ICIC Summit Live: What is an inner city? And how do we create jobs there? - Remarks by Dr. Porter

The keynote speech by Dr. Porter is now underway. He was just introduced by Kathleen Brown (yes, sister of California governor Jerry Brown!) of Goldman Sachs. Kathleen described how she was inspired by Porter so many years ago, and is now using his cluster-based approach to help grow small businesses in inner cities as part of the Goldman Sachs 10,000 Small Business (10KSB).  She describes the work of both Porter and ICIC as “audacious and transformative,” which is always nice to hear.

Porter, co-chair of the 10KSB program along with Warren Buffet and Lloyd Blankfein, takes the podium to detail a bit more of the program. He explains that if “cities get their acts together,” then 10KSB will roll out the program in their city as well.  So shout-out to economic development practitioners: if you want Goldman to help build small businesses in your town, be organized and prepared.

Enough with 10KSB (though, congrats to local Chicago for being the newest city to sign on with the program!); on to inner cities we move.

By way of background, Porter explains that current economic development strategies have moved from the national level to the regional level. At the regional level, economic development strategies must not forget about our inner cities; because the ebb and flow of our inner city economies may be very different than the regional economies of which they are a part.

Where are our inner cities?

They comprise only 0.1% of U.S. land area, but are home to 8% of U.S. population, 19% of U.S. poverty, and 31% of minority poverty. These “yellow zones,” according to Porter, are present in all of our cities despite varying size and scope.

Other key characteristics of our inner cities:

• Most residents actually do have high school education and do have jobs (this is a common misconception, he explains. Residents have jobs; it’s just a matter of how good those jobs are.)
• Average firm size in inner cities is small
• Population has actually been increasing in our inner cities
• Poverty remains high, but has actually declined
• Inner cities have lagged in job generation over the last decade

Inner city residents hold 22% of the jobs in the inner city, only 11% of jobs in the rest of the central city, and 7% of jobs in the rest of the region. Why? Porter explains that there’s a skills mismatch and transportation barrier for many inner city residents.

To create 100 new jobs for inner city residents, it would require the creation of 450 inner city jobs; 850 jobs in the central city; and 1,450 jobs in the rest of the regions.

“Jobs anywhere” is not enough, says Porter. Inner cities benefit from regional growth plans, but there needs to be a specific focus on inner cities. Only 18 out of 100 inner cities outperform the rest of their region.

So how do we focus on the inner city? What strategies should we adopt? First, we must match the skills of inner city residents with the new jobs. Second, practitioners should take a cluster-based approach to inner city economic development.

More on Porter’s cluster-based approach to follow. We’re streaming his speech live right now at www.icic.org/live right now; get updates on twitter by following @icicorg and #ICICSummit.

BY Amanda Maher on October 4th, 2011

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