What’s the use of a local currency?

By now you might have heard about our plans to create a local currency for Birmingham. But what is the point? What is the goal of creating a Birmingham Pound?

A local currency will help small and independent businesses, and reduce corporate dependency. It will be a vehicle for people to become aware of the importance of spending money locally. Because people will only be able to spend Birmingham Pounds at a local shop, they will look around for new businesses where they can spend their local pound. The Birmingham Pound will also be a strong marketing tool to make people aware of the importance of supporting the local community. It will tell them about all of the wonderful independent businesses that you can find in Birmingham. As the Birmingham Pound team we are very aware that we do not want only ‘cool’ independents to join the Birmingham Pound. We want every independent corner shop, craftsmen and supplier, because only in that way we can represent the whole diversity of our great city and truly support the local economy.

But how does that actually work? How does spending money locally help our city? A Birmingham Pound could increase circulation of spending in Birmingham. If you spend £100 locally, instead of at a chain store, more of this £100 will be respend within Birmingham and less will leave the city, because local and independent business have more of their costs tied to their home city than a chain store. A study of American local business found that on average, 48 percent of each purchase at local independent businesses was recirculated locally, compared to less than 14 percent of purchases at chain stores.

Map Birmingham

Not only would a Birmingham Pound entice customers to buy more locally, it would also be a tool between businesses. It would discover new places for businesses to get their resources locally and encourage them to do so. In this way the Birmingham Pound can increase local spending by businesses as well. All this together would create local resource loops. These resource loops will not only be better for Birmingham’s economy, but also for the environment, because transport miles will be diminished.

So far so good. But we shouldn’t forget another important factor. The Birmingham Pound will be a great way to develop relationship in the community; it is all about showing that we are proud of our city. As Dave Prendergrast, user of the Bristol Pound put it:

‘It is a great way of developing relationships with people in my community. I love shopping with the Bristol Pound, because instantly me and my local businesses are aware of our shared values and our desire to keep Bristol the exciting, unique city it is.

So join us on our mission for Birmingham’s local economy. We are currently investigating how to set up a pilot phase for the Birmingham Pound. But you can do things now already to show your support: Spend money at your local stores; follow us on Facebook and Twitter; or sign up for our newsletter to keep up to date with our developments. You can find more ways to be involved here.

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