So, What is the Local Economy?
What is the local economy? It is easier to say what the local economy is not!
The local economy is where traders, small businesses and self-employed have a personal stake in the economy. They have their own businesses and solidarity with others who are active in the same neighbourhood. By neighbourhood I mean a part of a city or possibly a city or region. It varies depending upon the nature of the business. Trading outside the neighbourhood is crucial for many businesses, the key to the local economy is solidarity and this takes many forms, not all financial.
Local Scenarios
The degree to which businesses practice solidarity is important. So, let’s imagine a few scenarios:
- An estate or small town built to accommodate a major business. In the past these were coal mines, steel works or other large companies, the relationship between ICI and Billingham springs to mind. The economy depends upon the survival of one key industry. Everything else in the neighbourhood will be to some degree dependent upon it. There will be shops whilst people have money to shop in them. This model fails when the main industry disappears, there is not enough money circulating to keep other businesses going and the entire economy collapses.
- So, the second model is the estate or small town there the economy has collapsed. It seems difficult to re-start a collapsed economy.
- A more stable model is where there are several large businesses so the economy is not dependent on the survival of one. This perhaps describes most of our major cities. They may be dependent on one type of industry but not on one company. Sheffield for example is still known as the Steel City. It still has several significant steel mills even though the numbers have fallen and so have the numbers employed by the remaining businesses.
- The city allows pockets of local economies to grow within it. So, Hunters Bar and Spital Hill are possible because they are a part of a larger economic entity, where a neighbourhood has a critical mass of small traders and self-employed working behind the scenes. Traders need footfall and so it’s difficult to open a shop where there are no others unless there is some reason people will pass your door. So, the most successful small trader areas will be either city centres or places where people visit, to view some attraction. Such attractions draw visitors and so attract other self-employed or small businesses. Where there is sufficient footfall, a number of businesses and other attractions accumulate, and we have a local marketplace.
Conclusion
To summarise, every neighbourhood has a local economy. The degree to which it is a satellite economy to some large-scale enterprise, a strong or robust coalition of small businesses or an economic wasteland depends on local circumstances.
The problem for many neighbourhoods is the local economy is invisible. Community development usually focuses upon the needs of disadvantaged people; so the focus is on children and young people, or the elderly or unemployed. Business people have other priorities and so are less inclined to engage in community activities. And yet arguably they are the people who build community through the local marketplace.