Local economic development as a social dialogue : a case of Enterprise iLembe.

Abstract

In looking for a structure that would successfully foster a participatory approach to Local Economic Development (LED) matters and at the same time create institutions that are socio-economically sustainable, Local Economic Development Agencies (LEDAs) have been identified as mechanisms of economic cooperation between different stakeholders at the local level. This research identified Enterprise iLembe as the custodian of social dialogue in the iLembe District and as an institution that can drive the common developmental goals set out by the district municipality. This research studied the role of social dialogue in LED matters through the case study of Enterprise iLembe. Enterprise iLembe is a development agency of the iLembe District, which was tasked with driving economic growth and investment promotion. The aim of the research was to study the level of cooperation between Enterprise iLembe and its stakeholders (local and district municipalities, the chamber of commerce and the greater iLembe community) from a social dialogue perspective. The research also aimed to understand the role of social dialogue in LED matters and the potential barriers that inhibit social dialogue in the district. This qualitative study involved interviews with officials from Enterprise iLembe, the iLembe District municipality, the iLembe Chamber of Commerce and the South African Local Government Association (SALGA). It was found that the chief problem causing the confusion and friction between the LEDA and the local municipal LED units is not only the uncertainty surrounding the roles and responsibilities as noted by previous literature and reports, but also the lack of consultation and information sharing between the LEDA and local municipal LED units; the LEDA was found to be trying to act as an autonomous body instead of embodying common developmental objectives and consulting with the parent municipalities. The key point here is that there is an undervaluing of local municipal input when implementing the common developmental objectives. The research recommends that Enterprise iLembe should engage in social dialogue (in its full sense) with local municipalities in order to have an effective social dialogue about the functions of both the agency and local municipalities. It is also recommended that the formalisation of forums in the informal economy be hastened in order to tap into the economic potential that the informal economy offers.