Democratization of Purchasing
Covid has affected purchasing patterns, largely accelerating a transformation that was already advancing at a brisk pace. The largest company in Canada, by market capitalization, is e-commerce juggernaut Shopify (almost $40 billion larger than the Royal Bank). A true measure of disruption.
Organizations campaign to ‘shop local’ against a tide of convenience through online retail. There is hypocrisy of merchants who want local customers, while amazon cardboard boxes arrive on their doorsteps. Buying locally has become more challenging as global retailers dominate sectors with undeniably competitive pricing while pedestrian traffic to our neighbors declines.
I operate several businesses including retail. With foot traffic impaired by pandemic restrictions, selling online is essential. We have a shopfront on Amazon and other marketplaces because this is essential in today’s retail landscape. Supporting local is an imperative. It creates local employment, local discretionary spending, a positive economic impact on sales volume and essential local tax reserves.
What happens when local governments don’t support policies that enable their taxation base? Logic would dictate provincial and municipal governments levying local taxation should be mandated to ‘shop locally’? What motivation would decision makers have for not investing in the community which pays their salaries, and drives their policies?
I looped into a Facebook exchange this past week where numerous businesses were acknowledging personal concerns on local procurement decisions. Some were soured grapes, some were legitimately disadvantaged by conflict, and in all cases the decisions to divert local investment outside the province should all be challenged for justification.
A contentious issue of mine has been reckless decisions to direct provincial, or municipal, tax dollars to off Island firms.
In some instances, a legitimate argument could be made that external companies poses more expertise in certain areas; but would it not be incumbent on local leadership to ensure our industries are made more competitive by bolstering local competency and creating a platform where local firms can win exported opportunities – and certainly local ones?
There are regional procurement obligations with Atlantic provinces, but these are on larger value purchases often targeted for larger companies. Within the municipalities the new Municipality Governance Act has obscured much of the governance decision making into super-fueled actors.
Our most important governance institutions suffer from a myopia that is either born of ignorance or conflict. The responsibility to redirect tax revenue as seed for growth would seem to be a collective interest; but we are becoming too far removed from elemental economics to be aroused to this simplicity.
When the inertia of bloat or compliancy paralyzes common sense, then it is past time for adjustment. Observing the number of persons and companies who have acknowledged this frustration, signifies a momentum for change.
In the realm of governance, the only method for enacting effective change is to offer service. The gripes of the frustrated are quickly muted. Empowerment comes from active participation, and the benefactor may not be the afflicted, but in decisions that empower those that follow.
Change in policy is much slow than change in commerce. Narrowing election timetables affords new participants to offer their service either inside or outside traditional political structures. Only this democratization will reform local procurement and investment priorities.
Author: Blake Doyle, June 2021
Read this Saturdays Business Edge in the Guardian.