A local resource-based approach applies a cost-effective use of local skills, enterprises, labour and materials in the infrastructure delivery process. The process optimizes the social and economic impact of investments in Manufacturing by ensuring that these investments are channelled through the local economy, so creating job opportunities and stimulating local markets, entrepreneurship and industry while safeguarding cost effectiveness, quality and sustainable asset delivery.
Reasons for Opting for local resource-based technologies:
- Government development objectives aim to generate employment and income opportunities for the local population and domestic construction industry. The infrastructure concerned requires relatively modest investments, e.g., rural roads, secondary and tertiary irrigation channels and small and medium-scale structures.
- Local resources including labour, skills, enterprises and materials are available.
- Scarcity of foreign exchange makes the use of imported inputs an economically unattractive option.
- A significant proportion of the population is unemployed or under-employed.
- Wage levels are low.
How can it help promote employment in India?
- Local resource-based approach is to deliver public (and private) investments in infrastructure as a means of expanding employment opportunities for the unemployed, raising productivity, providing social and economic infrastructure assets and facilities, permitting trade and generally improving well-being.
- Given the relative scarcity of capital and skilled labour, and the relative abundance of unskilled labour, countries with low incomes can rapidly achieve pro-poor growth by applying employment friendly technologies in as many sectors as possible. This would rapidly increase the demand for unskilled and low-skilled labour.
- Several investment programmes have a huge employment creation potential if delivered via employment-friendly technology and local enterprises. Investment in public infrastructure accounts for as much as 40 to 60% of national public investment in most developing countries. Public investment programmes therefore represent one of the few remaining government policy instruments through which productive employment opportunities can be stimulated and more balanced economic and social development promoted.
- Promotion of local resource-based approach in manufacturing is done in order to optimize their impact on poverty reduction in labour-surplus countries and provides technical assistance for this purpose.
Benefits of a local resource-based approach:
- It enables higher delivery and maintenance rates of basic assets and services essential for socioeconomic development such as vital access roads, water supplies, markets and health facilities with the same level of investment and at comparable or better quality standards.
- Creates jobs, particularly for the unskilled, poorer men and women within the community. This results in the injection of incomes into the local communities, with the immediate effect of increasing their purchasing power. This, in turn, results in improving living standards such as improved diets, ability to access socio-economic amenities such as schools, clinics, etc.
- Stimulates local entrepreneurship, community participation and local economic development with important income distribution effects.
- Enables the involvement of the local private sector and industry, that is, contractors, suppliers and manufactures of local materials, tools and equipment. Hence nurtures and develops the local construction and manufacturing industry, retains investment locally and saves on foreign exchange required for foreign imports.
- Develops skills in the delivery process that can be used in other income generating activities, as well as in subsequent maintenance works.
- Offers opportunities for employment creation, social reintegration, and the stimulation of local socio-economic development in countries emerging from either man-made crises or natural disasters. In such countries governments have few macro-economic tools at their disposal to revive their economies and to enable economic and social recovery. Public investment in infrastructure provides one such tool.
Thus, Regional Development leads to the distribution of employment opportunities on an equitable basis and they are not let to confine only to a handful of states which are creation gaps in the per capital income among different regions.