Enable small business and start-ups to experiment and iterate by helping to make commercial space more accessible and affordable.
Focus on promoting a local economy that keeps as much money circulating within the community as possible, helping to ensure better paying jobs for residents near to where they live.
Several strategies exist that municipalities can pursue to encourage entrepreneurship in their communities. Many of these strategies are no- or low-cost, many are rooted within the “economic gardening” approach to development, and all help to establish the basis for a society that is more just, more resilient, and more prosperous.
Not all strategies fall within the jurisdiction of municipalities. Municipalities can, however, advocate for change both directly and through bodies like the Federation of Canadian Municipalities, the Association of Municipalities of Ontario, the Large Urban Mayors’ Caucus of Ontario, and the Rural Ontario Municipal Association.
Be strategic about where you focus your efforts to ensure the maximum amount of money recirculates within the local economy. Utilize ‘economic gardening’ to foster the conditions that support small and medium sized enterprises.
Support more ‘organic’ forms of interaction to counter the impact of online retailers such as Amazon. Building walkable communities, for example, increases opportunities for interactions between proprietors and consumers.
Fostering equity, such as by providing adequate childcare and better pay, ensures more are able to participate in the economy.
Big box stores create a number of problems for the communities in which they are located and, for the most part, these problems greatly outweigh the benefits.
On average, just $0.14 of every dollar spent at a big box store is recirculated within the local community. This is a significant difference compared with the nearly $0.50 of every dollar spent in small and mid-sized enterprises (SMEs).
One reason municipalities pursue big box stores is their contribution to the municipal tax base.
Consider, however, just a few of the additional costs associated with these operations, much of which is due to their car-centric planning:
All of these are costs that must be balanced against the benefit of additional tax revenue.
By creating a reliance on big box stores, which is often what happens when they come to a community, a municipality needs to also recognize that decisions made with respect to the operation of those stores will likely be made far from the community in which they are located, and with little consideration for how changes may impact that community.
For municipalities who take an active role in supporting entrepreneurs, the continued support of big box stores creates a business environment in which it is difficult for SMEs to succeed. Big box stores create a huge barrier to the potential success of smaller, local startups.
Support local businesses by mapping your assets. This includes identifying areas in which your community can succeed, and focusing on building capacities supporting activities that interlink with surrounding communities.
Some questions, drawn, in part, from this source, you can ask that will help map assets that your community has include:
Try to imagine what your community would be like if there was a level playing field with all others in terms of employment and the job market, and consider what attributes you would then be able to leverage to attract people. By focusing on and building up these attributes, your community is building a foundation that has greater protection from risks, such as the recently experienced supply shocks, associated with over-reliance on the global marketplace.
These unique attributes can be solidified into a regional economy by fostering a regional supply network. Such a network is better able to withstand shocks to the “just enough, just in time” supply system of the global market.
Building off the unique attributes aspect, promoting the unique qualities of your local economy helps counter the influence of online retail. Local producers provide unique goods and services that cannot be found online. One-offs and artisan goods are more likely to bring people into physical proximity, such as downtown business areas and brick and mortar stores. (See the “Countering Amazon” section below for more information.)
Be strategic with your investment, in other words, and keep a view to the long-term benefit it can provide. (This last point is one that citizens need to hold their elected representatives accountable for, as the four-year timeline for re-election can cause politicians to make decisions that provide a benefit in the short-term, but which have negative consequences in the long run. Furthermore, many very real and important payoffs can’t be easily accounted for in a purely fiscal framework. The benefits that we gain from protecting ecosystems, for example, are foundational to life, but attaching a monetary value to wildlife habitat, or a wetland, or the carbon absorption of a mature forest can be challenging. In a political system where representatives have to demonstrate accomplishments within a relatively short four-year timespan the lack of a figure on which to hang their hat can be a problem.)
Strong Towns makes a number of recommendations for how local governments can support entrepreneurs.
Some examples include adjusting zoning codes to reduce business costs, simplifying local regulations for starting new businesses, and providing easy access to small business loans and/or grants.
Strong Towns also recently published The Local Leader’s Toolkit: A Strong Towns Response to the Pandemic.
Walkable retail and business districts are one of the main recommendations made by Strong Towns, a non-profit that focuses on helping municipalities become financially strong and resilient, for how municipalities can support entrepreneurs.
What’s the big deal with getting people out of their cars and walking?
Well, to borrow an analogy from Strong Towns, land-use planning is the hardware of a community, while the interests and relationships of citizens is the software.
By providing hardware that brings people together land-use planning can strengthen a sense of community, including the sharing of skills and ideas that are crucial to an innovative economy.
Supporting this dynamic interplay between people provides the basis, along with the shift in focus away from big box stores, for an approach to economic development known as economic gardening. Economic gardening is the work of establishing the right conditions for businesses to flourish. It’s taking a holistic approach, working with the soil, the water, the sunlight, to continue the analogy, so that the plants are happy and successful.
One major benefit to increasing this dynamic interplay, the interactions that happen between people in the course of their daily life, may be the casual face time between consumers and proprietors. Establishing opportunities for these interactions to happen, bringing people into public spaces that interface with businesses may act to increase local purchasing, rather than the continued and increasing reliance upon online retailers and delivery.
The key distinction here is between walkable communities and communities where residents have to get into their car to drive to access goods and services. The act of driving more often means that the consumer has a set need or goal in mind, and the trip to the store is, often, simply to get what they need. Walking around a community, however, presents far more opportunities for window shopping, happening upon something that piques the interest, developing a relationship with a proprietor, etc.
If Amazon is hollowing out local business, it is, at least in part, due to the convenience that comes from not having to get in the car and go through the rigamarole of having to drive as the means of accessing the goods. The appeal of Amazon’s model, their flagship service, if you will, is being able to deliver a purchase right to the home, at no additional cost, often within a day or two.
By creating spaces where consumers encounter possibilities to purchase goods and services they may need or want in the natural course of their day, you are enhancing the potential for local trade to occur. This is precisely what walkable neighbourhoods help do.
Walkable communities also support greater economic resilience. As André Picard, the well known health correspondent, writes, “walking is good for the environment, crime prevention, community-building and the economy. Conversely, the most unhealthy, unsafe, anti-social and costly thing people do routinely is drive.”
What Picard is pointing to are also known as co-benefits, or the benefits that flow from creating communities that are more walkable. Just one step further along the co-benefit causal chain is the increased savings in money spent in areas such as healthcare, environmental remediation, policing, to name a few.
Consider the benefit to a community if residents spent the money that they would otherwise put towards car ownership on local goods and services. Car ownership is the second largest expense most Canadains have, after home ownership, and this would divert a huge amount of money into local businesses and communities. A portion of this money, in turn, would find its way into municipal coffers, flowing again from there into our parks, libraries, schools, and community centres.
While we’re on the topic of childcare, which walkable communities support by making it safer for children playing outside, it is crucial that governments recognize the different ways in which COVID-19 has impacted people. Women entrepreneurs have been disproportionately impacted by COVID-19, with 62% having to layoff 80% of their employees, versus a figure of 45% for businesses as a whole.
Some ways to ensure women are able to participate in the economy equally include providing adequate childcare, and considering how broader societal shifts towards a shorter work week and some form of enhanced social safety net, such as a guaranteed basic income and paid sick days, can support a healthier balance between work and family commitments.
Similarly, there are barriers to participation in the emerging online economy that are felt more keenly by marginalized groups, including a widespread lack of accessibility on websites, a lack of access to broadband internet, particularly in rural areas, and biases present in access to funding, which is often controlled by privileged populations.
Creating more opportunity for people, which includes time to ponder, relax and rejuvenate, and pursue personal interests, can be a massive boost when it comes to unleashing creative potential.
The benefits that can come from caring for people, from ensuring that they are able to access a higher quality of life, could be a huge asset in the struggle to recover from the impacts that COVID-19 has had on the old economy. Jurisdictions that enable greater participation will be better able to adapt to the needs of the emerging economy.
Mixed-use development, the combination of retail and residential space on a streetscape, can help promote the casual facetime outlined above, and provide space for start-ups and other SMEs.
The trick, it seems, is to allow for the flexibility for mixed-use, without actually demanding it. By demanding mixed-use development what results, often, is development that isn’t scaled appropriately, whether spatially or financially, to suit local needs. Developers will build to a more generic scale, providing space at street level that is more suited to retail chains.
A key ingredient for enabling the success of mixed-use development isn’t mandating it’s construction, rather it’s providing the right conditions in the area for retail to flourish, and then allowing for the flexibility of use so that space can be converted according to need, whether this is residential, which may be the case in the early stage, or retail, which is more likely to be the case once there’s a vibrant community.
Walkable communities, discussed above, are a primary example of what makes a community vibrant. People are able to meet each other in a natural and casual way, occupying and utilizing spaces together to all the sounds and sights of life onto the street.
Connecting these core areas to surrounding communities with efficient transit, including active transit options such as cycling paths, bring people into these cores and establish them as desirable places to be, whether this is primarily for retail purposes or whether this is for a combination of retail and residential purposes.
The Flourishing Business Model Canvas, as well as the Benefit Corporation model, are two methods currently being used to foster greater returns for the communities that support businesses.
Adam Ballah is community organizer with the Simcoe County Greenbelt Coalition. The Simcoe County Greenbelt Coalition promotes prudent land-use planning to benefit the health and wellbeing of our communities, and is a signatory to the Just Recovery Simcoe initiative.
Adam has a BES and MES from York University, with focuses on climate change vulnerability, adaptation, and resilience, and the role that modern technology plays in society, respectively.
If you’d like to be a part of this initiative, or have comments or suggestions, please don’t hesitate to get in touch.