The Only Way Through is Local

How can we rebuild the economy that will not end in another catastrophe? Localize where we can, and we can localize a lot.

June 25, 2020

By: Todd Khozien, Co-CEO, SecondMuse

Over the past two months, response to the COVID-19 crisis has unearthed some major fundamental flaws in our economy. We’ve seen the devastating impact of an overreliance on a system with too many points of failure. And the crisis has left no area immune—both from the public health impacts of the virus and the economic devastation in its wake. Urban communities almost certainly risk destabilization. Suburban and rural communities lacking strong infrastructure have limited resources to weather the outbreak. Given the massively interconnected nature of our global economy, the ripple effects are sure to reach people and places everywhere. 

There is a saying that economic forecasting exists to make astrology look respectable…well, pandemic economic forecasting makes normal forecasting look respectable. On one hand, it could stimulate a new era of human economic and social development. On the other, we could be stuck trying to rebuild based on past models for decades, a rebuild that will surely end in another catastrophe. Success is contingent upon local communities harnessing their resources, values, and identities in thoughtful, strategic ways to come up with new models of human infrastructure.

This pandemic has blown the doors wide open on a quietly pernicious problem: long, complex supply chains are really quite vulnerable. When large sectors of the economy are reliant on distant resources with multiple single points of failure, things don’t turn out that well. There’s a reason why airlines have so many redundancies in their systems: the stakes are so high. Our negligence in building these redundancies was painfully obvious when one of the most uncomfortable, tangible truths of the crisis was revealed: Americans weren’t able to get masks to those who needed them. 

This will be a phased healing, with an approach that mirrors natural disasters of the past. First, there are rescue efforts: a resource triage to get the money out, fast, to anyone and everyone we can. Then, it’s a matter of rebuilding. 

We need to ask the question of what, exactly, we are rebuilding. And what we rebuild needs to incorporate voices and approaches that weren’t included the last time we had to ask that question. 

Our failure to build has been characterized by a lack of appetite, but it’s not that simple. Our system was broken—if someone wanted to make things, they needed access to a factory in China in order to scale. The old system relied on outsourcing and a failure to build redundancies in inventory and distribution, of which we’re seeing the painful shortfalls today. Shorter, localized supply chains are stronger supply chains. The current pandemic has revealed just how fraught that dependency was.

Now is the moment to ruthlessly go local in the presence of a global economy. 

Not every supply chain can or should be localized, but we need to localize where we can, and we can localize a lot. Localization also means acknowledging the context of the community —How can you leverage your community’s grit and heritage that are the essential components of your shared identity? What can you learn from your own defeats that will enable you to avoid the hard lessons of the Silicon Valley template, using your unique victories, your community’s unique victories, culture, and skills? If you double down on the strength of the location, even though you’ll be interfacing with the global economy you’ll still be building something unique, different, and hopefully better. 

Recovery won’t be templatized. It’s not just that challenges are facing every community – it’s that our collective muscle memory isn’t to use local resources to solve local (and occasionally global) problems. If communities double down on themselves, it will not only be better for those communities, it will almost certainly be better for the world. Is it that radical an idea to be creative with local resources to solve local problems? To encourage communities to embrace a bespoke approach to recovery? My hope is the Silicon Valley template becomes a relic akin to the company town. 

It’s a moment for cities to ask who we are — and how can we build truly local ecosystems. Our country was designed as a 50-state solution. We need not only a 50-state strategy for innovation, but a 2,000 city solution. And that’s just in the United States. Millions of ideas, voices, and resources need to be activated all across the globe in order to achieve a more resilient future.

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