The new normal: Are you ready for the coming local economy

The new normal: Are you ready for the coming local economy by Lara Ryan The “buy local” message is getting a lot of play these days, from supporting local farmers as we strive to make healthier nutritional choices to protectionism in the midst of economic-stimulus packages. More visits to the farmers’ market or local bike shop is good news to local aficionados, and the attention to the long-term impact our consumer choices have on our communities seems to be getting some media spin. That’s a good thing.The recession has slowed business around the world and left some analysts asking if we will ever return to “normal.” Jeff Rubin, a former chief economist with CIBC World Markets, says we’re in for a major readjustment. His book, Why Your World is About to Get a Whole Lot Smaller, connects the decline of globalization to the rising cost of energy. “As the price of oil hits triple digits again, shipping finished goods or commodities around the world becomes impractical,” he says. “A cheaper supply source is a closer supply source. Imports become more expensive than domestic products, and transport costs act as a tariff.” Rubin predicts a return to a world that looks a lot like the one we left behind. Local economies play a larger role, manufacturing jobs that were moved offshore come home, and we start to look at farming as an attractive career choice. He predicts a major cultural adjustment as the suburbs decline, because people can’t afford to commute, and a downturn in technological growth for our tech-dependent society as energy-fuelled electronics manufacturing slows. Fortunately, there is some significant buy-in to the “local is better” movement. Business Alliance for Local Living Economies-Nova Scotia (BALLE-NS) is a new business network taking flight in the province. It is part of an international movement of local networks working to build green and vibrant local economies. Locally owned independent businesses committed to the “Triple P Bottom Line” of people, planet, and profits is what BALLE-NS is all about. Some big drivers of sustainable prosperity in Nova Scotia have signed on as founding sponsors of the alliance, including Oxford Frozen Foods, Credit Union Atlantic, Wilsons Fuel, Bebbington Industries, MaManna Renewable Energy, Minas Basin Pulp and Power, C-Vision /LED Roadway Lighting, Tradewinds Realty, Propeller Brewery, and the Wooden Monkey restaurant. Support to launch the movement has also come from the provincial Department of Economic and Rural Development and the Community Foundation of Nova Scotia. (Full disclosure: I’m a founding board member.) What these organizations and others are buying into is the notion of a vibrant and prosperous province, supported by a local fabric of businesses, organizations, and people working together to build a green, culturally diverse, sustainable economy. Sounds like prosperity to me. Lil MacPherson, co-owner of the Wooden Monkey in Halifax, is chair of the BALLE-NS board. “Whenever possible I buy from local, independent, organic growers and producers,” she says. “My business is the most powerful way for me to express my values, serve my community, and make a contribution to a healthier natural environment. I believe we have all the tools we need to create a vibrant, prosperous, and sustainable economy. When I heard about the BALLE movement I knew right away we needed one in Nova Scotia, and I wanted to be part of it.” BALLE is about the economic and environmental impact of how we do business and build sustainable prosperity. Studies show that for every $100 spent at a local independently owned business, $45 is re-invested locally, compared to $15 of every $100 spent at a corporate chain. Alarmingly, sales at chain stores in Nova Scotia have increased 80% over the last decade, while sales for local independent stores are down 2%. Some would argue that this means an increase in GDP. But at what cost? The Genuine Progress Index shows that we’re not actually happier or more prosperous. We may have access to a wider variety of goods, but we lose the opportunity to buy those goods from local manufacturers and from stores owned by our neighbours. Local goods require less fossil fuel to ship and so create fewer greenhouse gas emissions. Produce sold in chain supermarkets travels an average of 2,404 kilometres, while food from local growers travels only an average of 90 kilometres. Moving to a new normal of the kind imagined by Jeff Rubin may not be so bad. A prohibitive cost of strawberries in February could create an opportunity for an entrepreneur to invest in a local greenhouse. Higher food prices could encourage more local production. As the price of energy changes our economy, we need to ask ourselves what impact the falling demand for global goods will have on large investments such as the Atlantic Gateway. Rubin says that the energy shock is not a momentary blip. It’s permanent. And global imports fall into a freight-sensitive category because freight costs represent a significant portion of final selling costs. The competitiveness of suppliers in faraway markets is highly vulnerable to the soaring cost of bunker fuel. Our economy will change as we import less. Are we ready? Infrastructure, technology, training, and work culture will have to undergo a massive overhaul to support a locally based economy. But we see some of this shift happening already. Two years ago, few people knew the term “staycation.” Now most of us are intimately familiar with the concept. Studies are underway on food miles because we want to know how far oranges travel to get to us. Even Walmart, the big baddy of the retail world, has implemented a program to track and disclose miles from source on a huge variety of products sold in its stores. BALLE gives us access to a vast network of communities that are working on local-first campaigns. One shining example is Bellingham, Wash. An early adopter of the BALLE network, Bellingham Sustainable Connections has grown to more than 650 local independently owned businesses. Bellingham last year was named the top EPA-certified green-power community in the U.S. and is a leader in green building. It is fostering new relationships between farmers and food buyers and shifting the purchasing choice of households toward independent retailers and services. And this year the National Resources Defense Council named Bellingham the No. 1 small city in the U.S., in terms of progress made toward sustainability. The ability to become more self-reliant as we build healthy communities and increase prosperity? It’s definitely something to strive for. Lara Ryan is a business consultant specializing in CSR. She can be reached at lara@lararyanconsulting.ca.