Michael Shulman: Eight Principles for post Covid-19 Reconstruction

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These are his eight criteria by which to measure your community’s comparative resilience:

(1) Local Ownership – What percentage of jobs are in businesses owned by people living in your community?  A high percentage means your community is relatively independent and will enjoy the high multiplier benefits of local businesses buying from one another.  Local businesses have always been the building blocks of a successful economy, but now we can’t afford to get distracted by global businesses. Putting a penny into attracting an Amazon HQ—let alone a few billion dollars—rather than expanding locally owned businesses is the most counterproductive approach to economic development imaginable.

(2) Local Investment – To what extent are your residents investing in local businesses, projects, and people?  Localizing purchasing patterns boosts prosperity but it’s not enough. Why invest in global companies, about which you know little and which leave you vulnerable to the whims of public markets, when you can make a higher return, with less risk, by investing in the merchants you love, or your city’s stormwater management system, or getting your son out of student loan debt?

(3) Economic Diversity – Is your economy diverse enough to meet the basic needs of residents?  Put another way, how self-reliant is your economy? The more self-reliant you are – on local food, energy, water, and finance – the less global disruptions will matter.  Diversity also boosts your local economic multipliers, which increases income, wealth, and jobs.

(4) Regeneration – Is your economy living within its natural means?  We are already spending 70-80% of our family budgets on services, which is great news for sustainability, because most service businesses have light environmental footprints.  But even for goods like food, water, wood, and paper, we will need to bring inputs of our diverse industries in line with what our local ecosystems can renewably provide.

(5) Innovation – To what extent are you fostering local innovation?  The key to economic dynamism is entrepreneurship. Is every person in your community with a great business idea, especially young people, able to find the capital, people, space, and partnerships needed to succeed?  The proliferation of incubators, maker spaces, and shared workspaces are among the many tools communities can deploy realize this objective.

(6) Social Equity – Is your community economy leaving no one behind, irrespective of race, gender, ethnicity, and so forth? Look out for blind spots in your economic-development strategy.  One reason to embrace locally owned businesses is that we know, thanks to studies by the Federal Reserve, that communities with high densities of local business have higher per capita incomes and less inequality.  Entrepreneurship and workforce development programs should focus on those who most need inclusion. This means embracing social inventions like worker cooperatives, community land trusts, and Time Dollar systems.

(7) Connectivity – To what extent is your community cosmopolitan and connected with the rest of the world? Are your businesses learning from their peers elsewhere? Are your policymakers?  Those connections—especially with people, culture, and knowledge—will allow you to take advantage of the best of what the world offers, without becoming dangerously dependent on it.  When other communities get in trouble, your connections will enable you to offer help. When you get in trouble, they can help you.

(8) Social Performance of Business – Are all your businesses embracing the principles above?  How many, for example, are measuring their performance through tools like the B-Corp assessment?  Those businesses that are monitoring their social performance with respect to their workers and other stakeholders and are steadily trying to improve it should be recognized and rewarded, and their practices shared and spread with other local businesses.

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