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Local Prosperity: FarmWorks is helping to grow local entrepreneurs and their businesses
The Centre for Local Prosperity brought a wide range of speakers and citizens together in Annapolis Royal and Cornwallis Park over four days in April 2015 to consider New Economics for Rural Canada.
Conference Keynote speaker, economist Michael Shuman, has written that Americans’ long-term savings in stocks, bonds, mutual funds, pension funds, and life insurance funds total about $30 trillion (America 330 M, Canada 33 M people). But not even 1 percent of these savings touch local small business—even though roughly half the jobs and the output in the private economy come from them. So, how can people increasingly concerned with the poor returns from Wall Street and the devastating impact of global companies on their communities invest in Main Street? Most industrialized countries have set up long-term savings and pension systems that systematically overinvest in global companies and underinvest in competitive local business. About half of U.S. jobs are in small and medium scale businesses, so an efficient capital system would be allocating roughly half our long-term capital—$15 trillion—to them. We’ve got to remove this huge subsidy to global business.
In his upcoming book and at the Conference, Shuman describes three criteria for local prosperity: Maximize local ownership of business; maximize local self-reliance (before seeking participation in the global economy); and grow triple-bottom line businesses. Nurturing local businesses requires Planning for success, People as entrepreneurs, Partners and collaboration, a Purse of local savings, Purchasing from local businesses, and Policymaking to support local enterprises. Shuman singles out FarmWorks Investment Co-operative as one of the Purse examples and says that “Atlantic Canadians may be surprised to learn that their innovations in local investing, such as the Community Economic Development Investment Funds, are inspiring communities throughout North America.”.
A 2011 study from Penn State authored by Stephan Goetz, professor of agricultural and regional economics, showed that per capita income growth was statistically more significantly correlated with small locally owned businesses that tend to generate higher incomes for people in a community than with big, nonlocal firms. “Smaller, locally owned businesses, it turns out, provide higher, long-term economic growth.” According to Goetz, small businesses and startups provide more than just jobs for community members. They also can improve innovation and productivity on a local level and use other businesses in the community such as accounting and wholesalers, while larger businesses develop their own infrastructure. “We can’t look outside of the community for our economic salvation.” Goetz said. “The best strategy is to help people start new businesses and firms locally and help them grow and be successful.”
In another Penn State study in 2013 “We found that for every $1 increase in agricultural sales, personal income rose by 22 cents over the course of five years,” said Goetz. “Considering the relatively small size of just the farming sector within the national economy, with less than 2 percent of the workforce engaged in farming, it’s impressive that these sales actually move income growth in this way.”
According to a 2010 national study by sociologists at LSU and Baylor University, counties and parishes with a greater concentration of small, locally-owned businesses have healthier populations – with lower rates of mortality, obesity and diabetes – than do those that rely on large companies with “absentee” owners. The authors state that “entrepreneurial culture facilitates collective efficacy for a community and provides a problem-solving capacity for addressing local public health problems” said Troy C. Blanchard, Ph.D., lead author and associate professor of sociology at LSU.
Shuman says that “we need a new vision of politics and an abiding commitment from citizens to participate in it. The quality of the sustainable communities depends on the degree and sophistication of citizen engagement. We cannot have sustainable communities built on millions of couch potatoes. People need to step up and take control of their lives for sustainable communities to work.”
Conference Keynote Speaker Marq DeVilliers, author of Our Way Out, said that he has seen enough of the world to know that Nova Scotia is a special place to call home. He states that “economic gardening” – growing small businesses and start-ups built on skills and attributes native to the region – can increase the prosperity of our communities. Farming and fishing are the kinds of skills that create necessary goods closer to consumers, leading to local prosperity.
FarmWorks Investment Co-operative Limited has raised a “Purse” of over one million dollars in three years from Nova Scotians who are convinced that local prosperity is ours to grow. Thirty-five local food-related businesses have already received loans, and by the time the million is disbursed another 15 to 20 community-based businesses will have received loans. FarmWorks’ clients’ successes are confirming the Keynote Speakers’ arguments for investing in local businesses. The increasing appetite for the products of local farms and producers shows that the purse must continue to expand in order to help fund more businesses.
FarmWorks envisions healthy farms, healthy food, and by extension, healthy people and healthy communities. We are helping to build locally owned businesses in communities across Nova Scotia. Investors in FarmWorks and businesses supported by FarmWorks are major contributors to the resilience necessary for a new economy to take root and grow in Nova Scotia. Everything starts with food.