Mark Whalen

In 1999 Thomas Friedman published The Lexus and the Olive Tree, a book that popularized the concept of globalization. Friedman postulated that increased trade in goods and services globally was not only inevitable, but would be, on balance, a good thing

But if globalization is a major fact of economic life in the early 21st century, there is a small but growing counter-current, one that seldom gets mentioned or noticed – what I call “localization.”

That globalization has produced a range of benefits seems undeniable. Consumers in developed countries like the United States have experienced lower prices across a wide range of items, from dress shirts and skirts, to Disney toys and flat-screen TVs. Nations like China, Vietnam and Bangladesh have reaped various degrees of benefit in terms of moving a portion of their population from poverty to middle-class status.

This has not been achieved without cost or social disruption, including job losses here at home and some questionable labor and environmental practices abroad.

Local Products, Local Stars

Which brings me back to localization.

In areas as diverse as fruits and vegetables, beer and banking, there is an observable trend to go local.

In New England we can especially see it at this time of year, with the proliferation and increased popularity of local farmers markets. The rapid growth in the number of restaurants offering farm-to-table options is undeniable. According to the USDA, farmers markets nationwide have grown more than three-fold since 1999 (the year of Friedman’s book), from 2,746 to 8,268. And for anyone driving around Eastern Massachusetts, it seems like much of that growth has happened right here.

And of course with the advent of summer we also become aware of the availability of local brews. From Ipswich Ale to Trillium’s Congress Street IPA, locally produced craft beers and ales have been taking market share from the mega-brands owned by Australian, Belgian and Brazilian conglomerates.

Local Products, Local Banks

Which brings me to banking.

Banking too went through its globalization phase. In the 1990s and into the early 21st century, bigness and global reach was all the rage, whether it was large U.S. institutions or international mega-banks.

Bigness implied enhanced service offerings and reach. It promised better technology and easy access to banking services from any corner of the globe. It conjured up images of stability – and the expression “too big to fail.”

Then the financial crisis arrived. “Too big to fail” too often meant taxpayer bailouts. Gigantic legal claims and settlements often meant reduced earnings and retrenchment. Loans slowed to a trickle and global reach didn’t mean much if you couldn’t refinance your home or business.

But for community institutions like Needham Bank, it was an opportunity to step into the breach. With our traditionally high capital ratios, our deep personal knowledge of the individuals and businesses seeking loans, and our unfailing commitment to the communities we serve, we were able to actually significantly increase our loans outstanding during the period from 2008 to 2013 – growth that continues to this day.

How have we achieved such success? Some of it was made possible by adopting new technology, which has become much more affordable, leveling the playing field.

Some of it involved innovation. For instance, we reimburse our checking account customers for any fees incurred using an ATM anywhere in the world, giving our local institution and our customers truly global reach.

But most of it involved sticking to our core mission: Serving the needs of local communities where we live, work and do business. As a mutual bank, we are fundamentally different from institutions managed from distant head offices and/or traded on New York or foreign stock exchanges. They answer to profit-driven investors – we answer to our customers, who are our neighbors.

We are also deeply involved in the very fabric of the community, donating time and funds to 300 local charities, from youth soccer and seniors homes to, yes, farmers markets.

At least in our corner of New England, people are increasingly seeing the benefit of not only buying locally, but banking locally. They understand that the benefits are direct, they are real and they are sustainable.

Is this the beginning of a trend? It certainly is in the communities we serve. It is perhaps too early to know if the trend is national. But we believe we are creating a model that, like the farmers market, is very attractive and poised to take off.

Mark Whalen is the CEO of Needham Bank, a $1.7-billion community bank headquartered in Needham with additional offices in Dedham, Dover, Wellesley, Medfield,
Westwood and Ashland.