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Draft 1.1 -- Not for Distribution or Circulation quality meats — and built new, value- adding businesses with these products, including a mail -order company and a restaurant called the Roadhouse. These three case examples cast doubt on one of the principal prescriptions given by economic developers — that is, to focus on expanding existing clusters of export - oriented business. They suggest that a smarter approach may be to create new clusters based, initially at least, on local demand. Two further clarifications about LOIS are important. First, import substitution does not mean withdrawing from the global economy. To the contrary, as the late Jane Jacobs argued, an economic strategy promoting import- substituting businesses turns out to be the best way to develop exports. Suppose North Dakota wished to replace imports of electricity with local wind - electricity generators. Once it built windmills, it would be self - reliant on electricity but dependent on outside supplies of windmills. If it set up its own windmill industry, it would then become dependent on outside supplies of machine parts and metal. This process of substitution never ends, but it does leave North Dakota with several new industries — in electricity, windmills, machines parts, and metal fabrication — that are poised to meet not only local needs but also export markets. But instead of putting all of a community's enterprise eggs in one export- oriented basket that leaves the local economy vulnerable to fluctuating global markets, import substitution develops myriad small businesses, grounded (initially at least) in diversified local markets, many of which then becoming exporters. Second, this perspective does not carry negative moral judgments about non -LOIS businesses. Some global, export -led companies can be terrific at creating wealth and jobs. Some of the efforts to attract these companies have paid off. Yet, as suggested in the adjacent box, claims made about numbers of jobs attracted through economic - development efforts should be examined critically. The logic of LOIS suggests the importance of six kinds of questions currently minimized or overlooked by mainstream economic development: • Local Planning — How can significant dollar "leaks" caused by imports be identified, and which can best be plugged with competitive LOIS enterprises? • Local Entrepreneurship — How can a new generation of LOIS entrepreneurs be nurtured and trained? • Local Business Organizing — How can existing LOIS businesses work together (through, for example, joint purchasing or marketing cooperatives) to improve their competitiveness? • Local Investing — How can local savings, whether in banks or pension funds, be tapped to support new or expanded LOIS businesses? 14 Attachment number 1 1 -4 Page 316