By Barb Davies, Community Economic Development Coordinator at Thrive
Michael Shuman is a powerhouse in the localization movement. An economist, lawyer and prolific writer, he has done pioneering work to show that local businesses are key for economic development and highly effective. “We’ve won the war on ideas,” says Shuman. “Even HSBC wants to be ‘The World’s Local Bank.’ We’ve also won the war on evidence that local economic development is far more effective and cost efficient than what is practiced today.”
Research shows that communities with a high density of local business have higher per capita job growth and higher per capita income growth. Other studies show that a strong local economy increases civic engagement, fosters social responsibility, improves public health, and facilitates environmental protection.
To gain all the benefits of local, Shuman argues, we must go way beyond the notion of spending dollars at local ‘Mom & Pop’ shops. Shuman challenges us to look deeply at what it means to localize. Where do your dollars go when you make a deposit at your bank? Who benefits from your mortgage payment? How are foundations and government participating in local economic development?
“Most economic development today is wasting money on attracting or retaining nonlocal business,” complains Shuman. “It’s far smarter not just to focus on locally owned business but to support them through private enterprises that are self-financing entities I call “pollinators”. For example, rather than build a business incubator that costs the government money every year, do what Fledge in Seattle does: charge incubated companies a percentage of their annual revenues for a few years to underwrite the next round of incubation.”
One might argue that localization in a city as prosperous as Calgary is unnecessary. Shuman warns, however, that “economic development based in one industry – like fossil fuels – only works when you reinvest your short-term bonanza in local business for the next generation. Diversification is the ticket to long term prosperity.”
REAP members are a significant economic force for long-term prosperity. Together, we represent 7,500 locally rooted jobs and $8.5 million in charitable contributions. Talk about reinvestment!
The next frontier, according to Shuman, is our investments. Canadian businesses with the highest profitability have 10-20 employees—with profits 60% higher than those traded on the Toronto stock exchange. Yet almost none of Canadians’ retirement savings are being invested in these small businesses. “Local investment,” Shuman argues, “not only can deliver great returns to your community, but also holds the promise of paying better returns to you personally.”
To learn more about how to use your dollars to grow the local economy join REAP, Thrive and the Arusha Centre during Down to Earth Week and hear more from Michael Shuman.
Michael Shuman is opening the ReLocalize Fair at 12 noon, Saturday April 18 at the Bridgeland Riverside Community Association Hall. More details are at this LINK.
- Propel your impact initiative forward with expert advice from Michael Shuman and networking with Calgary’s social innovators on April 17th at Social Innovation Pollination. Click here to register now through Eventbrite.
- Celebrate the world-wide movement to localize with Michael Shuman, workshops, local market, live music and family activities at the ReLocalize Fair on April 18th. Click here for more details, or here to register for the workshops.
- Learn how to align your foundation’s investment strategy with its philanthropic efforts at Brunch and Conversation with Michael Shuman on April 19th at Hotel Arts. Click here to purchase tickets now through Dexterity Ventures.
- Review Michael’s Small-Mart Revolution Checklist and consider the right next step for localizing your life and your business.
- Read Michael Shuman’s new book The Local Economy Solution: How Innovative, Self-Financing ‘Pollinator’ Enterprises Can Grow Jobs and Prosperity.