Over the past twenty years there have thousands of communities around the country who have embraced the concept of "Buy Local" goods and services. (I recall Butte County had a buy local program back in the 1980s.) The core concept here is that buying from local stories or service providers (especially locally owned), rather than from stores who may be from outside the local area (owners from outside the local area). The idea is great at first glance, and can be an outstanding way to grow local entrepreneurs and protect the environment (goods are produced locally, versus shipped from hundreds if not thousands of miles away, thus a smaller carbon footprint). Furthermore, most locally produced goods do not require as many if any preservatives, which is always a plus. (For more information on the buy local argument, see: http://www.livingeconomies.org/ )
Benefits Often Exaggerated
Unfortunately, the true economic benefits of buy local programs is often greatly exagerated. An article in the SF Chronicle (1/4/09) cited a report by Civic Economics. To quote the SF Chronicle, "It found that dollars spent at independent businesses yielded nearly three times more local economic benefit than those spent at chain competitors, and created about 80 percent more jobs." So in this argument, a national chain business (say Starbucks or Trader Joes) with 10 employees is equal to a locally owned business with 18 employees, and the locally owned store has three times the economic impact on the community. An e-mail I received from a regional chamber of commerce (not Chico) stated that a dollar spent in a local business circulated 17 times before leaving the community. (Obsolutely false.)
Other gross assumptions in their economic analysis: Local Entrepreneurs spend all profits locally. While some do, many spend profits elsewhere . Many have homes in Lake Almanor, Lake Tahoe, on the coast in Monterey or Fort Bragg, and as a result profits do leave the area. Another assumption: Local businesses pay higher salaries, which is not necessarily the case. Another assumtion: local business purchase all raw materials (coffee, food, office supplies, computers) from local producers, which is almost impossible, and rarely the case.
Buying Local Movement Could Hurt Chico Regionally
An interesting phenomenon is the fact that many communities are embracing a buy local program, which is ironically hurting communities like Chico, as cusomers who were purchasing in Chico are now deciding to buy locally in Oroville, Paradise, Willows, Orland, Corning, Gridley, rather than Chico. Chico draws retail spending from five local counties, with local small businesses and the City of Chico itself dependant upon the fact that Chico has been a retail trade hub. The long term impact of reduced retail spending in Chico (as a result of other buy local programs) could mean that programs like th City of Chico support of the arts - e.g. Chico Performances for local schools - could be hurt.
Darwin in Retail
I think a better way to select a business to patronize is based upon the quality of the service and quality of the product(s), based upon the price. If you visit communities around the country, those with successful local economies have a local consumer base that demand a high quality of service. Why is this important? Because if the local consumers demand a high quality of service, then those consumers from outside the area will be drawn to these same successful small businesses with outstanding products or services. Consider the successful local businesses (Sierra Nevada Brewery, Morning Thunder, and in the past - Corey's.) They are/were successful not because they are local, but because they are Good! So good, in fact, that you refer friends and family from out of town to go there. Would you do the same for a local business that had, for example, poor service, just because the business was local?
Potential Arguments for Buy Local
There are instances when buy local program have their merit. When a business is first starting, the owners are often still refining the quality of their products, services and operations. This "shake-out" period is an outstanding opportunity for the local community to support a local business, and help the business to refine their "product." These emerging businesses are vunerable, and need a conducive environment for growth (like a new born baby may need a incubator). Supporting new businesses during the first few months is outstanding way to help.
How Do We Help Build a Strong Local Economy
Again, by all means, buy local. But buy local only if the business has a superior product or service. If they don't have good quality of products/services, PROVIDE OPEN, FREQUENT FEEDBACK!!! This is the best way to help. If the entrepreneur is truely destin for success, then they will incorporate the feedback and improve. If they do not incorporate good business practices, customers will find other solutions. (Ironically, many national (non-local) businesses require their local operations to follow strict operations guidelines, and won't be able to adapt operations to local recommendations. Locally owned small businesses are not constrained by these requirements.)
Next Blog Topic: Import Substitution versus Buy Local
About Me: A local perspective from community and business members.
In his book, Deep Economy, Bill McKibben gives another reason to buy local: community. He cites research that customers report ten times as many conversations at farmers markets than at supermarkets.
He argues that people value what they don't have and right now, people lack community. Some things money just can't buy, but it appears if you spend your money locally, you just might get it for free.
Mark
Thought-provoking post. Looking forward to responding tomorrow! Thank you for posting this topic.