Investing Locally

Investing Locally

I was sitting in front of my friend Katie’s house, leaving her a note about the new business we’re starting together with some other mothers we know; a literary magazine for parents. She lives in the prettiest part of the neighborhood where I grew up.

I turned and saw a woman whose face looked tired, like a new mom, but familiar. She was pointing out the chickens to her husband and baby. “Did you go to Cleveland High School?” I asked.

“Sarah?” she said after a startled pause.

It was Jennifer. She’d inherited her grandmother’s house a few blocks away. She and her husband were working on fixing the house while she was on an extended maternity leave from her job in the Bay Area. “Will you go back?” I asked, imagining how little I’d like to leave this big, old house on a pretty street in a smallish city to an apartment in a big, loud city in California.

“Well, ” she said skeptically, “we’ve heard the job market isn’t very good here.”

Make that job market better

As I’d just finished meeting with a local printer to talk about business cards and swag (he has a friend who will make custom canisters of bubble liquid to give away to our target customers), and was plotting with Katie to open our account at a local bank, as (after all) all of our staff lived within a short bike ride of this branch, Jennifer’s comment jarred me a bit. I don’t see it as bad at all; but then, I’m not looking for a job, I’m trying to make one.

And the thing about doing this is that I’m reaping the rewards of so many investments I’ve made in my community over the decade I’ve lived here as an adult.

Investing local has many variants

The easiest way to invest locally is to simply buy things from locally-owned businesses and use local services. Lots of research has gone into the impact of money spent in the local economy; one Maine study showed that 45% of every dollar spent in locally-owned businesses stayed in the area, while only 14% of every dollar spent in large chain stores stayed in the community.

Another study from Michigan [pdf link] showed that a 10% shift in spending, from national chain stores to local, independently-owned businesses, would result in 1, 600 new jobs and a $137 million economic impact on the area.

A San Francisco study showed a similar impact on new jobs and, even more startlingly, found that a 10% shift away from independent retailers toward big chains would cause a loss of 1, 300 jobs and almost $200 million in economic activity.

And it’s not just buying locally; even telling others about the great businesses available locally has an impact. Cities with “Buy Local” campaigns impacted holiday shopping at independent businesses, even in a bad year for the economy at large. The “Think Local” campaigns also create a shift in behavior and attitude; consumers are more likely to consider their purchase decisions’ impact on the merchants involved before making them.

Buying local can be taken a step further by investing in local businesses and artists through “crowd-funding” campaigns like Kickstarter, Indiegogo, and a crowd (sorry) of new sites coming along to help provide the kind of backing banks won’t provide these days and venture capital firms can’t be bothered with. My editing team and I used Kickstarter to get our first issue financed, and we were thrilled to find that many of our backers came through local connections. Some of them weren’t even our target audience; they just wanted to support a new local venture.

A decision as small as giving your business to a local bank or credit union can impact your local economy. Credit unions and locally-operated banks will turn around and use your deposits and interest payments to loan money to local businesses, further spurring local jobs and the bright economy.

What I’ve learned is that, sometimes, investing locally doesn’t have to be about money at all. I’ve frequently consulted or provided creative help or even just my enthusiasm and emotional support to friends and people whose business ideas I found intriguing. I’ve sat across a table at a coffee shop numerous times and said, “yes!” and “wow!” and “you can do this! People need you!” to someone and then had the great good fortune of watching the thing happen. A few times (not just with my support, of course, but still) I’ve watched the thing create many local jobs.

Back to that job market

I have been kicking myself ever since I talked to that high school friend, wishing that I’d said something other than, “Oh, you have to meet my friend Katie.” I wish I’d said that this job market was really great for creative and smart people such as herself and her husband. I wish I’d said, “You can only see this economy in action if you stay here and take part in it.”

I really think that local investment is not just an abstract thing but an everyday decision, and one that you can make in total self-interest. You want that local economy to be strong not just for your own job prospects but for your old friends, and your friends now, and your future friends; for the children whose parents will move here and make friends with your children; for the schools your children will attend and the way they’ll want to return to your city when they grow up and get an education and keep your grandchildren close. (I’m thinking forward.)

If I see Jennifer again, I’ll give her the cheerleading pitch. Maybe she can work at our new magazine; she’ll have to stick around, though. It’s the best thing for both of us.

2 Responses to “Investing Locally”

  1. Anonymous

    It’s a lot harder to ‘create’ a job than apply and get one, but the rewards are definitely better. All the best to you in your new magazine endeavors.

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