Local development through the foundational economy? Priority-setting in Danish municipalities

Abstract

The foundational economy perspective suggests that industries, which provide services essential to all citizens’ well-being and participation in everyday life, should be placed centrally in economic development policy. This article studies the extent to which local governments put emphasis on foundational industries in their strategies for development. Moreover, drivers behind priority-setting are examined. Based on an analysis of all 98 Danish municipalities’ planning strategies and semi-structured interviews with relevant actors from two rural municipalities, we find that foundational industries are to a great extent emphasised, even if they are not characterised as the foundation for economic development. Rather, foundational industries are prioritised in the absence of other options or when municipalities are not compelled to put local job creation as a crucial focus to attract and maintain inhabitants.

Keywords

agenda-setting development policies economic development foundational economy local governments municipalities

Introduction

During the last decades, the emphasis on traded, high-tech and R&D-intensive industries has been a central feature of economic development research, policy and practice. However, in most recent years, a number of alternative perspectives on economic development policy have emerged, including doughnut economics (Raworth, 2017), the everyday economy (Reeves, 2018) and the foundational economy (Foundational Economy Collective, 2018), which all question this emphasis on a limited part of the economy as a driver for broader economic development and well-being.

The foundational economy perspective, in particular, presents a clear counter-narrative to the focus on high-tech industries. This perspective advocates for an alternative focus on the ‘part of the economy that creates and distributes goods and services consumed by all (regardless of income and status) because they support everyday life’ (Bentham et al., 2013: 7). Consequently, it is argued that the starting point for economic development policies should be industries which provide daily necessities, including services such as health and welfare, education, transportation, utilities, as well as food processing and retailing.

The proponents of the foundational economy suggest that a fundamental rethinking of our approach to economic development is needed as the current modus operandi has failed to deliver wealth and well-being for the majority of the population (Foundational Economy Collective, 2018). Rather, contemporary capitalism is characterised by increasing inequality (Piketty, 2014) and declining quality in the provision of foundational services. What is more, the emphasis on high-tech industries is arguably quite pervasive: previous research has established that the focus on high-tech industries is found in policymaking at the EU (Hansen and Winther, 2011), the national (Fothergill et al., 2019) and the regional levels (Hansen and Winther, 2014).

However, it has not yet been analysed if a similar emphasis is found in development policies at the local level. This is a significant omission, as the approach to economic development has important implications for local development policies. In particular, local authorities play a central role in the provision of many foundational services. Moreover, foundational services are geographically distributed – they are present in all localities, therefore, in principle, it is possible for local authorities everywhere to make foundational services a central part of their development approach.

In order to understand the drivers behind decisions to prioritise foundational or export-oriented industries, we draw on the agenda-setting literature which explains how topics are prioritised and can rise to the agenda. This can happen during certain windows of opportunity when key actors are not only able to bring attention to a perceived problem but, more importantly, advocate for feasible solutions to it (Dannevig et al., 2013; Kingdon, 1995).

Consequently, the aim of the current paper is to improve our understanding of the extent to which the foundational economy is emphasised in local development policies. Importantly, while some public authorities – in particular the Welsh Government (Llwodraeth Cymru Welsh Government, 2019) – have started to directly implement foundational economy thinking in policymaking, the analysis in the current paper is not limited to local development policies, which explicitly draw on foundational economy thinking. Rather, the aim is to understand to what extent local governments in Denmark are prioritising foundational industries in their development policies.

Empirically, the paper analyses development policies of all 98 Danish municipalities. Document analysis of municipal planning strategies is combined with interviews with representatives from two selected municipalities – Aabenraa and Svendborg – in order to answer the following research questions:

To what extent are Danish municipalities emphasising foundational and export-oriented industries in development policies?

Which drivers explain the focus of municipalities on foundational and export-oriented industries?

Foundational economy

As stated above, the foundational economy approach emphasises basic entitlements to goods and services essential for all citizens’ well-being and participation in everyday life irrespective of individual income and location. Rather, consumption is based on collective provision of social and material services through networks and branches. Which specific services are considered foundational can vary across time and space, but, generally, they supply what is considered mundane necessities, that are rendered invisible in the economy and taken for granted when functioning. The Foundational Economy Collective (2018) argues that these goods and services should be positioned as the starting point for economic development.

The Foundational Economy Collective (2018) distinguishes between the material domain and the providential domain. The material one covers pipes, cables, networks and branches, which connect households to daily essentials such as water, electricity, transportation, communication, food, and banking services. Privatisation of the provision has been an attractive policy option in recent decades as the territorially anchored household consumption of these services generates a stable revenue stream. The providential domain refers to universal welfare services available to all citizens. Namely, this includes education, health and social care, public administration, and police. The services are often means-tested or free-at-point-of-use, and, thus, heavily dependent on public funding or financing although they are also increasingly outsourced to private providers. As an example, home care services in some countries such as Denmark are tax-funded, but may nevertheless be delivered by private providers.

Typically, in the two domains, the production, provision and demand are highly localised and, consequently, partly sheltered from international competition. Further, services are distributed through systems of networks and branches where businesses generally are to be granted the right to operate. Obviously, train service operators and water suppliers have to be given access to relevant infrastructure. In similar manners, supermarkets and home care providers are granted permission to operate in an area. Moreover, foundational sectors employ larger numbers of workers; in some regions, they are even the main source of employment. In addition, employment is relatively stable as the demand for these services is non-cyclical. Investments in foundational sectors have historically been low-risk, generating modest returns of around 5% annually. However, growth in asset allocation to private equity and the 1980s’ introduction of high-yield bonds have resulted in expectations of higher shareholder returns of 10% on average in all private companies – including both newly outsourced and long-time privatised provision of foundational services. To meet such expectations, capital can either be extracted using financial engineering devises or at the expense of other stakeholders such as labourers, suppliers and customers (Foundational Economy Collective, 2018).

Despite this, many foundational services have, in policy debates, been viewed ‘narrowly as a lever for economic regeneration and competiveness’ (Foundational Economy Collective, 2018: 11) rather than a central part of wealth production. Instead, policy makers and economists have largely focussed on private sector, market-based activities as the core of wealth-creation, whereas activities such as social care are considered as unproductive consumption made possible through wealth generated by exporting industries. More recently, the Foundational Economy Collective argues, the focus has further narrowed down to knowledge intensive business services (KIBS) and high-tech manufacturing industries which are seen as next-generation ‘carriers of innovation, high productivity and renewal through competitivity’ (2018: 15). Promotion and support of these industries is tied to the anticipated economic benefits as they employ an educated, high paid workforce (Moretti, 2012). However, these industries are generally small in terms of direct employment. Further, they are mobile; thus, different regions and countries compete with each other to attract these activities by creating incentives and concessions that benefit the company through limited obligations and responsibilities to the community they are located within (Rodríguez-Pose and Arbix, 2001).

To shift from a focus on competitive industries and continued growth in GDP to one on well-being in societies and economic development through foundational industries, the Foundational Economy Collective (2018) advocates for a fundamental rethinking of the relationship between governing institutions and private operators in the foundational industries through constitutional reforms. Two key mechanisms social licences and corporate citizenship are proposed as instruments to achieve this. Social licences function as a reciprocal obligation where companies ‘specify what they put back as social benefits into the relevant communities’ (Foundational Economy Collective, 2018: 5). In exchange, the companies are granted permission to extract revenue. In addition, an introduction of corporate citizenships will provide companies with the rights and duties as normal citizens; further, companies will be held to the same ethical standards as public bodies.

Agenda-setting

As policy makers are faced with many different tasks and multiple solutions, setting an agenda is necessary to prioritise tasks and guide the direction of future policies (Zahariadis, 2007). Consequently, in order to understand why some topics rise to the forefront of the agenda, we draw upon Kingdon’s (1995) multiple streams framework and Dannevig et al.’s (2013) operationalisation of agenda-setting in a local context. Here, agenda-setting is understood as the initial part of the policy making process.

According to Kingdon (1995), agendas are shaped by three streams of problems, policies and politics. First, the problem stream represents real-world conditions that may be recognised by policy makers without receiving much attention from the public until certain events or discourses change the understanding of it; it thereby only becomes a problem when it is recognised that the condition could and should be different (Normann, 2015). As an example, privatising parts of public medical production might not be considered a problem until the security of supply is believed to be endangered (Mencke, 2020). Second, the policy stream covers proposed solutions or alternatives to potential problems. These are continuously competing for support and status as favoured solutions. Third, the politics stream contains the political context. This includes the perception of public opinion and preferences of policy makers to address a given problem. Agenda-setting is not a linear process where a problem is identified, different solutions are subsequently proposed and the best solution is selected.

Instead, windows of opportunity can emerge at certain critical times when the streams come together (Kingdon, 1984). A window opening can be ‘prompted by attention to a problem, developments in the acceptability of a solution, or a shift in the politics streams such as a national election’ (Cairney and Zahariadis, 2016: 100). This can be predictable, institutionalised events such as municipal strategies or annual budgets – or it can be unpredictable such as sudden and harmful focusing events which demand the attention of the public and put pressure on policy makers (Kingdon, 1995). For example the Covid-19 pandemic has drawn attention to problems related to providential services like long-term adult care (Béland and Marier, 2020).

Chances for an issue to rise to the forefront of the agenda increase during the window openings, yet they are neither sufficient in themselves to bring an issue to the agenda nor to generate policy change. Rather, these windows can be seized by political entrepreneurs such as appointed or elected officials, experts, lobbyists or corporate actors. They attempt to couple the streams and influence how issues and possible solutions are articulated and perceived in society (Kingdon, 1995).

Previous studies have largely focussed on the agenda-setting process in the context of national governments (Dearing and Rogers, 1996; Jones and Baumgartner, 2005; Normann, 2015). However, Dannevig et al. (2013) scale down the approach to a municipal level and argue that the ‘particular dynamics of local-level policy making leave more room for individual efforts’ (2013: 492). Further, central local-level actors do not often fit Kingdon’s definition of a political entrepreneur as they do not attract the high degree of attention required to promote their own pet proposal. Instead, central local-level actors can be found among engaged individuals, politicians, administrative employees and planners – what Dannevig et al. term ‘engaged officials’ (2013: 493). The individuals operate within a framework which is ‘created by the municipal organisation, anchored in national legislation, and shaped by the municipalities’ financial situation’ (2013: 493). The local context thereby supports or creates barriers for the engaged official to successfully put a topic on the agenda.

Further, Dannevig et al. point to conditions such as focusing events and the less noticeable real-world indicators, adapted from Kingdon and previous literature on agenda-setting (e.g. Birkland, 1997; Dearing and Rogers, 1996), to be of importance. Additionally, they go beyond the agenda-setting literature and argue that agenda-setting at the local level is often influenced by external experts such as researchers and specialists who may function as providers of knowledge that shape the attention and push an issue up the agenda through increased awareness.

We draw on Dannevig et al.’s (2013) set of adjusted concepts to guide our analysis in identifying real-world indicators, actor involvement and individual efforts as drivers for the advocated solutions to prioritise foundational or export-oriented industries on the local agendas.

The role of Danish municipalities

Since 2007, Denmark has been divided into five regions and 98 municipalities (Ministry for Economic Affairs and the Interior, 2014). By European standards, Danish municipalities are rather large in size with approximately 58,500 inhabitants on average. This ranges from less than 1,800 inhabitants in the municipality of Læsø to more than 623,000 inhabitants in Copenhagen (Statistics Denmark, 2020). The 2007-reform decentralised a number of policy areas, and allocated a higher degree of political responsibility and autonomy to the municipalities. Now, municipalities are responsible for undertaking most welfare and citizen-related tasks as listed in Table 1. Decisions on the allocation of tasks are made by the Danish Parliament; the tasks are mandatory and municipalities are subject to state supervision. Sources of revenue to execute these tasks most importantly include (income) taxes and a subsidy and equalisation system administered by the national government. This is to ensure that municipalities have the same financial basis for solving their tasks, yet the services are not standardised; rather, there is autonomy to define and individually prioritise the levels of service, for instance local bus services or adult care, to accommodate local needs.

Table 1.

Overview of areas of responsibility of the Danish state, regions and municipalities.

State	Regions	Municipalities
– Police, defence and legal system.– Research and education (levels above lower secondary school).– State roads and railways etc.– Tax collection etc. and recovery of debts to the public sector.– Overall coordination and framing of the public sector.– Overall planning for decentralised economic and business development in the regions (including tourism).	– Specialised health care services^a such as hospitals and psychiatry along with financing the majority of services delivered by general practitioners, physiotherapists etc.– Operation of institutions for vulnerable groups and groups with special needs.– Planning for regional development of areas such as public transportation, topics related to nature and the environment, and further mapping of and planning for extraction of raw materials.	– Financing, supply and authority in regards to social services.– Child care, the Danish public schools, special education.– Health care: public health, delivery of home care services, general rehabilitation outside hospitals, partial dental care and social psychiatry.– Jobcentres and support services such as unemployment insurance, early retirement -, cash -, and sickness benefits.– Libraries, music schools, local sports facilities and other cultural sites.– Local road networks and participation in a transportation company.– Emergency services and utility services (partly privatised).

^aMain responsibility.

Source: IRIS Group, 2017; Ministry for Economic Affairs and the Interior, 2014: 19–20.

Municipalities plan for both the physical and strategic local development. In 2000, planning strategies were introduced as a tool for this and to highlight ambitions and political prioritisations of focus areas for future development (Ministry of the Environment of Denmark, 2002). The individual municipalities are relatively free to decide upon the content of the strategy and whether to take a broader approach to local development or to strictly focus on physicals aspects i.e. spatial planning. Strategies are to be published maximum two years after each municipal election, which takes place every four years. The strategy should provide the foundation for the municipal organisation to further develop topic-specific strategies and policies and continuously adjust the general land-use framework (Danish Business Authority, 2018; Ministry of the Environment of Denmark, 2002).

Methods

First, we conducted a content analysis of the planning strategies published by Danish municipalities. The latest municipal elections took place in November 2017; hence the most recent versions should have been published by November 2019. However, not all municipalities had adopted new strategies, when data were retrieved from the Plandata.dk-register.¹ The data were retrieved in two rounds: on 4 February 2020 and on 10 March 2020. By the second round, 34 proposed strategies were yet to be fully adopted. Moreover, 13 municipalities had either not published a new strategy or only listed themes without any details on the specific content; instead, older planning strategies, municipal plans or working programmes for development were analysed.

Themes and priorities in the strategies were identified and coded according to their prioritisation of either ‘foundational economy’, ‘export-oriented economy’, or ‘other’. Focuses within the foundational economy-category were divided into eight different categories based on activities classified as belonging to the material or providential domains. The categories were: utilities,² transportation, food processing and retailing, retail banking, car retailing and servicing, health care, education, and social care (Foundational Economy Collective, 2018: 40–41).³ The category ‘export-oriented economy’ focusses on traded industries and was split into two types of focus: KIBS and high-tech industries, and other exporting industries such as tourism.⁴ ‘Other’ covers initiatives that, for example, prioritises increased biodiversity, physical aspects of housing and city planning, volunteering, sports and outdoor activities.

Through a simple quantification of the priorities identified in the strategies we obtained an overview of the different topics. This allowed us to select municipalities with different priority focuses as our units of analysis. The selection strategy was based on a priori theory-determined criteria to identify cases that were similar in regards to municipal type and size yet with contrasting focuses (Patton, 1990). Using theoretical replication, we examine two somewhat contrasting cases to be able to compare the results (Yin, 1994). We employed Statistics Denmark’s (2018) classification to determine the municipal type. The classification includes: capital, metropolitan, provincial, commuter and rural municipalities. It is based on number of inhabitants in the largest city in the municipality and accessibility to jobs.

We selected Svendborg and Aabenraa municipalities as our units of analysis. The selection was based on distinctive and differing prioritisations presented in the municipalities’ detailed strategies; their approaches thereby stand out as opposites in a Danish Context. In the 2019-strategy, Svendborg predominantly prioritises foundational economy areas, whereas the strategy presented by Aabenraa municipality, adopted in 2018, focusses on development of the export-oriented economy. In both Svendborg and Aabenraa, the mayoral elections have swung between Social Democrats and the Liberal Party over the last 15 years. Both municipalities are categorised as rural municipalities (Statistics Denmark, 2018), located within the Region of Southern Denmark (see Figure 1). Sectoral employment shares in the two municipalities are relatively similar (calculated following the classification of Martynovich et al., 2020). In 2012, 60% of the citizens in Svendborg were employed within foundational sectors and 40% in the export-oriented economy. In Aabenraa, the corresponding figures are 58% and 42%. Both municipalities have population sizes just below 59,000 inhabitants. They have experienced minor declines in the number of inhabitants over the last 10 years,⁵ but this trend has reversed within the last few years (Statistics Denmark, 2020).

To understand the drivers behind the presented focuses, we conducted eight semi-structured interviews with municipal officials and a local politician from the two municipalities along with an external consultant. Six interviews were conducted through video or phone-calls and two in person. The interviews, which each lasted between 45 and 60 min, were recorded, transcribed and coded according to the themes in the interview guide. Drawing on agenda-setting theory, a common interview guide was created with minor adjustments for each interview. It included themes such as perceived problems, development of priority focuses and the anticipated benefits.

The interviews were analysed jointly. Afterwards, the two municipalities were compared to improve our understanding of the mechanisms at play in the production of local development policies.

Municipal priority focuses

When analysing the planning strategies, we find that foundational sectors are highly present in the municipalities’ priorities. Table 2 illustrates the distribution of priorities in the strategies, varying from entirely focussed on foundational economy to entirely focussed on export-oriented economy. The classification is based on the priorities of the various themes included in the strategies.⁶ Table 2 shows that 78% of Danish municipalities present main or sole focuses on foundational initiatives in their strategies. In contrast, the municipalities who present a main or sole focus on exporting activities make up only 6%. The remaining municipalities (16%) present a balance between foundational and export-oriented priorities.

Table 2.

Share of municipalities’ priority focuses in percentages (n = 98).

All FE	Mainly FE	Equally FE and EE	Mainly EE	All EE
32%	46%	16%	4%	2%

EE: export-oriented economy; FE: foundational economy.

In line with this, we find that a large amount of the focus areas and activities presented correspond to the municipalities’ legally binding obligations. Some of the most commonly presented priorities are categorised as ‘utilities’ or ‘transportation’, as illustrated in Table 3; often, the two categories are coupled, for example, to accommodate an increasing need for charging infrastructure for electric vehicles. In addition, 61 of the 98 municipalities prioritise ‘other exporting industries’ as a theme. Themes which include initiatives connected to KIBS and high-tech industries are found to be the least common focus: less than a fifth of the municipalities present these as part of their priorities.

Table 3.

Numbers of municipalities with the different focus areas presented in their planning strategies and frequently presented initiatives within the focuses (n = 98).

Material FE	Utilities	68	Improving or expanding digital infrastructure and infrastructure to charge e-vehicles. Improving different types of (renewable) energy production, waste management, prep sewage water systems to increased water masses, and expanding district heating.
	Transportation	78	Expanding and improving roads for cars and bikes. Supporting public transportation including more frequent train departure on different levels of governance.
	Food	23	Supporting local food production through public procurement, network groups and promotion through tourism.
Providential FE	Health	27	Preventing and minimising lifestyle diseases through projects that focus on smoking, mental health and weight.
	Education	45	Improving physical conditions of schools and institutions, improving skills among teaching and pedagogical employees, ensuring that various types of education are offered and that more citizens get an education.
	Social care	30	Implementing welfare technologies in adult care and other welfare services. Ensuring a holistic and interdisciplinary approach to social services.
EE	KIBS and High-tech	16	Attracting investments and organisations that focus on, for example, IT, FinTech, and R&D.
EE	Other EE	61	Supporting projects to improve tourism. Improving export infrastructures and framework conditions for e-commerce. Exporting renewable energy to larger cities.
Other	Other	97	Attracting residents, developing urban spaces, communities and cultural activities, improving biodiversity.

EE: export-oriented economy; FE: foundational economy, KIBS: knowledge intensive business services.

Compared to material foundational activities, emphasis on providential services is less frequently detected. Although services such as public health and home care are among the legally binding responsibilities of the municipalities, they are not given as much attention in the strategies. As illustrated in Table 3, less than a third of the municipalities bring forward these types of services. This can partly be due to municipal autonomy, as some municipalities state that they only focus on the physical aspects of planning in their policy documents. However, funding of social care is explicitly depicted as a challenge by some municipalities where prioritisations between different user groups need to be made to ‘make ends meet’. Further, a need to rethink the provision of social services is highlighted by some municipalities and the use of relatives and third sector organisations is proposed as part of this.

Emphasis on KIBS and high-tech industries are only identified in 16 municipalities. Capital municipalities present general initiatives related to IT, Fintech and R&D, whereas municipalities classified as rural present initiatives related to other prominent organisations in each respective municipality. For instance, Struer (Bang & Olufsen) focusses on R&D initiatives related to sound, and Kalundborg (Novo Nordisk and Novozymes) on biotech. Further, Aabenraa connects their focus to an emerging industry after revealing that Big Tech companies are planning to establish datacentres⁷ in the municipality.

Even though we find that foundational activities to a large extent are promoted, the core of economic development is often still connected to industries outside the foundational, whereas foundational activities function as levers for ‘real’ growth. Similar to what is argued by the Foundational Economy Collective (2018), we find that some municipalities prioritise activities in foundational sectors to support development in exporting sectors; improvements of infrastructure and education to upskill local workforce function as levers to strengthen export-oriented industries. Thus, foundational activities are to a lesser degree portrayed as part of the core production in themselves.

However, in like manner, we find that some projects to promote tourism are used as a way to support and advance foundational sectors. Identified in 54 strategies, tourism is by far the most common export-oriented focus, and examples to utilise it in foundational industries include food markets or nature parks that also accommodate local schools. In this way, we find that distinctions between foundational and export-oriented focuses are on many occasions interlinked and not as clear-cut in reality.

Figure 2 presents the share of main priority focuses divided by types of municipality. Although foundational activities are generally emphasised throughout the planning strategies, we find that priority focuses vary considerably between the municipality groups. Our empirical findings suggest that it is predominantly municipalities in the capital and metropolitan regions which give priority to foundational industries. Conversely, rural and provincial municipalities to a larger extent emphasise priorities related to export-oriented sectors in their strategies.

In contrast, we do not find a correlation between the main priority focuses and the party affiliation of the mayors across the Danish municipalities. This may be due to the Danish multi-party system that is also manifested in the city councils.

Prioritising foundational or export-oriented industries?

In this section, we identify different drivers at play in the local agenda-setting processes. We examine which problems have been described in the two municipalities, the solutions presented, and which actors have been involved in emphasising these solutions on the municipal agendas in Svendborg and Aabenraa.

Real-world indicators and focusing events

It is always an attempt to solve all problems when a municipality creates this type of overall strategy. (Planner, Aabenraa municipality)

Over the years, increasing urbanisation has especially affected rural municipalities in Denmark. Both Svendborg and Aabenraa are categorised as such and have been faced with minor population declines over the last 10 years (Statistics Denmark, 2020). In addition, maintaining the levels of services provided to citizens along with balancing the municipal budget is an issue the city councils need to attend to when setting the agenda. For this reason, the number of inhabitants prove to be a central real-world indicator in both municipalities; this indicator is monitored closely by the municipal organisation, and attracting and maintaining tax paying residents are put forward as important objectives when determining municipal priority focuses.

In the recent five years, Svendborg has managed to reverse the population decline, and is now experiencing an increase. However, in order to uphold this trend, the municipality monitors other indicators related to issues important for achieving ‘the good life’, as a local politician argues. Such indicators in Svendborg measure the mental and physical health of the population, and transport and digital infrastructure. These are indicators which the municipality and local decision makers have been made aware of even if the indicators have not necessarily received a lot of attention in the local, public debate.

In a similar manner, Aabenraa has managed to break the spiral of population decline over the last couple of years, yet the ageing population and, consequently, higher expenditures on adult and health care prove to be among the prominent real-world indicators that spurred the interest in their advocated solutions. Indicators brought forward in Aabenraa also include citizens’ general physical and mental health. In addition to population size, the number of jobs is also monitored closely and advocated solutions are to strengthen these levels.

To summarise, similar real-world indicators connected to the same type of challenges in the problems streams are identified and monitored in both municipalities. The number of inhabitants is presented as the most central real-world indicator as it indicates the most important source of revenue, which allows the municipalities to maintain standards in service provision. In Aabenraa, this is further perceived as closely connected to the number of jobs, another indicator, whereas it is not articulated to the same degree in Svendborg. In contrast to Dannevig et al. (2013) who find that focusing events are the most important driver to put climate adaptation on the agenda, we do not identify any local policy issues that have emerged due to sudden, focusing events, which required attention from policy makers.

Advocated solutions

In order to address the challenge of maintaining or increasing numbers of inhabitants, the two municipalities have chosen radically different approaches. In Svendborg, the philosophy of cittaslow (Slow town) is presented as the central starting point for solutions and initiatives to direct development. The philosophy of cittaslow emerged in Italy in 1999 and mainly promotes local heterogeneity and services as the basis for sustainable development of communities (Mayer and Knox, 2006; Semmens and Freeman, 2012). Originally, the philosophy was adopted in Svendborg in the 2000s after the mayor at the time had been particularly engaged in implementing it. While Svendborg has been a certified cittaslow since 2008 it has, however, not previously been prominent in the planning strategy; several informants pointed to difficulties in making it ‘tangible’ and explicitly connect it to concrete projects. Yet, an evaluation of the previous planning strategy offered the opportunity to reintroduce the philosophy. In the current strategy, they aim to use it as an approach to ensure ‘the good life’ for all citizens by strengthening a sense of belonging and nurturing place-based qualities to attract new inhabitants. Through the cittaslow-certification, the municipality has committed to work to improve air, soil and water quality, promote public transport, improve digital infrastructure, as well as to ensure access to universal services (Cittaslow International, 2017).

Thus, in their strategy, the municipality emphasises concrete initiatives such as improving digital infrastructure along with local and regional transport infrastructure to ‘avoid seclusion’ (Svendborg Municipality, 2019: 20; cf. Townsend et al., 2013). Similarly, initiatives related to ‘exercise’ are prioritised as a way to improve the quality of foundational services such as education, and, moreover, decrease expenses in municipal health and social care. Related to that, the municipality aims to improve both the physical and mental health of inhabitants by prioritising projects to include marginalised groups into sports and communities connected to these activities (Svendborg Municipality, 2019: 36). Further, the municipality aims to promote the initiative ‘culinary Southern Fyn’ not only to support local food producers but also to attract more tourists.

Several informants argue that the cittaslow-approach distinguishes Svend-borg from other municipalities. Elaborating on this, one informant explains that the concept especially offered an alternative approach to development when it made its way to the municipal agenda prior to the financial crisis of 2007–2008; while ‘everybody else was chasing all kinds of opportunities for economic gains’ Svendborg was more conservative in their decisions on the direction of development, the informant continues. However, in the shadows of the financial crisis, cittaslow as an approach to development was rolled back, as it was believed that emphasis on ‘slow living’ and improving foundational services would send out the wrong signal in times of recession. As expressed by an informant, ‘cittaslow is appealing when everybody else is in a rush, but when the world is hibernating they [the city council] might agree that “now is not the smartest time.”’

As illustrated above, Svendborg displays a focus on improving their endogenous, foundational activities. No alternative, exogenously-created opportunities were presented in the planning process. Moreover, a local politician points out that there is no single, prominent industry to anchor the municipal strategy for development; rather, industries are multifaceted and made up of smaller enterprises. He further argues that the municipality’s location and transport infrastructure makes it less interesting for (export-oriented) companies. In addition, he highlights employment opportunities in the area surrounding Odense, the third largest city in Denmark. For these reasons, export-oriented focuses are less attractive and the municipality can ‘afford’ to focus on improvements of foundational services as advocated solutions to attract new inhabitants already employed in and around Odense rather than having to create jobs and cater to prominent, export-oriented industries.

In Aabenraa, the aim to avoid population loss and maintain local services to ensure ‘the good life’ (Aabenraa Municipality, 2018: 3) for citizens has also been key in the setting of priorities. The announcement of international datacentres to be established in the municipality brought a strong emphasis on this emerging industry, which guided the overall direction for municipal development around the goal of becoming a ‘world known digital community’ (Aabenraa Municipality, 2018: 7). In this way, Aabenraa ties their planning strategy to a globalised technology-intensive industry with the expectation of preserving ‘a healthy economy’ and not fall behind (Aabenraa Municipality, 2018: 11; Foundational Economy Collective, 2018). A municipal representative argues that Apple and Google validating their ‘unique selling points’ has given Aabenraa an advantage in the international competition to attract other investments related to this emerging industry. These unique selling points include place-based assets such as the access to and quality of material, foundational services like digital infrastructure, and energy supply from steady (and renewable) sources. Thereby, these services function as levers in the inter-urban competition with other localities across Europe to attract these investments as part of municipal glocalisation strategies to promote the municipality as a space for capital accumulation, business development and job creation (cf. Brenner, 2004; Swyngedouw, 1997). In addition, Aabenraa also benefits from other Danish selling points which include a national green image and political willingness to push for policies to use, for instance, excess heat.

Another informant argues that rather than hoping to receive revenue from corporate taxes from these Big Tech companies, the municipality focusses on the derived effects such as development of surrounding industries catering to the companies, and other smaller, digital companies. The interviewed representatives emphasise a need to be opportunity takers and seize the exogenous opportunity to create jobs in the rural municipality. A municipal official declares: ‘we are Aabenraa. This means that it is not every day new companies come around wanting to locate themselves here. We take what we can get and then we nurture it’. He further explains how the previous strategy for development revolved around the decision to move the regional hospital from the neighbouring municipality to Aabenraa. Similar to what they aim to achieve by emphasising digitalisation and the establishment of international datacentres, the regional hospital served as an exogenously created opportunity for the municipality to seize. This suggests that the decision on what to prioritise is primarily about taking the opportunities that emerge.

Finally, we find that the export-oriented focus on digitalisation in Aabenraa is highlighted as a means to attend to the identified real-world indicators by emphasising integration of innovative digital tools in certain providential services. Thus, the export-oriented priority focus is not only presented as a way to finance foundational services, but also becomes a means to add other types of resources to strengthen and accommodate the increased service demand.

In summary, we find that advocated solutions are dependent on the opportunities presented to the policy makers. Aabenraa is a taker of an exogenously created opportunity which is elaborated upon to accommodate and solve other issues in the local context. In Svendborg, the absence of externally proposed solutions gave leeway for a reintroduction of cittaslow as an alternative approach to development. However, we find that the emphasis on this alternative approach depends on whether the municipality can ‘afford’ to prioritise improvements of universal services rather than focussing on initiatives connected to the creation of jobs. Moreover, similar to what was identified previously, we argue that foundational and export-oriented initiatives cannot be strictly separated when determining which industries are given priority.

Actors: Engaged officials, external experts and political entrepreneurs

In Svendborg, the planning strategy is to a high degree the result of an internal planning process. Local planners were engaged in promoting cittaslow as a foundation for development to make the strategy more cohesive. A new group of municipal planners became involved in the process of the current strategy; this group advocated not only for a reintroduction of the cittaslow-concept, but also that it should be central. Thus, engaged officials took initiative to integrate it into the policy process and push it up the agenda in discussions with city council politicians and in cross-departmental meetings when developing the different strategy themes.

As cittaslow originally was advocated for by a former mayor and politically agreed upon, a general consensus about the approach was achieved without meeting any significant barriers. Moreover, to assist in completing the planning strategy an external consultant was hired in. The general themes had already been decided upon, yet she took on the role to push for the municipal organisation and city council to clarify rationales and assist the municipality in identifying strengths and weaknesses in their operationalisation of the cittaslow-approach and proposed initiatives. In that sense, she did not advocate for specific solutions. Rather, her role was to strengthen the advocated solution and to ensure that it was addressing the central identified problems in Svendborg.

Meanwhile, the strategic focus in Aabenraa was brought to the forefront of the agenda in a seemingly more complex way. The emphasis on datacentres was introduced by an external actor, Invest in Denmark (IiD), a subdivision of the Ministry of Foreign Affairs. IiD has actively been promoting Denmark as an attractive location for datacentres in order to support economic growth. Unlike the other actors, they, to a greater extent, function as a political entrepreneur advocating for their own pet proposal on multiple levels of government (cf. Kingdon, 1984). They actively try to couple the different streams in the national context, yet their proposed solution is also perceived as a solution to the context-specific problems in Aabenraa of maintaining population and employment levels. Thus, IiD serves as the link between the rural municipality and international companies with a potential interest in establishing datacentres in Denmark. Moreover, IiD has supported the municipal management in uncovering the nature and needs of these global companies to identify their ‘unique selling points’ when competing to attract these investments and companies, as expressed by a municipal representative.

The revelation of Apple and Google planning to establish datacentres provided an opportunity for local policy makers to attract other ‘digital companies as a catalyst for growth’ (Aabenraa Municipality, 2018: 15). In that way, the municipal management and administration has been central in coupling the different streams on a local level and determining that the datacentre opportunity and digitalisation should be prioritised. However, to narrow down the scope of integrating digitalisation into their strategy, engaged municipal employees initiated the use of external experts. These experts presented approaches to understand and implement digitalisation, and, further, assisted the municipality in uncovering potentials to use digital tools to improve the well-being of local citizens. Consequently, the external experts, similar to the case of Svendborg, have not pushed their own pet proposals onto the agenda. Rather, they contributed to shape a common understanding in the municipality that ‘digitalisation is about people’, as a planner states.

Similar to Dannevig et al. (2013), we find that individual efforts have been important in setting the agenda in both municipalities. Principal actors include local politicians, planners and other municipal officials who have been active in shaping and advocating for solutions connected to the problems that a few central real-world indicators continuously underline the importance of addressing. In both cases, external actors have been involved in the efforts to set a direction; experts and a consultant have facilitated the work to direct the priority focuses. Moreover, we find that in Aabenraa an external political entrepreneur has played an important role in pushing for datacentres as a solution to economic development on both local and national levels of government. Such an influential actor pushing their own pet proposal onto the local agenda is not found in Svendborg.

Discussion and conclusions

This paper set out to study the extent to which foundational economy thinking is emphasised in local development policies and understand the drivers behind municipalities’ decisions to prioritise foundational or export-oriented sectors.

First, we demonstrated that the 98 Danish municipalities to a great extent emphasise foundational industries in their planning strategies. This is not surprising given that Danish municipalities have legally binding responsibilities to ensure that various foundational services are delivered to citizens by either public or private providers. Nonetheless, we find that initiatives related to material services are most prominent, whereas providential services are less frequently prioritised in the strategies. Further, foundational industries are often presented as levers for increased productivity, economic growth and job creation in other industries, thus, arguments for prioritising them are not simply based on their positive contribution to citizens’ welfare (cf. Froud et al., 2020). Consequently, distinctions between prioritising export-oriented industries and focuses on foundational industries are not clear-cut in the municipal contexts; rather, initiatives emphasising one type of economy can be used to support and strengthen projects or services in other parts of the local economy.

A central tenet of the foundational economy approach is that it offers new perspectives on economic development policy in non-metropolitan areas, where the share of employment in foundational industries is considerable (Foundational Economy Collective, 2018). Despite this, it is particularly municipalities in and around Copenhagen and the other Danish metropolitan areas that emphasise initiatives to improve or invest in foundational industries, whereas rural and provincial municipalities to a larger extent emphasise export-oriented industries in their planning strategies. While focuses on KIBS and high-tech industries are only emphasised in 16 municipalities, the capital and metropolitan municipalities take a broad approach to the prioritisation of these industries, whereas rural municipalities emphasise single, prominent industries or companies. Thus, strategies for development are closely connected to the type of opportunities, which are present and presented to local policy makers by either engaged officials or other actors in the agenda-setting process. Thereby, the municipalities are opportunity takers within a framework ‘shaped by the municipalities’ financial situation’ (Dannevig et al., 2013: 493). Moreover, it suggests that foundational services are emphasised when municipalities are already experiencing growth in the number of inhabitants and are successful in attracting various types of investments. On the contrary, delivering social services such as adult care are frequently depicted as a challenge to be overcome. Due to higher demand for and inadequate funding of these services, use of volunteers or relatives is promoted as a part of the advocated solution by some municipalities. In that sense, these care services are not only rendered part of the invisible economy but parts are transferred (back) to the unpaid economy (e.g. Picchio, 2006). These findings indicate that providential services are not considered part of the core of wealth production despite their central contribution to citizens’ well-being.

Second, through a comparative analysis of the rural municipalities Svendborg and Aabenraa, we find that similar indicators as proxies for problems that need to be attended to are identified. Several real-world indicators are presented – the most central one being the number of inhabitants. Although years of depopulation have been reversed in both municipalities, the indicator remains highly important, as it essentially measures their ability to finance and uphold levels of universal services in the future. In line with Dannevig et al. (2013), we find that ‘engaged officials’ proves to be a salient category as their efforts have been central in the local agenda-setting processes. Further, actors – political entrepreneurs – which operate at a regional or state level may present persuading pet proposals that function as exogenous opportunities for municipalities to anchor their strategy for development. The proposals may come to dominate local agenda-setting, as the interest and support from these types of actors may further present itself as an opportunity for local authorities to exploit; whether the emerged opportunity promotes a focus on export-oriented or foundational industries may then be secondary.

The two different levels of analysis suggest that mundane, foundational industries are put central in the absence of other, prominent options or when municipalities are not compelled to put local job creation as a crucial focus to attract and maintain inhabitants. Ultimately, when examining the extent to which foundational economy is emphasised in Danish municipalities, our findings suggest that albeit foundational industries are highly present on the agendas they are considered something that is given special recognition in times of economic growth. As such, industries within the foundational economy are generally put high on the municipal policy agendas, yet this does not mean that they are considered starting points for economic development in local communities. Rather, they are regarded as unproductive consumption that municipalities can afford when exporting industries are thriving.

Footnotes

Acknowledgements

We are thankful to the interviewees who took the time to share their insights, to Nina Kattler for creating the map and to Høgni Kalsø Hansen who took the time to help in the calculation of employment shares in the municipalities. We also appreciate helpful comments received from Roger Hildingsson, Håkon Normann, two reviewers and the editior.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Teis Hansen

Notes

References

Aabenraa Municipality (2018) Sund Vækst - Vækststrategi 2018-2030 (Healthy Growth - Strategy for growth 2018-2030). Aabenraa Kommune.

Béland

Marier

(2020) COVID-19 and long-term care policy for older people in Canada. Journal of Aging & Social Policy 32(4–5): 358–364.

Bentham

Bowman

de la Cuesta

, et al. (2013) Manifesto for the foundational economy. CRESC working paper series 131.

Birkland

(1997) After Disaster: Agenda Setting, Public Policy and Focusing Events. Washington, DC: Georgetown University Press.

Brenner

(2004) Urban governance and the production of new state spaces in Western Europe, 1960-2000. Review of International Political Economy 11(3): 447–488.

Cairney

Zahariadis

(2016) Multiple streams approach: A flexible metaphor presents an opportunity to operationalize agenda setting processes. In: Zahariadis

(ed.) Handbook of Public Policy Agenda Setting. Cheltenham: Edward Elgar Publishing, pp. 87–105.

Cittaslow International (2017) Cittaslow International Charter. Available at: https://bit.ly/3spInLl (accessed 25 September, 2020).

Danish Business Authority (2018) Planstrategi (planning strategy). Available at: https://bit.ly/2ExVaZh (accessed 25 September 2020).

Dannevig

Hovelsrud

Husabø

(2013) Driving the agenda for climate change adaptation in Norwegian municipalities. Environment and Planning C: Government and Policy 31: 490–505.

10.

Dearing

Rogers

(1996) Agenda-Setting. Thousands Oaks, CA: Sage Publications.

11.

Forsyth

(2005) International aviation: Globalisation and global industry. In: Gangopadhyay

Chatterji

(eds) Economics of Globalisation. Aldershot: Ashgate Publishing Ltd.

12.

Fothergill

Gore

Wells

(2019) Industrial strategy and the UK regions: Sectorally narrow and spatially blind. Cambridge Journal of Regions, Economy and Society 12(3): 445–466.

13.

Foundational Economy Collective (2018) Foundational Economy: The Infrastructure of Everyday Life. Manchester: Manchester University Press.

14.

Froud

Haslam

Johal

, et al. (2020) (How) does productivity matter in the foundational economy? Local Economy: The Journal of the Local Economy Policy Unit 35(4): 316–336.

15.

Grubak

(2020) Global virksomhed ledte i hele Europa - valget faldt på Aabenraa (Global enterprise searched all over Europe - and chose Aabenraa). Jydske Vestkysten (accessed 27 February 2020).

16.

Hansen

Winther

(2011) Innovation, regional development and relations between high- and low-tech industries. European Urban and Regional Studies 18(3): 321–339.

17.

Hansen

Winther

(2014) Competitive low-tech manufacturing and challenges for regional policy in the European context—Lessons from the Danish experience. Cambridge Journal of Regions, Economy and Society 7(3): 449–470.

18.

IRIS Group (2017) Kortlægning af turismefremmeindsatsen i Danmark (Mapping out efforts to promote tourism in Denmark). Available at: https://bit.ly/3gg6klW (accessed 25 September 2020).

19.

Jones

Baumgartner

(2005) The Politics of Attention – How Government Prioritizes Problems. Chicago, IL; London: The University of Chicago Press.

20.

Kingdon

(1984) Agendas, Alternatives and Public Policies. Boston, MA: Little, Brown and Co.

21.

Kingdon

(1995) Agendas, Alternatives, and Public Policies. New York, NY: Harper Collins.

22.

Llwodraeth Cymru Welsh Government (2019) Wales 4.0 Delivering economic transformation for a better future of work. Available at: https://bit.ly/2FSK162 (accessed 25 September 2020).

23.

Martynovich

Hansen

Lundquist

K-J

(2020) Can foundational economy save regions in crisis? Papers in Evolutionary Economic Geography (PEEG) 2061. Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography.

24.

Mayer

Knox

(2006) Slow cities: Sustainable places in a fast world. Journal of Urban Affairs 28(4): 321–334.

25.

Mencke

(2020) Salg af vaccineproduktion har gjort os sårbare (Sale of vaccine production has made us vulnerable). Kristeligt Dagblad. Available at: https://bit.ly/3uUVQw9 (accessed 25 September 2020).

26.

Ministry for Economic Affairs and the Interior (2014) Municipalities and regions – Tasks and financing. Available at: https://bit.ly/2OZFUtq (accessed 25 September 2020).

27.

Ministry of the Environment of Denmark (2002) Strategi og kommuneplanlægning – en vejledning (Strategy and municipal planning – a guide). Miljø- og Energiministeriet.

28.

Moretti

(2012) The New Geography of Jobs. Boston, MA: Houghton Mifflin Harcourt.

29.

Normann

(2015) The role of politics in sustainable transitions: The rise and decline of offshore wind in Norway. Environmental Innovation and Societal Transitions 15: 180–193.

30.

Patton

(1990) Qualitative Evaluation and Research Methods. Newbury Park, CA: Sage Publications.

31.

Picchio

(2006) Unpaid Work and the Economy. New York, NY: Routledge.

32.

Piketty

(2014) Capital in the Twenty-First Century. Boston, MA: Harvard University Press.

33.

Raworth

(2017) Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist. White River Junction, VT: Chelsea Green Publishing.

34.

Reeves

(2018) The everyday economy. Available at: https://bit.ly/3kOdv3K (accessed 25 September 2020).

35.

Rodríguez-Pose

Arbix

(2001) Strategies of waste: Bidding wars in the Brazilian automobile sector. International Journal of Urban and Regional Research 25(1): 134–154.

36.

Semmens

Freeman

(2012) The value of Cittaslow as an approach to local sustainable development: A New Zealand perspective. International Planning Studies 17(4): 353–375.

37.

Statistics Denmark (2018) Municipality groups v1:2018-. Available at: https://bit.ly/309BZwj (accessed 25 September 2020).

38.

Statistics Denmark (2020) BY1: Population 1. January by urban, rural areas, age and sex. Statistics Denmark. Available at: https://bit.ly/3mPRsvM (accessed 25 September 2020).

39.

Svendborg Municipality (2019) Planstrategi '19 (Planning Strategy '19). Svendborg Kommune.

40.

Swyngedouw

(1997) Neither global nor local: 'Glocalization' and the politics of scale. In: Cox

(ed.) Spaces of Globalization. New York, NY: Guilford Press, pp. 137–166.

41.

Townsend

Sathiaseelan

Fairhurst

, et al. (2013) Enhanced broadband access as a solution to the social and economic problems of the rural digital divide. Local Economy: The Journal of the Local Economy Policy Unit 28(6): 580–595.

42.

Yin

(1994) Case Study Research: Design and Methods. London: SAGE Publications

43.

Zahariadis

(2007) The multiple streams framework: Structure, limitations, prospects. In: Sabatier

(ed.) Theories of the Policy Process. Boulder, CO: Westview Press, pp. 65–92.