Download - CONNECT 2011 - Michael Shuman
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10/13/2011 1
Revitalizing Cheshire County
From the Inside Out
A Serious Jobs
Strategy
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10/13/2011 2
The Struggle Over Capitalisms
TINA
vs.
LOIS
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TINA–There Is No Alternative
• Attract Toyotas
• Prioritize Exports
• Reassure Locals
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Economic Development Today
Top 46 ED Programs in 15 States
Sorted by % Funds Going to Local Business
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LOIS–The Alternative
• LO:
Local Ownership
• IS:
Import-Substituting
Development
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Hardwick, Vermont
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The Zingerman’s Story
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Local Living Economies
• Local Owned
• BOTH Self-Reliant &
Exporting
• Socially Responsible
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Overview
I. Why Embrace LOIS?
II. How to Nurture LOIS?
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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
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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)
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The Importance of Multipliers
Impact of $100
Spending (Austin)
$0
$20
$40
$60
Borders BookPeople
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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
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Harvard Business Review July-August 2010
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Other Reasons
Ownership Matters • Smart Growth
• Tourism
• Entrepreneurship
• Civil Society
• Political Participation
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Typical Skepticism
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Recent Competitiveness of Local (By Jobs)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990 1994 1998 2002 2006
Small
Big
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Profitability of Local in 2006 (Net Income/Net Revenue)
0%
5%
10%
15%
20%
25%
Sole Proprietors
Partnerships
C-Corporations
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Future Competitiveness of Local
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Our Current
Private Investment Strategy
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Household Finance
$2
$7
$4
$12
$1
$ 26 Trillion in 2009
Bonds
Stock
Mutual Funds
Pension Funds
Life Insurance
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Household Savings Here
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The Impact of $4+ Billion Shift
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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.
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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
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Wealth from Leak Plugging
The 25% Shift:
The Benefits of
Localizing Food
In NE Ohio
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25% Shift Re-employs 27,000
9,998
5,091
4,081
8,493
Jobs
Farmers
Retailers
Processors
Other
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Direct $$$ Benefits
Each year…
…$868 million in wages
…$4.2 billion output
…$126 million of state and local tax
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Indirect $$$ Benefits
• Tourism
• Business Magnet
• Entrepreneurship
• Unemployment Benefits
($127 million)
• Fiscal Health
• Improved Infrastructure
• Rural Development
• Economic Security
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Other Benefits
• Environmental
• Public Health
• Global Image
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Other Benefits
• Environmental
• Public Health
• Global Image
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Other Benefits
• Environmental
• Public Health
• Global Image
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Leak-Plugging Potential Here
Indicator Data for
Cheshire County
Employees (August 2011) 39,903
Self-Employed (2009) 5,818
Unemployed (July 2011) 2,425
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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
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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
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Opportunities for Local Food
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Low-Cost “Meta-Business”
• Supports All
Local Businesses
• Revenue Generating
• Modest One-Time
Investments
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Purchasing Metabusiness B2B Marketplace
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Partners Metabusiness Purchasing Coop
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Purse Metabusiness Small-Stock Issues
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People Metabusiness Self-Financing Incubator
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Zero-Cost
Economic Development
• Selective Procurement
Lifetime Cost Accounting:
Actual Bid Price = Nominal Bid - Taxes
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Zero-Cost
Economic Development
• Selective Procurement
• Bid-Out ED $$$
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Zero-Cost
Economic Development
• Selective Procurement
• Bid-Out ED $$$
• Securities Reform
Examples:
- Loosen DPOs
- Coop Investment
- Petition SEC
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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!"
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For More Information:
Michael Shuman
202-669-1220
www.cuttingedgecapital.com
www.livingeconomies.org