Page 4 - 2015 Small Shops of Sonoma County Holiday Guide

4 - www.sonomacountygazette.com - SS-12/15
The NON-RESIDENT establishments (establishments that have headquarters out-of-state) are down from 961 to 749 over the past ten years.
Santa’s Little Pollinators
Consumer purchasing comprises 70 % of the
economy. Buying LOCAL is a powerful force.
By Terry Garrett,
Co-managing member of Sonoma County GO LOCAL
In his new book, The Local Economy Solution, progressive economist Michael Shuman continues his 20-year effort to wring the necks of worn economic development strategies and get communities to embrace what is know as “import substitution.”
Import substitution is a simple concept. You know those goods we currently import for consumption? Substitute locally made goods for them. Not all imported goods, just the ones we can readily produce—like food and beverages, jewelry, clothes, housewares, electric vehicles among a few.
It doesn’t require outside investment or new taxation. We locals already provide an injection of money to local businesses through our purchasing behavior. Given that consumer purchasing comprises 70 percent of the economy, we exert a powerful force.
The advantage is that we don’t drain our money out of the county to pay for those imported goods. We keep it here where it’s invested into local enterprises.
That string of purchasing actions locally generates economic multipliers. If residents spend their income with locally owned companies, and every time it changes hands some of it recirculates locally, we have more money circulating more times in the local economy.
That means that if you buy locally produced food from a locally owned grocery store your economic impact is two times greater than if you bought an imported item from a non-local store.
Local Pollinators
GO LOCAL has been working the import substitution strategy in Sonoma County for seven years. In Shuman’s view, that makes our business and organization members and thousands of residents it supports “pollinators”.
A pollinator, by spreading the word, helps local businesses grow and helps new businesses start. Of the 28,400 new jobs created in 2013, 60% of them belong to new start-ups, 21.5% to expansions, while only 8.5% to move-in businesses from other areas.
There’s nothing like a boost in sales income to drive a new or existing enterprise. Cash flow from sales operations is king. It reduces the need to raise money through loans or equity, which lowers costs. If those means of finance are needed to expand capacity to fulfill greater sales demand, then those businesses can generally get better rates and terms.
Shuman says, “Perhaps what excites me most about the pollinator approach to economic development is how it scrambles old political divisions and opens space for new kinds of community action. It provides conservatives with an approach that’s market-driven, entrepreneurial, business-oriented, and highly decentralized, and progressives with proven tools that expand participation, shrink poverty, and promote diversity.”
Even more than it is today, our local food system is poised to be a major plank of Sonoma County’s identity and economy. That’s also true for North Bay region as a whole. When selecting food and beverage this holiday season, choose a locally-owned restaurant or grocer, and look for locally-produced items. Those choices double the positive economic impact in comparison with buying imported items from non-local sellers.
Local Business by the Numbers
Sonoma County’s economy is comprised of sectors like financial services, retail, construction, tourism, government, nonprofits and so forth.
Who owns the bulk of the businesses in Sonoma County, and where are they headquartered?
We are growing. There are 41,100 establishments (number of unique business locations) in Sonoma County as of 2013. That’s up from 34,200 establishments ten years ago.
RESIDENT establishments (reflects either a stand-alone company or one that reports to another company located in California) equal 38,200. We don’t know exactly how many of those are headquartered in Sonoma County.
LOCAL cont’d on page 5