Part of the role of the local government is to be aware of the opportunities that
already exist in the community, or how it can create new opportunities to enhance
business prospects. At the same time, it must be aware of aspects that can be
detrimental to business and try to eliminate them.
Economic Development in the context of the modern municipality has two
purposes.
1 To seek out potential investors and convince investors them to bring capital to a
city or region, thereby creating employment. These investors may come from
within or outside the area.
2 To enhance the local environment aesthetically, competitively and economically,
to ensure that current businesses stay and new businesses find the quality of life
attractive.
Three roles of the municipality
There are three basic roles that define the responsibilities of virtually all
municipalities. These roles are consistent with their traditional responsibilities, but
also have a special significance in terms of economic development. They are the
essence of what a local authority actually does, or should do. They are:
A Service provider. This role is the most traditional. It is the role in which municipal
administrations feel most confident. It includes routine operational functions such
as garbage collection and disposal, various administrative tasks, cleaning and
maintaining public areas (streets and parks), maintaining state and municipal
property. It also includes responsibility for capital investment with regard to the
provision, upgrading and maintenance of services, although in most cases this
responsibility has traditionally been shared with central government.
B Regulator. The second major role is that of regulator, which has increased in
importance with the establishment of more private enterprises. Where various
interests exist, it takes a single entity with overriding jurisdiction to regulate the
actions of others to ensure the common good. This is a highly important function in
terms of economic development and one that is most appropriate to the local
authority.
C Catalyst. The role of ‘catalyst’ is the main proactive responsibility. It entails
moving the community forward and creating the appropriate environment for
economic development. The unique position that the municipal government has in
the community allows it to create conducive circumstances. A municipality can
provide or restrict opportunities. Restriction is not always a negative factor: it can
sometimes be beneficial to the community. Problems arise when the restriction is
unintended.