Why Home Grown Economic Development Matters

Most jobs are created by those businesses that already have a presence here!

In the realm of economic development, communities often find themselves at a crossroads, debating whether to attract new businesses or focus on nurturing existing ones. Even though most communities try to do both, it’s important to realize that most job creation in any community (around 80% according to some studies) comes from the businesses that already exist in the community. While the allure of new enterprises can be strong, a more sustainable and community-focused approach often lies in retaining and expanding local businesses. This strategy not only preserves the community's unique identity but also fosters long-term economic resilience and growth.

Local businesses form the backbone of a community's economy and culture. They reflect the unique character of a place, contributing to its authenticity and appeal. When these businesses thrive, they help maintain the distinctive flavor that makes a community attractive to both residents and visitors. Moreover, local businesses play a crucial role in strengthening the local economy. They tend to recirculate a significant portion of their revenue within the community, creating a multiplier effect. This means that dollars spent at local businesses often support other local enterprises, driving economic growth and creating a robust economic ecosystem.

One of the most significant benefits of supporting local businesses is job creation. Local enterprises are more likely to hire from the local workforce and have a vested interest in their employees' well-being. As these businesses expand, they create stable, well-paying jobs that reduce unemployment rates and enhance economic security for residents. Local businesses also contribute to building stronger communities. They often support local charities, schools, and community events, actively engaging with their customer base. This commitment to community involvement fosters a strong sense of belonging and shared responsibility among residents.

Promoting local businesses can have positive impacts on environmental sustainability. With shorter supply chains, local businesses often reduce carbon emissions associated with long-distance transportation. They also tend to be more invested in maintaining the environmental well-being of their communities. From an economic perspective, relying on local businesses can mitigate risks associated with attracting new enterprises. Local businesses typically have a proven track record and a deep understanding of local market dynamics, ensuring a more predictable economic landscape.

Local businesses serve as incubators for innovation and entrepreneurship within a community. They provide aspiring entrepreneurs with opportunities to gain experience, learn from local success stories, and eventually start their own ventures. This entrepreneurial spirit, when nurtured, can lead to the emergence of a dynamic local business ecosystem.

Communities that prioritize the retention and expansion of local businesses often exhibit greater long-term economic resilience. With a diversified local economy, they are better equipped to weather economic challenges such as recessions or shifts in industry trends. Furthermore, supporting local businesses can create economic opportunities for marginalized communities. Local enterprises often include a diverse range of owners, including minorities and disadvantaged individuals, fostering greater economic inclusivity.

Retaining and expanding local businesses allows communities to make the most of their existing resources, including infrastructure, workforce, and talent. This approach is often more efficient than attracting new businesses, which may require significant investments in infrastructure and incentives.

While the benefits of supporting local businesses are clear, it's important to note that a balanced approach to economic development is often most effective. Healthy communities work on creating economic opportunities on both tracks, engaging in robust attraction activities while also working to create a strong economic environment in which local businesses can thrive.

In the pursuit of economic development, the retention and expansion of local businesses should be a key priority.

This approach offers numerous advantages, including the preservation of local identity and culture, economic strengthening, job creation, community building, and long-term economic resilience. While attracting new businesses can bring immediate attention and investment, it often comes at the cost of sacrificing a community's unique character and relying on external entities with uncertain long-term commitments.

Local businesses, deeply rooted in a community's history and values, provide a foundation for a more sustainable and prosperous future. By nurturing local enterprises, communities can build a resilient, inclusive, and thriving economy while safeguarding their identity and culture. This strategy not only supports current economic needs but also lays the groundwork for long-term success and community well-being.

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