Rampant unemployment. Diabetes virtually out of control. Fresh fruits and vegetables hard to find or afford. With one-third of our nation’s minority poverty concentrated in our inner cities, and signs of economic insecurity and income inequality everywhere, it’s easy to understand the sense of hopelessness and abandonment that tens of millions feel and are expressing in the streets of America’s cities. It may be tempting for some of our political leaders to bow their heads reflexively at prayer services and pay lip service to a set of afflictions they believe are so intractable that they defy strategic thinking, planning, and workable, affordable solutions.
Fortunately, there are transformative approaches that are based on the simple and now well-documented premise that our inner cities have distinct competitive advantages. If we build on that proven principle, first articulated by pioneering strategic thinker and Harvard Business School professor Michael E. Porter 20 years ago, the economic revitalization of this country’s cities can create hundreds of thousands of good-paying jobs, improve health and wellness outcomes, and give residents a renewed sense of optimism that the promise of “equal justice under law” is more than outdated rhetoric.
The roadmap for achieving these ambitious goals is multifaceted, but its centerpiece is the commitment of each city’s anchor institutions to make ironclad commitments to use their individual and collective purchasing power, employment opportunities, supplier diversity networks, and leadership positions to drive change.
What are anchor institutions? They are a group of generally larger educational, health care, for-profit and nonprofit institutions that play significant roles in every city by virtue of their size, number of employees, economic impact, and overall influence on public policy and community decision-making. Their willingness to use their clout to create opportunities for overwhelmingly minority-, immigrant-, and women-owned inner city suppliers to grow their businesses is just one example of how they can be a catalyst for job creation. Jobs create increased economic security and generate the disposable income that often leads to more nutritious food choices, better medical coverage, and strengthened community institutions. Simply put, if anchors are willing to invest in helping their suppliers build capacity and access the capital they need to grow, the collective impact in our inner cities is virtually incalculable.
These are the fundamental principles that underscore our work at Roxbury-based Initiative for a Competitive Inner City (ICIC). Founded by Porter as a research organization that studies the 328 cities in America with populations of 75,000 or more as well as high levels of poverty and unemployment, we also engage in practice leadership through our Urban Business Initiatives. One of them is Inner City Capital Connections (ICCC), an 11-year-old initiative now working in nine cities throughout the United States, including Boston and Worcester. Qualified inner city entrepreneurs participate over six months in a no-cost 40-hour program that teaches strategy, sales and marketing, finance and talent management, and introduces participants to debt and equity financing, and provides one-on-one coaching in which mentors from banking and consulting advise business owners how to refine their presentation. The culminating event is our New York capital-matching conference to which all the owners are invited to present their “pitch” for capital and receive valuable feedback.
The result? During ICCC’s first 10 years, more than 1,100 companies have participated. Collectively, they have received more than $1.3 billion of capital and have created more than 11,000 good-paying jobs. The initiative works because it’s relevant to the needs of inner city companies, 72 percent of which are minority-owned. We believe that rebuilding our cities and attacking the scourge of income inequality requires clusters of growing, healthy small businesses and capital markets that are willing to finance such growth and see significant economic and societal benefits in doing so.
Vibrant inner city small business ecosystems won’t completely solve the problems faced by Ferguson, Baltimore, Minneapolis-St. Paul, Baton Rouge, and Dallas. They require sustained local, regional and national conversations. However, the promise of sustainable inner city economic revitalization and well-being can go a long way to create a legitimate sense of inclusion in the American dream.Steve Grossman is CEO of ICIC and a former Massachusetts state treasurer.