Michael Shuman, an author, attorney, economist and entrepreneur, came to Ft. Collins Thursday night to talk jobs and how to rebuild the city’s economy from the ground-up.
His seminar set out an agenda based in part on his books, “Going Local and The Small-Mart Revolution.” According to Shuman, a shift to a sustainable, locally based economy could be the answer to a number of today’s problems, from global climate change to the current financial crisis.
The event took place at the Foothills Unitarian Universalist Church at 1815 Yorktown Ave. Ft. Collins, Colo. and was hosted by BeLocal, a non-profit that promotes local business.
Shuman had some specific advice for how students can get involved in growing their local economy.
“It starts by thinking local,” he said. “Trying to spend money at local restaurants, at local bookstores, students can focus projects on local analysis, and eventually they can open a local business.”
Departing from what he referred to as the normal status quo for economic development, Shuman suggested emphasizing growing local economies as a better investment for consumers, investors, entrepreneurs and the government.
Currently, according to Shuman, 86 percent of economic development programs are spent on attracting non-local business. The problem is that the money spent on these non-local businesses doesn’t stick around the community.
Shuman used purchasing a $100 book at Borders, a national chain, vs. a local bookstore as an example. At Borders $13 stays in the local economy; at the local store $45 does. This means more money coming into and staying into the community, ultimately creating more local jobs. This multiplying effect has been demonstrated in over two dozen studies cited by Shuman, all demonstrating that local jobs create two-four times as many jobs as non-local.
“The verdicts in,” Shuman said, “Local businesses create jobs.”
If Ft. Collins were to become what Shuman described as “self-reliant,” the city would see an additional 48,000 jobs.
Although he admits becoming completely self-reliant is unrealistic, Shuman said that even attaining 25 percent self-reliance is a worthy goal as that would bring 12,000 jobs.
Another reason to support local business development, Shuman said, is their profitability. He cited the fact that sole proprietorships make three times the profit of corporations.
Market forces, like rising fuel costs and an increased desire to become energy independent, will speed up the process of localization Shuman, said. As these costs and desire rise, the money savings found by making products cheaper and importing them will be lost.
Another major point in Shuman’s localization plan involves moving pensions and investment money into the local community. During his presentation he asked the audience, “By a show of hands how many of you use a local bank or credit union?” Most of the room’s hands shot up.
“Okay,” he said, “How many of you have at least 10 percent of your pension invested locally?” Only a few hands remained up.
“This is a market failure,” Shuman said. “We are over-investing in Fortune 500 companies and under-investing in local businesses.”
Shuman had some concrete ideas to help spur local business as well. Creating local gift cards for local businesses, creating a business-to-business marketplace where local businesses could purchase products from each other, fostering local partnerships so companies could buy collectively, bringing procurement costs down, were just a few of his ideas.
Staff writer Jesse Benn can be reached at email@example.com.