Transforming Rural Economies, Environments and Society “TRees - MODEL”

A Model Of Sustainable Regional Economic Development

June 2000

Introduction

The “TREES” (Transforming Rural Economies, Environments and Society) model evolved from the research undertaken for a report on sustainable regional economic development and local government organisations. It is a joint report by 5 practitioners involved in a diverse range of regional economic development activities. It has evolved from study undertaken with the “Centre for Australian Regional and Enterprise Development” in the Graduate College of Management, Southern Cross University.

The model is a pictorial representation of sustainable regional economic development and the strategic planning process needed to make it happen. The “trees” model has four main components, being the roots, the trunk, the foliage and fruits, and the external elements or environment. Each of these components will be discussed in more depth; but generally encapsulates:

o The “grass roots” complexity of integrating various industry sectors to share knowledge and skills, and differing issues and concerns.

o The “conduit” of economic development strategic planning, and a role for local government in balancing social, economic and environmental goals.

o The “visible” signs of change; either growth or decay of a regions main centers or smaller towns or the changes between industry sectors.

o The “external” elements or outside influences, particularly the global picture, that buffers ongoing change within the regions.

Development of the “TREES” model

Sustainable regional economic development is “the tree”. It is a very complex process of ecological and environmental interactions leading to both growth and decay. Just as regional economic development is a very complex process of social, economic and environmental interactions; that impacts in significant “change” and either growth or decline.

There is both an element of predictability and unpredictability in the process. Whilst the species of tree will take on a particular form and shape; each tree is different depending on where it grows and the resources available in that environment. Just as each region varies considerably depending on a different mix of community, economic and environmental factors.

All the components of the tree and regional economic development are interdependent, and need to work together. There is an element of nurturing or facilitation, and the elements of “top-down” and “bottom-up” energy needed to make it all happen. It is such a complex process that everything needs to work well together and it is difficult to identify a starting or ending point. The input from the roots in terms of the capacity of a business or region leads to the outputs in the foliage or leaves. One could argue that the roots are more important; but it is a two-way deal without sunlight and energy conversion from the leaves the roots would not be able to pick up the nutrients and goodness from the soil. There is a perception that regional economic development happens from the grassroots up. The reality is that all components are important and action needs to be occurring at all levels simultaneously.

The level of resolution and focus will vary the complexity of the model and situation. For example, it is important that individual businesses utilise their resources effectively to survive and grow; just as it is important that the regions direct their resources into appropriate infrastructure, and services to support each sector to function effectively.

Sustainable regional economic development and the tree, have strong linkages to strategic planning processes. Strategic planning is the ability to look at the bigger picture and the interactions taking place within a complex system. It is also the process of utilizing a range of tools to study and a better understanding of the impacts and implications of change. The strategic planning process is represented in the model:

• The roots include the gathering of a multitude of information, appropriate data and strategic auditing required for the planning process to be successful.
• The trunk is the narrowed section that draws in all the information to be distilled into and appropriate format (including benchmarks to compare businesses or regions), and to channel resources and energies in the appropriate directions with specific vision and outcomes.
• The foliage represents the numerous products as a result of well-directed or misdirected energies and resources.

The Components of the “TREES” Model

The components of the tree model are the roots, the trunk and the foliage or fruits. Elements external to the tree are the atmosphere, nutrients, water and soils. All of these elements are essential and the tree would die without them. These components will now be discussed in depth.

(a) The roots represent the individual businesses or organizations and industry groups and the diversity of industry sectors and community members within each area or region. These are the basis or the backbone behind the regional community and make up the inherent sector structure of the region (in terms of agriculture or mining, tourism, manufacturing, or technology, etc). Within regional development, it is the people who are members of the community, in particular those who take an active role and create the momentum, striving towards a healthy social and cultural well-being.

(b) The trunk represents the facilitators, leaders, regional organizations and networks from either private or the government (local, state or federal) sector. The trunk is the point in the process where all the information and resources from a multitude of sources become channeled into the core components essential for solid growth. These are important players in empowering people, encouraging stakeholder to work together, they help provide the direction, focus resources, provide incentives, test assumptions, measure the key performance indicators, develop leaders, partnerships and networks, and are the general conduit of growth. The trunk is made up of the solid inner core, the bark that holds it all together. The trunk also contains a range of imperfections such as knots, hollows, galls and burls, these could be seen as the local economic development managers, often in the “hot seat”, but can be extremely valuable (prized by wood turners who understand their art and value). If these components are chopping off the tree, it may lead to fungal infection and a decline in the trees health. Most trees have these characteristics, and the more of these imperfections, the generally more ecologically sustainable the tree; being ideal for habitat for beneficial species and increased biodiversity.

(c) The foliage and fruits represent the tangible or visible outcomes of change, including varying degrees of success and failure of economic development activity within a region. This change could be manifest in the ongoing growth of the larger more prosperous cities or new economy sectors, or decline of the smaller towns and older economy sectors within any region. It is the blossoming of all the results including employment creation, viable business and communities with suitable living standards and lifestyle. The upper part of the tree also reflects its capability to buffer the changing environments and occasional storms (including globalisation and changing resource use trends). A few leaves (businesses) may be blown off the tree, but hopefully it will not impact on the bigger tree and these leaves are still in the system to return as a source of nutrient and greater experience for the tree and region itself. The fruits of all the hard work are also the successful businesses and community leaders that emerge to showcase the regions abilities, and its prospects of even greater bounties, if well fertilised and resourced on an ongoing basis.

(d) The external elements include the soil, nutrients, water and the atmosphere. These elements represent the external components that influence the internal key drivers of energy, motivation commitment, knowledge, and skills. The soil represents the different regions abilities, which influences the innate capacity of the tree to grow. A deep resource rich soil, will lead to a strong healthy tree, shallow hungry resource deficient soil will lead to a weak tree (no matter how much fertilizer you pour in). The nutrients are the resources available (including money and time) and the balance of these nutrients within the region to grow. The water represents the knowledge and skills from education, training, facilitation and support structures within the community. The atmosphere (made up of the air, temperate and sunlight) includes the wider micro and macro-climate and national and global pressures under which change takes place. There are usually seasonal and cyclic patterns within which to ride out booms to busts; and spells of extreme threats with major storms and yet there are other opportunities to make compensatory growth when the climate is just right.

Recommendations

Sustainable regional economic development is a very complex process and requires considerable understanding, skill and expertise in strategic planning and community development.

A number of recommendations and actions have evolved from the research undertaken in the report. These include:

• All industry sectors, government and the community together with all components of society, the economy and the environment are interdependent. As all components are equally important it is imperative that they components work together cohesively.
• Increase the level of recognition and importance of regional economic development within local government. Internally it is not just a fringe activity for tourism development; it requires significant resources and strategic planning expertise and facilitation skills.
• Encourage local governments within particular catchments or regions to work more co-operatively together. A cooperative effort would maximize the use of limited resources.
• Facilitate stronger interaction between industry, community and government towards the common goal of regional economic development. Encourage a more open regional economic development planning process for individuals to have more input.
• Base the regional economic development planning on multi-sector solid regional facts and figures, rather than a piecemeal view of the region based on a single sector (such as tourism or small local towns development).
• Encourage the three tiers of government in Australia, to work more cooperatively. The role of governments in supporting change needs to be both proactive (top-down) and reactive (bottom-up); and needs to provide infrastructures to facilitate this development.
• State and Federal governments to provide more direct incentives (including low interest loans, and/or partnership grants) to entrepreneurial businesses or organizations, to help them become more effective and efficient, develop and grow, and better manage risks. Increase access to more direct funding for small and medium sized businesses.
• Reduce the amount of “strings attached” and red tape associated with State and Federal regional economic development projects undertaken by local regions. Encourage an entrepreneurial spirit to do things differently.
• Advocate on behalf of local government, for Commonwealth and State government to provide additional funding for infrastructure development indicated essential for regional economic development.
• Give appropriate recognition to community leaders and encourage more people to take on these leadership roles.
• Local government and business organizations should consider the employment of qualified facilitators and professional consultants with appropriate group development and regional economic development skills and experience. Community empowerment, social change, strategic planning and performance monitoring are very sensitive and complex tasks, and often need a fresh approach.
• Develop and support training courses for regional economic development practitioners leading to accreditation and appropriate recognition. Encourage wider adoption of training by local government and community leaders.