Alumna discusses research in economics and anthropology
Published: Tuesday, November 12, 2013
Updated: Tuesday, November 12, 2013 01:11
Last Friday, Jessica Meissner ’05 returned to campus to give an open lecture for the students of Prof. Elizabeth Ferry’s (ANTH) class, “Production, Consumption, and Exchange.” The presentation, titled, “Applied Anthropology in the ‘New Economy,’” allowed Meissner to discuss the results of her fieldwork in Washtenaw County, Mich. While in Michigan, Meissner, an economic anthropologist, studied the role of localized non-venture capital funded businesses in serving their communities.
According to the website for Meissner’s organization, The Shed, Business & Employment Cooperative, a mere “0.4 percent of business start-ups receive venture capital resources.” The website also states that, “less than 17 percent [of start-ups] receive capital from a bank or institution.” Given that very few companies receive capital investments in their start-ups, it became Meissner’s role in Washtenaw County to study the creation of jobs and businesses with little dependence on public subsidy.
“The county contracted me to do a study of their small businesses, entrepreneurship … the work force and how that was going to relate to the bigger picture and make some recommendations to them,” said Meissner during the presentation.
Through her research, Meissner noted that she heard the term “new economy” being used by companies supporting independent businesses that value self-reliance. She continued to explain that the term is most commonly used by “[the companies] that are trying to redefine the framework of our economic activities. In particular, they are interested in distributing economic and decision-making power back to the little guy.” She said that the main goal of the businesses is to increase independence and market competitiveness through localization, creating business alliances specific to servicing and remaining within smaller communities.
“Venture capital funds are looking for investments that are going to be high rates of return … and one concern that policy makers have is that the main way venture capital investors get their money back is by looking for an exit strategy,” Meissner said in an interview with the Justice. “That exit strategy means that start-up companies are either going to get sold to a larger, multinational corporation, or through an initial public offering.”
In short, Meissner said that venture capital funded businesses may start out local, but almost never remain so. In order to cultivate a healthy local economy, Meissner suggested the promotion of business cooperatives, or co-ops, as a way to better cater to the local community and allow multiple small businesses to remain competitive among other corporations.
According to the International Cooperative Alliance, a co-op is defined as “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.”
Co-ops have multiple-stakeholders, many of them being member-owners who stand to lose if the company fails and therefore have personal incentive in seeing to the success of the company.
Unlike multinational corporations, “co-ops aren’t working for profit maximization,” said Meissner. Rather, “they seek to benefit the member-owners” in addition to better serving the community. Co-ops, because they are locally run, can capitalize on opportunities in which larger corporations have no interest.
As an example, Meissner discussed electricity co-ops consisting of farmers, which successfully brought electricity to rural areas, therefore benefitting the farmers in their productions.
“Multinational companies would not have seen any profit in that, so they wouldn’t have invested” said Meissner.
It therefore becomes the responsibility of local corporations to serve the community in ways that no one else can. In essence, co-ops have the opportunity to service locals in areas that larger corporations view as unprofitable.
Additionally, in her presentation, Meissner noted that buying local products and services will allow money to circulate within the local economy three to four more times than it would if consumers chose to purchase the same goods from multinational corporations. Therefore, buying local services the community.
Furthermore, buying locally increases the number of stable jobs within the community, as it enables co-ops to hire more workers and, for the most part, co-ops have higher job stabilization and employ more workers than private companies, according to Meissner.
As stated on Meissner’s website, co-ops employ 20 percent more people than do multinational corporations, and as stated in her lecture, the percentage of layoffs in the private sector increased to about 12 percent in 2010, while that of co-ops decreased to nearly six percent.
“Of course, it does not always make sense to buy local,” cautioned Meissner. “It’s just about supporting and growing local businesses where it makes sense.”