Local economic development principles that work

You hear it all the time – small businesses are the engine of the economy. However, when it comes to economic development programs in each city, the focus is on uprooting other cities’ large companies. Since small businesses are essentially local businesses, maybe we’re just missing some local economic development principles.

How about cutting right to the chase and establishing something like this:

Local Economic Development Principles

As it relates to the community:
– Invest in natural culture districts with a predominance of local independent businesses over regional and national chain tenants.
– Support cultural amenities like coworking spaces, incubators, accelerators with multiple, affordable third places that entrepreneurs enjoy meeting at (ie coffeehouses, cafes, pubs, pocket parks) and associated programs and events (happy hours; shared presentations like Pecha Kucha, Ignite; scaled versions of SXSW, music festivals, Chattanooga TN’s CreateHere, etc.).
– Develop a public infrastructure of beautiful places (a cohesive mix of buildings, streets, squares) as destinations that both attract entrepreneurs and encourage them to stay, fostering spontaneous interaction.
– Allow people to live as close to the commercial districts as they desire. This often means developing a lot more attainably-priced housing downtown than is typically there.

As it relates to the individual businesses:
– Commit to an economic gardening approach of growing your own companies versus the zero-sum-gain approach of uprooting other communities’ companies.
– Establish working relationships between the entrepreneurial community and associated resources like universities, business groups and city agencies.
– Support the formation of an independent business alliance whose mission is to broaden public awareness of the value of local businesses and create greater linkages among local businesses.
– Procure at least X% of the goods and services the city purchases from local businesses.
– Eliminate all subsidies and other advantages given to non-local businesses and development that would impair the health of local business districts.

The result is a sustainable, triple-bottom-line economy that will nurture itself.

Here’s a collection of resources that speak to the aforementioned principles:

American Independent Business Alliance definition of a local independent business: Private, employee, community or cooperative ownership, at least 50% owned by area resident(s); full decision-making function for the business lies with its owner(s); limited number of locations, all within a within a single state or region.

Business Alliance for Local Living Economies principles:
– Think Local First: Buying locally produced food, products and services, by putting our capital to work through local investments, and by supporting local arts and independent local media. Thinking local first improves the health of the environment, strengthens community, and contributes to functional democracy.
– Increase Self-Reliance: Increase personal, community and regional security by building entrepreneurial capacity to produce basic needs like food, water and energy as close to home as possible. Self-reliance increases local resilience, saves energy and creates a foundation for world peace.
– Share Prosperity: Share prosperity, understanding that the fair and equitable distribution of resources is critical to the quality of life we seek. We provide meaningful living wage jobs, create opportunities for broad-based business ownership, engage in fair trade, and expect living returns from our capital.
– Build Community: Build community through local economic exchange, connecting producers with consumers, investors with entrepreneurs, and lenders with borrowers. Community life creates a sense of place and belonging that promotes security and happiness. Collaboration, cooperation, and fair trade between communities create a human-scale architecture for a sustainable global society.
– Work with Nature: Seek to integrate our activities with natural systems in order to create real and lasting prosperity. Every decision we make affects the vitality of our ecosystem, the health of all species and the availability of the resources that support life.
– Celebrate Diversity: Celebrate and nurture the natural diversity of the human family, ecosystems and economies. Diversity increases resilience, propels innovation, cultivates peace, and fosters beauty and joy.
– Measure What Matters: Measure success by the things that really matter to us — knowledge, creativity, relationships, health, consciousness and happiness — rather than continuous material growth. We employ business metrics that support this philosophy such as Living Wages, Living Returns, and the Triple Bottom Line.

Economic Gardening Principles
Helping second-stage companies (aka “gazelles”) with 10 to 50 employees and revenue of $1 million to $25 million – local businesses that have survived at least five years and are growing revenue and adding employees. Studies show that 3 to 5% of gazelles create the great majority of new jobs. The three basic elements of an economic gardening program are:
1. Infrastructure: building and supporting the development of community assets essential to commerce and overall quality of life (e.g. cultural amenities, education);
2. Connectivity: improving the interaction and exchange among business owners and critical resource providers (e.g. industry trade groups, public sector supporters, and academic institutions);
3. Market information: access to competitive intelligence on markets, customers, and competitors comparable to the resources historically available only to large firms.

Main Street Principles
The National Main Street Center provides a process-based Eight Guiding Principles for a successful main street: Comprehensive; Incremental; Self-help; Partnerships; Identifying and capitalizing on existing assets; Quality and Change. It’s implementation is centered around Four Points of Organization, Promotion, Design, and Economic Structure.

Any that should be added to this list?

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neilkt