Economic strategy is a wide-ranging area of economic consulting, involving the application of economic principles and analysis to provide clients with evidence-based insights aimed at addressing specific issues/problems and/or enhancing performance.
Illustrative examples of economic strategy assignments include but are not limited to the following:
- Competitor analysis – a firm may wish to know more about its actual and potential competitors in ‘far’ and ‘nearby’ markets whilst at the same time seeking to better understand the competition policy implications of any actions it might be considering.
- Formulation of local authority economic development strategies – since Putting People First – Action Programme for Effective Local Government in 2012 and the Local Government Reform Act of 2014 – local authorities (i.e. city and county councils) in Ireland have been given a more proactive role in economic development in their areas, which has become more important in their County or City Development Plans (CDPs) and mirrored in their Local Economic and Community Plans (LECPs). Economic development strategies necessitate the use of relevant evidence to analyse and consider the baseline composition of employment particularly in local authority areas and informed projections concerning future employment during the planning period of the CDP.
- Implementation of an economic strategy – specifying a brilliantly-researched economic development strategy for a local authority will have little impact if it is not costed or its implementation in practice is not adequately provided for.
- Economic implications of a change to the status quo – central government might, for example, propose a change to the boundary between two local authorities, with the potential loss to one of the local authorities being significant. In such a case, the local authority concerned may wish to engage an economic consultant to defend the existing arrangement using compelling evidence-based analysis.
- Feasibility study of a new purpose-built facility – a public body or group of investors may wish to commission a feasibility study of the need, demand and likely impacts of a new asset with economic development potential, for example.
- Competition and regulatory effects of new product development – in bringing new ideas to commercial application, enterprises may sometimes be at risk from overlooking the competition and/or regulatory effects of their actions.
- Bringing forward competition analysis of proposed transactions – parties to a planned merger or acquisition rightly give much time and effort to due diligence of deals but may miss giving sufficient attention to the competitive effects of transactions, which ultimately could prove costly if a deal is subsequently prohibited on competition grounds. The Competition (Amendment) Act 2022 includes provision for ‘sub-threshold’ mergers or acquisitions which may lead to a substantial lessening of competition (SLC) in any market in the State (including local markets). As part of due diligence, parties may wish to consider (early on in the process) whether a proposed deal would be likely to lead to an SLC in the market(s) in which they (the parties) operate (the markets in question may be local or sub-national markets). Failure to notify a deal that would lead to an SLC could end up in the deal having to be unwound by the CCPC (Competition and Consumer Protection Commission). How might such a deal come to the attention of the CCPC? Competitors of the parties or consumers could contact the CCPC if they thought that a proposed transaction would be likely to make them worse off.
- Competition compliance training – businesses and other organisations (for example, business representative organisations) may wish to procure competition compliance training to ensure compliance with the provisions of the legislation. Such training involves instruction in the main provisions of the legislation, the ‘Dos and Don’ts’ of competition compliance and advice on specific matters or questions that the client might have from experience.
- Economic strategy assignments may also include submissions to government budgets, special government studies involving written consultations, policymaking and/or position papers, among other studies.