The Local Economy Solution

The Local Economy Solution: How Innovative Self-Financing Pollinator Enterprises Can Grow Jobs and Prosperity by Michael H. Shuman

Reviewed by Honor May Eldridge

Shuman’s goal with his new book is to encourage Americans to support and promote their local economy. For decades, America’s rural and small communities have been disappearing as more and more people migrate to the cities. Those people who remain are seeing their opportunities diminish as factories move their manufacturing abroad and companies outsource their workforce. The consequence is that local communities across America are suffering and becoming increasingly impoverished. Governments have been at a loss to stem this tide. They have spent vast amounts of taxpayer dollars on trying to lure businesses to relocate into their district in the hope of increasing employment.

However, Shuman points out the inherent flaws in their approach. For him, its wasteful and guaranteed to fail given that these companies have no sense of loyalty and will just as easily leave when another mayor promises a better deal. He cites the example of Sarasota County’s Economic Development Board in Florida created an incentive package of $137m to bring 191 jobs from the Danish firm, Xellia, to the town. Their willingness to spend the obscene $717,000 per job failed to win over the Danish firm who opted for North Carolina instead and underlines the ridiculousness of the approach. This money would have been better spent supporting and growing the local businesses that Sarasota already had.

By investing in your local community, government can support local entrepreneurs and build local businesses, generating growth and increased employment. The impact of this type of approach can be of substantial benefit to the community at large. Local businesses can regenerate a neighborhood by creating more livable spaces. When coupled with the trend towards re-urbanization and the rise of younger generation who find suburban life less than appealing, prioritizing and rebuilding local businesses can led to the redevelopment of previously deserted areas. Similarly, individuals can use their personal spending to grow their local community. Since small actions can have huge impacts, when individuals commit to buying locally, they have the ability to jumpstart their community’s economy. A study in British Columbia founds that a shift in 10% of purchases to local could create 31,000 new jobs paying $940m in new wages.

But how to achieve this? Shuman points to the successes that we have all seen in the food industry with the rise of locavore food. The farmer’s markets and farm-to-table restaurants are springing up everywhere. The local coffee-shop has returned to increasingly challenging the chokehold that Starbucks on the industry, particularly with the help of millennials look to assert their non-conformity through unique purchases. From Sydney, Australia to Washington DC, food markets have been regenerated to provide a permanent location for sellers with word-of-mouth and intelligent advertisement helping to garner support.

However, farmer’s markets are not the only way to strengthen local. By grouping together, companies can increase their voice and increase economic competitiveness. Cooperatives and SME forum can allow businesses to group together and increase their collective bargaining power. This type of cooperation has become more digitized in recent years with technology has helped connect businesses together and allowing greater interchange among communities all facing similar challenges. Technology has not only changes the b2b interaction but also the interaction and marketing strategy of suppliers with their consumers. Businesses now have ever-increasing ways to connect with their customers since loyalty apps, websites and blogs help increase consumer engagement and develop a better more lasting relationship.

However, for Shuman, we still need to go further and we need to create ways to support and grow those individuals and businesses who are working within our immediate vicinity. He believes that the most effective way to do this is through companies that invest in and support the local community by creating the right environment for local businesses to flourish. He refers to these organizations as “pollinators”. Within the pollinator role, he subdivides it into 5 different types:

  • Planning; what are the most plausible opportunities for local businesses to meet local needs?
  • Purchasing; how can communities help support businesses through their purchasing power?
  • People; how can individuals be trained and encouraged to embrace local?
  • Partnership; how can local businesses increase their competitiveness by working as a team?
  • Purse; how can local capital be mobilized to finance local businesses?

The movement towards local is clearly growing. More and more people are increasingly aware that they need to shift their spending habits if they want to maintain the uniqueness of their local Main Street and wider communities. Shuman’s book provides a clear and interesting insight into the dynamics at play, the people fighting the cause and the actions we need to take in order to build on and solidify this success.