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CONNECT 2011 featured Michael Shuman, one of the nation's leading experts on community economics.
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10/13/2011 1
Revitalizing Cheshire County
From the Inside Out
A Serious Jobs
Strategy
10/13/2011 2
The Struggle Over Capitalisms
TINA
vs.
LOIS
TINA–There Is No Alternative
• Attract Toyotas
• Prioritize Exports
• Reassure Locals
Economic Development Today
Top 46 ED Programs in 15 States
Sorted by % Funds Going to Local Business
LOIS–The Alternative
• LO:
Local Ownership
• IS:
Import-Substituting
Development
Hardwick, Vermont
The Zingerman’s Story
Local Living Economies
• Local Owned
• BOTH Self-Reliant &
Exporting
• Socially Responsible
Overview
I. Why Embrace LOIS?
II. How to Nurture LOIS?
I. Why Embrace LOIS?
Business Subsidies in Lane County (OR)
(mid-2003)
$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000
Cost Per Job
LOIS
TINA-Gross
TINA-Net
30x
10x
Recent U.S. Stimulus
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
Cost Per Job
Local
Global-Gross
Global-Net
Stimulus (High)
Stimulus (Low)
The Importance of Multipliers
Impact of $100
Spending (Austin)
$0
$20
$40
$60
Borders BookPeople
The Jobs Verdict
Study $ Circulated Locally:
Local vs. Nonlocal Ownership
Austin (2002) 3.5
Maine (2003) 5.0
Chicago (2004) 1.6
Toledo (2004) 4.0
Iowa (2006) 1.6 (Jobs)
San Francisco (2007) 1.4-1.7
Phoenix (2007) 2.9
Grand Rapids (2008) 1.6
New Orleans (2009) 2.0
AVERAGE 2.6
Harvard Business Review July-August 2010
Other Reasons
Ownership Matters • Smart Growth
• Tourism
• Entrepreneurship
• Civil Society
• Political Participation
Typical Skepticism
Recent Competitiveness of Local (By Jobs)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990 1994 1998 2002 2006
Small
Big
Profitability of Local in 2006 (Net Income/Net Revenue)
0%
5%
10%
15%
20%
25%
Sole Proprietors
Partnerships
C-Corporations
Future Competitiveness of Local
Our Current
Private Investment Strategy
Household Finance
$2
$7
$4
$12
$1
$ 26 Trillion in 2009
Bonds
Stock
Mutual Funds
Pension Funds
Life Insurance
Household Savings Here
The Impact of $4+ Billion Shift
II. How To Nurture LOIS?
Planning Plug the leaks.
People Support LOIS entrepreneurs.
Partners Compete through collaboration.
Purse Harness pensions locally.
Purchasing Spearhead “Local First” campaigns.
Policymaking Remove anti-LOIS biases.
Hannah Grimes Work
Planning Industry Clusters
People Business Incubators
Entrepreneurship Classes & Hub
Partners Leadership Circle
BALLE Network
Purse Angel Investors Network
Giving Monadnock
Purchasing Marketplace
Buy Local Guides
Policymaking
Wealth from Leak Plugging
The 25% Shift:
The Benefits of
Localizing Food
In NE Ohio
25% Shift Re-employs 27,000
9,998
5,091
4,081
8,493
Jobs
Farmers
Retailers
Processors
Other
Direct $$$ Benefits
Each year…
…$868 million in wages
…$4.2 billion output
…$126 million of state and local tax
Indirect $$$ Benefits
• Tourism
• Business Magnet
• Entrepreneurship
• Unemployment Benefits
($127 million)
• Fiscal Health
• Improved Infrastructure
• Rural Development
• Economic Security
Other Benefits
• Environmental
• Public Health
• Global Image
Other Benefits
• Environmental
• Public Health
• Global Image
Other Benefits
• Environmental
• Public Health
• Global Image
Leak-Plugging Potential Here
Indicator Data for
Cheshire County
Employees (August 2011) 39,903
Self-Employed (2009) 5,818
Unemployed (July 2011) 2,425
Leak-Plugging Potential Here
Indicator Data for
Cheshire County
Employees (August 2011) 39,903
Self-Employed (2009) 5,818
Unemployed (July 2011) 2,425
Potential New Jobs (Direct) 17,640
Potential New Wages
(Direct)
$840 million
Examples of Leaks Indicator Potential Jobs for
Cheshire County
Offices of Physicians 480
Limited-Service Restaurants 360
Commercial Banking 360
Temporary Help Services 297
Engineering Services 187
Hotels and Motels 175
Wired Telecommunications Carriers 158
General Warehousing and Storage 146 Custom Computer Programming Services 144
Department Stores 141
Opportunities for Local Food
Low-Cost “Meta-Business”
• Supports All
Local Businesses
• Revenue Generating
• Modest One-Time
Investments
Purchasing Metabusiness B2B Marketplace
Partners Metabusiness Purchasing Coop
Purse Metabusiness Small-Stock Issues
People Metabusiness Self-Financing Incubator
Zero-Cost
Economic Development
• Selective Procurement
Lifetime Cost Accounting:
Actual Bid Price = Nominal Bid - Taxes
Zero-Cost
Economic Development
• Selective Procurement
• Bid-Out ED $$$
Zero-Cost
Economic Development
• Selective Procurement
• Bid-Out ED $$$
• Securities Reform
Examples:
- Loosen DPOs
- Coop Investment
- Petition SEC
Patrick Henry: (with minor edits)
“Why stand we here idle?
Is life so dear or peace so
sweet as to be purchased
at the price of chains…?
Forbid it, Almighty God. I
know not what course
others may take, but as
for me, give me
community or give me
death!"
For More Information:
Michael Shuman
202-669-1220
www.cuttingedgecapital.com
www.livingeconomies.org
