How to Bring Recovery to Inner Cities: ICIC IDs Some Possibilities

11.12.2013 | Inner cities seem especially resistant to the current economic recovery (such as that is anyway), but the Initiative for a Competitive Inner City floated a blueprint recently at its Inner City Economic Summit, held October 23-24 in Cleveland, Ohio:

“City vitality depends not only on the success of industries but also on the ecosystem connecting its residents, workers, businesses and policymakers. Industry cluster growth drives broader economic growth; but clusters cannot grow without the right business environment, and individual businesses cannot grow without access to the right resources. Complementary efforts to support all three—clusters, business environments and individual firms—are necessary to ensure a vibrant and resilient city.”

The conference examined those “drivers of economic growth.” But as ICIC founder Michael Porter noted, the key to inner city revitalization lies not just in linkages to regional plans, but “inner city-specific development plans” linked to those regional ones. Moreover:

“We know that inner cities have four main advantages: strategic location, local market demand, integration with regional clusters and workforce. And long-term solutions to inner cities will be driven by the private sector, with support and collaboration by the public sector, foundations and nonprofit organizations.

But despite these advantages, specific tools must be utilized for driving inner city economic growth. We’ve identified three categories of drivers to increase the competitiveness of the urban core: improving the local business environment; implementing a cluster-oriented growth strategy; and supporting business growth strategies.”

It’s not surprising that recommendation number two is to bolster cluster development. Porter was one of the first to put some intellectual teeth (and a name) behind the economic development model that encourages clusters of like-minded businesses, which feed off of one another’s innovations and workforce talents, to create a hub of new industry. It has since become a model for resurging metro areas, including Cleveland, where the conference was held. Cleveland’s cluster of hospitals, universities, and manufacturing know-how has led to a rise in high-tech medical device businesses. The success of this “eds and meds” strategy has led a lot of cities to chase similar strategies.

But—as we’ve also noted previously—cluster development is not a cure-all, especially when every region is chasing the same thing. Better to play to one’s current regional strengths. A recent Brookings Institution report on traded goods can help metro areas identify those strengths. The report tracked metro areas’ exports and imports to show just how specialized metro areas are, and secondarily, how they can capitalize on those specialties.

Take Tucson, Arizona, for example. Among the more 100 largest metro areas in the country, Tucson is the most specialized trader. Its major commodity is stones and ores. “Its mining-related trade, which ranges from operating mines to the city’s annual gem show, makes up 8.8 percent of the metro area’s total traded value, far exceeding the national average of 0.4 percent.” As a share of GDP, Tucson’s mining industry is larger than in any other metro area in the country. On the other end, Tucson trades at below-average levels in many other commodities, including energy products, agricultural products, and transportation equipment.

These kinds of metrics, the report notes, can help metro areas determine their strengths, but they “can also serve as warnings to metro areas to diversify. What would happen to New Orleans’ economy and trading patterns if a major oil-related firm like Tidewater, Inc., moved elsewhere along the Gulf Coast, or if Dell moved out of Austin?”

Not everything depends on heavy industry or cluster development of course. The National League of Cities highlights four initiatives that show how small and large cities throughout the US are taking creative steps to solve local problems: Baltimore’s Food Policy Initiative, San Francisco’s Bank on San Francisco, which inspired NLC’s own Bank on Cities Campaign, Connecticut’s Municipal Leadership for Children and Families in Small and Mid-Sized Cities initiative (a 142-page PDF), and Seattle’s green building program.

However cities go about it, it will be imperative that they (and their inner cities in particular) continue to collaborate with other groups in the region. The conference closed with an examination of Detroit, noting with particular approval the growth in regional cooperation (also something we’ve written about).

Alex Abboud, writing on ICIC’s blog underscored this very point.

“One of the messages about Detroit’s struggles that I’ve heard in the media is about the hollowing out of the city at the expense of the region. Given this, it was encouraging to hear about collaborative initiatives such as the New Economy Initiative, which brings together 10 foundations to focus on Detroit and Southeast Michigan. Their goal is to find the next anchor institution, and they are betting on entrepreneurship as the way there. Additionally, there is a network of incubators throughout the region, from Detroit to Ann Arbor, who collaborate and support each other. The Detroit Food and Ag Network has expanded throughout the region as well, linking efforts beyond the city itself.”

That kind of regional perspective and cooperation is good news indeed.

The conference proceedings are now available at ICIC.


Photo / mmonebeber

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