Convening Anchors to Promote Shared Value

ICIC was back in the Big Apple this week after having just been there last Thursday for ICCC’s Match Day. 

ICIC Chairman Michael Porter and CEO Mary Kay Leonard were there to join Deputy Mayor Robert Steel and Department of Small Businesses Services Commissioner Rob Walsh. Jointly, they convened local higher education leaders and city officials at Gracie Mansion. The session – “New York City’s Anchor Institutions: From Social Responsibility to Shared Value” – included a presentation and discussion led by Professor Porter on how the city’s colleges and universities can build shared value with the economically distressed communities around them.  

Turnout for the event exceeded expectations due to much excitement about the day's agenda. The 80+ attendees included presidents and top deputies from 23 of New York City’s leading colleges and universities across the five boroughs. 

By way of background, anchors are large institutions, typically educational, medical or cultural, that are deeply rooted in their local geographies. They play an integral role in the economy and can have deeper local impact by targeting their core activities. Nationwide, urban-based colleges and universities provide 2.4% of private sector jobs and spend $175 billion on goods, services, and salaries and benefits. These institutions have added 12.5% of jobs from 1998-2009.

Anchors create shared value with their local communities when they pursue activities that promote both community vitality and the anchors’ own competitiveness.  ICIC encourages anchors to focus their activities around seven roles in a Strategic Framework for Shared Value (see above).

The University of Pennsylvania provides the classic example for how an anchor can do well for itself by doing well for its community.  In the mid-1990s, the university suffered because West Philadelphia was unsafe and economically blighted. Over the next decade, President Judith Rodin worked to improve the long-term vitality of its neighborhoods through improvements in safety, provision of affordable housing, increased retail activity, improved K-12 education options, and access to the university’s goods and services procurement.  These efforts span multiple anchor institution roles and because of them, UPenn was able to achieve a better experience for students and staff, increases in recruitment and enrollment, enhanced reputation that helped rankings and fundraising efforts, applied learning opportunities for students and faculty, and Improved community relations.

New York City boasts over one hundred colleges and universities that hold enormous potential to build shared value with their local urban neighborhoods. New York City is a college town: some 550,000 students call it home, and colleges and universities spend an estimated $17 billion annually and employ 3.3% of the NYC workforce.  Institutions such as Columbia University, Fordham University, and CUNY have undertaken major real estate developments recently.

ICIC research discovered promising examples of New York City anchors that are active in select roles across the Framework. As Purchaser, Columbia University strives to focus 35% of its construction spending with minority and local vendors and enjoys superior, nimble, and speedy service from these vendors. As Community and Real Estate Developer, Pratt Institute has completely transformed its neighboring Myrtle Avenue corridor and has boosted its brand, enrollment, and financial situation as a result. As Workforce Developer, LaGuardia Community College provides a holistic approach to help students access in-demand jobs in the healthcare sector and has an average program completion rate of 90%. As Core Service Provider in education, The New School applies a community-based learning model that engages students and faculty in hands-on learning experiences across the city.  As Cluster Anchor, SUNY Downstate Medical Center has helped develop the biotech cluster through its incubator facilities and associated workforce development activities. Exposure to this entrepreneurial activity has been highly valuable to students and faculty.

Yet despite pockets of success, enormous untapped opportunity remains. NYC anchor institutions lag leading institutions across the country in promoting inner city economic and community development. For instance, in FY2011 University of Pennsylvania purchased $115M worth of goods and services from local vendors in seven zip codes in West Philadelphia; this amount represented 16% of total goods and services spending, nearly double what the university had done in 1999. New York City colleges and universities are still far behind in this area.

Monday’s Gracie Mansion event identified next steps for how the City’s colleges and universities can build shared value. Specifically, high potential areas include programs in local purchasing of goods and services, innovative ways to re-think workforce development, and geographically-based collaborations across anchor institutions.

With a clear understanding of what is possible, we know that NYC’s anchor institutions are capable of creating additional shared value for their local inner city communities.

BY Amanda Maher on November 16th, 2011

TAGS: economic development | nyc | anchors | upenn