20 Responsibility Issues
> Local Communities


Introducing The Issue 

Businesses have the ability to shape and benefit the local economies in which they operate in various ways. For example, they can invest in their local economy by sourcing suppliers and creating job opportunities locally, rather than offshoring or outsourcing to national or international entities. This helps keep economic resources within the local area, creates local jobs and prosperity, and improves quality of life for all.

A diverse local economy, providing secure employment and producing a range of goods, will be more resilient, self-reliant and sustainable. Consequently, local sourcing and hiring can be particularly important in invigorating economically depressed or vulnerable areas such as inner city neighbourhoods or rural communities. Sourcing locally may also help promote social cohesion, improve the quality of life for local people, promote customer loyalty, reduce the cost and environmental impact of transportation, and strengthen a company's relationships within the community.


3 Simple Questions

Responsible 100 has developed 3 simple introductory questions to help you explore this important issue and your organisation's exposure to it. Please respond with as much relevant information as you can. These 3 questions are available via this Google Form.


Definitions

The concept of community doesn’t pertain only to a neighbourhood, location, area or place. It can be much broader. For example, a community can be a group of people who share a culture, ethnicity, religion, life circumstances or common interests. However, here we focus only on the local geographical community - or communities - that a business or organisation is a part of.

Defining a local geographical community is subjective, it is affected by place, culture and prevailing norms. In some of the more rural parts of the world, a local community could be everything within hundreds of miles. In cities, however, a local community can refer to an area limited to just a few streets or blocks. As such, businesses and organisations should provide and explain their definitions of the geographical community or communities in which they operate in their responses to this question set.

A beneficial local multiplier effect is created when money repeatedly circulates within a local area. When money is spent on goods and services within a local community, research shows that most of it remains in circulation within that community, usually in the form of money spent on other local products, inputs and services, and on staff wages. This enables communities to benefit and become more prosperous, and ultimately increase people's ability to afford more products and services from more local businesses.


Exploring The Issue

Businesses have the ability to shape and benefit the local economies in which they operate in various ways. No matter the size of a company, socially responsible practices will not only benefit the business, but also make a positive impact on the world. Businesses have the ability to shape the economy around them through the way that they choose to use their money.

For example by buying local themselves. Organisations can support the local multiplier effect in a variety of ways. For example, by investing in their local economy by sourcing suppliers and creating job opportunities locally, rather than offshoring or outsourcing to national or international entities. This helps keep economic resources within the local area, creates local jobs and prosperity, and improves quality of life for all.

A diverse local economy, providing secure employment and producing a range of goods, will be more resilient, self-reliant and sustainable. Local sourcing and hiring can be particularly important in invigorating economically depressed or vulnerable areas such as inner city neighbourhoods or rural communities. Sourcing locally may also help promote social cohesion, improve the quality of life for local people, promote customer loyalty, reduce the cost and environmental impact of transportation, and strengthen a company's relationships within the community.

However, businesses must balance their necessary considerations of cost, quality and convenience with their ability to support the local economy. Further, the desire to focus locally may conflict with other values and aspirations of a company. For example, sometimes the local choice isn't the best environmental one - tomatoes grown under the hot sun of Southern Europe, even when air-freighted to UK markets, may have a lower carbon footprint than those grown in an artificially heated, poly-tunnel environment locally.


Questions For Employees

Coming soon...

Links, News & Further Resources

New Economics Foundation: Local Economies:  The New Economics Foundation is a think-tank hoping to develop a new economy that better addresses the needs of the people and the environment. This link will take you to resources that explore what businesses can do to help local economies of today and the changes they would like to see tomorrow. 

Key Studies: Why Independent Matters: Case studies into the impact that businesses of all sizes can have on the communities around them. Includes studies on start-ups, inequality in large businesses, wages and jobs created, etc.

Levelling Up the United Kingdom - 2 February 2022: New ‘Levelling Up’ policies aim to provide equal opportunities for economic progress across the United Kingdom to tackle geographical inequality. It aims to improve productivity, boost economic growth, encourage innovation, create more jobs and increase access to education.

Research: How Entrepreneurship Can Revitalise Local Communities - 17 January 2022: Much has been written about the potential for entrepreneurship to spur economic growth — and yet time and time again, we’ve seen business-driven revitalization programs fail to make a real, lasting impact on their local communities. What will it take to foster ventures that actually revive the economies in which they’re founded? This article argues that if the goal is to harness the power of entrepreneurship to revitalise impoverished places, business leaders and policymakers must shift away from a focus on scaling up, and that they must instead encourage founders to “scale deep” — that is, to grow slowly and become strongly embedded into the local economy, rather than growing as quickly and broadly as possible.

When Community Becomes Your Competitive Advantage - 21 January 2020: This article by the Harvard Business Review discusses how businesses can facilitate the development of communities between their customers. According to the article, consumers today have different expectations regarding their relationships with brands. They don’t just want a customer support email address and a newsletter; they want deeper interaction with the company and fellow buyers of the product or service.

The Communeconomy: Joe Grafton at TEDxSomerville - 24 May 2012: While there is clear economic evidence that prosperity lies at the root of a resilient local economy, many of our individual needs for community can be addressed in an increasingly disparate world. If we build strong and sustainable local economies that are inclusive and participatory, many of the world's social and economic ills can, and will, be addressed.

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