PACA?in a PACA?
Preparation:* Advance
info* Hypotheses
Kick-off
work-shop
Findings-Workshop:Elaboration
of Diagnostic + Proposals
Interviews
Mini-workshops
Presen-tation
of Diag-nostic +
Pro-posals
Imple-mentation
PACA-Exercise (2-3 weeks)
PACA-Project
Fieldwork (1-2 weeks)
What about the fieldwork?What about the fieldwork?
Formats: Qualitative interviews
(“conversation”)
Mini-workshops
Tools: Guideline (always) Mapping (sometimes) Life-line (sometimes)
Diamond Five Forces Transaction Matrix SWOT Metaplan to define
possible action – if participants are
strongly motivated
Diagnostic and proposalsDiagnostic and proposals
Results workshop to elaborate diagnostic a proposals = 1-2 day exercise of the PACA Team
Immediate presentation of findings to local audience
What is the immediate result of a What is the immediate result of a PACA?PACA?
A diagnostic of the local economyA set of proposals for practical activities
– to strengthen the local economy– to stimulate the competitiveness of companies– to create new business opportunities
Numerous local stakeholders who have a clearer idea about Local Economic Development
What about the follow-up?What about the follow-up?
immediate workshop with local stakeholders to define priorities, activities and responsibilities for implementation and monitoring
implementation of activities by local stakeholdersworkshops for evaluation and definition of further
activities, possibly facilitated by external consultants
ImplementationImplementation
creation of working groups– for given sectors– around project ideas
working groups initially operate independentlycoordination between activities
– initially informally– later, as complexity increases, via a
Stakeholder Forum or similar fora
What again was the basic idea of What again was the basic idea of Local Economic Development?Local Economic Development?
Create a business-friendly environment Improve the quality of the location for firmsStimulate upgrading in companies
– through inter-firm learning– through support in fields like training,
management, technology• refocus and strengthen supporting
institutions• stimulate closer interaction between
companies and supporting institutionsAttract new companies, stimulate
entrepreneurship
Understanding local Understanding local competitiveness:competitiveness:Michael Porter‘s „Diamond“Michael Porter‘s „Diamond“
Supporting institutions
Main companies and rivalry
Demandconditions
Related andsupporting industries
* A local context that encourages appropriate forms of investment and sustained upgrading* Vigorous competition among locally based rivals
* A core group of sophisticated and demanding local customers* Unusual local demand in specia- lized segments that can be served globally* Customers whose needs anticipate those elsewhere
* A critical mass of capable local suppliers* Clusters instead of isolated industries
Factor (input)conditions* training* technology* finance* infrastructure
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