We hear people talk about the benefit of shopping locally, and especially now as many of Shetland’s small business owners look to re-open after the shutdown period.
I have always wondered about the true benefit of shopping locally, and I was on a webinar recently where the question was asked of someone who works in the area on local development, and her answer was four.
This would mean that for every pound we spend in a local shop, instead of from the mainland or the internet, it boosts the local economy by four pounds. A pound spent buying something from Amazon or Ebay is a pound that leaves Shetland and contributes nothing to the local economy.
A pound spent in a local shop is recycled through the local economy in for form of wages, property costs, other local suppliers, and so is effectively spent four times.
I looked into this some more and discovered that there was some research in 2002 by the New Economics Foundation, which said that in general the Local Multiplier Effect (as its proper name is) for the UK is three, although there are regional variations.
In a location like Shetland where there cannot be ‘leakage’ to the next county or city, then the Local Multiplier Effect is likely to be higher than the UK average and may even be more than the four that the speaker from Bristol referred to.
This doesn’t mean that we should never buy anything from the mainland or the internet, as sometimes we have to because of price or availability.
It does mean that if we have the reasonable choice, buying local will be better for all of us.