Local enterprise companies and rural development

Abstract

This paper discusses the rural dimensions of the objectives and activities of Local Enterprise Companies (LECs). These form a network of local economic development agencies that operate as part of regional policy under the umbrella of the ‘regional’ development agency, Scottish Enterprise. It is argued that to more fully understand the operation of such regional and local development agencies, it is necessary to consider the broad external environment within which LECs operate, together with their characteristics, objectives, policies and activities and how they implement them. Key issues in the external environment are the inter-related and changing natures of rural economies, regional development policies and the wider socio-economic, technical and political factors. The issues of the decentralisation of power from central government to the ‘private-sector-led’ LECs and of accountability are also discussed. LECs focus upon improving the operation of markets by combining ‘market failures’, usually acting as enabling organisations rather than directly providing services, and give importance to the role of acting in partnership with others. The paper provides lessons both for rural economic development partnerships and for the possible setting up of other regional development economic development agencies.