A citizen movement committed to restoring Vermont to an independent republic, free to pursue life, liberty and happiness unimpeded by the demands of an imperial, corrupt and disintegrating United States.
Publisher’s Note: We begin our annual fall 2015 Chelsea Green book review series with Michael Shuman’s The Local Economy Solution. And listen to Shuman on Jim Hogue’s local WGDR Vermont radio show here.
The Local Economy Solution by Michael H. Shuman, certainly offers a variety of tools, business strategies and developmental methods in order to achieve success in growing a local economy. Through his main idea of “pollinator enterprises,” Shuman provides a clear vision into how communities can localize and grow by working together. By comparing pollinating bees to his successful local business method, Shuman proposes a variety of approaches to overcome any local economy obstacle.
With three other books under his belt about the local economy, Shuman excels at organizing and enlightening the reader with his ideas. As a globally recognized expert on community economics, he spreads his ideas and knowledge in ways other than books. To name a few, he has given invited talks for thirty years in almost all of the states and eight countries, he teaches economic development at Simon Fraser University in Vancouver, he has appeared on a number of television and radio shows, and he was one of the architects of the crowdfunding JOBS Act that was signed into law by President Obama in April of 2012. He was also a founding board member of the Business Alliance for Local Living Economies (BALLE). Full of knowledge and experience, Shuman is able to organize his brilliant ideas into a book that is beneficial to communities everywhere.
Shuman’s solution to the local economy all stems from his pollinator parallel. As well as being self-financed, pollinators have an important job. As a business owner, rather than just trying to build your own business and make it the best it can be, Shuman’s solution requires not only improving your own local business, but helping other local business succeed as well. In nature, “pollinators like bees, butterflies, or bats carry pollen from plant to plant, and they instinctively know that the intermixing of these pollens nourishes the entire ecosystem. Pollinator businesses similarly carry the best elements of one local business to another, thereby fertilizing all local business and creating a healthy entrepreneurial ecosystem.” (Shuman, 16) This analogy that Shuman makes is really important. He compares something that a lot of communities struggle with, and simplifies it by comparing it to something that these creatures instinctively do every day. Because the idea of nourishing the whole ecosystem comes natural to pollinators, it makes us think that maybe we should be doing the same.
Shuman divides up the book into seven chapters with each chapter going into great depth about each of the seven P’s of local economic development – Principles, Planning, Purchasing, People, Partnerships, Purse, and Possibilities. First, he explains Principles. In this chapter, Shuman defines the problems or most common myths that people believe about local economic development. In doing so, he provides the reader with a much deeper understanding later on as to why his solutions or alternatives to these myths actually work.
Something that many local businesses deal with is the competition of global businesses. However, in Shuman’s chapter all about Planning, he explains how a local business should find their direction, especially by outlining what their own competitive advantage is over global businesses. In doing this, the community must find characteristics that make them stand out. In other words, it is essential that local businesses plan what will make them unique so consumers gravitate towards them over the available global businesses.
Many times, communities will start a buy-local campaign in efforts to boost excitement and awareness around local businesses. Shuman recommends this as one of the very first things a community should do when thinking about the next P – Purchasing. Another important point Shuman makes about purchasing involves community support. “If a modest fraction of a community’s consumers shift a modest fraction of their expenditures toward local business, the economic boost can be extraordinary.” (Shuman, 73) He also offers a wide variety of ideas about how to increase sales in local businesses including local coupon books, advertising tips, local rewards cards, local gift cards and more.
Shuman’s next P on local economic development is People. This chapter is all about training generations that will be running these businesses in the future. According to Shuman, this is the one category that mainstream economic development has paid attention to the most. “The profession has spawned many kinds of programs providing resources to would-be entrepreneurs, including courses, mentors, incubators, industrial-development parks, and workforce-development programs, all aimed at transforming human capacity into prosperous local production.” (Shuman, 103) He goes on to explain that entrepreneurship training happens not only within schools but also within businesses every single day.
Unlike People, Shuman’s discussion about Partnerships differs from mainstream economic development practices. While those practices might lead to a few successful local businesses, Shuman’s ideas about partnerships offers a method of all local businesses working together which results in more businesses experiencing more rewards. Ultimately, Shuman displays partnerships as a way to collaborate with other local businesses in order to reduce costs and increase profits.
When speaking about the next P, Purse, Shuman provides knowledgeable insights. “Far less than half of banking capital goes into local business, and almost no securities capital. This represents a huge capital market failure, and fixing this failure must be a top goal for local economic development.” (Shuman, 159) His approach to this chapter is recognizing what a perfect world would look like and explaining strides that would go in that direction.
Perhaps my favorite chapter of the book revolves around the last P, Possibilities. Shuman’s pollinator businesses have “a million wishes.” What this means is that they will grow a mass of local businesses oppose to just one. “Like a healthy ecosystem that has many different kinds of pollinators that fertilize many different kinds of plants, a healthy entrepreneurial ecosystem will have all five types of business pollinators thriving as well.” (Shuman, 191) What makes this chapter stand out is how it brings all of the other elements together by stating that a truly successful local economy will have all of these components and still seek constant improvement.
Not only does Shuman explain why his ideas work, but he also lists steps and gives specific examples to achieve success in each of these chapters. Through all of these seven P’s of local economic development, Shuman expects pollinator businesses to grow the number of jobs in locally owned businesses, increase the number of young adults that are prepared to start a business, push up the survival rate of locally owned businesses, and multiply the number of local businesses that improve social performance, respect to workers, stakeholders, and the environment. Overall, Shuman does an excellent job of capturing each aspect of a community and explaining how the businesses within that community can not only succeed, but help other local business succeed as well. To anyone who owns a local business, is looking to start one, or anyone who is interesting in improving the local scene, The Local Economy Solution is the book with the answers to all of your questions.
Book Review written by Alyson Campbell of Saint Michael’s College.