In his new book, "The Small-Mart Revolution," Michael Shuman argues that local businesses create a vibrant local economy with more local jobs and wealth.
A strong local economy also reduces transportation, and makes it easier for a community to maintain high environmental and labor standards (local businesses won't move simply to find a place with less protective laws).
And because shorter supply lines substantially reduce emissions (most food travels 1500-2000 miles before eaten), Bill Mckibben has said that local business may "be one of the keys to containing global warming." Municipalities can support local business by implementing local purchasing preferences, instituting "buy local first" campaigns, providing local business directories and training, and removing subsidies and other benefits for non-local businesses.
Large box stores and shopping malls are a particular problem. They contain huge impervious surfaces, lead to more driving by shoppers, and result in longer supply chains in the delivery of their products. Localities can enact size ordinances limiting the size of single retail stores and shopping malls. Localities may also require that new retail stores undergo special review if they exceed a particular size, or generate substantial vehicular traffic. The Institute for Local Self Reliance has put together an excellent BigBoxToolKit to help communities keep out big box stores, or reduce their footprint.
Local business networks are cropping up around the country. For example, in the Hudson Valley in New York, the newly formed Hudson Valley Sustainable Business Network, a project of Sustainable Hudson Valley, is working on a wide range of projects to support the local economy. The Business Alliance for Local Living Economies is an alliance of 37 independently operated local business networks with more than 12,000 members dedicated to building local living economies.