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Thwarting Leaky Buckets And Other Local Economy Adventures
In the leaky bucket analogy for local economies, money flows into a region to circulate through local businesses like water into a bucket. Water that leaks out is money that escapes the local economy to pay for imports. The more watertight the bucket, the more wealth retained.
In the early 1980s, unemployment rose steeply in Lane County, Oregon, because of a downturn in the once-dominant timber industry. The Neighborhood Economic Development Organization (NEDCO) in Eugene, Oregon, was trying to respond by funding job-training programs, but no new jobs were open and it seemed like pouring money into a bottomless bucket. Government economic development efforts focused on tax breaks and other financial incentives in a failed attempt to lure corporations to the region.
Alana Probst, who directed NEDCO, began to develop a different approach, one that would work to plug the leaks. Here’s how Jane Jacobs described the approach in Systems of Survival:
The Buy Eugene initiative, which started by asking ten businesses to each list forty items they were importing, quickly built up an impressive resumé as a local matchmaker. It proved its worth within the first year by creating 14 new local contracts for work formerly done elsewhere, replacing $500,000 of imported purchases, creating 90 new jobs and saving local purchasers about $125,000.
The initiative encouraged Eugene's citizens and its business owners to imagine what was possible, rather than what wasn't working. Its success can be measured in contracts written, jobs gained, and money saved – and also in the number of great import replacement stories created. For example:
Buy Eugene caught the attention of harried legislators and tax payers across the state of Oregon, and in 1986 a network of similar agencies, dubbed “Oregon Marketplace,” was launched by the Oregon Department of Economic Development.
Probst said Buy Eugene’s greatest contribution was to set an example of a community looking within for solutions to its economic problems and then taking risks together.
Spurred by a growing appreciation for local food, citizens, businesses, non-profits, and governmental organizations have begun to work together to build regional food systems. But what else might be sourced locally? What can citizens do to thwart the leaky bucket syndrome of their own local economies?
In the Berkshires we are thinking of wool, furniture, and energy in addition to food. In the spirit of the Buy Eugene program, the Schumacher Center and BerkShares, Inc. are joining with members of the Chamber of Commerce, community bankers, government officials, and philanthropists to develop the tools, networks, and culture that will unite existing economic development efforts in our home region under an ethos of import replacement. Our goal is to turn “supply chains” into “supply loops” and allow “community supported industry” to flourish.
We are recording our adventures on our website, building our toolkit of applied programs, and sharing what we learn as we go. Your support will help us continue this work.