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Marrying Economic and Social Objectives for Local Government Success

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With pressure on budgets and service delivery becoming the norm in the public sector, improving social conditions is an uphill challenge that inhibits local government success.

However it’s not all doom and gloom because local government is uniquely positioned to facilitate and enable effective business and community partnerships.

What framework and processes can be used?

You can make a start by downloading this (free) e-book, which outlines:

  • What types of partnerships drive local resilience and prosperity
  • New ways of linking commercial and community benefits
  • How to motivate businesses to contribute more
  • Different forms of business and community engagement
  • How local government can enable opportunities
  • 6 examples of how it works in practice
  • How to make a start

Gathering internal and external perspectives is a great way to get the ball rolling, and economic and social development teams need to create a common language and form a common view of success.

Here’s an extract from the e-book:

1. Setting the scene

As the saying goes, there are no healthy high streets without healthy backstreets – the underlying social and environmental health of a community will have a direct impact on economic prosperity.

Robert Putnam’s 1993 paper, ‘Making Democracy Work: Civic Traditions in Modern Italy’ put forward the notion that successful communities became rich because they were socially strong, and not the other way around. The strength of our social fabric is like invisible glue and hard to measure, however we know when it is missing because we see the signs such as rundown and shabby neighbourhoods. In The Art of Belonging, Hugh Mackay notes:

… communities don’t just happen. We have to create them and build them. That means participating in the life of the community – socially, commercially, culturally”

Consider the major retail strip in your town: some of the individual businesses might be doing well and outperforming their competitors, however they may not be able to withstand the advent of a broader recession or major local downturn. When an economic or social tide ebbs, it can carry all boats with it. This point was reinforced by Mike Hirst, Managing Director of the Bendigo & Adelaide Bank, at a panel session:

It’s very hard to run a successful business in a poor community”

Australia as a whole hasn’t experienced recessionary conditions since the early 1990s. Whether we will be so fortunate from here is unknown, which is good reason to fortify your economic and social agenda. The goal is to create the foundations for greater resilience and prosperity in the future.

The City of Greater Dandenong commissioned research from the Centre for Local Economic Strategies to explore the links between the public, private and social sectors in the context of socially inclusive growth. Local governments role in bringing different organisations together and empowering them to act was cited as a critical success factor.

Think of a triangle with local government, business and community interests in each corner. The challenge is to develop a strategy and set of actions that unify each of the sides of the triangle. Local government has strong control over its own dealings with businesses and with its community agenda, however it has less control over business and community interactions, which is why an effective ‘facilitation’ or supporting role is required.

Every social problem is likely to be a constraint on business and economic growth in some form. For example:

  • Low levels of education and attainment may constrain growth by reducing the attractiveness of your area to a company looking for a new location
  • Dysfunctional social and disability services will inhibit people and their carers to participate in the workforce
  • Poor levels of health will affect employability, job readiness, absenteeism and workforce productivity
  • Ignoring the needs of diverse local populations can lead to social or civil disruption
  • Excessive unemployment reduces demand for local products and services
  • A shabby main street may deter private investment and reduce the potential for local trade and tourism.

For any given social issue there is likely to be an adverse flow on effect to business conditions, whether large or small.

Businesses of all sizes have been generally supportive of community causes. In 2013, ABS data shows that philanthropic donations from Australian business were estimated at $850 million. These are after-the-fact distributions of profits, not to be confused with operational expenditures. Against an annual GDP figure of $1.6 trillion in 2015-16 of which 75% is attributable to private sector production1, philanthropic donations represent less than 0.1 per cent of private sector production.

These figures raise the following questions:
  • Should we accept that this cosmetic level of support represents the true potential of the private sector?
  • Do businesses understand and appreciate the link between social conditions and profitability?
  • Can you shift their community agenda from philanthropy to more focused and effective forms of support?
  • What is the potential of that shift in terms of mobilising additional resources?
  • How do you motivate change and support the transformation?

This paper addresses these questions by drawing on the concept of creating shared value. It offers a framework and process that local government can use to influence businesses and motivate them to play a greater role. Such approaches are likely to be sustained and more effective than traditional forms of community investment.

To read on, DOWNLOAD the (free) e-book.


Phil Preston is a Shared Value Expert, Collaboration and Facilitation Services provider and Keynote Speaker on Business and Social Convergence. He can be reached via



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