A local economy is a healthy economy

The financial crisis of 2008, although devastating to all of us, has actually brought a new sense of urgency to the idea of local purchasing, not only as an economic development strategy, but also as a way to fight global warming.

“Buy Local” means giving preference to purchasing locally produced goods and services. In today’s consumer driven marketplace, larger multinational companies use their economies of scale to encourage consumers to purchase goods manufactured in more distant locales, by offering lower prices.

Most would assume that when faced with budget squeezes, most managers are going to be concerned about their bottom-line first and foremost. However, as I’ve talked with business leaders since October, many are looking for ways do something to help out both on the economic and climate fronts. The simplest and easiest solution is by buying local products.

Buying locally is a smart business strategy, especially over the long term, for several reasons. For starters, it contributes to a stronger economy in the communities where the business is located. Also, suppliers and consumers are demanding it because local purchasing not only reduces greenhouse gas (GHG) emissions from reduced shipping and transportation costs, but creates what famed economist John Keynes termed the “Local Multiplier Effect.”  

Economic Benefit
In general, for every $1 spent at a locally owned business, the local economy receives $3 in terms of income, jobs, tax benefits and community/philanthropic contributions. Additionally, local businesses tend to use other local services such as accountants, bookkeepers, advertising, consultants, legal services, and other miscellaneous expenses.

Groups such as the Interra Project and the Business Alliance for Local Living Economies have been stressing this for years and a number of recent studies back them up.