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Home / Hawkes Bay Today

Chris Perley: Local enterprise a better business model

Hawkes Bay Today
1 Oct, 2016 12:34 AM4 mins to read

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Chris Perley

Chris Perley

The question of how we as a region encourage a better economy and jobs for our people is not often debated.

There is an implicit view that we support new enterprises, but which ones. I know of artisans who do incredible things with sound systems but lack the start-up capital to take the next step.

Who knows what could come of them. And yet if an outsider comes in and promises a number of low-paid jobs by extracting something of ours and "compromising" our commons, the suits are on full display for the photo op.

"You want to take, exploit and pollute? We're all ears! Jobs and GDP!"

Ernesto Sirolli, who visited Hawke's Bay two years ago, challenged that corporate subsidy view. It favours the extractive economy over the creative, with all that comes with that.

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The challenge to what is effectively corporate welfare in the US is growing with various claims that up to US$450,000 of central and local government subsidy - the people's money - is being paid for each job created.

In the US at least, it has become an industry, and their trends in governance, commerce, environmental and social issues are very much our trends, just one or two decades in front.

Small business and artisanal start-ups are just not as sexy. Perhaps it is about a sense of importance. Is there a provincial cringe in favour of the well-dressed swank from outside rather than the inspired and head-down artisan who might be considered - quelle horreur - an artist! Bring in a corporate and ministers of the Crown come along to complete the perfect picture. You can have a nice lunch.

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The poor positioning of how we promote enterprise is beyond simplistic. We tend to come with spreadsheets from the top instead of building the bedrock of place by recognising the linkages between culture, a quality environment and enterprise; all the social capital, justice and people-centred, small enterprise regional development work. We have even heard politicians appeal to outsiders with our "low wages", attempting to compete based on lower costs rather than higher quality.

Arguably the most bewildering is our ignoring the empirical research on how a community of local enterprise outperforms in every way those communities dominated by a smaller number of outside corporations.

A community blessed with many locally-owned, rather than a few outside-owned corporates, has higher median incomes, less inequality, lower unemployment, better community infrastructure, streets, schools, community gathering places, as well civic and social engagement.

The findings are extraordinary. Buying local makes economic and social sense. Encouraging local start-ups makes sense. Local owners are both financially and personally vested in their communities because it is home, not a place and a people far away to be milked for profit.

And our dollars churn around far more as multipliers of value. The economic impact of a locally owned store is between two and four times that of a chain. Buy local. It works.

Pay people well. It feeds back. They feel better. They have hope. They might even leave and start up a firm making some bizarre musical instruments.

Local firms are more reliable, they do not take the subsidy money and run; they are more locally accountable; tend to buy local themselves; generate greater creativity and entrepreneurship; and care about the local identity and celebrate diversity and difference.

Look at our Hawke's Bay cafés and bars. Some of them are proudly weird. That's Austin Texas' small business slogan; "Keep Austin Weird." We really ought to steal it.

Why is this not a policy focus of our central and local governments? Why don't we hear more about it?

The pile of research grows higher, and yet we encourage the big and centralised over the local and smaller.

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It is time to embrace and play an active role in encouraging and assisting creative local start-ups and treat them like gold. Build a vibrant artisanal society. Celebrate the ideas.

Make Hawke's Bay weird.

# Chris Perley is standing as a candidate for Hastings District Council in upcoming local government elections has a background in primary sector and regional strategy, policy, research and operational management across land use community, economy and the environment. He is a research affiliate in the Centre for Sustainability (CSAFE) at Otago University.

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