Making money work locally
Another economic development strategy is to plug the ‘leaks’ in the community economy. Money leaks out of communities in many ways, including:
- businesses buying supplies outside the area
- people shopping in other centres
- commuters earning a wage in the community but living and investing elsewhere
- externally owned businesses taking local profits back to head office elsewhere
- local superannuation funds being invested elsewhere.
Some loss of dollars is essential because all communities are part of a larger economy. However, communities that are particularly susceptible to ‘leakage’ are those close to a major centre, with limited local suppliers, or those that depend on other towns for key services such as medical services.
The classic strategy many communities have used to ‘capture’ more dollars locally is the ‘Buy Local’ campaign. However, there is a range of other things that communities can do, such as:
- Identifying opportunities to fill gaps in the economy by researching local buying and spending habits
- Identifying inventory items in demand but not available locally
- Facilitating supply contracts between local firms
- Improving the quality of service in local businesses through employee training and customer feedback
- Improving the streetscape and the appearance of local businesses
- Developing a community currency
- Identifying opportunities to process products or value add locally
- Developing a local or regional brand
- Considering community-owned enterprises such as community banks
- Exploring opportunities for e-commerce.
Extra resources
- More information about community currency can be found at the ‘LETS in Australia’ site.
- BusinessVictoria has some useful hints for developing a brand.
