Most communities measure economic progress by looking at regional gross domestic product (GDP), population growth, or successful corporate attractions. We know that these measures are misleading and wrong, but what should be our alternatives? How should those of us promoting stronger local economies measure success? Next Thursday, June 11, at 1 pm ET, I’m leading a webinar sponsored by the American Independent Business Alliance (AMIBA) to answer this question. I’ll also summarize our report card on the local economy movement, which we released in late April.
Here’s a sneak peek of the twelve measures I’ll be recommending:
(1) Median Income – Median income shows how much money people living at the 50% percentile make. It’s better than average income or GDP per capita, because a tiny number of gazillionaires cannot really artificially inflate this number. If median income is rising, then all the boats in your economy are probably rising.
(2) Inequality — Economists have a specific way of measuring the local economy called the Gini Coefficient. The higher that number, the greater the inequality. You should see whether, over the last five to ten years, your Gini number is shrinking and your community is moving toward greater social equality.
(3) Local Business Jobs – Look at the number of jobs in private firms (not enterprises) with fewer than 500 employees, and be sure to add public employees and self-employed people. These firms and institutions are 99% locally owned. The higher the number of these employees—and the higher the percentage they collectively comprise of the local workforce—the stronger your economy will be.
(4) Degree of Self-Reliance – The more diverse your economy, the more likely it will retain local flows of purchasing and investment dollars. One simple way of measuring your self-reliance is to compare your economy to the U.S. economy as a whole. Why? Because the U.S. economy is actually relatively self-reliant, and its consumption patterns from place to place are quite similar. If the percentage of your workforce in, say, construction is smaller than the U.S. as a whole, chances are good you are importing work from construction firms outside your community. The smaller your import dependencies, the stronger your economy.
(5) Survival Rate of Small Business – Look at the number of the smallest businesses in your economy—say, those with under 50 employees. If that number is steadily increasing, then you know that the entrepreneurial ecosystem—including finance, technical assistance, courses, you name it—is performing well.
(6) Number of B-Corps and Benefit Corps – The B-Corp label is the best measuring system for businesses with exceptional behavior benefiting not just investors but workers, community members, and ecosystems. There are now more than 2,000 certified B-Corps in the United States. Thousands more have taken advantage of a less stringent law that most states have set up called “benefit corporations.” The more of these exemplary performers in your economy, the more other local companies will be inspired to improve their own social performance.
(7) Business Network Size – Local business networks, like Local First Arizona, can help improve the competitiveness of member firms through joint marketing, joint purchasing, joint contracting, and joint advocacy. The more dues-paying business members of your network (Arizona has nearly 3,000), the more powerful this collaboration can be. A growing membership is evidence that your efforts are paying off.
(8) Non-Grant Support of Business Networks – Fifteen years ago, the U.S. had hundreds of local business networks. Most disappeared because they couldn’t develop revenue models beyond fundraising from foundations or government agencies. A business network should strive to provide useful services for its members to justify regular dues. Better still, deploy a business model for your network (like running a buy-local phone app) to diversify your cash flow. (My book, The Local Economy Solution, describes more than two-dozen such business models.) Revenue streams that are not dependent on the whims of grantmakers can ensure the long-term success of your network.
(9) Public Procurement – What percentage of your local government’s purchasing is going to local businesses? The higher that percentage, the stronger the multiplier effect on income, wealth, and jobs. The City of Preston, England, for example, increased its local procurement from 5% to over 18%, injected tens of millions of new pounds annually into the local economy, and was able to provide 4,000 new living-wage jobs.
(10) Crowdfunding Investments – To what extent are businesses in your community raising capital directly from community members through investment crowdfunding? Count the number of such raises in your community each year, and the money flowing into them. The bigger these numbers, the more local investment is taking hold. Give your community extra credit if you also have a local investment fund supporting local businesses.
(11) Corporate Attractions – Ultimately, a local economy can benefit from a supportive economic development department. And there is no surer sign of indifference or hostility to local businesses than awarding huge incentives (grants, tax breaks, capital improvements) to large, nonlocal companies. The less of this activity, the more likely your economic development establishment will be laser-focused on the health and expansion of local small businesses.
(12) Brain Drain – To what extent are young people, especially your most talented, sticking around after high school graduation? Dead-end communities will steadily bleed away young people. Creative, diverse, dynamic communities are those where young people will stay (at least if there’s affordable housing).
So how do you measure these indicators? Come to our June 11 webinar, and I’ll show you ways to capture this data easily and inexpensively. Again, you can register for free here. See you there! (And enjoy our latest listings of local investment opportunities below.)
- Michael H. Shuman, Publisher
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NEW INVESTMENT OPPORTUNITIES
Below is our list of recently posted investment opportunities across the United States. Please note that our listing of these opportunities does not constitute an endorsement. Remember that all investments carry risk. Click on the hyperlinks and read the details carefully before investing.
Use the map below to help you find an investment opportunity near you. Each issue, we’ll highlight about a half dozen active campaigns.
COMPREHENSIVE LISTINGS
Click the images below to view our comprehensive list of investment opportunities, organized by theme or region.
NEW OPPORTUNITIES
INVESTMENT OPPORTUNITIES BY KEY THEMES
✔️ Energy 💡
✔️ Food & Farming 🌱
✔️ Housing 🏡
INVESTMENT OPPORTUNITIES BY REGION
✔️ Great Lakes
✔️ Mid-Atlantic
✔️ Midwest
✔️ New England
✔️ Rocky Mountains
✔️ South
✔️ Southwest
✔️ West
FUNDS OPEN TO GRASSROOTS INVESTORS
The following is our first draft of funds that invest in local businesses and are open to non-accredited investors. Please help us add to this list!
MSJ & PARTNER EVENTS
June 8: Align Your Money With Your Values: Investments - Virtual Event
June 11: A Report Card on the U.S. Local Economy Movement - Virtual Event
June 17: Laboratories of Democracy: Emerging State and Local Policy Visions - Virtual Event
June 17-19: SVN’s Global Gathering - In-Person Event (Santa Fe, NM)
June 21: World Localization Day
June 25: Michigan Good Business Summit - In-Person Event (Detroit, MI)
JOBS BOARD
Homestead Community Land Trust: Chief Real Estate Development Officer
The Industrial Commons: Senior Director, Strategic Communications
BECOME A MAIN STREET CHAMPION
Whatever your interest or ambition, we invite you to “go public” to help others in your region find you, scheme with you, and start a local investment movement in your community. We aim to identify dozens, then hundreds, then thousands of Main Street Champions like you in every corner of the globe. Together, we can move our hard-earned savings from Wall Street to Main Street, putting them to work in our own communities. Fill out the intake survey below to join this growing cohort!
About The Main Street Journal
The Main Street Journal aims to catalyze the movement of $50 trillion from Wall Street to Main Street, facilitating economic development and economic justice. It’s sponsored by the National Coalition for Community Capital. We welcome feedback on all aspects, from our design to our content. Please send your ideas to Jen Risley at jen@main-street-journal.com.
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Our Team:
Michael Shuman – MSJ Publisher
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PARTNERS
Abrams+Angell | American Independent Business Alliance | Candide Group | Capital for Change | Capital Institute | Community-Vision Solutions | Cordata Capital | Council Fire | Crowdfund Better | Crowdfund Capital Advisors | Democracy Collaborative | Eleanor LeCain | Exit to Community Collective | Fair Food Network | Garlic and Roses | Impact Finance Center | ImpactPHL | Initiative for Local Capital | Institute for Local Self-Reliance | The Kassan Group | Longfellow Health Clubs | Mission Driven Finance | National Coalition for Community Capital | Natural Investments | Neighborhood Associates | Neighborhood Economics | New Majority Capital | Next Egg | Nonprofit Quarterly | Ownership America | Ownership Capital Lab | Ownership Matters | Partnership for Southern Equity | PathLight Law | Project Equity | Project for Public Spaces | Prospera Partners | Raise Green | Revalue | Rising Tide Capital | Schumacher Center for a New Economics | Shelterforce | Slow Money | SOCAP | Sun Valley Institute for Resilience | The Super Crowd Inc. | Sustainable Business Network of MA | Transform Finance | Uwharrie Bank | Village Well | Zebras Unite
We welcome any nonprofit or for-profit entity committed to local investment as a partner. If your organization is interested, please contact Jen Risley at jen@main-street-journal.com.