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Founder of Consulting Unplugged & Chair of Design Management SCAD, Andrew Pek, Discusses Design Thinking in Local Communities
Design thinking is most commonly used to reimagine products or businesses, but when applied to communities it can have drastic impacts on the ecosystems and overall development of that community. You can apply design thinking principles to understand the impact of individuals buying from their local businesses instead of the big corporations that undermine community efforts. Reinvesting into your community supports the growth of all local businesses by encouraging other individuals to give, empowering entrepreneurs, enhancing economic growth and opening doors for increased employment. New businesses are the engine of economic success and can directly impact local communities.
Improve Your Local Community
Experts have studied the causes and effects of recycling money within communities for years, and have found that investing financially back into your community encourages communities to grow uniformly and sparks a chain reaction of support. Less than 40% of the money you spend in a large organization will impact your community. The distribution of those costs are reinvested in bigger organizations around the world and, in most cases, pocketed by the CEO’s and board members that head those organizations.
On the other hand, more than 65% of money spent on local businesses are reinvested into that same community. In most cases the entrepreneurs and employees that make up that local business live in the community they work in. They take your investment, and continue to purchase goods and resources in that same community - completing the cycle. Outside of the physical cycle that’s sparked, other entrepreneurs and community individuals witness the investment and are inspired to do the same.
Support Product and Service Innovation
Supporting community inspired businesses with your purchasing power allows small business to compete against the corporate giants and allows for new perspectives to influence the industry. Your support will give more entrepreneurs a legitimate shot at stirring the corporate pot and in turn directly weaken the corporate control over the ecosystem of your community. Without your support established brands are able to corner their market segment, price out competitors, and develop a monopoly that will be much harder to break into.
Supporting entrepreneurship brings more players to the game - and promotes healthy competition. This allows businesses to rely on their creativity and innovate new ideas that will both set them apart from the competition but also introduce new ideas to their communities. Competition fuels innovation, and innovation fuels growth. Without this pressure for opportunity, bigger national brands have more power to increase their profit margins at the expense of the consumer.
Better Customer Service
Supporting entrepreneurs means you will be buying from people intensely passionate about their product. Young entrepreneurs are extremely invested in early development, and optimizing their product, so they’re more receptive to feedback and concerns. In short, your opinions matter. Big corporation have protocols and generational strategies that are almost impossible to change, no matter how much the culture has changed. Local businesses are forced to keep their ear to the streets and build their businesses on the needs of the people they interact with daily. This creates a chain reaction of events and products that directly impact the physical, financial and cultural makeup of your community.
At the core of a quality new business is a problem that needs solving. Entrepreneurs go through their own design thinking process to determine what those problems are and the best ways to combat those problems. They create opportunity for community members to access goods and services that will help improve their daily life or mental well-being, and develop a need for their product that is both empowering and advancing.
That demand brings in money, and allows the entrepreneur to perfect their solution while also providing alternatives to accommodate a wider audience of consumers. That audience grows with consumers that face the same problems, but in a different area. In most cases your community problem, is not unique to your community, but similar communities face the same problem but don’t have the necessary resources to create a solution. Your contributions to a small business has the potential to create change in other communities around the world.
Local Employment Opportunities and Benefits
Lastly, small businesses create employment opportunities for community members that might not have the entrepreneurial bug, but understand their community needs better than any other. Their employment gives these entrepreneurs even greater insight on the issues that are present in their community, and allow for business owners to create more targeted solutions. Now the business is able to double down on their community efforts by creating a better product, all while financially supporting their community members through employment.
These are just a few of the many ways that entrepreneurs can impact your community. All of these entrepreneurs are inspired by design thinking and therefore are encouraged to look at their communities in a new light - constantly finding ways to improve and support those that they interact with on a daily basis.