Diamondback Online - The University of Maryland's Independent Daily Student Newspaper

Issue date: 2/25/08 Section: Opinion

"Efficiency is doing better what is already being done."
- Peter F. Drucker
Last week, College Park City Council members called for the city to place rent caps on the retail space slated for construction under the city's parking garage. The move may have been motivated by a general feeling of malaise towards the relentless march of chain stores into the area, but it makes sense in more ways than one.

Aside from allowing the city to actively promote a unique college-town atmosphere and escape the anonymity of commercialization, promoting independent business makes sound economic sense, as local merchants increase tax revenues and promote greater economic vitality.

Independent businesses have been found to have three times the economic impact on a region than analogous chain stores. A typical chain bookstore returns about $13 to the local economy for every $100 spent at the store, whereas independent booksellers have been shown to return $45 out of every $100.

This may seem startling, but the causes behind the staggering disparity are quite simple. Independent businesses tend to have smaller reach in terms of their employment pools and tend to hire local labor; be owned by people who live in the area and keep the profits within the regional economy; and support secondary employment of artists and authors.

Instead of stopping merely at a rent subsidy, the city should consider promoting the creation of an independent business association. Austin, Texas, is home both to the University of Texas and the "Keep Austin Weird" campaign, which was adopted by Austin Independent Business Association (AIBA) to promote locally owned businesses. Nonprofit groups such as AIBA help locally owned businesses take root in communities by allowing merchants to compete with their corporate counterparts by compensating for many of the advantages held by chain stores.

Independent business associations make cooperative media buys, coordinating their advertisements to make purchases in bulk to decrease their marketing costs. They host trade shows together, bringing in continuing education speakers to teach merchants how to improve the efficiency of their businesses. Many associations have also created branding campaigns to make independent businesses distinctive from chain stores and educate the public about the businesses of buying locally.

The best part of such a plan is that it would come at a very low cost to taxpayers. The association would be inexpensive to start and would be self-sustaining, as it promotes efficiency rather than relying on subsidy. Over the years, a comprehensive campaign to promote independent merchants could create such a resilient community of locally owned businesses that the city may find it unnecessary to rely on taxpayer support of rent caps altogether.

That doesn't sound too weird, does it?

POLICY: The signed letters, columns and cartoon represent only the opinions of the authors. The staff editorial represents the opinion of The Diamondback's editorial board and is the responsibility of the editor in chief.

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