How to Build a Strong, Inter-Connected Local Economy
Its the dream of every small-town resident: a booming local economy rich with culture and opportunity.
The issue is that many local business owners and community managers find they dont know what steps to take to increase the strength of their local economy.
In essence, the problem of a weak local economy comes down to two factors. First, local businesses are too focused on competing with other small businesses and they allow corporations to take up a large percentage of local revenue. Second, local businesses buy goods from large, global companies to reduce costs.
Both actions result in the deterioration of small businesses and the growth of outside corporations.
There are many ways to foster a booming local economy, but a cohesive strategy is needed to find long-term, sustainable success.
Below are some proven strategies to build a strong local economy.
Steps to Take for Business Owners
Over the past few decades, the Business Alliance for Local Living Economies (BALLE) observed and documented habits of small business owners that consistently contribute to a strong local economy.
Similar patterns were observed by the Massachusetts Institute of Technology (MIT)
Below is a list of actions these two groups observed to be effective:
Act local first.
Buy goods and services from local businesses. Likewise, invest in newly founded businesses in your community.
Prioritize equity
Facilitate an economy that provides benefits to everyone.
Regenerate soil and nature
Use business to restore the local natural environment.
Accelerate collaboration
Build cooperative infrastructure to create shared work between businesses.
Share ownership
Distribute ownership of local real estate and services among community members.
Shift capital
Keep the money you spend within the community.
Co-create policy
Engage all local stakeholders when making new decisions.
Cultivate connections
Make connections with local stakeholders to share in opportunities.
The strategies above are all considered bottom-up strategies, meaning they are effective actions that can be taken by entities that dont have executive control over the local economy. In other words, anyone with money and time can utilize these strategies and create profound change.
The Benefits of a Strong Local Economy
Its simple: when money stays in a community, profits go up, more businesses open, and wages increase. Likewise, when a significant amount of cash leaves the community, the opposite effect is observed.
Small, locally-owned businesses create up to 90 percent of net new jobs in the U.S. Those jobs go to unemployed individuals within the community and bring in experienced professionals from outside. Thats a net positive for everyone.
More business means there is more to do for residents. Counties with a thriving small business sector have lower rates of obesity and diabetes than those communities with lower rates of small business participation.
In short, a strong local economy brings in more money, more community, and provides health benefits to locals.
Build from Within
No one wants a weak local economy, but the reality is that many communities across Ohio and the U.S. are struggling to support local businesses. Once money starts to leave the community, it can be difficult to get it back.
Many small business owners opt for the low-priced goods and services offered by corporations. However, this ends up being costly in the long run as increased corporatism drives small businesses into bankruptcy, then increases prices once they have a monopoly.
Instead, when small businesses follow the strategies listed above, they see money pour into the community. If they do not, the money goes elsewhere.
If you are looking to strengthen your local economy one of the best ways is to join your local chamber of commerce with the Southern Ohio Chamber Association (SOCA). We have helped local chambers all over Ohio build stronger local communities through grassroots economic actions and unbeatable benefits for small businesses.