The narrative of cities as engines of growth and development is well acknowledged in South Africa. The Integrated Urban Development Framework (IUDF) articulates the notion of an urban dividend, which can be reaped through aligning and coordinating investments, developmental plans, and outcomes around people, place and the economy. The IUDF proposes nine policy levers, including Inclusive Economic Development (Lever 6), which is essential for creating jobs, generating higher incomes and creating viable communities. However, the substance of the urban dividend has eluded the majority of South African cities.

Despite being responsible for most of the country’s economic activity and employment, South African cities are not as competitive, productive or inclusive as they should be. Cities may be attuned to the importance of their economies, but have not established clarity and governance of their specific economic roles and functions. Local government suffers from a historic tension between the understanding of local economic development (LED). On the one hand, LED is seen as facilitating business promotion, job creation, small business support, skills development, micro-economic development projects and tourism, but on the other hand, larger, metropolitan municipalities are seen as strategic economic development actors, actively levering their role as planning authorities, land owners, infrastructure investors, and strategic decision-makers to steer and support their economies.

These working papers on “Strengthening Urban Economies” explore how to grow urban economies through improving local conditions for diverse enterprise development and growth, ensuring inclusive economic infrastructure and services, and building innovation-driven economies.