# Highlighted Business Actions * [ ] Start a "Buy Local" campaign. (Expand Action)
* [ ] Join or start a bulk buying club.Expand Action
* [ ] Start a local business to meet basic needs. Expand Action
* [ ] Policy action: Shift subsidies from global to local. (Expand Action)
# Explore the Business topics * [ ] Local Businesses
* [ ] Local Markets
# The Big Picture Most people understand the importance of small, local businesses – if not as a general rule, then at least for their own community. But what do we mean by “small” and “local”? The answer may seem self-evident: examples come to mind of independent bookstores, family-run restaurants, or even local credit unions. But if we dig a little deeper, defining small and local becomes more difficult – providing global corporations an opportunity to define these terms in ways that benefit them.
For example, it may surprise you to learn that the definition of “small” used by the US Small Business Administration (SBA) is so broad it includes firms with up to 1,500 employees and average annual revenues of $39.5 million. [1]
If that’s not what you think of as “small”, defining “local” can be even trickier. Take, for example, an owner-operated shop selling fruits and vegetables – surely a small business. But if the produce comes from dozens of different countries, is grown on industrial-scale farms, and is delivered by large corporate wholesalers over international transport networks, is it really “local”, or is it just a tiny piece of a gigantic global-scale trading system?
Truly small, truly local businesses are becoming increasingly rare, especially in the industrialized world. Examples might include family farmers selling directly to their customers, or craftsmen and artisans using nearby resources to produce wares for surrounding communities. One key feature of such enterprises is that the distance between producer and consumer is fairly short – a good rule of thumb for 'local'. For many decades, however, government policies have pushed that distance to widen dramatically, in part by subsidizing the infrastructure needed for global trade. Government agencies, meanwhile, promote international trade in other ways: the US Small Business Administration, for instance, sponsors programs to induce small firms to "travel along the exciting and profitable road to overseas markets." [2]
**Why are truly small and local businesses important?**
One reason is that they tend to rely more on human labor and less on energy and technology than large global businesses. That reliance on human labor means small businesses create far more jobs. Independent retailers, for example, employ 57 people for every $10 million in sales, while the online behemoth Amazon employs just 23 for the same amount of sales. [3] That’s why Amazon has destroyed nearly 150,000 more jobs in the US than it has created. [4] Similarly, a UK study showed that every new supermarket that opens in that country leads to a net loss of 276 jobs. [5]
Another reason locally-owned businesses are important involves accountability. When people purchase through global supply chains, the distances between production and consumption are so wide that it is all but impossible to make ethical choices. A fish served in a California restaurant may have been caught illegally on a Thai fishing vessel manned by slaves. A t-shirt bought in Germany may have been sewn in a Bangladeshi sweatshop, where workers labored in unsafe conditions for starvation wages. When needs are met via local businesses, on the other hand, customers know far more about the impacts on both workers and the environment – leaving those businesses much more accountable.
Local businesses, unlike their global counterparts, also pay their fair share of taxes. Global businesses can minimize taxation because they are not tied to any particular place, and can choose to call "home" whatever country offers the lowest taxes and biggest subsidies. Because they are so adept at avoiding taxation, the rest of us end up paying more.
A final reason to strengthen local businesses is that doing so whittles down the power of global giants over every aspect of our lives. Many corporations today have annual revenues larger than the GDPs of entire countries, giving them enormous resources to influence government policy. According to Stacy Mitchell from the Institute for Local Self-Reliance, Amazon alone employs more lobbyists in the US than there are members of the US Senate. She concludes that giant tech companies like Amazon, Apple, and Facebook “have created a form of private government – autocratic regimes that are tightening their control over our main arteries of commerce and information.” [6] Needless to say, other giant corporations, from fossil fuel companies to giant agribusinesses, exert similar control over other aspects of public life.
Clearly, a fundamental change in direction is needed. The goal is not to shrink the producer-consumer distance to some arbitrarily-defined number of miles, nor to eliminate all trade. Instead, our money and our policies must favor the small producer and marketer instead of the corporate giant, and local economies rather than global.
**References** [1] “Table of Small Business Size Standards”, US Small Business Administration, August 19, 2019. https://www.sba.gov/document/support--table-size-standards [2] Breaking into the Trade Game: A Small Business Guide to Exporting (Washington, DC: Small Business Administration, 1997), p. i. [3] Ingrid Lunden, “Amazon’s share of the US e-commerce market is now 49%, or 5% of all retail spend,” Tech Crunch, July 2018; Felix Richter, “Amazon’s Workforce is More than Half a Million Strong,” Statista, November 1, 2018; Stacy Mitchell, “The Truth about Amazon and Job Creation,” Institute for Local Self-Reliance, July 29, 2013. [4] Stacy Mitchell and Olivia LaVecchia, “Amazon’s Stranglehold: How the Company’s Tightening Grip is Stifling Competition, Eroding Jobs, and Threatening Communities”, Institute for Local Self-Reliance, November, 2016. https://ilsr.org/amazon-stranglehold/ [5] “How to... Oppose a Supermarket Planning Application,” Friends of the Earth UK, September 2005. [6] Stacy Mitchell, “Amazon Is a Private Government. Congress Needs to Step Up,” The Atlantic, Aug. 10, 2020. https://www.theatlantic.com/ideas/archive/2020/08/americans-can-barely-imagine-congress-works/615091/