Community Participation and
Emerging Forms of Governance in
Economic Development Strategy
David A. Wolfe
Program on Globalization and Regional Innovation Systems
Centre for International Studies
University of Toronto
Paper Presented to the Annual Meeting of the
Canadian Political Science Association
UWO, London, June 2, 2005
Program on Globalization and Regional Innovation Systems
Learning in the
Knowledge-based Economy
• As innovation becomes the order of the day
– Harnessing knowledge is key to organizational success
• KBE/S places a premium on the ability to acquire,
absorb and diffuse knowledge
– Learning is central to process of adaptation
• Learning is fundamentally an interactive process
– requires networks with users and producers
• External linkages of firms become critical
– Systems of innovation
– Regional innovation systems
– Clusters
Program on Globalization and Regional Innovation Systems
Role of Regions in Innovation
• Innovation is a ‘social’ process
– Networks and relationships facilitate the translation
of new ideas, ie. research into commercial products
• Innovation is ‘place-based’
– Occurs in an institutional, political and social context
– Spatial proximity facilitates sharing of knowledge
and capacity for localized learning
– Localized learning is facilitated by common set of
regional institutions
• Generates untraded interdependencies - technological
spillovers
– Knowledge and practices transferred between firms
– Tacit dimension
– Transferred through networks
Program on Globalization and Regional Innovation Systems
Cluster Characteristics
• Defined as:
– “a geographically proximate group of interconnected
companies and associated institutions in a particular
field linked by commonalities and complementarities”
(Porter)
• Beneficial outcomes of cluster collaboration:
– Creates trust linkages among firms
– Facilitates specialization
• Focus on core competence
• Builds critical mass
• Improved marketing
• Enhanced resources for the cluster
• specialized financing, education, policy supports
• Attracts customers, new investment, skilled talent
• Growth of a ‘thick’ labour market
Program on Globalization and Regional Innovation Systems
Spatial Scales
• National
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Industry structure - Corporate organization and governance
Legal/regulatory framework
Fiscal (taxation) and macroeconomic environment
Framework of industrial relations and labour training
Financial system
Government policy
• Regional
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Regional areas of specialization
Research infrastructure – higher education sector
Specialized training institutions
Industrial attraction and retention
Government policy/support
• Local /Cluster
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Physical infrastructure – transportation and communications
K-12 educational system
Civic governance
Lifestyle assets
Program on Globalization and Regional Innovation Systems
Conceptions of Social Capital
• Features of social organization of a region that
facilitate coordination and cooperation among
economic actors
– Capital refers to asset
– Social connotes that it is attained through community
• Social capital - shared norms and trust (Morgan)
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Trust is a unique asset – it has value, but no price
Earned by discharging obligations to your partners
Facilitates cooperation among firms and sectors
Expedites learning and speeds the flow of knowledge
Program on Globalization and Regional Innovation Systems
Governance Structures in the
New Paradigm
• Three dimensions:
– Associative governance
– Multilevel governance
– Joined-up governance
• Recognizes the importance of community actors
as important sources of local knowledge
• Helps overcomes policy silos and improve
coordination across different levels of government
• Allows for economic development to be addressed
holistically (e.g.. Transportation)
Program on Globalization and Regional Innovation Systems
Making Multilevel Governance Work:
The Role of Institutional Learning
• Challenge is to structure knowledge in social
ways
– establish effective mechanisms for local social knowledge
management
• Requires higher order of learning
– By institutions engaged in critical /reflexive self-monitoring
• ‘learning by learning’
– Three learning dynamics
• Civic learning
• Administrative learning
• Policy learning
• Changing role of the state
– Associative governance
– Public sector as facilitator
– Key role is coordinating and consensus building
Program on Globalization and Regional Innovation Systems
Role of Collaborative Institutions
• Formal and information organizations that:
– Facilitate exchange of information and technology
– Foster cooperation and coordination
• Enhance social capital and improve competitiveness by:
– Creating relationships and establishing trust
– Creating collective institutions
– Identifying common strengths and developing common
agenda
• Strategic planning exercises draw upon social
capital created by these institutions
– Generate trust by engaging key social partners in ‘talk’ –
builds set of shared understandings and expectations
Program on Globalization and Regional Innovation Systems
Creating Collaborative Institutions
• “The presence of collaborative institutions and
organizations, such as cluster organizations,
professional networks, research-industry consortia and
entrepreneurial support networks, greatly facilitates this
environment. These alliances, networks and other
relationship-building mechanisms create connections
and linkages vital to economic development in a
technology-driven world. . . . many regions fortunate
enough to have university research assets underuse
these knowledge economy resources, precisely because
relationships have not been established to connect the
university and local industry. . . Relationships matter.”
(Montana et al. 2001)
Program on Globalization and Regional Innovation Systems
Business Attraction Strategies
in the New Paradigm
• First wave (1950s – 1970s)
– Firm attraction based on cost subsidies
– “Smoke-stack chasing”
• Second Wave (1980s)
– Expand research infrastructure
– Upgrade training and education capacity
– Fill gaps in financing, support for SME’s, tech transfer
• Third Wave (1990s - )
– Builds on principles of associative and joined-up
governance
– Responds to demand from private or joint public/private
initiatives
– Leverages resources and recruits non-public sources of
knowledge
Program on Globalization and Regional Innovation Systems
Strategic Planning at the
Community Level
• Innovation-based strategic planning
– Promotes innovative ideas in all aspects of regional
economy
– Facilitate relationship-building
• Strategic assessment of local/regional assets
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Workforce skills
Knowledge assets and R&D
Creative elements
Infrastructure
Quality of place
Collaborative institutions
Entrepreneurial networks and clusters
• Key Role of Community Leadership
– Civic entrepreneurs
• bring civic interests together to collaborate
• Create broad buy-in across all sectors of community
Program on Globalization and Regional Innovation Systems
Best Practices
• Made in Ontario examples
– Sector strategies, 1992-1996
– Office of Urban Economic Development
• Toronto, Ottawa cluster studies
– Ontario Competitive City Regions initiative
– Biotechnology Cluster Innovation Program (BCIP)
– Regional Innovation Networks
• Lessons for Policy
– Adopts principle of ‘joined-up’ governance
– Focuses on alignment of strategic assets and resources
– Associative and reflexive
• Brings the community back-in
Program on Globalization and Regional Innovation Systems