South Australian Business News

Michael Shuman: If South Australia wants great work to flourish and expand, it needs to create a local investment ecosystem

Tuesday, May 9th 2023

Michael H. Shuman is an economist, attorney, author, entrepreneur, and leading visionary in community economics. He is an Adjunct Professor at Bard Business School in New York City. He is also a Senior Researcher for Council Fire, where he performs economic development analyses for states, local governments, and businesses around North America.

Together with Green Industries SA, the lead agency for the circular economy, the South Australian Business Chamber presented an opportunity for our newly established ThirtyNiners members to meet with the US development expert himself earlier in May. 

Michael said following the event As someone who speaks to 50 audiences per year, give or take, it’s rare that he finishes an engagement saying wowza!

That’s my feeling about what you all — policymakers, business leaders, economic developers, social entrepreneurs — are doing in South Australia. 

Thanks to the generous sponsorship of Green Industries SA and the South Australian Business Chamber, I was able to engage with seven audiences over three days, including sessions with the 1839’ cohort and the ThirtyNiners. I was impressed with the receptiveness, knowledge and questions asked by both the South Australian Business Chamber audiences on local economics and how this connects to circular economy, and broader social, environmental and business trends more broadly.” 


On the last day of Michael’s visit, he put the following dispatch into the Main Street Journal, his newsletter on local investment that reaches 8,000 readers: 

That a government agency is actually named Green Industries” is itself revolutionary. At the same time the City of Adelaide has a Circular Economy Team. Imbued with circular thinking, economic developers in South Australia are focused on local production that minimizes the use of non-renewable resources, generates less waste, and nurtures new businesses that can usefully repurpose whatever byproducts of production remain. Australians understand that every link in this circle can and should be local businesses and that local investment can accelerate this economic transformation.”

My main message was that if South Australia wants this great work to flourish and expand, it needs to create a local investment ecosystem. Currently, residents are putting nearly all their superannuation savings in publicly traded big businesses, even though smaller companies are responsible for most of the jobs in the state. This is a profound capital market failure. Fixing this failure (by moving 70% of superannuation savings into local investments) would make more than $159 billion available for new or expanded locally-owned, circular-minded businesses in South Australia. That’s serious money.

I further argued that South Australia easily could take a dozen steps — most of them costing very little — to ensure that great local businesses secured the capital they needed. My recommendations included: educating SA businesses and investors about new local investment opportunities; bringing these players together in monthly, neighborhood-based potluck dinners; publishing online lists of SA companies now looking for local investment; setting up new local investment funds (perhaps in collaboration with Ethical Fields); funding technical assistance that brings down the costs for residents who want to deploy self-manage superannuation funds for local investment; and using municipal bonds to help fund these initiatives.

I was delighted that every audience, independent of its profession or politics, seemed not only receptive but ready to get this work rolling. South Australia is at the cutting edge of innovative economic development practice, and soon may be at the cutting edge of local investment.

Michael Shuman


Economist, attorney, author, entrepreneur, and leading visionary in community economics.

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