The science of truly-local DNA: Beyond shopping local
As General Shinseki wisely noted, “If you don’t like change, you are going to enjoy irrelevance even less.” This sentiment perfectly captures the crossroads facing American communities today. When discussing “Truly-Local”
initiatives, most people immediately think of shopping at local stores. However, this represents only 15-20% of the complete Truly-Local DNA needed for community prosperity. The full spectrum is far more comprehensive and scientifically impactful.
The Multiplier Effect: Not All Local Spending Is Equal - Shopping locally at independently owned businesses generates a 3-7X greater economic impact than shopping at chain stores or online retailers. According to a landmark study by the Institute for Local Self-Reliance, for every $100 spent at a local business, $68 remains in the community compared to just $43 from chain stores. This 58% higher local economic return creates a compounding effect.
The mathematics is compelling: a community of 10,000 people shifting just 10% of their spending to locally-owned businesses can generate an additional $4.7 million circulating in the economy annually, supporting up to 52 new jobs.
Strategic Economic Development ROI - Traditional economic development often focuses on attracting large employers through tax incentives. However, data from the Economic Innovation Group shows that communities investing in entrepreneurial ecosystems and downtown revitalization see a $7 return for every $1 invested, compared to a $2.50 return for traditional business attraction. Communities like Littleton, Colorado implemented an “Economic Gardening” approach, focusing on growing existing local businesses rather than recruitment. The result? They tripled job growth while spending 80% less on economic development than comparable communities.
The Quantifiable Value of Local Media - The disappearance of local media creates “news deserts” with measurable negative consequences. According to the University of Notre Dame study, municipal borrowing costs increase by 0.25-0.4% after a newspaper closes, resulting in millions in additional taxpayer burden. Government wages and tax revenues increase by 1.4% and 1.6% respectively, reflecting less accountability. Additionally, voter turnout drops by 8%, and civic engagement decreases by 13%, according to research from the University of North Carolina. A community without its own media voice becomes invisible to outside investment and visitors.
Tourism Amplification: The 3x3 Strategy - Even small communities can develop tourism economies. The “3x3 Strategy” involves identifying three unique local assets and promoting them through three different channels. Communities employing this method have seen visitor spending increase by 34% on average over five years.
Winthrop, Washington (population 400) transformed itself with a Bavarian theme, generating $35 million in annual tourism revenue, while Pella, Iowa created a Dutch heritage corridor that attracts 150,000+ visitors annually.
Government Policies: Addition by Subtraction - Many well-intentioned local regulations actually impede economic growth. Communities that reformed permitting processes saw new business applications increase by 27% on average. Reducing business startup time from 60+ days to under 30 days correlates with a 21% increase in small business formation, according to data from the Kauffman Foundation.
The Circulation Framework - The “10% Shift” doesn’t require residents to spend more money - just to redirect existing spending. When a community of 20,000 redirects just 10% of their outside spending locally, approximately $5.6 million in new economic activity is generated annually without anyone spending an additional penny.
Reversing Youth Exodus - Communities implementing innovation districts and entrepreneurial ecosystems retain 38% more young adults according to research from the Brookings Institution. Towns like Paducah, Kentucky reversed population decline by establishing an artist relocation program, attracting creative entrepreneurs who renovated 100+ buildings and created a thriving cultural district.
Arts as Economic Engines - Beyond cultural enrichment, arts districts generate significant economic returns. Data from Americans for the Arts shows that arts attendees spend an additional $31.47 per person beyond the ticket cost. Communities with established cultural districts experienced 23% higher property values and 13% higher retail sales than comparable
neighborhoods.
The Truly-Local approach isn’t merely about shopping - it’s a comprehensive economic strategy backed by compelling data. Communities embracing these elements aren’t just surviving; they’re thriving despite digital disruption and economic challenges. The science is clear: building local economic DNA creates prosperity in a rapidly changing world.
John Newby is a nationally recognized Publisher, Community, Chamber, Business & Media strategic consultant & speaker. His “Building Main Street, not Wall Street” column runs in 60+ communities nationwide. As the founder of Truly-Local, he assists communities, businesses, and local media in building synergies to create more vibrant economies. He can be reached at: info@Truly-Localllc.com.