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Reverse economic development
Feb. 7, 2011
by Ivan Raconteur

I ventured into a local retail establishment on a recent morning and observed some parcels from one of those large office supply companies stacked near the door.

Knowing that this was not a usual vendor for the store, I asked the genial proprietor about it when I encountered him near the till.

He did not seem all that pleased about the situation, and explained that the city staff had ordered the items for the city office. Because the city office was closed when the delivery company tried to deliver the items, the delivery driver had delivered the shipment to another local business that was open.

It appears that the business that signed for the shipment was not keen on storing the items until Monday morning, so the owner called the business owner to whom I was talking, and asked him to take charge of the shipment, which he did.

I gather that the owners of both businesses were irritated at being burdened with the inconvenience of handling the shipment, especially since both of these local businesses sell at least some of the items in the shipment, but neither company had been offered the opportunity to provide a quote (and, consequently, had no opportunity to make a sale).

I suspect I, too, may have been less than amused were I in their position.

This made me think about the subject of economic development.

Some cities seem willing to spend thousands of dollars to entice businesses to their communities. They set budget money for economic development, because they recognize the benefits that businesses bring to a community.

Some communities, however, don’t seem to recognize the benefits of keeping the businesses they already have.

We might ask ourselves, for example, if it matters whether local governments support their local businesses by purchasing things locally when possible.

Some, no doubt, think they are saving money by ordering online or driving to a big box store in another city.

One might argue, however, that they may or may not save money on a given item at a given time. One might also suggest that there are other factors that tip the value scale in favor of the local business.

The local business pays taxes in the city. The outside business does not.

The local business, if it is fortunate, may employ local people. The wages might not be high, but any local job is an asset for a community.

The owners of a local business may support the community in other ways, such as donations to local groups and individuals.

If a local business owner has children, he may also support the community by adding to the revenue of the local school district by thousands of dollars.

Some cities don’t seem to understand that.

Some local business owners might observe that they have never seen a member of their city staff or even their city council in their stores.

The question is, does it matter?

Will the city changing its supply order from an Internet company to a local business mean the difference between survival or failure for that business?

Probably not.

Will city council members shopping locally make a difference?

Possibly not, although it might create the impression that they care.

As a (sometimes reluctant) taxpayer, I would rather have local government entities support local businesses, at least to the extent of purchasing things they are buying anyway, locally, rather than supporting taxpayers in another city or state.

It may be a small thing, but to me, it makes a lot more economic sense than cities spending thousands of dollars in economic development funds or tax incentives to attract new businesses.

Most local businesses aren’t asking for much.

They don’t want handouts or big tax breaks.

They have probably even resigned themselves to the fact that people won’t make all of their purchases locally, but wish people would at least buy something locally.

If cities purchase a few things locally, and if residents spend as little as $1 per month at a local business, it might mean the difference between a profit and a loss for the month for those businesses.

If local businesses make a profit, a lot of that money stays right in the community and helps to support other businesses and organizations.

Cities have many choices about where to buy the things they need, but they should at least be honest about the real cost of those purchases.


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