By Roman Mukendi, AMIBA Resilient Local Economies Intern
When we Choose Indie Local, we contribute immensely to resiliency and security in our local supply chain, which forms the backbone of our local economies. Over time many U.S. companies established their manufacturing base outside the country because it proved cheaper than producing the same items locally. The net effect of this action was a loss of good-paying jobs, a diminished middle class, and externalization of funds[i].
During and after the COVID-19 pandemic, demand for various items by the American public was swelling due to working remotely from home arrangements. The swelling in demand constrained most businesses, especially when they could not meet timely customer demand, eventually leading to revenue loss and the closure of some businesses (especially small independent businesses). In short, small businesses encountered a lot of prohibitive costs. They also have had to deal with backlogs, which later pushed them to the end of the supply line. The COVID-19 pandemic affected 98% of global supply chains.
Through a process called ‘reshoring or industry repatriation, ’ small businesses, together with other large American companies, have resolved to bring back production plants and build a strong supply chain in the country. A small business owner was quoted by the New York Times as saying, ‘‘localization gives businesses the much-needed speed, and that is a huge advantage over a place like China.’’ ‘‘Producing locally will cost the same, if not less,’’ he added.
Obviously, by having small businesses move production and the associated value chain to the U.S. means an expansion of our local economies in many ways, notwithstanding job creation. What is striking is that nearly half (46.4%) of all U.S. employees are employed by a small business, with data further indicating that small businesses are a significant source of innovation, economic growth, and national prosperity. Arguably, small business manufacturers are also said to be “nimble enough with their profit margins that they can afford to produce custom or specialty products that larger manufacturers cannot[ii].” Therefore, choosing indie local better guarantees delivery, unique products manufactured in sync with community needs, more jobs, and a thriving local economy.
Now, because of our closer proximity to small manufacturing businesses and their reliance on our participation in the local economy, it is incumbent upon all community members to Choose Indie Local. Doing so means we invest in a sustainable supply chain system better able to react and respond to local product demands. It is important to note that “public purchases and any investment in local manufacturing initiatives for small businesses (that comprise the majority of the manufacturing sector) will crowd in more private investment. In turn, these small manufacturers will act as suppliers of key inputs and components to larger manufacturers, particularly in industries critical to securing our supply chains.”[iii] Therefore, by choosing indie local, you will protect local industries and aid both public and private investment into the local economy.
[i] THE STATE SMALL BUSINESS CREDIT INITIATIVE AND REBUILDING THE U.S. MANUFACTURING BASE, MAY 2023
[ii] https://www.score.org/resource/blog-post/how-small-manufacturing-businesses-drive-us-economy
[iii] THE STATE SMALL BUSINESS CREDIT INITIATIVE AND REBUILDING THE U.S. MANUFACTURING BASE, MAY 2023