Innovation and institutional strategies for local enterprise development

Research to date on local governments’ role in local economic development has typically focused on the structuring of institutional arrangements to foster and encourage local enterprise. Such arrangements are regarded as generally successful, but they do not always live up to expectations. This paper extends our thinking about the factors contributing to local enterprise development by proposing a typology that coordinates individual innovation and institutional strategies for enterprise development. It is based on our preliminary research into category winners in the National Office of Local Government National Awards for Innovation in Local Government (2000). This early work reveals that enterprise development in some communities centres around innovative individuals while in others such development is driven by institutional arrangements created for this purpose. The research evidence also suggests that when these two factors work together sustainable local economic development is much more likely. Key factors explored are issues of power and authority, organisational learning and the fostering of individual innovation. The research has policy and management implications for local economic development. This includes the recognition and fostering of individual creativity and innovation and the way this is acknowledged and encouraged in local institutional arrangements.