How to Ward Off Big Business Invaders

How to compete with business invaders

Politicians love news stories about their luring big out-of-area companies, even as they camouflage the associated tax breaks. But rarely do these arrivals bring as many jobs as promised, and they sometimes kill existing local ones. Then they may leave town in a few years, drawn by another sucker's offer of bigger subsidies. What they don't pay in local taxes, others must make up. And even if they stay, their profits leave town.

For obvious fiscal and emotional reasons, locally owned firms usually are loyal to their communities, and spend most of their profits there. These businesses tend to reliably support good jobs, tax revenue, social stability and civic participation, including local charitable donations - mostly without tax breaks.

Still, local businesses have found it hard to offer the cheaper prices and range of products of the huge national and international companies because they haven't had economies of scale, especially in purchasing and overhead.

But technology, and especially the Web, are now making it easier for "Main Street'' businesses to pool resources and benefit from economies of scale. Some use computerization to help cut costs, by, say, merging some back-office administrative and distribution functions. And local firms can do joint marketing to widen the range of goods and services that they sell collectively -- operating sort of like departments within the same store. Consider Providence's Hope Street Merchants Association.

John McClaughry, a vice president of the free-market Ethan Allen Institute, wrote about this in a column, "The Local Economy Solution,'' in the July 12 Valley News, an Upper Connecticut Valley newspaper, inspired by Michael Shuman's new book, "The Local Economy Solution.''

He cites such Shuman examples as ShopMidland, in Ontario; Main Street Genome, in Washington, D.C., and Sustainable Connections, in Bellingham, Wash.

Mr. McClaughry notes that in "In Ann Arbor, Mich., a successful deli named Zingerman's has created a family of independently owned but coordinated enterprises - creamery, bakery, coffee roaster, candy maker, produce grower, roadhouse restaurant {and} online sales collectively named the Zingerman's Community of Businesses. It operates an entrepreneurship training program for employees who have visions for new businesses of their own.''

Local firms that want to collaborate to compete with the big shots should consult the Business Alliance for Local Living Economies and the American Independent Business Alliance for pointers. And consumers seeking to improve their local economies should do the obvious and patronize locally owned business, be they manufacturers, farms or stores.

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He also focused on sustaining 4 percent annual gross domestic product growth. Economic growth in itself won't make most people's lives better. It depends how it's sliced up.

But I enjoyed David Frum remarks in July 10 Atlantic online article, "What Jeb Bush gets right - and wrong -- about American workers'':

"Nor are these under-employed Americans for the most part devoting themselves to childcare, elder care, community involvement, or self-improvement. As sociologists such as Robert Putnam have noted, contemporary Americans do less of all those things than their longer-working counterparts of half a century ago. Instead, as Americans reduce their work commitments, they increase their hours watching TV and playing video games.''

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For people of a certain age, there are "Summertime,'' "Hot Town, Summer in the City'' "Those Lazy-Hazy-Days of Summer,'' etc. Whatever your age, the season sends lots of songs. The durable institution of the summer vacation (more time to listen) and the invention of the transistor radio have played key roles in making so many of them memorable.

Every July, I have flashbacks of riding around in the mid-'60s in a friend's Mustang listening to the Beach Boys blaring. The hot-weather music will fade out in a few weeks. But new songs will arrive late next spring and become life markers for the young.

Robert Whitcomb (rwhitcomb51@gmail.com) is a Providence-based writer and editor; a partner at Cambridge Management Group (cmg625.com), a healthcare consultancy; a Fellow of the Pell Center, and overseer of newenglanddiary.com. He's also a former International Herald Tribune finance editor and former editorial-page editor of The Providence Journal.