Sustainability for local business crucial factor
The intensity of the recent West Michigan Regional Policy Conference may have buried yet another important economic study released last week by Local First and funded by a Steelcase Foundation grant. Local First, a nonprofit group promoting local business ownership and patronage, commissioned research firm Civic Economics to conduct the study, which showed that even a 10 percent shift in consumer spending to locally owned enterprises would create 1,614 jobs and $53.3 million in wages, and would reduce unemployment by .05 percent in Kent County.
The study reflects for the most part on consumer spending at grocery stores (including locally headquartered Meijer stores), full-service restaurants, pharmacies and banks. If one considers the buying power of business-to-business services, the number of local jobs and revenue generation would increase well beyond the factors reflected in the survey.
As business owners begin to plot their budgets for 2009-2010, consideration of local talent is urged, whether it’s the services of local advertising agencies and architects, the use of local restaurants for business gatherings, or the myriad of other B-to-B goods and services purchased as a matter of course. Local First notes that this, too, is about sustainability.
The study noted, for instance, that this market is evenly split between locally owned and chain restaurants. Local restaurants carry a recirculation rate of 56.1 percent, compared to 36.8 percent for chains. Executive Director Elissa Sangalli Hillary noted that local restaurants are purchasing foods from local farms, using local marketing and paying wages to employees living within the local area.
Perhaps greater consideration this week, as national financial institutions are in position to receive federal/taxpayer bailouts, is the fact that just 6 percent of all Kent County banks are local, under private ownership. Based on total bank deposits of $10.87 billion in the region, Local First board President Guy Bazzani noted that local banks recirculate the money within the community, while non-local, publicly traded banks use the local deposits as loans in other communities.
Bazzani said he wants to see policy makers use the survey information “to make wise decisions when we’re determining what sort of business we want to offer incentives to move into our communities.” He offered another example: “If you go out to dinner 10 times a month, go one more time to a locally owned business and you can change the output by millions of dollars. That’s the message.”
As the “holiday season” approaches, Michigan retailers reported that 40 percent of those surveyed statewide expect higher sales from September to November, despite a drop for the period ended in August. (Grand Rapids retailers reported no decrease — or increase — for that period, but anticipate a 19 percent increase in the next few months.)
“Sustainable business practices” are well understood in this metropolitan area, and, in fact, lead the nation. Steelcase is certainly among those that have modeled or led the way. The economic impact of the Local First study is therefore easily understood. It’s a matter of practicing the principles the business community is espousing.