Thursday, September 27, 2007

A Fine Balance: Chain-stores vs. Local Entrepreneurship

Stories of development have similar themes whether the development is occurring in urban Southwestern Pennsylvania or rural India. One such theme, in a very basic sense, is the tension between outside investment and homegrown entrepreneurship. Outside investment often translates to large national or international chains or corporations opening new locations in a developing community. On the other side of the coin is homegrown entrepreneurship, which refers to smaller, locally owned businesses. The tension exists because sometimes larger chains make it harder for smaller businesses to survive, while benefiting the local economy less than a smaller store. A study conducted in Austin, Texas ( ) demonstrated that if $100 was spent at a large chain bookstore, only $10 would remain in the community. If that same $100 was spent at a smaller book store, over $30 would be recirculated in the community. Additionally, large chains are sometimes criticized for zapping a community of it's unique cultural identity. Each town looks exactly like the next if the same chains define it's commercial district. Of course, outside investment can be extremely beneficial and to a community as well, and perhaps an expedient way of economically growing a neighborhood. While striking a decent balance is an ongoing challenge, most will agree that supporting small, locally owned businesses is a worthy cause. East Liberty, the neighborhood I've been working in with the other CORO fellows, is a community defined, in part, by this theme. There are several large chains that have recently opened in the neighborhood, namely a Home Depot, Whole Foods, Borders, Walgreens, and a Target, which will most likely be opening soon. These stores have successfully started to bring people back into East Liberty, which had previously been thought of as a "no-go" zone due to the perception of it as a blighted neighborhood. However, these large stores will not be enough to restore economic vitality to this community. A cadre of successful small and locally owned businesses will be crucial to this task. Luckily, there are already success stories to serve as a model and inspiration for more small businesses. Around five years ago, Justin Strong opened the Shadow Lounge ( ) on two credit cards. Since then he's built a successful business in East Liberty that is now known as one of Pittsburgh's hottest spots. Almost every night the Shadow Lounge has a space for performance artists of all types, and another space with a DJ and a dance floor. In a largely black neighborhood, Shadow Lounge is a cultural melting pot, attracting a crowd that's considerably diverse, in a city that's considerably segregated along both race and class lines. Many people would point to this institution as representing the essence of what East Liberty needs more of- A thriving black-owned and operated small business. There's a definite need for communities to support entrepreneurs like Justin in order for the small businesses to grow and thrive. Look out for future posts that will explore what's happening in Pittsburgh to this end. --- Sujata Shyam

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