a social group of any size whose members reside in a specific locality, share government, and often have a common cultural and historical heritage.
One of the most important parts of life is providing for the needs of loved ones. Providing for the needs of your community, investing in your community (family, friends and countrymen).
However, does this translate into most our lives?
Take a moment, close your eyes and think, where do you invest on an average day?
For many Americans they start the day out at Starbucks, Gas up at somewhere like BP, commute to work at whatever Fortune 500 company in the nearest big city. After working late, dinner is too much of an effort, so you grab some McDonalds or maybe order some Pizza for the kids. After taking more work calls at home you finally settle down and watch Television or a rental movie with your family. Wake up tomorrow and start over.
For many suburbs and small towns in America, the most convenient business is the chain. During the course of the day it seems we have invested a significant amount of expendable income in these non-local corporations.
In our current state, most economic development efforts are focused on attracting and retaining these large corporations to areas in need of growth, however, what return on investment do we actually receive from these organizations?
–Starbucks was recently caught in an eco-scandal where the company confessed to leaving their water faucets running all day(to clean spoons) and wasting an estimated 23 million liters of water per day.
–BP nearly ruined the gulf coast of the U.S with a recent oil spill.
–Fortune 500 Company– Studies show the majority of Americans are overworked and overstressed.
–McDonalds– Just watch the movie Super Size me.
–Television– People who watch over 4 hours of TV a day are 4 times as likely to be overweight and have health problems.
The average American’s retirement investments are in top Fortune 500 companies. What kind of jobs do these chains provide?
The biggest banks in the financial system needed a bail out from the government to avoid another Great Depression; their “corporate culture” ultimately kicked many people out of their homes, and we couldn’t even hold them accountable.
It seems that the companies we are trusting our retirement with are destroying our health and communities.
Here at Kalu Yala we have the opportunity to hear some very innovative ideas and one of my favorites on this subject has been Michael Shuman’s proposition of local business as the key to economic (and community) prosperity. Michael believes there is coming a shift in the next 5 to 10 years where big multinational corporations will be replaced by regional local businesses.
In the video below michael outlines the key concepts of local business.
As Michael pointed out in the video, the high impact of local business is the key to local prosperity.
Advantages of Local Businesses:
- They are owned locally so they don’t take money and run.
- They spend money locally, use local services, and profit locally.
- Local Businesses tend to have a size and character that is very unique thereby perpetuating the culture of the city or town.
Essentially, by investing in local businesses you are increasing wealth in your own town and preserving your culture.
If your neighbor put up a general store and produced home grown tomatoes at a competitive price, why get in the car and drive to Wal-Mart for them? The dollar you give him will go towards continuing his business and will build goodwill within your relationship. He would hire locally, train locally and spend locally. Not to mention the tomatoes will probably be healthier for your kids.
What if your neighbor provided a stock offering for the local community to allow the community to invest in his company’s success. Your investment would allow him to become more competitive and eventually, even provide you with dividends!
What if the majority of businesses in a town were like this? What if your 401-K and retirement funds were invested in your friends businesses and vice versa?
Investing in local business sows goodwill in the form of money and trust in your community, and a good local business in turn multiplies the value of the original investment.