10/13/2011 1

Revitalizing Cheshire County

From the Inside Out

A Serious Jobs

Strategy

10/13/2011 2

The Struggle Over Capitalisms

TINA

vs.

LOIS

TINA–There Is No Alternative

• Attract Toyotas

• Prioritize Exports

• Reassure Locals

Economic Development Today

Top 46 ED Programs in 15 States

Sorted by % Funds Going to Local Business

LOIS–The Alternative

• LO:

Local Ownership

• IS:

Import-Substituting

Development

'Dead-end' Austrian town blossoms

with green energy

Hardwick, Vermont

The Zingerman’s Story

Local Living Economies

• Local Owned

• BOTH Self-Reliant &

Exporting

• Socially Responsible

Overview

I. Why Embrace LOIS?

II. How to Nurture LOIS?

I. Why Embrace LOIS?

Business Subsidies in Lane County (OR)

(mid-2003)

$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000

Cost Per Job

LOIS

TINA-Gross

TINA-Net

30x

10x

Recent U.S. Stimulus

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

Cost Per Job

Local

Global-Gross

Global-Net

Stimulus (High)

Stimulus (Low)

The Importance of Multipliers

Impact of $100

Spending (Austin)

$0

$20

$40

$60

Borders BookPeople

The Jobs Verdict

Study $ Circulated Locally:

Local vs. Nonlocal Ownership

Austin (2002) 3.5

Maine (2003) 5.0

Chicago (2004) 1.6

Toledo (2004) 4.0

Iowa (2006) 1.6 (Jobs)

San Francisco (2007) 1.4-1.7

Phoenix (2007) 2.9

Grand Rapids (2008) 1.6

New Orleans (2009) 2.0

AVERAGE 2.6

Harvard Business Review July-August 2010

Other Reasons

Ownership Matters • Smart Growth

• Tourism

• Entrepreneurship

• Civil Society

• Political Participation

Typical Skepticism

Recent Competitiveness of Local (By Jobs)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 1994 1998 2002 2006

Small

Big

Profitability of Local in 2006 (Net Income/Net Revenue)

0%

5%

10%

15%

20%

25%

Sole Proprietors

Partnerships

C-Corporations

Future Competitiveness of Local

Our Current

Private Investment Strategy

Household Finance

$2

$7

$4

$12

$1

$ 26 Trillion in 2009

Bonds

Stock

Mutual Funds

Pension Funds

Life Insurance

Household Savings Here

The Impact of $4+ Billion Shift

II. How To Nurture LOIS?

Planning Plug the leaks.

People Support LOIS entrepreneurs.

Partners Compete through collaboration.

Purse Harness pensions locally.

Purchasing Spearhead “Local First” campaigns.

Policymaking Remove anti-LOIS biases.

Hannah Grimes Work

Planning Industry Clusters

People Business Incubators

Entrepreneurship Classes & Hub

Partners Leadership Circle

BALLE Network

Purse Angel Investors Network

Giving Monadnock

Purchasing Marketplace

Buy Local Guides

Policymaking

Wealth from Leak Plugging

The 25% Shift:

The Benefits of

Localizing Food

In NE Ohio

25% Shift Re-employs 27,000

9,998

5,091

4,081

8,493

Jobs

Farmers

Retailers

Processors

Other

Direct $$$ Benefits

Each year…

…$868 million in wages

…$4.2 billion output

…$126 million of state and local tax

Indirect $$$ Benefits

• Tourism

• Business Magnet

• Entrepreneurship

• Unemployment Benefits

($127 million)

• Fiscal Health

• Improved Infrastructure

• Rural Development

• Economic Security

Other Benefits

• Environmental

• Public Health

• Global Image

Other Benefits

• Environmental

• Public Health

• Global Image

Other Benefits

• Environmental

• Public Health

• Global Image

Leak-Plugging Potential Here

Indicator Data for

Cheshire County

Employees (August 2011) 39,903

Self-Employed (2009) 5,818

Unemployed (July 2011) 2,425

Leak-Plugging Potential Here

Indicator Data for

Cheshire County

Employees (August 2011) 39,903

Self-Employed (2009) 5,818

Unemployed (July 2011) 2,425

Potential New Jobs (Direct) 17,640

Potential New Wages

(Direct)

$840 million

Examples of Leaks Indicator Potential Jobs for

Cheshire County

Offices of Physicians 480

Limited-Service Restaurants 360

Commercial Banking 360

Temporary Help Services 297

Engineering Services 187

Hotels and Motels 175

Wired Telecommunications Carriers 158

General Warehousing and Storage 146 Custom Computer Programming Services 144

Department Stores 141

Opportunities for Local Food

Low-Cost “Meta-Business”

• Supports All

Local Businesses

• Revenue Generating

• Modest One-Time

Investments

Purchasing Metabusiness B2B Marketplace

Partners Metabusiness Purchasing Coop

Purse Metabusiness Small-Stock Issues

People Metabusiness Self-Financing Incubator

Zero-Cost

Economic Development

• Selective Procurement

Lifetime Cost Accounting:

Actual Bid Price = Nominal Bid - Taxes

Zero-Cost

Economic Development

• Selective Procurement

• Bid-Out ED $$$

Zero-Cost

Economic Development

• Selective Procurement

• Bid-Out ED $$$

• Securities Reform

Examples:

- Loosen DPOs

- Coop Investment

- Petition SEC

Choose Wisely

Patrick Henry: (with minor edits)

“Why stand we here idle?

Is life so dear or peace so

sweet as to be purchased

at the price of chains…?

Forbid it, Almighty God. I

know not what course

others may take, but as

for me, give me

community or give me

death!"

For More Information:

Michael Shuman

202-669-1220

shuman@igc.org

www.cuttingedgecapital.com

www.livingeconomies.org