Local sustainability learning organisation the Ethos Foundation, in collaboration with Southern Cross University (SCU) has released a report about Local Living Economy and its relevance for Australia.
Called “We are the (enterprising) leaders we have been waiting for: Local Living Economy and its relevance for Australia” the report presents a range of data about the power of independent, locally owned small business and enterprise in terms of regional economic development, employment and community development. It also discusses many living examples of how communities around the world are rebuilding their local economic power through local enterprise.
The report discusses the US and Canada, where the Business Alliance for Local Living Economy (BALLE) is spearheading regional economic innovation through a network of over 80 place-based regional LLE hubs representing more than 22,000 entrepreneurs. The most active among these is Sustainable Connections in the region of Bellingham, Washington, which is a network of over 600 independent, locally-owned businesses. Sustainable Connections has a staff of 12 and an annual budget of close to $1 million.
BALLE research and experience shows that if we reduce the dollars leaking out of local communities by substituting non-local imports with locally produced goods and services, then local employment, local business sustainability, new enterprise development and local economic health can be substantially increased in all communities in all parts of the world.
The positive economic impact of small, established, local businesses on their communities is well researched and documented.
In Australia, over 1.3 million people run their own business. Price Waterhouse Coopers (2007) reported that in Australia the estimated total value of family-owned businesses was A$4.3 trillion, representing a “greater value than the total of the ASX market capitalisation of all listed companies plus the total value of all managed funds in Australia”. It also noted that household spending representing 60% of GDP and retail trade representing 23% of GDP “play key roles in facilitating sustainable economic growth” (Price Waterhouse Coopers, “ The economic contribution of small to medium-sized grocery retailers to the Australian economy, with a particular focus on Western Australia” 2007, p iii).
All three of these factors – family-owned businesses, household spending and retail trade – are central to the development of local living economies.
The Edward Lowe Foundation in the US identified that in 2008 over 90% of the US business sector was made up of businesses with between one and nine employees. In the same year, 74% of jobs in the US were provided by businesses with between 1 and 99 employees ( http://www.youreconomy.org/pages/states/us.ye?region=Comp).
The US Small Business Administration (2010), reports that “sole proprietorships (the legal structure chosen by most first-stage small businesses) are nearly three times more profitable than C-corporations (the structure of choice for global business)” ( “An Analysis of Small Business and Jobs” p 82).
Because small business is almost always physically located in a region or community, we know that these substantial economic contributions from the small business sector play a vital role in driving and maintaining healthy regional and local economies.