I am a huge supporter of economic gardening - the idea that the economy and jobs are things we should grow locally, rather than economic hunting - searching for jobs and bringing them here. The problem of attracting jobs is that you rapidly dominate the scene with chain stores. When you become economically dependent on chain stores, you are no longer creating a unique urban environment, but a rather dull Copy-and-Paste town with a potentially fragile economy.Economy Resiliency
Economic gardening is extremely important because it builds the foundation of a resilient and diverse economy.
An economy consisting of an endless array of small businesses is a much more resilient economy than one centred around very few large businesses. In the former, the effects of bankruptcies, relocations, and downsizing are relatively small and contained to the affected business - maybe a dozen employees at most will loose their job if a small business fails. If a shop closes down, it doesn't take long for another entrepreneur with a great idea to fill it back up;
On the other end of the scale, you can have a town that is economically centred around very few large businesses, such as a WalMart store, a bank headquarters, or a medical research facility, that produces most of the economic activity of that region;
Were one of those corporations to file bankruptcy, relocate their operations, or downsize - the result is usually thousands of people out of work - often, that many workers generate a significant portion of the economic activity in many towns and smaller to mid-sized cities.
As a result, these smaller towns and cities are often malleable to the whims of the large corporations that they are economically dependent on, because that by taking the risk with those corporations downsizing or relocating out, they are taking a risk on destroying the local economy. In essence, the town has made those corporations too big to fail.The Copy-and-Paste Town
Economic gardening leads to a diverse and unique local economy. If all you are doing is economic hunting - searching for the next retailer to open up in your town, you risk becoming what I call a 'Copy-and-Paste town'. A Copy-and-Paste town has nothing unique to offer, and can be described simply by its combination of fast food retailers and big box stores that it offers its residents;
I call it a Copy-and-Paste town because it consists of nothing more than retailers that have 'copied and pasted' their standard template into the town simply to milk profit out of the town, often by using minimum wage jobs, without contributing any kind of uniqueness or livability to the town.
The Copy-and-Paste town is generally economically bad because most of the profits are 'milked' out of the state, rather than kept and reinvested locally.
More obviously, a Copy-and-Paste town is generally a dull place to live in (and probably one of the most dull places I could describe - I don't know why anyone would want to visit it, let alone live there.) Yet it is the natural consequence of our expensive, over regulated, suburban environment. An environment that requires all businesses to be in a stand-alone single use building and provide their own parking, is a naturally expensive environment to start a business in;
Those costs are often out of reach of the average entrepreneur.
The Copy-and-Paste model fits perfectly into the suburban automobile-centric environment. It is often hard for small businesses to survive in such an environment. The time overhead of driving between many stores and parking at each is very large, so consumers in an automobile-centric environment tend to prefer to visit the least number of destinations in a trip as possible. The ultimate consequence is that the suburban environment makes it difficult to for small specialised businesses to survive, as it prefers the consolidation of goods and services into megastores that provide all of your needs at one location;
If not, you better offer drive through service;
Both are very expensive, requiring extensive capital that usually only the chain stores can afford.Planting the Seeds
By now we understand the importance of creating a local and diverse economy, one that is resilient and where most of the profit stays in town. For our economic garden to flourish, we need to plant two seeds. The first seed is to lower taxes, and the second seed is to lower the cost of entry.
The first seed should be obvious - with less taxes to pay, businesses have more revenue to spend without having to raise prices, increase sales, or cut expenses, and that generates more economic activity that can be invested in the interest of the business.
A traditional human-scale urban environment can get away with lower taxes, because it's a very cheap place to maintain in contrast to an automobile-scale suburban environment. The dense, walkable environment utilizes a lot less land and infrastructure, and utilizes what it does have more efficiently;
Municipals are well versed in utilising tax breaks as a method of rewarding or attracting certain economic activity, although often for the wrong reasons (such as attracting a big box store with the promise of 10 years of no property taxes in exchange for 100 barely-more-than-minimum-wage jobs.) By building a traditional city efficiently and compact, we do not have to make such special cases - we can have all-round low taxes that will help grow our economic activity.
The second seed is lowering the cost of entry. Over and over again, I have stated and shown how the suburban model of expecting every business to build and own a dedicated building with its own parking is extremely expensive;
The high cost of entry of starting a business is the most important issue we must overcome to garden an economy. Many cities are working on ways to get lower the cost of entry for new players to the market.
Portland, Oregon is famous for its food trucks;
The cost of entry of starting a food truck is much lower than opening a conventional fast food restaurant. A used food truck can be found for as low as $20,000 and can be easily customized with a bit of paint. Try to see if you can purchase a suburban fast food store for that price, let alone right in the middle of town with the foot traffic that food trucks attract. It's also easy to relocate a food truck if you find that your market is stronger in another part of town.
Many cities offer kitchen incubators to lower the cost of entry for start-up street vendors and other businesses that need a kitchen but lack the access to one;
Other cities offer ultra-low-cost office space;
In my next post, I'm going to specifically cover street markets as low-cost business incubators;
The Copy-and-Paste town, unique only by its configuration of chain stores, is a very dull and uninteresting place. They tend to be very suburban, sprawled, and full of stroads;
Not a desirable place I would like to live.
You can avoid building a Copy-and-Paste town, as well as encourage economic diversity, a resilient economy built on a diverse array of small businesses, and keep more money in the local economy by encouraging economic gardening.
In my next post, I am going to be focusing on public markets and how they can be used to encourage economic gardening;
And to create vibrant and interesting urban environments;
So that we can keep building great cities;