Economists debate the effectiveness small businesses truly have on positively contributing to the growth of an economy, as well as improving communities. Naturally, there is uncertainty when trying to determine whether prioritizing purchasing from local businesses as opposed to corporate suppliers is the best method for financially strengthening an area. However, the benefits that local businesses provide are apparent. Though no one entity should be responsible for providing goods and services to consumers, supporting small businesses over larger companies proves to be more effective in building both a strong economy and community.

Michelle Hustler, a trade and business development specialist, published an article titled 3 reasons why you shouldn’t buy local. In this article, Hustler lists her reasons why buying from local businesses can harm rather than help. The writer argues that a campaign that urges consumers to purchase from local vendors impedes competitiveness, is hypocritical, and she also argues that nothing is truly “locally produced.” She states that high duty rates, that once were applied to many goods, are now only applied to a few select goods due globalization. As people may have expected, consumers would buy locally produced goods since imported goods then became more expensive. “Instead, these sectors, in the absence of the helpful push of competition, became less and less internationally competitive, while the tastes and needs of consumers kept up with global trends” (Hustler, 2016). This statement concludes that small businesses become less competitive in the global market because they feel less inclined to be competitive due to a lack of local competition. Hustler then goes on to say that “the disparity between what [is] being offered locally and what [is] wanted by consumers, in tandem with increased online access to products from around the world, pushed [consumers] to buy these products from overseas, despite the high rates of duties.” The goods and services that local businesses offer does not fully satisfy the tastes of consumers, and consumers turn to foreign producers as a result. However, this shows that local businesses compete with international businesses to retain support from their consumers. Also, the idea that there are not enough local businesses to compete amongst one another isn’t entirely true.

Another argument that Hustler presents is that the discouragement of imports in an effort to support local manufacturing hurts other local businesses around the globe. As a nation who is trying to push for the emergence of independent in their own sectors, this practice is what they are attempting to implement. The very purpose of putting tariffs on imports is to promote development of local businesses. This also serves to create jobs and create a flow of money within the community to further stimulate small business growth because those small businesses invest within each other. 

Hustler also questions what classifies as a local business by saying “the definitions for ‘local’ are inconsistent and unclear.” She introduces examples of locally-owned franchise restaurants, such as a Burger King, and an independent restaurant opened by a foreigner. This comparison is invalid because what defines “local” isn’t as unclear as the writer suggests. Considering where the profit goes can be a determining factor. For a franchise store that is a branch of a larger company, the revenue from that store, though locally owned, mostly goes towards that company. As for an independent store, most of the profit is retained within that store and that store owner is more likely to use his revenue to invest within other small businesses within the area to buy resources to sustain their own business. The argument regarding whether a business is considered “local” is not based solely on location, but whether a business is independent.

Karen Selick, the writer of the next article also provides her take on why buying locally can be detrimental to growth. In this article, Selick points out fallacies that lie within purchasing from local businesses. Firstly, she touches on how trade is better for both consumers and the overall economy. “The smart part is the recognition that trade tends to improve people’s lives” (Selick, 2008). Admittedly, the gains that a nation receives from trade contributes a large part in improving an economy. There are multiple reasons behind this as consumers exchange money for a good they to give “greater satisfaction than the money would” (Selick, 2008). Another is that specialization allows countries to maximize their efficiency in producing a good because they no longer have to split their resources between producing two goods, and are then able to trade for other goods they may want instead of producing the good themselves. In reality, there is no definite method in growing an area economically. Trade provides benefits to a nation’s economy as a whole. 

 