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Role of Community-Led Growth in Fostering Local Economic Development

Published On
June 2, 2023
Read Time
4
Mins
Author
Jay Magdani

The concept of a community-led growth model is relatively new, but it is fast gaining momentum across the globe to drive local economic development. It also has a far-reaching impact on social, political, cultural, and human assets, all of which fall within the ambit of economic growth. 

Many intergovernmental institutions and business organisations are embracing this model strongly. For example, The World Bank supports several governments in designing, implementing and evaluating this model in low to middle-income countries. Duolingo, the world’s leading language learning mobile app, launched nine courses to 50 million learners in less than 2.5 years with the help of a team of fewer than 40 employees. The company leverage its community to develop, test and spread the word about its courses.

This blog will discuss everything you need to know about the community-led growth model.

Community-Led Growth: Meaning and Principles

Community-led growth refers to a support network of like-minded people enthusiastic about engaging in a specific cause, interest, product or service. These people self-organise themselves to drive a change or pursue a common goal. 

Often, they might address a local cause or take up a global cause to create an impact at the local level. The community-driven development gained even more traction during the COVID-19 pandemic when people began to connect virtually. 

5 Principles of Community-Led Growth

Community-led growth is based on these foundational principles, such as:

Shared Vision

The community share a vision they want to achieve. This vision comes from a shared value and commitment to do something for society, a country or an organisation. The community members then align their personal or professional goals with this vision.  

Diversity of People

A community has people from diverse backgrounds in terms of their demographic, geographic, behavioural or psychographic profile. Such diversity brings different perspectives to the community.

Collaborative Local Leadership

A community with people from around the world needs strong local leadership. This is because each city, country or group has a particular way of thinking or doing things. A local leader holds people together without hurting their sentiments but challenges their traditional ways and finds the root causes of issues. A local leader also listens to local voices and feedback. 

Local Resource Mobilisation

This principle refers to effectively mobilising local resources to build awareness, increase participation, and empower them to influence their socioeconomic development positively. It also supports sustainability and builds resilience at the local level. The government or business organisations can tap into these resources to scale up local development.

Self-accountability

When people have a stake in something, they show greater self-accountability towards the vision. They accept responsibility for their actions and are sincerely committed to growing their community.

Benefits of Community-Led Growth

This model enables to build of an ecosystem that creates a win-win situation for the entire community and economy at large. here are some benefits of community-led growth:

Income Generation

The mobilisation of local resources can generate employment and empower the community to become self-reliant. Community members can find new sources of primary or secondary income.

Access to Better Resources

When the community earns better, they can access quality food (nutrition), healthcare, education, etc. It improves their standard of living, secures their future and promotes socio-economic equality at the macro level.

Robust Infrastructure

When community-led growth begins to unlock its potential, it also paves the way for critical infrastructural development, especially in rural and remote regions. Private and public companies begin to invest money to build roads and schools and supply electricity, water and telecommunications, etc.

Visibility to Home-Grown Solutions

Community-driven development gives a platform to local entrepreneurs to test their business ideas, find suitable product market fit and gain initial market traction. When home-grown businesses get visibility, it enables the country to increase its global economic footprint.

How Can Startups Create Value Through Community-Led Growth?

Here’s how value-creation can be done through community-led growth:

Facilitating Customer Relationships and Branding

Startups can leverage this growth model to build customer relationships, brand loyalty, and brand community. According to the 2021 Community Industry Report, 86% of organisations agree that community is critical to their mission. A few global business leaders from companies such as Notion, Meetup, Topia and Linear have started a movement to create a community-led future. 

Adopting a Bottoms-up Strategy

This model enables startups to rethink the traditional market funnel and adopt a bottoms-up strategy to put ‘community’ at the core of their business instead of the ‘product’. When community members feel they are essential to a brand, they create a sense of belonging and become brand advocates.

When startups build prosperous communities, it will boost the startup ecosystem and, thereby, local economic development. 

Conclusion

Community-led growth is about shifting your mindset from ‘value capture’ to ‘value creation’ to create a symbiotic relationship with your stakeholders. You should be able to create a nurturing, interactive and comfortable space for the community to express themselves. 

Also, we must note that Community-led growth can happen only when there is true equality, diversity and inclusion without compromising authenticity and transparency. 

However, like any other business channel, community-building requires focus, commitment and resources. 

The integrated platform for founders, Scalix, can help you kickstart this growth model for your startup.

Join our Early Founder Programme to know more.