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Clustering for Growth

Michael Porter, founder of the ICIC, kicked off today’s schedule with a talk about cluster-based economic development, and how these strategies can spur economic and job growth in inner cities.

Inner Cities have particular characteristics, and strategies for economic development need to reflect this. In particular, he pointed out that higher poverty rates are common (31% compared to 9% for the United States as a whole), that inner city residents often may not be able to access jobs across the region, and that inner city development needs to respect and be tailored to the particular skills and experiences of residents in the inner city. Despite the growth that many cities have experienced, in the last 10 years 82% of inner cities have performed worse than their region as a whole.

One of the key distinctions Dr. Porter talked about is that between local clusters and trading clusters. Local clusters, as the name implies, exist primarily to serve the local market (i.e. Retail, health). Trading clusters aim to serve national and international markets (i.e. Life sciences, transportation and logistics). Local clusters have demonstrated more growth, in particular in inner cities.

Clusters work best when they build on existing groups of businesses, not when a city attempts to build them from scratch. Adapting this for inner cities, it strikes me that a successful inner-city cluster and growth would build on the following

• Existing businesses (particularly small, locally-owned businesses)
• Underutilized (or unused) skills of inner city residents
• Gaps in the local and regional marketplace that align with inner-city businesses and skills of residents
• Businesses and clusters of businesses that can concentrate jobs and economic activity in the inner city area.

What can your region build upon in the inner city to start developing a cluster? This question is the starting point for spurring more inner city economic growth.

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Private Leadership for Public Good

“This is Just What You Do in Chicago”

James Glerum, a board member of the Civic Consulting Alliance, said this early in the session called “Corporate Community Engagement in Chicago: Commitment and Results”, which talked about private sector contribution, and cross-sector collaboration in addressing pressing social issues.

The Alliance brings together pro-bono teams of consultants and experts from different sectors. The session focused on a case study of their partnership with the City Colleges of Chicago, transforming the colleges and reinventing them for the 21st century.

I have previously read about the Alliance, and have been very much looking forward to their participation in this session. Both a board member (Glerum) and a staff member (Brian Fabes, a project manager) spoke, in addition to representatives of Accenture and KPMG, who participate in the Alliance’s efforts.

The Alliance representatives spoke about how they tapped in to Chicago’s long-standing culture of giving back, corporate leadership, and the imperative of collaborating with the organizations you’re helping, not just imposing solutions from the top down. Michael Scimo of Accenture built on this, talking about the value to business beyond social good, of building human capital, the business environment, and helping their employees grow as well.

This session also touches on the evolving role of public sector leadership. Cheryl Hyman, the President of City Colleges of Chicago, is as innovative and entrepreneurial as any successful private sector CEO. Her approach, working with the Alliance, is a departure from how education reform has happened in the past.

Another comment that resonated with me, from Terry Mazany of the Chicago Community Trust, is that these problems are ‘bigger than any single organization can take on’. It speaks to the importance of involving everyone – the organizations directly involved, along with the private sector, government, and other leaders, in addressing social issues.

The question then becomes, how do you best foster, or harness, this culture and use it for the greater good? The Chicago model would seem to be:

1. Figure Out Your Corporate Culture
Do you have a culture of giving back? Who are your business leaders, and what do they like to engage in? What are companies looking for? Do they want to give money, time, or do they want to add value beyond that?

2. Build True Partnerships
The CCA and public organizations truly work hand-in-hand. It’s not about top-down solutions, or fixes imposed from outside. Consultants and public leaders engage in long-term collaborative processes to improve the public good.

3. Change Takes Time
The CCA projects are long-term, over a period of years. It’s easy to get distracted as there are always new issues commanding attention, but they recognize that you have to stay focused, and implement change in a long, continuous process.

Every city is different, but the lessons from Chicago will go a long way everywhere.

Thoughts Prior to Urban 2.0.

I have the pleasure of spending the next day and a half at Urban 2.0: The Next Generation of Jobs. As someone with a long interest in cities and urban spaces, and as someone who follows the Initiative for a Competitive Inner City’s work, I’m very excited to be attending and writing about this event.

With the (north) American economy stagnant, and business and industry in transition, it’s an interesting time to be discussing the future of cities, and their role in the economy. Most would say that cities have made a comeback in the last 20 years, after experiencing a decline in the previous four decades. Thinkers like Richard Florida have argued cities (and mega-regions) attract and hold on to the best talent. Christopher Leinberger has predicted the suburbs will be tomorrow’s slums. Yet, there is still evidence that suburban growth (economic, not just population) outpaces that of cities. And even in the core of most cities, you’ll find empty storefronts with remnants of businesses that have fallen apart (I think I’ve seen a closed or closing Borders in every American city I’ve been to the past two years). New developments are half-built or stalled before ground is broken.

Cleveland Public Library
Downtown Cleveland, Ohio.

With that as a context, here are five questions on my mind, and the themes that will frame my posts over the next two days.

• What are the industries of the future that will drive urban (and economic growth)? Is there a place for industry and manufacturing? Is there a place for agrarian pursuits, traditionally found outside the city core?
• How do we build economic capital in lower-income neighbourhoods, and empower traditionally marginalized groups to reach greater economic success?
• How does a(n inner) city interact and relate to a larger regional economy?
• What’s the role of business, government, NGOs, and every day citizens in making this happen?
• What will the city of the future look like?

Some of the brightest, most talented urban thinkers are in the room today and tomorrow. I can’t wait to hear what they have to say.