Economic development can be delivered either by a local government agency or an external service provider – both models have their advantages.
Economic development is a key pillar of local and regional development. It boosts competitiveness, supports innovation and helps communities cope with crises and demographic change. But what can different economic development models learn from each other? To answer this question, Fellbach town council and the Steinbeis Transfer Center Economy, Start-up, Commune in Villingen-Schwenningen analyzed and compared their respective economic development models.
The economic development agency in the town of Fellbach forms part of the local administration, whereas the Steinbeis team is an external economic development service provider for three municipalities in the Schwarzwald-Baar and Rottweil districts. The team drew on its experience in benchmarking projects with businesses to carry out a comparison of the two economic development models and highlight their respective strengths and weaknesses.
Delivering economic development through a local government agency …
In the town of Fellbach in Baden-Württemberg (population 47,200), economic development is delivered through a local government agency that is the point of contact for all areas of business. The agency provides support to local businesses, works to attract new investment to Fellbach and manages the municipality’s broadband service. In 2023, it merged with the town’s city management, marketing and tourism departments.
… versus delivering economic development through an external service provider
The Steinbeis Transfer Center Economy, Start-Up, Commune delivers economic development services for the municipalities of Deißlingen (population 6,300), Niedereschach (population 6,100) and Dauchingen (population 3,900) in the south of Baden- Württemberg. It provides efficient support and funding assistance for companies and startups and helps to strengthen the local economy.
Being part of local government structures versus flexibility
The fact that the Fellbach economic development agency forms an integral part of the local administration and coordinates closely with the other departments facilitates cooperation among the relevant actors and enables faster decision-making. The structure also provides reliability and inspires trust. On the other hand, being an external service provider gives the Steinbeis Transfer Center more flexibility than a local government agency and also means it has access to an extensive network of experts.
Working with the Fellbach economic development agency gave the Steinbeis team a deeper insight into the responsibilities and processes of a municipal administration. It is now using these learnings in its communication with public administrations and agencies and integrating its work more closely with local government structures. For its part, the Fellbach economic development agency is making greater use of the Steinbeis model’s agility and external expertise to respond faster to market developments and foster innovation.
The challenge of demographic change
In Fellbach, the close coordination between the economic development, city management, marketing and tourism teams enables more targeted public communication and interaction in the town aimed at attracting young people and skilled professionals. Meanwhile, the Steinbeis model, where economic development is delivered by an external provider, can facilitate collaboration and sharing of experiences between different municipalities, thereby reducing costs, leveraging synergies and strengthening the competitiveness of the entire region. Collaboration between experts enables the development of innovative strategies for dealing with structural change.
Both teams are now looking to utilize the strengths of the other model. The Steinbeis Transfer Center is doing more to highlight local quality of life in order to appeal more to young people. And Fellbach is following the Steinbeis model’s example by increasing cooperation with other municipalities in order to leverage synergies that will strengthen its global competitiveness.
Communication and visibility
The factors that help the Fellbach administration tackle demographic change also have a positive impact on all PR measures. Close coordination with the local administration’s departments and the municipality’s marketing and PR initiatives ensures targeted positioning of the relevant measures. As an external service provider, it is somewhat harder for the Steinbeis Transfer Center to gain people’s trust and acceptance.
So what have both models learned from each other? The Steinbeis Transfer Center intends to do more active PR work, whereas Fellbach has found examples of professional communication from Steinbeis to be especially valuable.
The value of benchmarking
The benchmarking project delivered concrete benefits for both economic development organizations. The structured comparison of the two models allowed both teams to identify strengths, weaknesses and best practices and make their own work more efficient and effective. Compared to loose networking, which is also very valuable in its own right, benchmarking is a more focused, methodical and results-driven method.
In addition to learning from each other, the two economic development teams have also carried out a number of joint activities, including funding applications for the “First Step Advance! Fellbach” and “Go EGON Go” microfinance projects. Both these initiatives help business founders with low capital requirements to make the leap into self-employment. The close cooperation between the two teams resulted in the state of Baden-Württemberg awarding both projects 100,000 euros to secure microloans.
There have also been benefits on the event organization front. The partners now support each other with the conception, planning and running of events, for instance by arranging speakers or jointly promoting each other’s events. This enables wider coverage of technical topics and ensures that target groups are reached more effectively.
Another important plus is the rapid, bilateral communication that enables direct sharing of information which has already been checked and evaluated, saving time and effort compared to the use of research that doesn’t come from a trusted partner. It means that tried-and-tested solutions can be quickly adopted and tailored to each region’s specific requirements.
Contact
Wolfgang Müller (author)
Steinbeis Entrepreneur
Steinbeis Transfer Center Economy, Start-Up, Commune (Villingen-Schwenningen)
www.start-mit-steinbeis.de
Dr. Christoph Pfefferle (author)
Digitalization Officer
Fellbach Economic Development Agency