In all of the communities we work with, creating a more robust local economy is always identified as one of the most important goals.
So what exactly is a local economy, and what are the benefits?
A common definition of a local economy is one in which businesses are owned and operated locally, local people are employed, and money is kept circulating within the community through spending and earning locally.
But is a strong local economy good for the community, aside from employing people and ensuring businesses thrive? How can local economies be further leveraged to create more benefit in communities?
The Centre is exploring the concept of a ‘shared value’ local economy, and how this can be built in a community. According to Michael Porter and Mark Kramer in the Harvard Business Review, “The principle of shared value involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center. We believe that it can give rise to the next major transformation of business thinking.” Harvard Business Review, Creating Shared Value, by Michael Porter and Mark Kramer, January 2011.
So, financial return on investment (ROI) isn’t the only measure of a successful local economy, or individual business. Well-being of customers, protection of the environment and resources, employee satisfaction and retention, a healthy social fabric are all things that create a social return or community return on investment. A shared value economy is one in which economic value is created in a way that also creates value for society by addressing its needs and challenges. I love this idea: “Businesses must reconnect company success with social progress.”
I was thinking about this when I visited one of Whistler’s new businesses, and intrigued by their company motto “Optimizing work productivity with happiness!” I was immediately struck by the atmosphere as soon as I walked into their office – lots of blank wall space cluttered with sticky notes, and a room full of food for employees to be happily fed throughout the day – no doubt to increase creativity! The CEO declared to me that his personal mission statement for his business is to ‘increase the median income in Whistler,’ while providing professional, meaningful work in a collaborative and idea-generating environment. I’d call that shared value.
Embedding social values and return right into the business model, where ROI is measured by both, rather than incorporating a corporate social responsibility strategy as an aside to the business plan, is what shared value is about. “The concept of shared value …. recognizes that societal needs, not just conventional economic needs, define markets.”
If we are to build a stronger shared value local economy, we need to figure out what it could really mean for our communities. The Centre is currently talking to innovators, entrepreneurs and strategic thinkers in the Sea to Sky Corridor to delve deeper into this shared value local economy, and how to create and build it. Stay tuned to see what we find out.
If you are interested in learning more about creating shared value, or any of the other work we do, please contact Cheeying Ho at 604-935-8209 or cho[at]whistlercentre.ca
By Cheeying Ho