Local businesses both large and small have a significant impact on the communities in which they’re located. When businesses flourish, so too does every other aspect of the community. However, when they suffer, residents may start to notice a decline in the appearance, wealth, and welfare of the community. This is evident in the decline of GM and the subsequent deterioration of Detroit, one of the most famous economic collapses in this century. But what is the connection? Why do communities suddenly deteriorate when their leading local businesses do?
Companies Create Jobs
With the increase in local businesses comes an increase in the number of jobs available as well. Oftentimes, because the demand is high, so too is the pay. Not only that, but unemployment rates drop because those individuals who didn’t want to or couldn’t afford to commute to out-of-town businesses can now find employment within bussing, biking, or walking distance.
In addition to increased employment rates, adding local jobs helps out other local businesses as well. When several businesses are within walking distance of one another, residents are more likely to stay in town to shop rather than go to out of town strip malls and shopping centers.
In short, communities flourish when new businesses set up headquarters within their boundaries, so it only makes sense that they falter when those businesses do. Residents of communities have a vested interest in the health of major local employers, so should an employer begin to struggle, it is imperative — and a show of respect — for that business to let the community know.
Local Businesses Increase the Tax Base
When companies generate revenue within a certain jurisdiction, they must pay taxes to said jurisdiction. This tax money goes directly back into the community. When local employers are doing great, you may notice new schools being built, a stronger police force, new playground equipment, and new infrastructures being built. When you notice these signs, it’s an indicator of booming business and profit. However, when improvement begins to slow, or worse, when decline sets in, it’s an indicator of the opposite — businesses that are not doing too well.
Businesses Often Shape Community Identity
It is not uncommon for larger businesses to swoop into small, unknown towns and to put them on the map as the home of XYZ Corporation. When this happens, those towns assume the very identity of the company. Some examples of this include San Jose, Apple, and Facebook; Seattle and Boeing; Detroit and Ford; Oklahoma and Big Pharma. This phenomenon is comparable to towns that house major landmarks, or those that have a major natural disaster or catastrophe happen within their limits.
Large companies aren’t the only businesses capable of shaping towns’ identities. Take, for instance, antique towns to which individuals from all over flock to browse vendors’ booths, or artsy communities that attract wealthy buyers, celebrities and art collectors. Communities take their cues from local business owners, and without those cues, a neighborhood can remain shapeless and constantly grappling for that something that will set it apart from the rest.
Businesses of all sizes have a considerable impact on the communities in which they choose to set up shop. Those impacts extend to all aspects of a community, from the local government to the residents to the economy in general. This is why residents should involve themselves in growth plans, do their research on companies that plan to make headquarters within the town’s boundaries, and, once a business has been inaugurated, support that business and root for its success. Doing anything but would be equivalent to rooting against the town’s success.
Photo Credit: Mikey