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Inner City Exchange
ICIC's daily blog featuring opinions and commentary from leaders and practitioners in the field on all things related to cities and urban businesses.
Recognizing 15 Years of Urban Heroes
Each year, ICIC celebrates the nation’s fastest-growing urban firms at the Inner City 100 Awards Gala. While these companies have all been selected for their extraordinary year-over-year growth, they also are honored for their steadfast commitment to inner cities. As we head into the 15th year of Inner City 100, we continue to celebrate the impact that these business have on their communities and local residents. Here are a few of their stories.
Giroux Glass
While most CEOs would contend that they began their companies as a result of a unique skill or overwhelming passion, that’s not entirely the case with Los Angeles-based Giroux Glass. The wildly successful glass repair company sprung up in what seemed like a case of fate. Back in 1991, real estate investor Anne-Merelie Murrell found herself in the glass business incidentally. She had been buying and renovating buildings in the USC-area of Los Angeles for years, one project at a time. She eyed an industrial property, but the owner refused to sell unless the purchaser was willing to take on the resident glass company and its 10 employees.
“I wasn’t particularly anxious to do that but I did it,” says Murrell. “I was interested in buying properties and changing the face of these few buildings, not getting into the glass business.”
But sometimes, fate works in our favor. Despite a rocky start and inconsistent profits, the glass business began to soar. In addition to the 1992 riots that devastated the neighborhood, the earthquake of 1994 created a demand for both repairs and new construction. By 2008, Giroux Glass had over 400 employees and $37 million in annual revenues. In recent years, the company added satellite offices in Las Vegas, Fresno and San Bernadino.
“As a real estate investor, Anne-Merelie Murrell wanted to make a difference in her neighborhood one property at a time. As an entrepreneur, her impact has multiplied a hundredfold,” says former ICIC President David Latimore. Half of all Giroux Glass employees are inner city residents; these jobs pay well and include health insurance and other benefits. Murrell has even drafted a succession plan that transfers ownership of the company to the employees. She is cultivating a leadership team among her current workforce in order to capably manage the company once she retires.
BY Mary Duggan on May 14th, 2013
TAGS: small business | ic100 | urban heroes | inner city 100 | urban revitalization | jobs | entrepreneur | economic development
Want to Boost the Economy? Improve Graduation Rates
There’s nothing novel about levels of education being correlated to future income potential. It’s a longstanding fact that the more education one receives, the more he or she is likely to earn over their lifetime.
But what people may not realize is the impact that high school graduation rates have on the local economy. As it turns out, high school dropouts are costing the economy $1.8 billion in lost tax revenue each year.
A new report finds that increasing graduation rates to 90% could plug state and federal budget gaps simply because of increased tax revenues collected from the graduates. In Colorado, for example, the state had to cut $4.7 million from its higher education budget between 2012 and 2012. If 90% of Colorado’s high school students graduated, the state would have collected an additional $4.1 million in revenue. Instead, the state only graduated 74% of its students in 2011.
In New Jersey, the state recently cut $19.2 million from its public assistance budget. If the state could boost its high school graduation rate from 83% to 90%, it would result in an additional $19 million for state coffers.
BY Amanda Maher on May 9th, 2013
TAGS: economic development | cities | taxes | education
Innovative Product? Check. Foolproof Marketing Plan? Call in the Expert.
Photo: Harvard Business School Professor Rohit Deshpandé
Even great products encounter marketing difficulties. This is the lesson of “Tiger-Tread,” a case study by Harvard Business School Professors Rohit Deshpandé and Richard N. Cardozo, which will be presented at this year’s Inner City 100 Symposium by Dr. Deshpandé.
With over 15 years experience in executive marketing education, Dr. Deshpandé knows a thing or two about marketing solutions. “Tiger-Tread,” is loosely based on a product, produced by the Dow Chemical Company, known as “Liquid Tire Chain.”
Liquid Tire Chain is a substance that creates a gummy texture when sprayed onto the tires of an automobile. The newly formed traction layer helps stuck vehicles maneuver out of snow and ice. Dr. Deshpandé will take Symposium participants through some of the challenges that Liquid Tire executives dealt with as they brought this product to market with an eye on the relationship between finance and marketing.
BY Guest Blogger on May 6th, 2013
TAGS: marketing | branding | harvard business school | ic100 | small business | entrepreneur | business
Shifting Gears: Linking Federal Procurement and Transit to Create Local Jobs
Photo by Flickr user prayitno
Amid all the efforts to create well-paying local jobs, there is a missed opportunity in transportation. As cities and states build out or rehab their transit networks, the jobs associated with the bus and train fleet manufacturing are going abroad. There’s currently no mechanism in place to ensure that these jobs, paid for using taxpayer dollars, stay here at home.
The Los Angeles Alliance for a New Economy (LAANE) and the USC Program for Environment & Regional Equity (PERE) are on a mission to change just that.
Using Los Angeles as a test city, the organizations crafted the “Transportation and Jobs for America Project.” Nearly $26 billion is slated to be invested in Los Angeles’s mass transit system over the next several years, and LAANE realized this is a huge opportunity to create jobs for local residents—particularly lower-income, inner city residents.
In a recent webinar hosted by Living Cities, LAANE outlined the three primary goals of their project:
- Reshape government procurement to ensure that public dollars are spent to create American factories, well-paying jobs in disadvantaged communities, and to make procurement more transparent, efficient and effective;
- Support a responsible business sector to bring clean energy transit equipment to the U.S.; and
- Build a community program to organize for the creation of good jobs, factories in low-income communities, and access to those jobs by disadvantaged local residents.
BY Amanda Maher on May 2nd, 2013
TAGS: cities | jobs | living cities | transit | la | buy america | laane
Goldman Sachs 10,000 Small Businesses Grad Turns Fastest-Growing Urban Business
Photo: Vladmir Naranjo accepts the #8 spot on the 2012 Inner City 100 list
Access to capital. Procurement and contracting. Recruiting and maintaining talent. Understanding the local permitting processes. Finding affordable real estate. Building a business is often like navigating an obstacle course. Learning the tips and tricks to overcome these barriers to growth can really make or break a small urban business.
Houston-based PMG Project Management Group has experienced these challenges firsthand—and has come out on top.
When a friend told co-founder Vladamir Naranjo about the Goldman Sachs 10,000 Small Businesses program, it piqued his interest. The program provides urban business owners with management education, capital and business support services. But by his friend’s account, the program seemed too good to be true. So Naranjo took the time to research and investigate the program. As it turns out, the program was not only very credible, but PMG was eligible to participate.
During the program, Naranjo refined his business model. As many CEOs know, a passion for the work often engulfs the executives in the day-to-day activities. Just because someone has a particularly strong skill, it does not mean that the business owner will know how to successfully run a business. That said, with a little help, these business owners can go on to have wildly successful careers. Naranjo left the 10,000 Small Businesses program with the ability to better delegate so he can focus on implementing the company’s new growth strategy.
BY Amanda Maher on April 30th, 2013
TAGS: small business | business | 10ksb | #10ksmallbiz | houston | ic100 | entrepreneur | executive education
Want to create local jobs? Look in your own backyard
Many economic indicators suggest that the economy is rebounding—slowly but surely. But to the 11.7 million Americans still out of work, the jobs aren’t coming quickly enough. After mass layoffs and improved efficiencies, companies just aren’t hiring the way they did in the past.
There has been an overreliance on new entrepreneurs, or the creation of new businesses, to help pull the economy out of the deep recession. But, as former U.S. Small Business Administrator Karen Mills pointed out in a recent article, our best chance at creating new jobs is through the businesses right here in our backyards. Existing businesses hold the key to future job growth: they created 8.7 million private sector jobs from March 2011 to March 2012 alone.
Mills explains that there are millions of companies across the nation that “are ready to scale their operations, plug into supply chains, export overseas and add to their workforce. All they need are the right tools, the right opportunities and the right resources to make it happen.”
ICIC couldn’t agree more.
BY Mary Duggan on April 26th, 2013
TAGS: small business | business | jobs | entrepreneur | ic100 | capital | procurement | anchors
Detroit Future City: An Integrated Approach to Economic Development
Three years ago, Detroit’s public, private and philanthropic stakeholders embarked on a journey to rethink Detroit’s future. An extensive public planning process engaged over 30,000 local residents, hundreds of civic leaders, and technical experts who, together, helped to craft a long-term vision for the city’s equitable growth and development. The result is Detroit Future City.
The Detroit Future City (DFC) Strategic Framework is unlike your typical economic development plan. Rather than a “vision plan” which tends to be illustrative, or a “master plan” that is legally-mandated, DFC’s strategic framework uses a hybrid approach. DFC is a comprehensive, action-oriented blueprint that assigns responsibility for implementation. Ultimately, DFC seeks to raise quality of life for Detroiters, residents and businesses alike.
DFC has five key elements of change: economic growth, land use, city systems, neighborhoods, and land/building assets. In last week’s What Works Webinar, ICIC Research Practice Manager, DFC consultant, and Detroit native Kyle Polk dove into the economic growth element.
BY Guest Blogger on April 25th, 2013
TAGS: economic development | industrial | detroit | what works | workforce development | ask the expert | cities | workforce | detroit future city
The High Cost of Underutilized City Parking
America’s infatuation with the automobile has led to sprawling cities, air pollution and zoning codes that mandate a certain number of parking spaces be built for residential units. These residential parking requirements – ranging from two parking spaces per unit to one parking space per bedroom – stem from the fear that streets will become congested and street parking will be overwhelmed if plentiful off-street parking is not provided.
In addition to other negative effects, this has resulted in spiraling development costs whereby an affordable housing unit now costs upwards of $350,000. Per space, surface parking costs around $3,000 and where land is unavailable, underground parking costs at least $25,000. Ultimately, parking requirements act regressively because lower-income households are the least likely to own multiple cars but still must pay, in higher home prices or rents, for their unused parking.
A reduction in arbitrarily determined parking requirements would lead to higher equity, lower development costs, and more productive land uses.
Currently, parking requirements are sucking the potential out of affordable housing developments. A lesser requirement would allow a developer to build more units. In San Francisco, nonprofit affordable housing developers say that the requirements have added 20% to each unit’s costs while decreasing the number of buildable units onsite by 20%. Recently, San Francisco revised its policy to allow for only 0.25 parking spaces to be built per affordable housing unit. Developers then “de-couple” the spaces, giving the residents the option to rent a parking space if necessary.
BY Amanda Maher on April 22nd, 2013
TAGS: economic development | cities | parking | transportation | housing | community development
Turning Trash to Cash: TerraCycle’s Rise to the Top
Tom Szaky, founder and CEO of Terracycle
You’ve heard it before—one man’s trash is another man’s treasure. A 2011 Inner City 100 winner Trenton-based TerraCycle takes the meaning to a whole new level.
It began with worms. Co-founder Tom Skazy was on Fall Break from school. While he was up in Montreal, he watched friends feed table scraps to worms inside a composting bin. His friends then used the fertilizer for their indoor plants. It seemed ingenious; there’s an abundance of food waste—he just needed to get a critical mass of worms to start producing the fertilizer. Before long, the eco-fertilizer was stocked on the shelves of some major retailers, including Home Depot and Wal-Mart.
After finding success by recycling materials for fertilizer, TerraCycle diversified into reuse of other materials. A unique opportunity emerged: Sponsored Waste! Different “Brigades” are sponsored; Bottle Bridges by Honest Tea, Yogurt Brigades by Stonyfield Farm, Energy Bar Wrapper Brigades by CLIF BAR, and so forth. Sponsored Waste now works with several consumer packaged goods manufacturers to turn their non-recyclable packaging into new products.
BY Steven Pedigo on April 18th, 2013
TAGS: ic100 | business | small business | entrepreneur | trenton | green jobs
To Conquer the Growing Wealth Gap in Suburbs, Begin with Cities
Two prominent articles were published recently highlighting the growing wealth gap in suburban communities. Suburbs, once the traditional haven for middle-class families, are experiencing a wealth divide akin to cities—where inner city residents have fared worse than their wealthier urban counterparts.
In the first article, “Suburban Disequilibrium,” published in the New York Times, the authors describe the vast wealth in the Los Angeles suburb of Bradbury. Just a few miles ease is Azusa, a Los Angeles suburb that is mostly working class Latino families. “These towns represent extremes of social inequality, but in Los Angeles and other areas, they reflect a defining pattern of contemporary suburban life,” the authors write. “Nationwide, rich and poor neighborhoods like these house a growing proportion of Americans, up 31 percent compared with 15 percent in 1970.” Simply, the middle-class suburb is facing extinction.
The second article, “Gentrification threatens to displace residents in the inner suburbs as well as in the District,” is a column by Robert McCartney for The Washington Post. Here, the focus is on the redevelopment of lower- and middle-income housing units into more expensive units, thereby displacing longtime working class residents. In order to access affordable housing, families are being uprooted and children are forced into new (often worse) school districts. Where families choose to stay, parents are often taking second and third jobs to afford the increased housing expenses.
BY Amanda Maher on April 16th, 2013
TAGS: economic development | cities | poverty | wealth gap | suburbs
Are Kitchen Incubators the Greatest Thing Since Sliced Bread?
Photo: Hot Bread Kitchen operates an incubator program, HBK Incubates that offers affordable commercial kitchen rental and comprehensive business support services
First it was food trucks, and now it’s kitchen incubators. They are popping up in cities left and right. Once a novelty, the kitchen incubator seems to have become commonplace.Kitchen, or culinary, incubators offer shared commercial kitchen space to help early-stage catering, retail, and wholesale food entrepreneurs get their businesses off the ground. The main draw of a kitchen incubator is that by clustering under the same roof, the businesses share costs. For most entrepreneurs, the notoriously high startup costs associated with the food industry such as purchasing equipment, finding affordable rent, and paying the licensing fees required of commercial kitchen space are cost-prohibitive.
Many incubators are run as non-profit entities by quasi-public organizations, such as local main street groups. Others are run as joint ventures out of vocational schools or universities. In most cases, a fee-based system (sometimes even a sliding scale depending on the entrepreneurs’ income) is used to charge tenants on an hourly, daily or monthly basis. In few instances, the incubators might operate as accelerators in which investors take an equity stake in their tenants.
BY Amanda Maher on April 11th, 2013
TAGS: business
When Leaning In Didn't Work -- Even For Sheryl Sandberg
Written by Kimberly Weisul and Connie Guglielmo, One Thing New
We're not so sure about this whole Leaning In thing. Are women really not leaning in? Should we be leaning in more, and if so, how far forward are we talking? When is it OK, if ever, to lean back? What about leaning sideways -- are we good with that?
And does anyone know a good chiropractor, just in case?
There's no debate that Facebook COO Sheryl Sandberg is a powerful, successful, confident, lucky, rich woman. Excellent. We need more of those. Sandberg's new book, Lean In: Women, Work and The Will to Live, has renewed the discussion about the lack of women at the upper echelons of businesses and other organizations in the U.S.
As Sandberg writes, "Women hold around 14 percent of Fortune 500 executive-officer positions and about 17 percent of board seats, numbers that have barely changed over the last decade." Yet multiple studies have shown that companies with gender-diverse management teams and boards perform better than those that are run exclusively, or almost exclusively, by men.
Sandberg's conclusion is that women need to learn how to play better in a man's world. Her suggestions, in part, include smiling, saying "we" instead of "I," praising the boss, and working extremely hard to prove you've got what it takes to rise to the top even as you juggle work with raising a family.
There are good reasons, of course, for women to want to advance up the corporate ladder. And there are good reasons for companies to want them to, too. McKinsey ranked companies by the percentage of women on their executive committees. Those in the top 25% had a 41% higher return on equity and did 56% better in terms of their operating results than the companies with all-male executive committees. Not-for-profit Catalyst found that Fortune 500 companies with three or more women on the board showed a "significant performance advantage" over companies with fewer women. That's measured by return on sales, return on equity and return on invested capital.
BY Guest Blogger on April 9th, 2013
TAGS: business | entrepreneur | workforce | leadership | gender equality
Can Grocery Stores Serve as Community Anchors?
Above: Philadelphia Mayor Michael Nutter shops at one of the Brown’s Grocery Stores (courtesy of CSMonitor)
We’ve talked at length about the importance of the food cluster. From urban agriculture to kitchen incubators, there are myriad opportunities to use food as a fulcrum for inner city job growth and business development.
Inner city grocery stores are another tool for urban revitalization.
Though often associated with “food deserts” – or geographic areas underserved by traditional supermarkets – grocery stores can have significant impacts on their local communities, far beyond nutritional and health benefits.
In a recent webinar, UpLift Solutions, a nonprofit working within the grocery industry, outlines the economic impact of supermarkets.
First, grocery stores provide hundreds of job opportunities. These markets hire the least-skilled workers and provide on-the-job training. Certainly, the entry-level positions at grocery stores don’t pay the highest of wages, but they offer a starting point for otherwise hard-to-hire residents, such as those who have been unemployed for long periods of time or who have a criminal record. The sheer size of the grocery industry offers significant opportunities for upward mobility. In fact, in some cities, grocery store employees are unionized, ensuring higher wages and benefits.
Second, grocery stores have been shown to increase nearby residential home values by 5-7%. Increased home values mean greater tax revenues for the city. In a city where the residential tax rate is $14 per $1,000 in home values, a $200,000 home would have a tax bill of $2,800. If the property value increases by 7%, the tax bill would increase by $196 per year. While this may not seem like a huge increase to city coffers, when many houses experience an increase in property values, the new revenues over several years begin to accumulate.
BY Amanda Maher on April 8th, 2013
TAGS: food | urban food | grocery stores | anchors | workforce development | urban revitalization | economic development | workforce
Brickstarter: Moving From NIMBY to YIMBY
Crowdfunding—or the individual contributions by many to fund a particular project—have launched some really captivating, innovative products. The world’s first 3D printing pen was created through crowdfunding; aquaponics systems are becoming available to the average household; and technology and design are being combined to create new sweat-proof, wrinkle-free dress shirts for the active wearer.
Most of the ideas launched using crowdfunding produce a consumer good of some sort. But what if we were to use that model to fund civic projects? Can we “crowdfund” the city?
A few years ago, three designer friends decided that they wanted to build a pool in the middle of New York City’s East River. This floating pool would run using river water and an advanced filtration system. They posted their idea on Kickstarter, the most well known of the crowdfunding websites. They had a goal of raising $25,000, and ended up raising over $40,000 for their pool. It is one of the first known times that the crowdfunding model had been used for a capital project.
But innovation blogger Kevin Gray writes, “Crowdfunding capital projects is gaining momentum. In Bogota, Columbia, the 66-story BD Bacata Downtown skyscraper will be partly owned by the community. In Rotterdam, the Netherlands, locals crowdfunded a bridge. On New York’s Lower East Side, a pair of architects are creating, and crowdfunding, the first-ever underground park in an abandoned trolley car station.”
BY Amanda Maher on April 3rd, 2013
TAGS: crowdfunding | crowdsource | economic development | community development | urban revitalization | capital
Can Businesses Maintain The Culture That Fueled Their Initial Growth?
It can be done. Just ask the CEO of Chobani.
On May 21st at Harvard Business School (HBS), Chobani CEO Hamdi Ulukaya and HBS professor Joshua Margolis will jointly present “Making Sure Your Culture Does Not Spoil as you Grow” as part of the Inner City 100 Symposium agenda. Based on Dr. Margolis’s case study on Chobani, the presentation offers a unique opportunity to hear both academic and professional perspectives on one of the country’s most ascendant businesses.
The presentation will focus on a problem that many established businesses struggle with: namely, how to maintain the culture that fueled company growth while dealing with the new challenges that inevitably absorb scarce executive bandwidth as a company scales.
No company knows fast growth quite like Chobani. The company was founded in 2005 with a modest staff of five, and now boasts over 2,000 employees. Initially making due with one truck of milk per day, the firm’s operations demand an astounding 4 million pounds of milk daily to serve its customers. Chobani owns over half of the US Greek Yogurt market and 20% of the total yogurt products market, while powerful competitors like Danone and General Mills eye their market share and profits.
BY Sathya Vijayakumar on April 1st, 2013
TAGS: ic100 | culture | business | small business | entrepreneur | sustainable growth | chobani | case study | ask the expert
Do the “Bones” of Our Economy Suffer from Osteoporosis?
In his State of the Union address, President Obama stressed the importance of investing in the nation’s infrastructure in order to get the economy back on track. If approved, his “Fix it First” program would begin the repair of 70,000 structurally deficient bridges almost immediately.
This is a start. Yet the American Society of Civil Engineers (ASCE) released a report last week indicating that much more needs to be done. In the 2013 Report Card for America’s Infrastructure, ASCE gave the nation’s infrastructure a D+ grade. ASCE estimates that $3.6 trillion worth of investment is needed to bring our infrastructure up to par.
Traditionally, people think of “infrastructure” as our roadways, bridges, and transit. But infrastructure encompasses so much more than that: it includes things like our drinking water, hazardous waste, and energy facilities; power lines, dams, levees and ports.
The ASCE graded 16 different categories using a simple A to F school report card format. Few of the categories fared well. Solid waste ranked the highest with a B- whereas inland waterways and levees scored the lowest with a D-. On a positive note, no category ranked lower than it did when the last report was released in 2009. Indeed, solid waste, drinking water, wastewater, roads, and bridges all saw minor improvements.
Still, the results are dismal. “The infrastructure experts have diagnosed the bones of our economy with what is the equivalent to severe osteoporosis,” says Dr. Jason Hartke of the U.S. Green Building Council. Solid infrastructure is critical to support healthy, vibrant communities. It is essential for America’s long-term economic, employment, income and export growth.
BY Amanda Maher on March 29th, 2013
TAGS: infrastructure | fix it first | bridges | economic development | cities | industrial
Audible.com and Why Business Location Matters
Audible.com’s lobby in Newark. Picture Credit: bcdcnewark.org
Since ICIC’s founding in 1994, we have relentlessly sought to spread the word on business location in the inner city. In a continuation of this trend, we recently published research trying to answer the question “Do Inner City Firms Bring Opportunity to the Disadvantaged?” based on 2012’s Inner City 100 winners. Given our repeated emphasis on the topic over the years, it’s heartening to hear about stories like Newark’s Audible.com.
Early last week, CEO Don Katz was awarded the 2nd annual Kevin J. McKenna Award for helping to revitalize Newark through his decision in 2007 to locate his business in the urban core of the city. In a recent interview in the online magazine Next City (linked below), Katz described the thinking behind his decision and how the city and company have mutually benefited from their arrangement. Here are a few key points from the company’s story that are particularly salient to other cities and businesses thinking about urban renewal.
Molding a Talent Base from the Ground Up
In the interview, Katz goes into detail about the company’s efforts to contribute to education reform in Newark. The company decided soon after its founding to select their interns from North Star High School, a local charter school. What happened next is really unique and remarkable: the company decided to recognize the best students as “Audible Scholars” and provide them with a stipend and guaranteed jobs following graduation. This kind of investment, unusual in its local orientation and ambition, has the potential to make an outsize impact on the company’s surrounding area. Students get a platform for their ambitions that no one in their family may have ever had, the certainty of a job helps to stabilize the community, and the company gives back while building a local pipeline for talent that other companies can’t easily access. Whether you want to call it shared value or just good business, there’s little doubt that programs like this one are a potential model for other companies to consider as a best practice.
BY Sathya Vijayakumar on March 27th, 2013
TAGS: shared value | newark | cory booker | what works | business | economic development | urban revitalization
What Are the Roots of Racial Economic Inequality?
The gap between the rich and poor is growing in America. It’s what fueled the “Occupy” movement; the 1% vs. the 99% became a rally cry to try to rebuild America’s middle class. Indeed, 1% of Americans own 37% of the nation’s total wealth.
While this seems straightforward, there are actually massive gaps within the 99% itself. A new study by Brandeis University looks at the discrepancy in wealth accumulation among races. “The Roots of the Widening Racial Wealth Gap” is a longitudinal study that tried to identify the causes between the black-white economic divide.
After tracing the same 1,700 households over 25 years, the study found that the wealth gap between white and African-American families nearly tripled, increasing from $85,000 in 1984 to $236,500 in 2009.
Data from the Pew Research Center confirms this: a 2009 survey of American households found that the median wealth of white households ($113,149) was 20 times that of black households ($5,677) and 18 times that of Hispanic households ($6,325). The recession took the hardest toll on minorities: from 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanics, 53% among African-Americans, but just 16% among white households.
What explains the disparities?
Despite popular misconceptions, there is no evidence that personal attributes (such as laziness) or behavioral choices (like substance abuse) contribute to the problem.
Instead, the Brandeis study found that where we live, where we learn, and where we work all factor in to the black-white wealth gap. Specifically, there are five factors that contributed to the divide: (1) homeownership; (2) employment; (3) inheritance; (4) college education; and (5) marriage.
BY Amanda Maher on March 25th, 2013
TAGS: equity | wealth | economic development | urban revitalization
ZipSpaces: A Bold Idea to Reactivate Vacant Storefronts
Car sharing, bike sharing, and now…storefront sharing? That’s the bold idea behind “ZipSpaces” – an effort to bring vacant storefronts back to life by renting them out on a timeshare basis.
Rebekah Emanuel is the mastermind behind this idea. As the name would indicate, she modeled the program after the well-known Zipcar program. ZipSpaces allows you to “check out” commercial space that would otherwise sit vacant. On Monday a storefront may be a health clinic, on Tuesday perhaps a farmer’s market. Tuesday night could even be an art gallery.
Similar to the online vacation rental site AirBnB, owners post their space and indicate what the space can be used for: does it include a kitchen, could it be used for a restaurant? Is there space for receptions or large gatherings? Is there an outdoor area? A stage for performances?
Renters view the spaces online and rent properties accordingly. A key card allows users access to the space for the period of time they have it reserved. Users report if anything in the space is left dirty or unclean, just as someone would when renting a vehicle.
BY Amanda Maher on March 22nd, 2013
TAGS: urban revitalization | retail | what works | business | economic development | small business | community development | zipspaces | zipcar
Haciendo Comida Mexicana Para La Comunidad - The Rico Way
When I was growing up, my Dad (who was born in Ciudad Juárez) and I would visit my grandparents to see what Mexican delicacies my grandmother had been preparing all afternoon. Grandma would spend hours in the kitchen making green enchiladas, tamales, menudo, refried beans, fideo (google it) and homemade tortillas. Today, the smell of Mexican food brings back fond memories of my childhood, including some of the people who made it special.
When I moved to Boston five years ago, I found it incredibly difficult to find really good Mexican food like my grandmother would make. As a native Texan who considers rice and beans as its own separate food group, this was quite the conundrum. I was comforted to know, however, that I am not the only person who had experienced such difficulties.
Jorge Fierro, CEO of Rico Brands in Salt Lake City, was in a similar situation. Fierro, also a native of Mexico, was consistently disappointed with what was available at the local grocery store for the Mexican food connoisseur. To combat such a travesty, Fierro decided to open up his own market and restaurant that could serve the freshest Mexican food products in Salt Lake. After showing significant success with the market, Fierro was able to secure a Utah Microenterprise Loan to turn Rico Brands into a high-growth firm. He decided to manufacture, label and distribute his “De La Olla” pinto beans. Rico Brands currently employs 85 people at its Salt Lake facility that now produces 125 different products and distributes to more than 60 stores. The company’s success expanding its revenue sources led the firm to appear on the 2010 Inner City 100 list with revenues of $2.6 million.
BY Alex Rodriguez on March 19th, 2013
TAGS: ic100 | community development | community impact | shared value | salt lake city | small business | business
[Study]: Low-income households hit hardest by Sandy
![[Study]: Low-income households hit hardest by Sandy](http://www.icic.org/ee_uploads/images/sandyblog.jpg "[Study]: Low-income households hit hardest by Sandy")
Just four months ago, Hurricane Sandy wrought havoc from the mid-Atlantic region through New England. Transit ground to a halt. Businesses were devastated. Homes destroyed.
But until now, there was no hard data on exactly who was affected by Hurricane Sandy. Two related studies now paint a picture of the devastation. And unfortunately—we’re learning that those hit hardest are low-income families that already struggle to get by.
The Furman Center for Real Estate and Urban Policy at NYU analyzed the breadth of the storm surge and how many residential units were directly impacted. They found that nearly 300,000 people (3.7% of NYC’s total population), living in 76,000 buildings, were directly hit by Hurricane Sandy. Nearly half of all homes affected are single-family properties; 35% were 2-4 family homes, 12% were commercial properties and the rest were a mix of uses, including condos and co-ops.
Data indicates that over 80% of the homes in the storm’s surge area were built before 1983, the year of NYC’s most recently adopted flood-related building codes—making them more susceptible to hurricane damage. “It will be very expensive to adapt these buildings to the modern realities of more frequent and stronger storms, so it is important to understand what’s at stake and how much it could cost,” said Max Weselcouch, a research analyst with the Furman Center.
BY Amanda Maher on March 18th, 2013
TAGS: economic development | natural disaster | superstorm | sandy | nyc | new york | new jersey | real estate | housing | construction | chre | urban revitalization
Cities Continue as Hotbeds for Innovation
Due to state and federal funding cuts, cities have become the hotbeds for innovation in addressing social ills. To support these efforts, Bloomberg Philanthropies launched the Mayor’s Challenge, in which 305 cities entered their best ideas for a chance at winning a slice of $9 million in prize money.
Back in November, we highlighted the top 20 cities that were chosen to attend Ideas Camp. The finalists participated in an intensive two-day collaborative session in NYC to strengthen and stretch their ideas. Early this year, each city had to submit its refined ideas.
The top 5 winners have just been announced, with Providence, Rhode Island taking home the $5 million grand prize. Chicago, Houston, Philadelphia and Santa Monica each won $1 million.
So what was Providence’s big idea? It’s really quite simple, actually: to close the vocabulary gap between low-income and higher-income students in the city. The innovation lies in the method of doing so. The “Providence Talks” program uses technology to identify the number and types of words children hear each day, both at home and in daycare. The program gives feedback on the child’s vocabulary development and then vocabulary coaches help teach parents strategies to improve their child’s household auditory environment.
Closing the “word gap” is vitally important to ensure the success of students later in their lives. By the time children reach age four, research indicates that low-income children hear 30 million fewer words than their higher income peers. Currently, only one in three children entering kindergarten in Providence enters at the appropriate literacy benchmark.
BY Amanda Maher on March 14th, 2013
TAGS: cities | innovation | bloomberg | houston | providence | santa monica | philadelphia | chicago | mayors challenge
Do Inner City Firms Bring Opportunity to the Disadvantaged?
Written by: Mack Davidson, ICIC
As luck would have it, ICIC’s new inner city home in Roxbury, MA, is only a short walk from a nifty bakery-café. The café isn’t just a standout due to its savory soups or light, fluffy scones – although they are excellent! The icing on the cake, though, for this culinary gem is its staff. The café has made a determined effort to hire “disadvantaged” workers, such as former prison inmates.
Tapping overlooked, hard-to-place inner city residents as employees is exactly what ICIC encourages. The effort can lead to a win-win scenario. The employer ends up with a hardworking, loyal workforce. Meanwhile, the employees gain a foothold in the mainstream economy.
ICIC had this paradigm in mind when it reviewed survey results for 2012 Inner City 100 winners. Are those high-achieving firms recruiting “disadvantaged” workers from surrounding neighborhoods? What factors predispose them to do so? The following paper takes a stab at these questions. It also lays the groundwork for further research into this very human – and social – angle of urban entrepreneurship.
Key Survey Findings not to Miss:
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Three factors explain a large share of the variation in minority representation at the firms.
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A CEO’s impact on a firm should not be underestimated. The chief executive’s ethnicity is relevant to the percentage of minorities on staff – and more.
- Relying on referrals may shortchange a firm trying to cast the widest net for talent.
Download ICIC’s latest white paper: The Flow of Prosperity.
BY Guest Blogger on March 13th, 2013
TAGS: ic100 | workforce development | community development | urban revitalization | workforce | jobs | business | what works
Mapping a More Cohesive Urban Community
Each winter, Boston officials and volunteers take to the streets for a few nights to conduct a homeless census, including a count of people living on city streets, in shelters, in transitional housing and other temporary housing programs. Thorough data collection helps the city to design programs that meet the needs of this population.
In a recent article by Global Urbanist, author Marcus Tudehope highlights twelve reasons why community-led mapping and enumerations are powerful tools to return power and democracy into the hands of the urban poor. Here are a few reasons why:
Evidenced-Based Advocacy: Better data helps urban communities become more visible to local authorities. In Boston, for instance, unless city officials know the severity of their homelessness problem, they will be unable to provide services to help ameliorate the problem.
BY Amanda Maher on March 11th, 2013
TAGS: mapping | census | cities | community development | urban revitalization
Making the Case for Downtown Detroit [Report]
There’s been much ado about Detroit hallowing out for decades, followed by the resurgence of certain downtown neighborhoods. As some of the city’s largest employers, Henry Ford Health System, Detroit Medical Center and Wayne State University have driven growth in Midtown Detroit. Technology companies like Twitter have spurred economic development through the city’s Woodward Corridor. Young entrepreneurs and artists are relocating throughout the city’s urban core to take advantage of low cost infrastructure and housing.
While there is some consensus that downtown Detroit is growing economically and changing physically, until recently there had been little data to support the claims.
That changed recently when the Hudson-Webber foundation and its partners released a report titled “7.2 SQ MI,” referring to the 7.2 square mile area of “Greater Downtown.” Greater Downtown includes the neighborhoods of Midtown, Woodbridge, Corktown, Eastern Market, Lafayette Park, Rivertown and the Central Business District. The report captures data regarding this area’s residents, workforce, employers, visitors and investors.
In terms of quick demographics, the report finds that there are 36,500 people living in these 7.2 square miles, for a population density of 5,076 people per square mile (down 13% from 2000). The average per capita income is $20,216. While only 8% of residents in Greater Downtown are college educated, this number skyrockets to 42% for residents aged 25-34—one of the area’s fastest growing populations.
The report found many reasons to be optimistic about Greater Downtown: there are still several major employers in this area, including General Motor and DTE Energy. A staggering 97% of housing in the central business district is occupied—primarily by the workers of downtown companies who opt to live nearby. And downtown is still the home to sports and entertainment: from the Red Wings to Lions, to the Fox and Fillmore theaters, downtown remains a hot spot. Nearly 10.5 million people visit Greater Downtown each year to partake in the fun.
Several other amenities are sprouting in Greater Downtown. There are now 301 restaurants (49 with outdoor seating) and 300 retail establishments in this area. Combined with 77 cultural amenities, 108 acres of parkland, 11 miles of greenway and now 16 miles of bike lanes—it’s no wonder that people are once again concentrating in the city’s 7.2 square mile downtown.
Equipped with these statistics, Detroit’s leaders are better able to make the case for downtown business development. “Things are changing in greater downtown, and we needed to have a baseline of information that accurately depicted things for potential investors,” said Katy Locker, Vice President of the Hudson-Webber Foundation.
To attract businesses to the Central Business District, city officials may tout the low lease rate: Detroit’s CBD lease rates are $19.72 per square foot (above Cleveland and Minneapolis, but below Pittsburgh and Philadelphia). Vacancy hovers around 17%, meaning there is plenty of opportunity for new businesses to take root in the downtown core.
The City is trying to prove to the business world that it’s serious about its comeback; since 2006, $6 billion has been invested in real estate development projects in Greater Downtown. Even during the Great Recession, $3.9 billion was invested in a total of 70 projects. Since 2010, 65 more projects have been completed, 35 are under construction, and an additional 30 are in the pipeline.
BY Amanda Maher on March 6th, 2013
TAGS: detroit | housing | population | density
The 2013 Sequester: By the Numbers
Photo Credit
Last Friday, the American economy suffered another setback as Congress failed to replace the sequester.
The sequester is a $1.2 billion dollar package of federal spending cuts. To sequester means to remove or withdraw; in this context, it refers to the withdrawal of some of the funds that Congress has already approved. The purpose of the sequester was to help stabilize the national debt by reducing the total amount that the nation owes by $4 trillion over the next decade when combined with other measures that the administration has already signed. Back in 2011, Congress passed the Budget Control Act under the premise that if both parties couldn’t agree on a plan to further reduce the national debt, the sequester would take effect beginning March 1, 2013. In short, the sequester was agreed upon with the intention that it would never be passed into law. Indeed, it was designed poorly specifically so that lawmakers would have to fear the political blowback if it ever was passed. And yet here we are.
Over the past two years, Congress has already reduced the debt by more than $2.5 trillion. More than 2/3 of the reduction has come from spending cuts; another $600 billion has come from new taxes; $500 billion has come in the form of interest savings. Yet, we’re facing over $1 trillion of additional, arbitrary budget cuts in order to meet the $4 trillion goal.
Perhaps it’s fatigue from the coverage of the debt ceiling in 2011 and fiscal cliff in 2012, but there has been much less media coverage of the impact of the sequester. But just like the other budgetary crises, the sequester threatens thousands of jobs and could potentially hinder recent economic growth. As detailed below, the sequester will likely hit low-income residents particularly hard.
BY Sathya Vijayakumar on March 4th, 2013
TAGS: policy | politics | sequestration | economic development | economy
What’s on the Agenda for America’s Urban Heroes?
The fastest-growing firms in America are gathering in Boston to power up by accessing the tools and know-how that small businesses need to grow. The Inner City 100 Symposium: A Cast of Urban Heroes will make a bigger bang, pow or zap than ever before in celebration of the program’s milestone 15th year. Not only will participants receive a day of world-class management education at Harvard Business School, but they will also have the opportunity to learn from standout Inner City 100 alumni. Presenting companies, among many others, will include Pandora Media, Chobani, TerraCycle, Coyote Logistics, Emma and Revolution Foods. The full agenda as well as registration for the Symposium is now available online.
Who are America’s urban heroes? They:
• Turn trash into cash
• Work hard, play hard and study hard
• Innovate through the gift of music
• Revolutionize the way children are fed
• Manufacture the Italian art of delicious
• Help all pets fly
• Reinvent the world’s flavors
• Telecommunicate with your custome
Not to mention, they do all of this while creating economic opportunities for America’s inner cities.
BY Alex Rodriguez on March 1st, 2013
TAGS: small business | boston | ic100 | business | management education | inner city 100 | jobs | community development
Reclaiming Food to Create Healthy, Economically Secure Neighborhoods
Each year, U.S. retailers discard an estimated $47 billion worth of food—much of it still edible. Lightly bruised apples and freckled bananas get tossed; surplus meats and dairy that have passed the stamped sell-by date go to waste too. A recent study found that U.S. supermarkets discard an average of $2,300 worth of food per store, per day. What if we could reclaim these foods, price them accordingly, and sell them in neighborhoods that would otherwise have little access to healthy food?
There’s no better person to lead this effort than Doug Rauch, the former President of Trader Joe’s.
The grocery store chain has become wildly successful, in part for its ability to sell cheap but attractive products. But even Trader Joe’s has a surplus: Rauch estimates that 5 billion pounds of food wind up in Trader Joe’s garbage bins annually.
BY Steven Pedigo on February 27th, 2013
TAGS: clusters | cities | jobs | economic development | food | urban revitalization | boston
The Rise of the 20-Minute Neighborhood
In cities everywhere, mayors and their planning staffs are designing cities that are pedestrian and bicycle-friendly. Fast-paced roads are being reworked to slow traffic. Two-lane thoroughfares are being changed to one-lane roads to allow for wider sidewalks and bicycle lanes. Mayors are putting a stake in the ground and declaring that cars are no longer king.
This is the mantra behind the 20-minute neighborhood. These neighborhoods are places where residents have easy, convenient access to many of the places and services they use daily, including local markets, restaurants, schools and parks—all without getting in the car.
20-minute neighborhoods are typically characterized by a vibrant mix of commercial and residential establishments within a one-mile walking distance. They are similar to traditional, walkable downtowns, but are popping up in neighborhoods outside of Main Street.
BY Amanda Maher on February 25th, 2013
TAGS: cities | community development | urban revitalization | transit
Big Cities Get Smarter. Big Companies Don't.
Businesses need to “think differently” when it comes to the world’s largest cities. This is a mantra urged by Next Street Founder and Managing Partner Tim Ferguson in a recent thought leadership piece published in TLQ digital magazine. In the article, “Can Big Business Keep Up with Big Cities?” Ferguson argues that commercial institutions of tomorrow will be distinguished not by their size but by their outlook.
The article points out that, worldwide, the increasing size of cities is projected to produce a billion new consumers and $20 trillion (not a typo) in new annual spending by 2025. Yet three out of five CEOs in a large-scale survey by McKinsey described cities as “irrelevant” to their companies’ plans. Further, Ferguson points out that the banks are missing a large shift in the American economy from tangible assets like buildings to intangible assets like domain names. What explains this disconnect of epic proportions?
BY Sathya Vijayakumar on February 21st, 2013
TAGS: cities | business | capital | ask the expert | next street
How To Keep Your Budget Relevant All Year Long
by Brad Farris, EnMast
I’m a bit of a budget freak. For me, a budget is the most useful tool you have for running your business. But I know this isn’t true for everyone. I know that for most people a budget is something you work on at the beginning of the year and then don’t touch the rest of the year. And that’s a shame.
Here’s how you can make your budget more dynamic and useful all year long.
BY Guest Blogger on February 19th, 2013
TAGS: small business | business | capital | budget | business management
ICIC Research Indicates State of the Union Promises Are On Point
Image coutresy of wbur
“It is our generation's task…to reignite the true engine of America's economic growth – a rising, thriving middle class,” said President Obama during his State of the Union address on Tuesday.
These words are music to the ears of inner city residents everywhere. Indeed, unlike his 2013 Inaugural Address, President Obama’s speech on Tuesday gave credence to the fact that Americans are still struggling; despite improvements in the economy, our lowest-income residents still suffer from a high cost of living and mediocre wages.
For months, Washington has been tiptoeing around fears of the fiscal cliff, the debt ceiling, and the sequester.
But as Obama said Tuesday night, reducing the deficit isn’t an economic plan. “A growing economy that creates good, middle-class jobs – that must be the North Star that guides our efforts.” We must find ways to create jobs, train workers to fill these jobs, and ensure that these are well-paying jobs. We must also find ways to lift residents out of poverty.
How do we get there?
BY Amanda Maher on February 14th, 2013
TAGS: economic development | cities | jobs | business | industrial | infrastructure | manufacturing | what works
3 Big State of The Union Takeaways for Businesses
Image courtesy of BigThink
In his State of the Union address last night, President Obama laid out an agenda remarkable among 2nd term presidents for its breadth and ambition. Among the array of policies he talked about, three passages stuck out for their relevance to urban communities and the people and businesses that call them home.
1) Raising the Minimum Wage
“Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead.” – Barack Obama
The room let out an audible gasp when President Obama announced the rebirth of this policy. During the heyday of Obama’s post-election euphoria in 2009, he had previously shown support for raising the federal minimum wage to a gaudy $9.50. The political realities of an entrenched congressional divide however have made even a call up to $9.00 an audacious bid. Conventional economic wisdom suggests that raising the minimum wage actually leads to less jobs as costs for businesses rise. But recent research has suggested that the increase in costs is offset by lower turnover costs and higher productivity from workers. While it’s not exactly breaking news that higher paid people perform better, disagreement on the economics and the worries of an economy still laboring under 7.8% unemployment make the policy’s fate an open question. If proponents are right, this could be a boon for inner city residents and additionally provide a lever for businesses to hire them. If they’re wrong, this could be a potentially large setback for small businesses with already tight payrolls.
BY Sathya Vijayakumar on February 13th, 2013
TAGS: small business | business | jobs | cities | urban revitalization | politics | policy | minimum wage | sotu
To ward off economic loss, cities must battle climate change
The Northeast was brought to a standstill once again this weekend, as Nemo, the latest storm to wallop the region, made its way up the coast. Offices sent workers home and school children rejoiced in a fortuitous long weekend full of snow. Shuttered transit and a driving ban kept residents hunkered down at home. Businesses were left with no option but to close up shop for most of the weekend.
Nemo brought more than 30 inches to many regions in the Northeast, with Connecticut and Massachusetts bearing the brunt of the storm. Still reeling from the aftermath of Hurricane Sandy, New York and New Jersey each received about a foot of white powder.
Given the preponderance of catastrophic weather events hitting the nation in recent years, it’s worthwhile to look at the ways cities are adapting to climate change.
Of particular importance is how to adapt to rising sea levels; many of the nation’s largest cities and population centers are concentrated along the coastlines. A 2011 report by the Natural Resources Defense Council found that coastal cities like New York and San Francisco should expect “serious challenges” from sea-level rise, while Southwestern cities like Phoenix should anticipate water shortages. Midwestern cities, like Chicago and St. Louis, are urged to brace for larger storms and flooding.
BY Amanda Maher on February 11th, 2013
TAGS: cities | economic development | community development | chicago | global warming | climate change | natural disaster
Trend Alert: Public Entities Adopting Community Benefits Agreements
As cities continue to grow, developers are scooping up properties and building bigger, better buildings than ever before. In dense areas, new towers are reinventing urban skylines. In smaller and less dense cities, new four- to six-story mixed-use buildings are changing the character of neighborhoods.
But change doesn’t come easily. Oftentimes, community opposition can delay projects for years.
In order to push projects forward, many developers have initiated or agreed to Community Benefits Agreements (CBAs). CBAs are contracts signed by community groups and developers that require the developer to provide specific amenities and/or improvements to the local community. In turn, community groups agree to support the project. Mitigation can include a range of options, from environmental cleanup to park improvements, from workforce training to the promised hiring of a percentage of local workers.
CBAs are often used when a development project is perceived to negatively impact a low-income neighborhood, such as when an area that has traditionally provided affordable housing becomes gentrified.
BY Amanda Maher on February 8th, 2013
TAGS: cbas | utilities | public sector | shared value | san francisco | nyc | los angeles | environment | jobs
The Next Steve Jobs Might Hail from Newark - Here’s Why
Photo Credit to Forbes
With gridlock on Capitol Hill, news of infrastructural improvements has more often come from the Chinese than the American press in recent years. In a step in the right direction however, the Washington Post reports that the Federal Communications Commission (FCC) recently submitted a proposal to create very powerful, free WiFi networks that would cover almost all metropolitan areas and most rural ones. While the project has generated news mainly because of the lobbying fight it has spawned between large telecommunications companies (AT&T, Qualcomm, etc.) and large technology companies (Microsoft, Google, etc.), the project would be a global first. Just as Eisenhower’s 1956 interstate highway project cut transportation costs and gave the U.S. a competitive advantage that many nations are only just approaching, this ambitious project by FCC head Julius Genachowski has the potential to give Newark and Palo Alto something powerful in common: access to the next wave of American innovation.
How would this help inner cities?
According to the article, “Cities support the idea because the networks would lower costs for schools and businesses. Consumer advocates note the benefits to the poor, who often cannot afford high cellphone and internet bills.” Unlike contentious national arguments over taxes and spending, the plan has the additional benefit of having already been tested and analyzed. In 1985, “when the U.S. government made a limited amount of unlicensed airwaves available to the public, an unexpected explosion in innovation followed. Baby monitors, garage door openers, and wireless stage microphones were created.” Fast forward a quarter century later, and one can only begin to imagine the innovation that might follow from low-income consumers gaining access to connected devices. Finally on the broader network, underserved resident participation would spur technologists to create products that could continuously monitor their health, improve the quality of their educations, and share tools that might allow them to eventually build their own transformative companies. If this project is successful, it is not an overstatement to suggest that the next Steve Jobs might hail from Newark rather than Palo Alto.
BY Sathya Vijayakumar on February 6th, 2013
TAGS: innovation | newark | equity | community development | cities | technology
Will Obama’s Second Term Lead to More Urban Investment?
Image courtesy of the Washington Post
“We are true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else, because she is an American, she is free, and she is equal,” said President Barack Obama during his 2013 Inaugural Address.
Sure, there are exceptions to every rule. But more often than not, those born in the bleakest of poverty have a hard time rising out of poverty to join middle- and upper-class society. Growing up in an urban school system makes it more challenging to go on to college and obtain well-paying jobs.
Because poverty (19% of total national poverty), especially minority poverty (31% of national poverty), is concentrated in inner cities (which comprise only 0.1% of U.S. land area), it begs the question—what action has President Obama taken to improve distressed urban communities? Moreover, what’s on his second-term urban agenda?
BY Amanda Maher on February 4th, 2013
TAGS: jobs | cities | equity | poverty | urban agenda | policy | politics | urban revitalization | economic development
Flipping the Switch on Workforce Development
Photo courtesy of gadgets.ndtv.com
A couple of weeks ago, I caught a 60 Minutes report entitled “Are robots hurting job growth?,” and it got me thinking a little bit about what might be in store for the American workforce in the coming years.
As we get off the mat from the Great Recession, the term “jobless recovery” has been tossed around to describe an economy that is showing record corporate profits, a stock market that is humming, and an unemployment rate that continues to be high. It seems clear that the most recent recession was truly an economic realignment and it has forced us to ask ourselves, “Where are the jobs of the future?”
BY Alex Rodriguez on February 1st, 2013
TAGS: jobs | small business | workforce development | manufacturing | industrial | workforce | business
Better Streets Driving NYC Business Growth
All cities grapple with street design—finding the delicate balance between which space should be used for public transit, vehicular traffic, bicycle lanes and pedestrian access. New York City, the largest and one of the densest cities in the U.S., is no different. The NYC Department of Transportation recently released a report outlining its approach to street design projects, including the results that have led to greater safety, efficiency and vitality.
Perhaps the most interesting findings are how better street design has boosted the local economy.
Along 8th and 9th Avenues in Manhattan, NYC’s Department of Transportation installed the first protected bicycle lanes in the United States. In addition to a decrease in injuries (35% decrease to all street users along 8th Ave., and 58% along 9th Ave.), there has been up to a 49% increase in retail sales for locally-based businesses along 9th Ave., compared to just 3% borough-wide.
In Union Square North, a new pedestrian plaza, protected bicycle paths and simplified intersections helped reduce commercial vacancies by 49%.
After transforming an underused parking area on Pearl Street, Brooklyn into a pedestrian plaza, retail sales increased 172% at locally-based businesses compared to just 18% across all of Brooklyn. Seasonal outdoor seating and new façade improvements have paid off: there has been a 77% increase in seated pedestrians and 14% increase in sales at fronting businesses. The Pearl Street Business Improvement District held a total of 27 public events through the first ten months of 2012—signifying the business community’s continued investment in the area.
BY Amanda Maher on January 24th, 2013
TAGS: economic development | cities | urban revitalization | community development | transportation | nyc | brooklyn
Best Practices In Action: 4 Businesses To Look Up To In 2013
Photo courtesy of the BleacherReport
Earlier this month, I wrote a blog highlighting four focal points that small businesses should concentrate on in 2013. The focused calls to action are aimed to help small businesses scale in spite of the uncertain economic climate. When forming these 2013 “to do’s”, I thought about business standouts that have demonstrated sustainable growth in difficult economic times. Many Inner City 100 firms, averaging 50% annual growth, have carried out these small business best practices to help them scale. Below are four Inner City 100 firms that have put these New Year’s Resolutions into practice.
1. Develop a business strategy . . . really!
CEO Carly Markesich of Discover Gymnastics, (number 100 on the 2012 Inner City 100 and hailing from Houston, Texas) has taken advantage of her proximity to the University of Houston to find top talent to staff her gymnastics center. By leveraging the city’s primary anchor institution, Discover Gymnastics is able to provide a high-quality athletic opportunity that is lacking from its primary competition - public schools. Since most public schools are cutting arts and athletics budgets, Discover Gymnastics is well-positioned to differentiate itself from the competition. Its focused extracurricular program with well-trained gymnast instructors enables Discover Gymnastics to build its market share by offering what public school cannot offer.
BY Alex Rodriguez on January 22nd, 2013
TAGS: small business | business | jobs | ic100 | workforce development | what works | ask the expert | strategy | value proposition
Growing Healthy Cities, Healthy Economies
Photo courtesy of citylimits.org
Iron Chef was already a cultural phenomenon, and a craze for artisanal cheese and locally grown produce had long since spread beyond California. But since March 2009, when First Lady Michelle Obama broke ground on the White House vegetable garden, the country has been on notice that the importance of fresh, healthy food is being taken more seriously — and at the highest levels — than it has been in decades.
The sudden interest in food has the potential to bring more than high-quality meals and, perhaps, better health: It could also be the catalyst to create impressive employment growth in our cities, including our most distressed neighborhoods.
That’s not just because the food industry is booming, accounting for about 11% of the U.S. economy and employing 17 million people. It’s because the food cluster is ideally suited to become a linchpin of inner city economic development.
To explain how cities can leverage the food sector to create jobs and entrepreneurship opportunities, ICIC recently partnered with the U.S. Conference of Mayors to issue an insights report. The report “Growing Healthy Economies” outlines reasons why the food sector can serve as a valuable source of economic opportunity for distressed urban cores including:
BY Mary Duggan on January 16th, 2013
TAGS: nyc | jobs | economic development | cities | food | anchors | urban revitalization | clusters | what works
Goldman Sachs Commits to Another City
Image courtesy of Community College of Philadelphia
Last week, Mayor Michael Nutter announced that the Goldman Sachs 10,000 Small Businesses program has arrived in Philadelphia. This announcement followed months of Mayor Nutter advocating for Philadelphia as the right city for the program to land next. Goldman Sachs agrees, citing that the city’s strong political partners, potential for economic growth and scalable business sector as all the desired attributes of a program partner.
During the announcement at City Hall Mayor Michael Nutter said, “This program will help small businesses in Philadelphia and across the region by providing access to capital and a world class business and management education program.”
Also as part of the announcement, Goldman Sachs publically committed $20 million to helping small businesses in Philadelphia. Half of that commitment will be applied to small business loans through the Philadelphia Industrial Development Corporation (PIDC) and Community First Fund. Another part of the commitment will fund the business education program provided by Community College of Philadelphia.
BY Mary Duggan on January 15th, 2013
TAGS: small business | cities | business | philadelphia | 10ksb | 10,000 small businesses | goldman sachs | executive education
Reckoning With Our Fiscal Reckoning
Image coutresy of CartoonBlog
To add some perspective to our current situation, small business blogs and news editors have rarely been forced to pay attention to government decisions as regularly as they have had to over the past year. Aside from industry-specific reforms (i.e. Healthcare Reform), and the occasional discussion of business tax credits or policy generally, it’s a compliment to America’s stable business environment that domestic companies haven’t historically had to worry about the government juggling their futures as going concerns. But that is precisely the precarious position that we find ourselves in today, one in which our country’s future is being held hostage to the messy contours of democracy. If last month’s congressional reckoning with fate was aptly named the fiscal cliff, then the multiple potentially treacherous slopes that will converge in 2 months could appropriately be described as something of a Fiscal Mount Everest. This article will attempt to run through what has already happened, what is left to accomplish, and some potential reasons for optimism.
What Just Happened:
As my colleague recently wrote in the piece What impact will the fiscal cliff have on America’s poor?, the “fiscal cliff” was a combination of large tax increases and service cuts that would have taken effect over the New Year if lawmakers hadn’t narrowly acted to prevent them. The tax increases were a result of the expirations of both the payroll tax cuts and the Bush tax cuts on income and capital gains. The service cuts consisted of yet another new term to the 2012 lexicon that citizens would rather forget- sequester, an agreement to implement $1.2 trillion in spending cuts that would be so politically and tangibly painful that Congress would have to address the long-term debt picture or risk potentially throwing the country into a self-induced depression. The end result? Congress permanently extended 98% of the Bush tax cuts, decided Social Security needed payroll taxes more than citizens needed the extra cash, and delayed the supposedly immovable sequester by two months. Complicating things, outgoing Treasury Secretary Tim Geithner announced on December 26th that we would breach the debt ceiling on December 31st. Since the New Year, Secretary Geithner has taken extraordinary measures to meet the government’s obligations for about two months, setting up the mythical Everest dive sometime in February.
BY Sathya Vijayakumar on January 14th, 2013
TAGS: economy | policy | jobs | fiscal cliff
4 Focal Points for Small Business in 2013
Image courtesy of Jay Author
As 2013 begins to come into focus, many small business owners are wondering how to approach the coming year. Even though political leaders were able to avoid the anticipated fiscal cliff, there are still some looming questions surrounding the debt ceiling fight that will soon be upon us and could have a major impact on small business. The current economic recovery appears to show some signs of progress, but how sustainable it is to create good jobs within the U.S. is unclear and up for debate.
That being said, there is still some tried and true advice that, after working to help nearly 300 small businesses find the resources they needed to grow, is highly pertinent regardless of the surrounding external environment. In fact, I would argue that such a re-examination of your current business model and a renewed dedication to best practices could help you to not only stay afloat in 2013 but also take advantage of new business opportunities that could increase your revenue line and hasten your firm’s growth trajectory.
BY Alex Rodriguez on January 9th, 2013
TAGS: small business | business | strategy | workforce development | workforce | competition | entrepreneur
Can Relocating City Buildings Revitalize Inner Cities?
Photo: Renderings/Sasaki Associates and Mecanoo Architecten
In Somerville, Massachusetts, a small city just to the north of Boston, city officials are hoping a new library will serve as an anchor to its Union Square, a neighborhood in the midst of an economic revitalization.
This summer, Somerville received an $18 million grant from the Massachusetts Board of Library Commissioners for a $45 million new library in Union Square. The new library would serve as a public common; it will include an auditorium, community meeting rooms, classrooms, an outdoor courtyard, garden terrace and flex space for book sales, art displays and pop-up shows. “It’s about creating a space where people are coming together, having exchanges, being creative, versus a more traditional space where people come to read and check out books,” says SPL Director Maria Carpenter in the September/October 2012 edition of the Somerville Scout.
At the same time, the City of Somerville is considering relocating its City Hall offices to Union Square. In its original grant application to the MBLC, Somerville proposed creating a joint library-city hall building. The MBLC denied the request, and as City Planning Director George Proakis tells the Scout, “Saddling the library commissioners with financing the construction of a new city hall did not work so well.”
BY Amanda Maher on January 7th, 2013
TAGS: community development | boston | dudley square | union square | somerville | economic development
Counting Down The Top Small Business Blogs of 2012
The countdowns of 2012 are not over yet. Before we look forward to all the exciting developments that 2013 is sure to bring, we are looking back to toast the top small business blogs of 2012. What was important to America’s urban business leaders over the last year? ICIC’s five most popular small business blogs help highlight and recap the small business scene from 2012.
BY Mary Duggan on January 4th, 2013
TAGS: small business | business | jobs | entrepreneur | 2012
2012 in Review: ICIC's 4 Most Popular Economic Development Articles
It seems every time you ask someone how they’re doing they respond with something along the lines of “Busy, but good.” Well, here at ICIC, things are no different. The past year has been quite the busy one—but it’s been an exciting year full of urban business programming and economic development research and implementation. We’ve been in too many cities to count, including Chicago, New Orleans, Los Angeles and Salt Lake City. We also announced our strategic alliance with Next Street, which will provide cities and small businesses with a one-two punch for helping to create jobs and revitalize urban areas. In January, ICIC will be moving to Dudley Square, an inner city neighborhood, to co-locate with Next Street and begin maximizing our impact.
Given all that’s been going on, we decided to look back at our biggest economic development web articles for 2012.
Designing Walkable Downtowns Help Cities Reap Real Benefits: Perhaps one of the most anticipated urban planning books of 2012 was Jeff Speck’s The Walkable City. And it doesn’t disappoint. At the CEOs for Cities fall conference, Speck highlighted some of the key messages from his book. As most of us know by now, walkable cities are good for the local economy, for resident health and for the environment. But how do cities alter resident behavior and encourage them to drive less? First, create a reason to walk. Second, establish a safe walk. Third, make walks physically comfortable. And lastly, design interesting walks. Speck recognizes that street improvements can take significant time and monetary investment. Thus, cities should prioritize and begin with making their downtown areas the most walkable.
BY Amanda Maher on December 27th, 2012
TAGS: walking | downtown | cities | bloomberg philanthropies | mayors challenge | milwaukee | san francisco | syracuse | food cluster | food trucks | fiscal cliff | poverty | urban | economic development
Why the Boss' Wife Matters to You
Image courtesy of flickr user Susanica
Written by Kimberly Weisul, One Thing New
Originally posted on One Thing New
The higher you go, the harder it gets.
No, that's not what mountaineers attempting Everest claim. It's what my super-high-achieving female friends have told me about the corporate world. For these women, it doesn't get harder because of the workload, or the travel, or because they manage more people. It gets harder because the higher up in an organization they go, the more sexist the men around -- and above -- them become.
I didn't know what to make of this when I first heard it. It wasn't my experience, but these women have made it higher up the corporate ladder than I. Now a group of studies, put together by Professor Sreedhari Desai of UNC-Chapel Hill, not only confirms this phenomenon but shows why sexism actually gets worse as you advance.
BY Guest Blogger on December 21st, 2012
TAGS: business | workplace | women | women entrepreneurs | equity | entrepreneur
Baking Up Economic Growth in Inner City Detroit
ICIC has long been known for its cutting-edge research that helps policymakers and economic development professionals create jobs and prosperous communities. But ICIC is much more than that. Over the past several years, we have been ramping up our small business offerings—and now many high-growth urban firms make use of our suite of programs.
The Inner City 100 is a ranking of the fastest-growing companies located in America’s inner cities. The program not just spotlights these growing companies, but supports them through educational programming to continue to strengthen and expand their businesses. The program helps to identify the unique competitive advantages enjoyed by inner city businesses relative to their non-urban counterparts. The successes of the 720 Inner City 100 winners inspire political and business leaders, academics and the media to examine the inner city as an emerging market and a place of economic opportunity. The program has led to innovative investment programs, helped blaze a path for other inner city entrepreneurs and provided enormous stimulus for change in local communities.
Inner City Capital Connections (ICCC) is a free program sponsored by Bank of America designed to stimulate the flow of capital to inner city businesses. ICCC is the country’s only program that educates investment-ready companies about sources of capital and matches them with investors to grow their businesses and create jobs. The program helps growing inner city businesses:
BY Alex Rodriguez on December 18th, 2012
TAGS: ic100 | iccc | avalon | detroit | capital | entrepreneur | small business | food | management education
Promoting Equitable Urban Revitalization
Chris Haller leads the Urban Interactive Studio (UIS), a technology consulting firm specializing in web and mobile solutions for urban planning agencies and firms. He's the founder of EngagingCities.com where he helps urban planners understand and use the Internet and gives practical advice.
Last week, Haller wrote a blog for Engaging Cities reflecting upon the 2012 Inner City Economic Summit and ICIC's "What Works" campaign. That post is found below.
At the same time as our cities become more desirable places to live thanks to the draw of cultural facilities, parks, transportation, restaurants, and sporting events, they are also hurtled into the pursuit to find ways to accommodate growth. Since economic development initiatives are at the forefront of city agendas, we now wonder how to promote equitable urban revitalization and foster economic opportunity for all residents.
When the Initiative for a Competitive Inner City held its 2012 Inner City Economic Summit, participants left enlightened about today’s models and collaborative partnerships that can lay the groundwork for sustainable economic development.
BY Guest Blogger on December 17th, 2012
TAGS: inner city economic summit | economic development | cities | jobs | engaging cities | what works | workforce | clusters | food
A Start-Up...Grows Up
Guest Blog by Jonathan McCredie, co-founder of Fennick McCredie, a 2012 Inner City 100 winner
Here at Fennick McCredie we were thrilled to be named among the top 100 urban growth companies in the nation by the Initiative for a Competitive Inner City. Since the announcement the most common question has been “So…how’d you do it?” Looking back, some of the answers were a little surprising:
Focus. This one isn’t surprising. In fact it’s a bit overused – every company talks about focus. Still it’s good advice so we tried to focus and it worked. The surprising part however…
Our focus was never, ever on growth. True statement. Our focus is on client service. Deborah and I allocate the majority of our time to current projects and maintaining client relationships. This is the exact opposite of most growth firms and flies in the face of conventional wisdom. Just to be sure, we had our accounting firm run the numbers: industry-wide the utilization rate for firm partners (time spent on current projects) runs about 57%. At Fennick McCredie we ran 65%. On top of this we had zero full-time marketing staff. Conventional wisdom centers on getting new clients. We did the opposite, choosing to take care of the ones we had. How does a firm who doesn’t focus on new business, get new business?
BY Guest Blogger on December 13th, 2012
TAGS: ic100 | fennick mccredie | customer service | small business | entrepreneur
Burgeoning Businesses Start at the Brooklyn Flea
It’s no secret that new businesses have high failure rates. Investing in a new venture can be extremely expensive and entrepreneurs risk losing everything if their firm doesn’t succeed. On average, 50% of new businesses fail within five years (ranging from 51% in mining to as low as 36.4% for construction companies).
This is why so many entrepreneurs are looking for alternative, less-risky options for testing their businesses.
We’re seeing food trucks pop up on corners everywhere. Business incubators are allowing businesses to refine their models. And now, many entrepreneurs are using flea markets to get their businesses off the ground.
BY Amanda Maher on December 12th, 2012
TAGS: brooklyn | flea market | businesses | entrepreneurs | small business | incubator | nyc
Do Industry Partnerships Hold the Key to Filling Workforce Gaps?
As baby boomers begin to retire, attrition in workforce expertise poses a threat to America’s economy. Already, employers complain of a lack of highly skilled, highly trained employees to fill open positions.
Yesterday, McKinsey released a report “Education to Employment: Designing a System that Works.” To coincide with the release, McKinsey hosted a webinar in which panelists analyzed the disconnect between employers, prospective employees and educational programs. When asked “Are graduates ready for the workforce?,” fewer than 50% of employers and youth answered “yes,” while over 70% of education providers said “yes.” Mona Mourshed, who presented the study’s findings, said this highlights that employers, education providers and youth are living in parallel universes.
What is the solution? After studying countries around the world, McKinsey found that innovative and effective workforce development programs have important elements in common. Namely, education providers and employers actively step in to one another’s worlds on a regular basis.
BY Amanda Maher on December 11th, 2012
TAGS: workforce development | industrial | manufacturing | jobs | business | public-private partnerships | siemens | blum | apprenticeship 2000
The Rise of Specialized MBA Programs and How They Will Benefit the World at Large
As ICIC has highlighted before, there are a number of benefits to a specialized and carefully trained workforce -- and in many cases, capitalizing on expertise is one of the best ways to actually grow businesses. In the article that follows, education analyst Emma Collins looks at ways in which business schools around the country are responding to this need through the creation of specialized MBA programs. More of Ms. Collins’ work, most of which deals with higher education in the Internet space, can be found here.
Guest Blog by Emma Collins
Getting a business degree is something that has long been viewed as a sort of “gold standard” for corporate success, though the MBA scene has been undergoing a slow change in recent years. More and more institutions are offering so-called “specialized” or “niche” degree programs that promise to train students in nuanced areas of business administration, in subjects as varied as winery management, church leadership, and energy policy. Most of these programs are offered through smaller, lesser-known institutions, but many graduates are finding them invaluable for breaking into specific fields. The growth of this sort of specialized curriculum has the potential to reshape business education going forward.
According to The New York Times, students have been flocking to specialized MBA programs in numbers that have increased by about a 4 percent margin each year since 2001. “Investing as much as $30,000 in such a narrowly focused degree may be risky—especially if the market for a particular job dries up suddenly (the tightening of the real estate industry is a good example)—but going deep instead of wide seems to fit right in with an increasingly segmented world,” the Times said.
BY Guest Blogger on December 10th, 2012
TAGS: mba | education | businesses | workforce development | jobs
The Problem with "Best of" Cities Lists
Guest Blog by Alex Abboud
Over the past week, my hometown of Edmonton, Alberta, has been abuzz about the Quality of Life rankings released by Numbeo, which put Edmonton 3rd in the world, and provincial counterpart Calgary 5th. In a city where civic boosterism runs high, and a share of civic leadership (if not the general population) craves external recognition and ‘world-class’ status, this is like crack. There are level-headed exceptions, but if you’re plugged into the local social media scene, it’s been inescapable, despite the fact that nobody in Edmonton had probably heard of Numbeo two weeks ago (the Huffington Post story had been liked over 8,000 times as of posting this).
The problem with this, of course, is that these quality of life rankings are in a sense meaningless. Sharon Lerner wrote a good piece on this for Good last year, titled Why “Best Place to Live” Lists are Kind of the Worst. Key passage:
But the problem, or one of them, is that taste varies wildly. Another is that, because they attempt to incorporate an entire nation’s desires, these one-size-fits-all features tend to showcase a version of life as we’d like it to be, a version that glosses over the things that truly make a difference to most people: community, services, and policies that ease their daily life. Idealizing places means being ignorant of their inevitable flaws. Graduation rates and crime stats, on which many of these lists are based, are important to consider. But allowing them to define a place is like falling in love with someone’s online profile.
BY Guest Blogger on December 7th, 2012
TAGS: cities | rankings | alberta | quality of life | transportation
A Sense of ‘Place’ Matters to Akron
By: Dr. Eric Anthony Johnson, Executive Director, University Park Alliance
Originally Published on 11/24 in the Akron Beacon Journal Online
During all the political conversation of recent months, Americans heard precious little on the national stage about the vitality of our cities. Yet our cities are key to future prosperity and job creation due in large part to the proximity of local economic anchors within their boundaries. These are the places where people live, work and learn and where the art of placemaking will be at the center of building competitive advantages.
Placemaking is the ability to identify the unique assets of a community to create and develop strategies and outcomes around quality of life and economic sustainability that best connect people with their place. As such, all community and economic activity must be grounded somewhere in the community that is connected to its greatest assets, not disconnected.
In Akron, the benefits of visionary planning by local leaders such as Mayor Don Plusquellic and University of Akron President Luis Proenza are visible in significant stretches of new investment in Akron. Visit the Akron area if you haven’t recently. Look around and see the progress for yourself. What you’ll witness is a solid foundation emerging for future prosperity.
BY Guest Blogger on December 5th, 2012
TAGS: university park alliance | akron | cities | economic development | placemaking | urban revitalization
Financing Growth Clusters in Southeast Louisiana
(avg: 5.00 of 5)
ICIC recently released a study, "Economic Investment Opportunity of Southeast Louisiana." The purpose was to analyze priorities of Southeast Louisiana and assess how well the region's capital markets align with the area's economic development priorities. The report makes recommendations to Seedco Financial-Louisiana as to how it can strategically lend and bridge gaps that hinder the region's growth and cluster development.
The study identified the clusters with the greatest potential to facilitate equitable growth in the region. Clusters were categorized according to performance and inclusiveness, thus helping lenders focus their investment around specific priorities.
Here are two takeaways from the report that are relevant for your city:
BY Amanda Maher on December 4th, 2012
TAGS: economic development | jobs | cities | clusters | capital | cdfis | seedco | investment | new orleans
Startups and Government, The Next Frontier
American innovation has historically been funded almost entirely by the federal government, primarily to aid the military in keeping our citizens safe. Why is your GPS system so accurate? Because it’s undergirded by technology that was developed to beat the Russians to the moon during the Space Race- a sophisticated set of satellites rove continually around the earth, sending back signals wirelessly to your Toyota.
Sometime in the mid-1990s however, with the advent of the internet (another technology powered by federal investment), the cutting edge of technology became dispersed rather than centralized. Scruffy undergraduates in garages and private university labs alike became key drivers of technological change, creating new vocabularies (Googled anything lately?) and helping to overthrow dictators (smartphone-led) in unforeseen ways. In recognition of this fact, the US SBA held a webinar last week entitled “Startups and Government” to talk about 2 promising initiatives to help small businesses get access to government contracts and create value: RFP-EZ and Data.gov.
RFP-EZ
The political conversation around the country over the last 6 months has consistently sounded the alarm about the need to rein in out-of-control federal spending in the coming years. An interesting dimension of cutting spending is that much of it is somebody’s income, whether through contractors to build the nation’s infrastructure or in-kind Medicare outlays for our seniors.
BY Sathya Vijayakumar on December 3rd, 2012
TAGS: public-private partnerships | sba | next street | start-up | entrepreneurs | rfp-ez | data.gov
The 10 Least Employed Cities
With national unemployment at 7.9%, policymakers and economic development practitioners have been searching for ways to boost job growth and put Americans back to work. Some policies have been incredibly successful (see what NYC is doing with their Workforce1 Centers). Other policies less so. One thing is clear: there’s no silver bullet to job creation.
UBM Future Cities released a report today looking at unemployment rates in cities nationwide. According to the authors, “Reasons for urban joblessness vary: An industry fails or becomes outdated; companies suffer budget cuts; regions are abandoned by business in favor of greener, foreign pastures.”
The new study highlights the ten cities with the highest unemployment rates. The report analyzes cities with populations over 500,000 and used a combination of US Census Bureau and US Bureau of Labor Statistics data to put together the list. In each of the ten cities, unemployment is higher than 8%. In some cities, unemployment is greater than 10%.
BY Amanda Maher on November 29th, 2012
TAGS: cities | unemployment | ubm future cities | nyc | detroit | washington, d.c. | san jose | hurricane sandy | policy
What Concerns Small Businesses about 2013? Inner City 100 CEOs Respond
Wondering what the small business climate will look like in 2013? Small business owners, especially, are unsure of what to expect when there are so many unanswered questions concerning both the global and domestic economy such as:
- What will the regulatory climate look like with the implementation of the Affordable Care Act?
- What will be the highest marginal tax rate?
- Will there be entitlement reform and how will it be structured?
- Will we see an increase in interest rates?
- How likely is a default in Greece or any other member of the EU?
- Will a continued slowdown in Chinese GDP put a halt to any kind of economic recovery in the US?
At this point, most believe that the answers to these types of questions are largely in limbo. In an effort to get some kind of idea as to where the economy is headed and where entrepreneurs are most concerned, I decided to look for some anecdotal clues from some incredible value and job creators: Inner City 100 winners. Over the course of fourteen years, Inner City 100 winners employ over 103,000 people (40% of which are inner city residents) while creating nearly 73,000 new jobs and growing at an average year-over-year rate of roughly 50%. I figured that asking members of a group that has shown incredible success over a long period of time might give us some clues as to how they are managing these uncertain economic times.
BY Alex Rodriguez on November 28th, 2012
TAGS: small business | tax code | health care | china | greece | interest rates | business | jobs | entrepreneur
What impact will the fiscal cliff have on America’s poor?
(avg: 3.33 of 5)
With Thanksgiving behind us and no budget resolution in sight, falling off the "fiscal cliff" is becoming more of a reality. The impact could be huge, especially on America's poorest residents.
To begin, it’s important to understand what the fiscal cliff is and how we got here. The “fiscal cliff” is a combination of huge tax increases and service cuts that are set to kick in on January 1, 2013. The Bush tax cuts, Obama payroll tax cuts and long-term unemployment insurance will all expire at this time.
President Obama formed a Congressional committee earlier this year to explore ways to preserve the tax cuts. To do so, the committee had to find a way to cut $1.5 trillion from the budget elsewhere. The committee was unable to find a resolution, and as such, we face $1 trillion in immediate tax cuts at the beginning of the New Year.
Wealthier Americans will face the steepest increase in taxes (5.8 percent); taxes for the bottom 20% of Americans will only increase 3.7 percent. However, the net share of income spent on taxes will have a greater impact on poor Americans. According to an article in The Nation, the bottom 20% of Americans will see their after-tax income reduced by nearly 2% while the top 40% of Americans’ after-tax income will be reduced by only 0.1%.
BY Amanda Maher on November 27th, 2012
TAGS: fiscal cliff | congress | budget | president obama | spending cuts | poverty
Are You Shopping Small On Saturday?
SBA Administratior Karen Mills talks about Small Business Saturday on MSNBC's Your Business
Small Business Saturday, Between Black Friday and Cyber Monday is a day dedicated to supporting small business retailers during one of the busiest shopping weekends of the year. Last year, over one hundred million people came together to “shop small” at their local small businesses. Founding partner American Express, along with the U.S. Small Business Administration (SBA) and other partners offer free services to business owners in order to help them take full advantage of the event.
BY Mary Duggan on November 21st, 2012
TAGS: small business | #smallbizsat | small business saturday | sba | amex | retail | holiday season | holiday shopping | economic development | jobs
NOTEBOOK: Lending up, but still needs hand
ICIC’s Inner City Capital Connections program held its Capital Training Day for the second time in Detroit this past October. Urban entrepreneurs seeking growth capital gathered in the Madison Building for a day of financial workshops and advisory sessions. The day’s content was led by debt and equity providers to help prepare the entrepreneurs to pitch for capital. Sessions offered guidance on how to work with debt and equity providers, how to develop a strategy for increased capacity, and how to appeal to investors. The capital training has proven effective as; program participants have gone on to raise $703 million in capital.
Crain’s Detroit Business recently interviewed participants from the Detroit training about the lending landscape in Detroit. Respondents agreed that lending is up, but diligent preparation by small business owners is a must.
Originally Published in Crain's Detroit Business
November 18, 2012
By Gary Anglebrandt
Now that downtown Detroit and nearby areas are filling up with residents, and the hip thing for local businesses to do is announce a move into the heart of the city, one might expect that money is opening up to people who want to start or grow businesses.
A perfect place to find out was the Inner City Capital Connections seminar held by the Boston-based Initiative for a Competitive Inner City at the Madison Building in late October. The group holds the seminars to bring investors and lenders into the same room as small-businesspeople for a day of financial education.
Lending from traditional banks has picked up compared to 2009, said Karl Bell, senior vice president of Invest Detroit, who sees more opportunities for retailers as density in the downtown area increases.
BY Guest Blogger on November 20th, 2012
TAGS: small business | business | detroit | ask the expert | entrepreneur | capital | iccc | financing
Working Capital Helps NYC Small Businesses Get Back On Their Feet
Photo courtesy of the Huffington Post
As we all know after weeks of heart-wrenching news footage from New York City, small businesses were hit hard by hurricane Sandy. Mass electricity outages that lasted for days, ruined equipment, and damaged merchandise were compounded by a Nor’easter that recently brought the area the season’s first snowfall.
ICIC witnessed this small business hardship first hand when we traveled to New York City on November 9th for the annual Inner City Capital Connections (ICCC) National Match Day. The pain that businesses felt was palpable, with many reporting that, 10 days after landfall, their power had still not come back – some businesses had to reconsider their attendance altogether. Struggles of course weren’t limited to ICCC companies; as the following passage from “Hurricane Sandy Slams Small Business” suggests, many people’s professional and personal lives are deeply intertwined and the total economic consequences are estimated to be vast:
"Losing my business means losing my house, said Yuyama. "It means losing everything." He said he's not yet sure what insurance will cover, if anything.
BY Sathya Vijayakumar on November 15th, 2012
TAGS: small business | business | nyc | capital | hurricane sandy
Increasing Impact: Industry-Specific Workforce Development Strategies
Through the years, ICIC research has identified industry clusters that are ripe for inner city business growth and job creation. But increasingly, employers are having difficulty filling job openings in these growing industries. Place-based workforce development efforts are giving way to more specific, sector-based workforce strategies. By matching workers’ skills to the needs of growth industries within a region, cities are amplifying impact and driving local economic stability.
For our next What Works webinar, Janet Lees will discuss SFMade’s Hiring Made Better program. Through this initiative, SFMade connects low-income workers to job opportunities with San Francisco-based manufacturing firms. In under two years, over 325 local businesses have been involved with Hiring Made Better, 52 businesses have received hiring consultations and 47 low-income individuals with barriers to employment have been hired by local manufacturers.
BY Amanda Maher on November 14th, 2012
TAGS: economic development | workforce development | workforce training | manufacturing | industrial | skills gap | san francisco | sfmade | what works | webinar
Small Business Advice to the President
Now that the election is over and the dust has settled, it’s time to get down to business. Small business—that is.
The economy and job creation was one of the hottest topics of the 2012 Presidential Election. Clearly, Americans are still worried about the sluggish economy. Business owners and residents alike are worried about the U.S. falling off the “fiscal cliff.”
With a second term solidified, how should the President respond?
BY Amanda Maher on November 13th, 2012
TAGS: small business | business | jobs | entrepreneur | sba | election | economy
Finding Financing for Jobs and Growth
Today, more than 100 growing inner city companies from around the country are in New York City pitching to investors for growth capital. These investment-ready companies have been chosen from over 5,200 nominations because of their strong growth potential and their commitment to the inner city. At the annual Inner City Capital Connections (ICCC) National Match Day, the companies will connect with and receive feedback from investors through on-on-one ‘speed pitching’ sessions.
The goal of the match day is to connect urban entrepreneurs with the capital they need to grow and ultimately create jobs in their communities. According to ICIC research, 71% of inner city businesses operate, on average, with only ¼ of the capital they need.
ICIC partners with Bank of America, FORTUNE and the U.S. Small Business Administration (SBA) on the ICCC program to help close that capital gap.
Since the program’s inception in 2005, over $703 million in capital has been raised - $532 million in debt and $171 million in equity. Many of the participating small businesses have earned repeat rounds of funding or return to the program to access the next stage of growth capital. Of this year’s 178 participating businesses, many are returning to either make a new deal or a new investor connection.
Link Howard, CEO of Detroit-based Powerlink is one of those returning business owners....
BY Mary Duggan on November 9th, 2012
TAGS: iccc | capital | match day | nyc | detroit | jobs | businesses | entrepreneur | powerlink
Our Agenda Is Urgent, And We Need More Partners
“We are at a time where the U.S. is facing unusual challenges and the need for us, particularly in the private sector, to step up and get engaged in this issue is greater than any time in my professional career.” – Dr. Michael Porter
This was the preamble to Dr. Michael Porter’s call to action at last week’s Strengthening Competitiveness Through Small Business Growth panel discussion in Chicago. ICIC hosted this panel in partnership with Goldman Sachs 10,000 Small Businesses. In front of 80 Chicago economic development, business, academia and government leaders, Dr. Porter advocated for aligned efforts to strengthen America’s business environment.
Dr. Porter cited findings from the U.S. Competitiveness Project to support the urgency for these efforts. The project that he and his colleagues at Harvard Business School have been working on over the last year and a half has revealed disturbing trends about the trajectory of business and economic competitiveness in America. Dr. Porter stated that job growth in the American economy has come to a screeching halt—and it stopped well before the recession. All of the jobs that have been created in the past 20 years have been in industries not subject to international competition, such as real estate and healthcare. Dr. Porter went on to say that America’s standard of living has not been improving and American wages have not been growing.
“We have to see this as a long-term challenge. We have to work together fundamentally to create a better environment for healthy business. If we don’t have healthy business, nothing else is going to work,” Dr. Porter explained. No community in America can be healthy without healthy businesses. Business is where wealth gets created; business is where most jobs are created; and business is what really drives economic prosperity. If business does well then the country will not only have a healthy economy, but will also have the resources available to address issues in society that could make the country stronger.
BY Mary Duggan on November 8th, 2012
TAGS: small business | economic development | business | community development | shared value | ask the expert | competitivenss | u.s. competitiveness project | michael porter | goldman sachs | 10,000 small businesses
The Private Sector's Huge Response to Sandy Relief Efforts
Above: Specialty cans of water produced by Anheuser-Busch
Two major events have captivated the U.S. over the past 10 days. One is over, one is not.
Although the Presidential Election came to a close last night, Hurricane Sandy relief efforts must go on. Hundreds of thousands of residents in NY and NJ are still without power, countless people won’t be able to return to their homes until this winter, and the road to infrastructure recovery will be long.
But the private sector is stepping up in big ways. Here at ICIC we often tout “shared value” – which involves businesses “creating economic value in a way that also creates value for society by addressing its needs and challenges,” according to ICIC founder and Harvard Business School Professor Michael E. Porter.
In the wake of Hurricane Sandy, the actions of private sector companies might not exactly fall in to this stringent definition; only some of the companies will necessarily benefit from their acts of giving. However, the private sector response should not go unnoticed.
According to the U.S. Chamber, here are a few unique ways the private sector has stepped up:
BY Amanda Maher on November 7th, 2012
TAGS: hurricane sandy | public-private partnerships | private sector | businesses | corporations | community impact | shared value
20 Ideas that Could Change Our Cities
Bloomberg Philanthropies is on a mission to find innovative solutions to solve the problems facing America’s cities—and they’ve enlisted the creative support of people in 20 cities to do so.
Today, the foundation announced the 20 finalists in the Mayors Challenge – a boot camp style competition akin to a business plan competition. The finalists will converge in NYC later this month for an intense, two-day “Ideas Camp” to share and hone their ideas. The finalists then have until early 2013 to refine their proposals and submit for the prize round.
Bloomberg Philanthropies will award the winner of the competition $5 million to invest in their idea; four runners up will receive $1 million each. Winners are chosen based upon the idea’s vision, potential impact, ability to be implemented, and replicability potential.
BY Amanda Maher on November 5th, 2012
TAGS: cities | business | economic development | community development | workforce | food | mayors challenge | bloomberg philanthropies | syracuse | san francisco | milwaukee
Helping Orlando Companies Position for Growth
Above: Dr. Cameron Ford, Director of UCF's Center for Entrepreneurship and Innovation at the "Strategizing for Small Business Growth" event in Orlando
Yesterday, ICIC and Staples were in Orlando where we held an event called “Strategizing for Small Business Growth.” The goal was to provide content to local entrepreneurs to help them grow their firms. We collaborated with organizations like the University of Central Florida’s (UCF) Small Business Development Center to attract companies to the event. Together, ICIC and Staples delivered valuable content to the small business owners to highlight the resources available to them to help achieve greater success.
Dr. Cameron Ford, Founding Director of the UCF’s Center for Entrepreneurship and Innovation (CEI) gave the keynote presentation. Dr. Ford is an expert in the areas of creativity in entrepreneurship; he researches how novel ideas evolve, gain legitimacy, and attract resources in new ventures. His research on this subject has appeared in over 60 academic papers, including publications in the Academy of Management Review, Journal of Management, Journal of Organizational Behavior, and IEEE Transactions on Engineering Management.
His presentation yesterday was called “Growth Strategies for Small Businesses.” He explained strategy by quoting ICIC Founder Dr. Michael Porter, “[Strategy] means deliberately choosing a different set of activities to deliver a unique mix of value.” Strategy is having a unique position in your market, making necessary trade-offs and creating “fit.”
BY Alex Rodriguez on November 2nd, 2012
TAGS: small business | business | entrepreneur | value proposition | scaling | five forces | ucf | staples | strategy | orlando
Inner Cities are Home to Some of America’s Greatest Neighborhoods
Above: Fells Point, Baltimore, MD
What’s in a name?
Ok, that question has been asked time and time again. Let’s switch it up.
What’s in a great neighborhood?
Last month, the American Planning Association released its list of “America’s Great Neighborhoods.” The APA characterized “great neighborhoods” as those with the following qualities: a variety of functional attributes, accommodates multi-modal transportation, has design and architectural features that are visually interesting, encourages human contact and social activities, promotes community involvement and maintains a secure environment, promotes sustainability, and has memorable character.
BY Amanda Maher on November 1st, 2012
TAGS: inner cities | apa | neighborhood | community development | cities | placemaking
NYC's New Industrial Strategy is #WhatWorks
Last week, ICIC hosted its latest What Works Webinar: "NYC's Comprehensive Industrial Strategy." To begin the webinar, ICIC Research Practice Manager Adam Kamins explained why industrial activity is poised for a comeback in the U.S. and what this means for inner cities. Miquela Craytor, Director of Industrial Initiatives for NYCEDC then took a deep dive in to NYC's multi-pronged approach to industrial rentention and expansion.
Here are a few takeaways from the webinar:
- Industrial jobs are associated with higher wages and lower barriers to entry than the economy as a whole--making them opportunities for inner city residents.
BY Amanda Maher on October 31st, 2012
TAGS: what works | webinar | nyc | industrial | capital access | manufacturing | economic development
The Economic Impact of Hurricane Sandy
Above: Waves crash along the beach in Milford, CT during Hurricane Sandy
Much of the eastern seaboard is still reeling from Hurricane Sandy. The NYSE has been closed for two days. Millions of residents are without power. And NYC’s Mayor Bloomberg says this may be the city’s “worst storm ever.” While largely unscathed, ICIC’s own staff hasn’t been untouched; many team members are grounded elsewhere due to airline cancellations.
We can’t help but wonder….what is the economic impact of Hurricane Sandy?
Just over a year ago, we asked the same question about Hurricane Irene. We found that Hurricane Irene, while powerful, did not cause the devastation that forecasters had predicted. Initially, it was anticipated that Irene would cause $10 billion in economic damage; in reality, the storm caused about $7 billion.
While it’s still far too early to calculate the actual impact of Hurricane Sandy, estimates have started to come in. “It seems likely that Sandy will impose greater destruction of property (than Irene), and add to that the loss of about two days of commercial activity, spread over a week across 25% of the economy, an initial estimate of the economic losses imposed by Sandy is about $35 to $45 billion,” says Peter Morici, economist and professor at the University of Maryland.
BY Amanda Maher on October 30th, 2012
TAGS: economic development | economic impact | hurricane sandy | jobs | nyc
Ask the Expert: How Focusing on Sustainability Helped a Business Sustain its Growth
Are you a budding entrepreneur currently looking for a market opportunity as well as an industry to grow a small business? Many Inner City 100 winners have made their success by finding a competitive landscape and applying their industry knowledge gained through years of experience to execute an idea that creates a fast-growing firm.
MSDSonline, of Chicago and #47 on the 2012 Inner City 100 list, is such a firm. Led by CEO Glenn Trout, MSDSonline is $10.5 million in revenues in 2010 and had a five-year CAGR of 31%. MSDSonline sells environmental health and safety software. The company's software suite allows customers to maintain a database of chemicals to comply with environmental laws. A Material Safety Data Sheet (MSDS) is a document that the Occupational Safety and Health Administration requires for every chemical a business keeps onsite.
Tell us how your company was founded and what attracted your industry?
Our company was founded as a free website during the dot.com build-up in the mid-1990's. We originally tried to make money by creating a lot of web traffic with relevant industry content to generate advertising revenue. We were acquired by a dot.com in the late 1990's who was effectively an online chemical distributor, and they acquired us primarily as a lead generation tool for them to sell chemicals. When the dot.com bubble burst, our parent company went under, and effectively spun us out. Luckily for us, we had done some good research talking with our registered users, and we quickly recognized we had an opportunity to go beyond advertising by building upon our brand and already large content database and creating online software to help our users comply with OSHA and EPA laws.
BY Guest Blogger on October 29th, 2012
TAGS: msdsonline | chicago | ic100 | ask the expert | mergers and aquisitions | small business | entrepreneur | sustainability | web-based solutions | employee retention
Training for Growth Capital
“I received top notch education on how to determine the best capital programs for my company. This is a tough economy to find money in, and we are still working on it, but the connections that we have made through the ICCC program have been invaluable to the continued growth of my company. An organization like ICIC that educates and connects inner city businesses to help them grow and prosper is such a gift!” – Tammy Tedesco CEO, Edibles Rex
One of ICIC’s core strengths since its founding in 1994 has been its enduring dedication to collaboration between the public and private sectors. Not only do we accomplish this externally through truly innovative formal partnerships with banks like Next Street, but also internally through various programs. No project exemplifies this credo more than Inner City Capital Connections (ICCC), the nation’s only program that educates urban companies about capital and then matches them with financing to spark growth.
The program, anchored by a collaboration between Bank of America and ICIC, has helped 375 businesses in 35 states earn over $700 million in investment capital. Today’s Capital Training Day will see 75 companies from around the country convene in Detroit for a day-long capital education workshop. The 8th annual workshop will include educational sessions on different kinds of capital, including angel investments, venture capital, bank loans, lines of credit, and factoring. Entrepreneurs will additionally receive personalized mentoring from both debt and equity providers on how to effectively communicate with capital providers. Leading this year’s educational sessions are executives from John Hancock’s Financial Network’s Michigan Financial Companies, LSQ, Next Street, Huron Capital Partners and Detroit Venture Partners, among others. Along with companies from Chicago’s October 29th Capital Training Day, these newly educated companies will emerge ready to compete for capital during the ICCC Match Day on November 9th in the center of the financial world, New York City.
BY Sathya Vijayakumar on October 24th, 2012
TAGS: small business | business | entrepreneur | capital | iccc | detroit | executive education | financing | debt | equity
The Plant: Combining New Food Models and a Manufacturing Legacy
(avg: 4.00 of 5)
Above: "The Plant" - a former meathouse packing plant in Chicago is being reused for urban agriculture and business incubation
A variety of factors have ignited a boom in the sustainable food industry: concerns over energy usage, high transportation costs and increasing demand for local produce are just a few. As developable land is gobbled up in cities, there is little space left for lower-profit urban agriculture. Solutions have been small-scale and hard to come by thus far.
But in Chicago’s South Side neighborhood, entrepreneur John Edel seeks to change that. He is transforming an old meatpacking plant in to an experiment in urban food production.
“The Plant” is a net-zero energy mix of greenhouses and aquaponic vertical farms, small food businesses, breweries and light manufacturers. Roughly 80% of the building materials from the industrial site are being reused, so the physical structure itself is a model for adaptive reuse and sustainable development. A team of volunteers from the neighborhood has helped to renovate the building.
BY Amanda Maher on October 23rd, 2012
TAGS: food | food cluster | manufacturing | industrial | incubator | urban agriculture | small business | inner city
Launching a Renewed Focus on Massachusetts’ Gateway Cities
Above: Launch of the MassINC Gateway Cities Innovation Institute at the Massachusetts State House
Social and economic disparities continue to plague Massachusetts’ Gateway Cities. These cities, once vibrant urban economic centers, have fallen victim to the decline in traditional manufacturing and erosion of blue-collar jobs.
Now, 15% of the Commonwealth’s population (1 million people) call Gateway Cities home—and yet, these cities account for 30% of Massachusetts residents living in poverty, 22% of the state’s immigrants, 50% of the state’s incarcerated youth, and 71% of the students attending failing schools.
But Gateway Cities have long histories, diverse populations, and significant assets that can be retooled for future prosperity.
That’s why today, MassINC launched the Gateway Cities Innovation Institute. “Gateway Cities are working hard to reinvent themselves amidst a shifting economy that has left them behind,” said Greg Torres, President of MassINC, a Massachusetts-based nonpartisan think-tank. “The Gateway Cities Innovation Institute provides the focus, resources and network-building capacity needed to give lift to the transformation these cities are undertaking.”
BY Amanda Maher on October 17th, 2012
TAGS: massinc | innovation | gateway cities | poverty | inner cities | diversity | urban revitalization | economic development | anchors
Designing Walkable Downtowns Help Cities Reap Real Benefits
(avg: 3.60 of 5)
“There are real benefits to the local community when cities decide to become more walkable.” – Jeff Speck, author of The Walkable City
Jeff Speck, author of The Walkable City, spoke to the CEOs for Cities conference today about designing walkable downtowns. He outlined not just why they are important, but how cities can take action to encourage more walkable environments.
There are three primary benefits to being walkable: economic, health and environment.
Economic: The reality is that 64% of Millennials are now choosing where they want to live before finding a job, and 77% plan to live in urban areas. This data is supported by the fact that one in four teenagers are opting out of obtaining drivers licenses nowadays. There has been a major cultural shift where young people are no longer buying cars and houses. Millennials want to be close to work, entertainment, public transit and other amenities.
BY Amanda Maher on October 16th, 2012
TAGS: cities | walking | transportation | economic development | environment | community health | urban design | safety
Study Reveals U.S. Business Strengths and Weaknesses, Porter Advises Action
(avg: 3.00 of 5)
He’s “the most famous and influential business professor who has ever lived,” and he’s on a mission to protect America’s status as a global leader.
These words come from this morning’s Fortune article, which featured ICIC Founder and Chairman Michael E. Porter. The article discussed his numerous contributions to thought leadership within competitive strategy, both at the firm- and national-levels. Currently, Dr. Porter is trying to minimize the finger-pointing between public and private sectors, and encouraging each to support the other to help drive American competitiveness.
Dr. Porter continues to garner media attention as he travels the world for Harvard Business School’s U.S. Competitiveness Project, an initiative aimed at addressing “the ability of firms operating in the U.S. to compete successfully in the global economy while supporting high and rising living standards for Americans.” This initiative specifically looks at the current state of the American economy, identifies its deficiencies, and prescribes public and private sector solutions to keep the United States relevant in an increasingly global market.
BY Alex Rodriguez on October 15th, 2012
TAGS: competitiveness | professor michael porter | business | harvard business school | workforce training | tax code | infrastructure | procurement | inner city economic summit
Industry / State Collaboration Needed in R.I. to Address Job vs. Skill Gap
(avg: 4.00 of 5)
Straddled by states with recovering economies, Rhode Island struggles to recover from the Great Recession. The unemployment rate, as low as 4.8% in 2007, skyrocketed to nearly 12% in 2009. Despite some improvement, unemployment in Rhode Island remains at 10.7%, the second highest in the nation.
Last night at Rhode Island College, business and community leaders gathered to answer the question: Does Rhode Island suffer from a skills gap or a jobs gap? As it turns out, the answer is: BOTH.
There are over 9,500 job openings throughout the state, but nearly 60,000 residents can’t find employment. Even if these 60,000 residents had the skills to fill the 9,500 open positions, there would still be over 50,000 residents out of work.
So why are these jobs going unfilled?
BY Amanda Maher on October 11th, 2012
TAGS: economic development | jobs | workforce development | skills gap | unemployment | rhode island
Realizing Economic Opportunity in Port Cities
(avg: 5.00 of 5)
Often, and as recently as yesterday, ICIC touts the importance of industrial assets to our inner cities for creating well-paying jobs and spurring business growth. Preserving industrial land in port cities is particularly important given global economic trends.
As noted in an ICIC blog post, these trends include:
- Productivity adjusted labor costs in China’s industrial heartland are rising 15-20% annually.
- Managing vendors and operations from halfway around the globe are making it more expensive to conduct business abroad.
- High employee turnover and inconsistent quality are increasing production costs.
- The price of crude oil has increased from $16/barrel to $100/barrel in just over a decade. Thus, it is more cost-effective for many firms to shift production closer to their headquarters and/or production base.
- Domestically, the bursting of the real estate bubble has reduced pressure by commercial and residential in some markets, resulting in more affordable industrial land.
If prepared, port cities are poised to reap the benefits of a comeback in manufacturing.
BY Amanda Maher on October 10th, 2012
TAGS: economic development | cities | economic opportunity | industrial | manufacturing | workforce development | ports | exports | site selection | newark
What to Do When You Have a Cash Flow Crunch?
Put your largest asset to work for you.
That was the key takeaway of ICIC’s most recent CEO Series Webinar led by LSQ Funding. LSQ, an accounts receivable financing provider, presented tips for how small businesses can use accounts receivable (A/R) financing as a bridge to land bank financing. A/R financing is the sale of receivables to credit worthy customers, where receivables represent work 100% delivered or rendered.
For many small businesses with a shortage in cash flow, leveraging A/R contracts can be a solution to access cash quickly. Small businesses often need more working capital to scale than is available to them. A/R financing can provide a runway for small business owners to get the working capital they need, when banks tell them “no” or “not yet.”
That was the case with Detroit-based Micron Electrical Contracting. Co-owners Dwayne Coleman and Les Alexander attended ICIC’s Inner City Capital Connections (ICCC) Capital Training Day, where they met executives from LSQ Funding.
BY Mary Duggan on October 9th, 2012
TAGS: small business | business | entrepreneur | capital | iccc | ar financing | factoring | micron | cash | financing | ask the expert | ceo series
Commission: No Silver Bullet for Massachusetts Job Creation
Above: Senator Karen Spilka, co-chair of the Jobs Creation Commission, presents the final report
For the past two years, a 17-person commission has been looking at what it will take to create more jobs here in Massachusetts. Yesterday, the commission released its 90-page report, which, to no surprise, contained no silver bullet for job creation.
So how do we create jobs and build a stronger economy here in the Commonwealth?
A heavy emphasis was placed on investing in infrastructure like roads, water and sewers. ICIC research has found this is particularly important to inner cities. Inner cities have high concentrations of infrastructure assets, including water ports, intermodal facilities and the country’s largest airports. Per square mile, the average inner city has roughly 100 times as many of these assets as the rest of the U.S. This infrastructure is at the core of regional transportation and distribution systems. By investing in inner city infrastructure, Massachusetts has a great opportunity to strengthen the competitiveness of both local and regional economies.
BY Amanda Maher on October 4th, 2012
TAGS: massachusetts | economic development | infrastructure | workforce development | gateway cities | jobs | business development
Done Right, Downtown Growth Can Be Good For All
City leaders and urban enthusiasts have been raving about the re-population of America's cities for some time now. But much of the excitement had been around the growth of broader metro areas, not growth within actual city limits.
Perhaps for the first time since the 2010 Census data was released, there is a study that looks specifically at the growth within downtown areas - not just as places to work, but also as places to live.
Last week, the U.S. Census Bureau reported that there has been significant population growth in the downtown areas of many major U.S. cities. "Between the 2000 and 2010 censuses, metro areas with 5 million or more people experienced double-digit population growth rates within their downtown areas (within a two-mile radius of their largest city's city hall), more than double the rate of these areas overall," the report stated.
Chicago, New York, Philadelphia and San Francisco were among the largest downtown population gainers. Chicago alone attracted 48,000 new residents to its downtown over the decade studied. A few cities, such as New Orleans and Baltimore, bucked the trend. New Orleans is probably the least surprising due to the outmigration after Hurricane Katrina.
BY Amanda Maher on October 2nd, 2012
TAGS: economic development | cities | urban revitalization | boston | population | chicago | nyc | san francisco | philadelphia | u.s. census
The Disparate Challenges To Growth
Written by Mack Davidson, Senior Data Analyst, ICIC
Do hyper-achieving, fast-growing companies have any limits to growth? That was a question ICIC staff hoped to answer as they scrutinized surveys returned by 2012 Inner City 100 winners this past winter. After all, the average winner had seen its revenue increase at a 40% compound annual growth rate (CAGR) between 2006 and 2010 – the Great Recession notwithstanding. Were winners susceptible to economic gravity?
As it turns out, survey respondents revealed that not even super achievers are necessarily immune to growth challenges. The firms’ self-reported revenue growth projections for the periods 2010-2011 and 2011-2012 revealed a surprisingly varied picture.
BY Guest Blogger on October 1st, 2012
TAGS: small business | business | growth challenges | ic100 | capital | workforce
A New Economy in Need of New Tools
(avg: 4.50 of 5)
Last week, ICIC convened 250 corporate, civic and city leaders from across the U.S. to address challenges facing our inner city economies. Practitioners discussed how to align systems – including land use, capital and small business technical assistance – around an inner city’s growth clusters to drive economic and business growth.
Throughout the two-day event, important themes emerged:
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Equity is an economic argument—not merely one of fairness. Equity is vital to the growth of our cities, regions and nation—not just our inner cities. Inequality within the region holds growth back for all residents and businesses.
Certainly, regions need to be growing in order for our inner cities to prosper. However, regional job growth is not sufficient for the revitalization of inner city economies.As ICIC research has shown, communities need specific strategies for growing the economies of inner cities.
BY Amanda Maher on September 26th, 2012
TAGS: inner city economic summit | summit | economic development | community development | workforce | anchors | capital | urban revitalization | workforce development | boston
ICIC Summit: Connecting Underserved Businesses to New Revenue Generating Opportunities
New ventures face something of a chicken and egg problem- to take away business from established companies, they often need to grow to a certain size to be considered viable competitors. To grow and become viable, they often need capital. When studies or news outlets suggest that “the deepest financial markets in the world” are an American strength, they’re referring to our capital system’s ability to solve this chicken and egg problem. As if this problem weren’t difficult enough to solve (there’s a reason an estimated 9 out of 10 new ventures fail), ICIC and others have identified additional challenges faced by minority and women-owned businesses in terms of gaining capital and credibility. Often, as we’ll see with the Connecticut example below, even local firms can be systematically excluded from gaining the scale necessary to benefit, and otherwise promising local growth is stifled. Today at the 2012 Inner City Economic Summit, an excellent panel from across the country discussed strategies to better serve underserved businesses.
“The construction industry is all about relationships- the single biggest barrier to successful inclusion of all firms in the marketplace is this fact.” - Raleigh Roussell TEXO
To alleviate this fact of commercial life, Mr. Roussell and his colleagues created the Contractor Development Alliance to bring together disparate groups to realize the gains that can be made from extending contract involvement to underserved, local firms. Through direct incentives to hire underserved businesses and indirect methods like incubation and basic training on contract acquisition, the Alliance has facilitated the extension of hundreds of billions of dollars in contracts to previously excluded firms.
BY Sathya Vijayakumar on September 25th, 2012
TAGS: inner city economic summit | summit | revenue | scaling | small business | business development | bridgeport | texo | mwbes | miami dade college | procurement
ICIC Summit: What do small businesses need to learn to scale and grow?
In Breakout Session 2 of the Inner City Economic Summit, panelists identified the biggest deficits small businesses face in order to grow, expand and create local jobs in inner city communities. The panel included:
- Tameka Moss, Director of Talent at Next Street
- Jose Corona, CEO of Inner City Advisors
- Mike Fetters, Professor of Finance and Accounting at Babson College
- Luke Yancy, President and CEO of The Mid-South Minority Business Council Continuum
What’s Needed to Scale to Second-Stage Growth
Jose Corona cited character within the firm's leadership so that they can transform from a startup to a true employer that is creating jobs. This can be tough, as Corona cited, because entrepreneurs have a tough time letting go of their original vision. Luke Yancy found that his portfolio of firms need certifications and management education in order to learn how to operate effectively and profitably. Moss said that Next Street's firms are highly mature: but they are largely controlled by one person and that in and of itself can inhibit the company’s growth. She explained that Next Street forces them to think about how they can embrace disciplined change that makes the operation move more efficiently while positioning it for newer and better growth opportunities that allow their firms to be better positioned to take advantage of future growth. Mike Fetters also said that small businesses need to learn to break down their costs per unit in order to truly manage operations—when they are able to do so, it gives the company a vision as to how the business should run.
BY Alex Rodriguez on September 24th, 2012
TAGS: small business | business | economic development | cities | jobs | entrepreneur | summit | inner city economic summit | goldman sachs | next street | inner city advisors | interise | babson college | mmbc continuum
ICIC Summit Keynote: Can the U.S. and its cities be competitive again?
By: Linda Li
By now, we have all heard about the decline of U.S. competitiveness in some form or another. But before we heard from Professor Michael Porter, Founder and Chairman of ICIC and Bishop William Lawrence University Professor at Harvard Business School (HBS), many of us did not realize just how seriously broken America’s job machine has become.
To give you an idea of the current challenges we face, here are some statistics that Professor Porter presented. First, the growth rate of the number of new jobs created in this country averaged 2.1% annually between 1975 and 2001. Growth has slowed significantly, and even shrunk for a period, since then. Of the net new jobs added, none have been fro sectors exposed to international competition.
Second, of the hundreds of thousands of jobs have been lost during this recession, 80 percent were for those with a high school education or less. None of those jobs have recovered, net-net.
Third, labor force participation rate has been in decline since 1998. This is not just a product of the latest financial crisis, says Professor Porter, this shows a “much more fundamental” recession of the country’s economy.
BY Guest Blogger on September 24th, 2012
TAGS: inner city economic summit | summit | competitiveness | harvard business school | professor michael porter | jobs | economy | economic development | cities
Using Economic Development Strategies to Inform Investment Decisions
By: Brian Hull, Senior Analyst, Strategy Consulting Practice, ICIC
Last week, ICIC hosted its Inner City Economic Summit. One of the panels was "Financing Growth Clusters." Brian Hull details the panel, including the case studies that were presented and how each panelist is trying to strategically link capital to inner city growth clusters.
Rachel Rochat, a manager in ICIC’s research department, kicked off the Summit’s capital panel, “Financing Growth Clusters” with an opening statement about the importance for inner city firms of accessing debt and equity to finance their growth. ICIC’s research into the capital gap phenomenon shows that the supply of capital to inner cities is lower than would be expected given the size of the economies. This is resulting in more than 70% of inner city firms lacking the capital they need and limiting their growth potential.
Equally important, capital providers can be more effective in promoting growth in the national’s inner cities if their investment decisions are informed by economic development priorities and by existing capital and technical assistance gaps. The panel included stories of just this type of forward-thinking approach to financing inner city firms.
Colleen Galvin, Assistant Commissioner, Financial Services and Capital Access, NYC Department of Small Business Services; and Nancy Carin, Executive Director of BOC Capital spoke of the NYC Construction Loan Program. The program assists small women and minority-owned construction businesses that are seeking city contracts access working capital and technical assistance for bidding and bonding. The city of New York spends roughly $1.95 billion annually on construction services, with $253 million going to certified NYC construction companies.
BY Guest Blogger on September 24th, 2012
TAGS: capital | clusters | inner city economic summit | summit | nyc | milwaukee | seedco | new orleans | next street | citi community capital | jobs | economic development
Live at ICIC's Inner City Economic Summit: How Cities Define and Quantify "What Works"
Written By Cristina Garmendia
One of the things I was listening for in the introductory session, “What Works for Cities: Spotlight on Solutions” was exactly how cities define “what works.” What are the measures of success for economic development? As a student of policy analysis, I am very interested in quantitatively measuring impact of investments. Yet I know evidence-based decision-making is a dream for many policymakers, as the evidence either doesn’t exist and is prohibitively expensive to collect. Many policy decisions have to be made on the basis of anecdotal evidence and short-range political optics. It is important that innovative programs have funding to evaluate social and economic impact.
We heard inspiration from case studies from asset-based forms of economic development: stakeholder, input, and clustering assets. My round-up of the case studies from the anchor institutions panel is below.
BY Guest Blogger on September 20th, 2012
TAGS: what works | economic development | icicsummit | cleveland | detroit | boston | syracuse | urban revitalization | anchors
Live at ICIC's Inner City Economic Summit: Food for Jobs
Written By Linda Li
How can each city’s unique food economies contribute to that city’s economic development? That was the subject of the many interesting discussions during the opening day of the 2012 Inner City Economic Summit. Case studies from four cities—Boston, Cleveland, New York, and Detroit—gave us a flavor of the types of innovative, bottom-up approaches that help create jobs and grow the local economy.
What struck me was how critical it is to understand the place of food within the city, regional, and national economies. Having the proper context goes a long way to crafting effective strategies to engage with the food cluster to create and sustain growth and employment. Common success factors underpinning each strategy were the necessity of deep community engagement; collaboration across public, private, and social sectors; and regular evaluation.
BY Guest Blogger on September 20th, 2012
TAGS: boston | cleveland | nyc | detroit | food | economic development | cities | jobs
Live at ICIC's Inner City Economic Summit: Making Industry Work for Cities
Written By Alex Abboud
The first panel of the day focused on the role of industrial land in cities. The comeback of manufacturing in the US has made headlines over the past couple of years. This panel, focusing on case studies from Chicago, Baltimore, San Francisco, and St. Paul, offers key lessons for how a city can benefit.
Land Use and Availability is Key The disappearance of industry from American cities, and subsequent conversion of its land, over the past few decades is well-documented. Former industrial sites - particularly along waterfronts - have been converted to housing, or replaced by new projects or green space. I am fortunate to be able to travel a fair bit and see many different cities. I've been surprised when I come across industry in prime locations, like the working port in St. John's, Newfoundland, Canada (a metro of about 200,000) seen in this picture below. It is literally one block from downtown's main strip. You can still find industry in many cities, but usually it's not nearly as prominent or conveniently located as it once was.
BY Guest Blogger on September 20th, 2012
TAGS: workforce | jobs | cities | urban revitalization | industrial | manufacturing
Live at ICIC's Economic Summit: Putting the Work Back in Workforce
In times of rising unemployment and political gridlock, we hear a lot about job creators and their efforts to combat the worst economic crisis since the Great Depression. While they’re a crucial part of any recovery, the 2012 Inner City Economic Summit showcased the potential of workforce development through a panel featuring 3 intriguing advocates from around the country.
First, Loh-Sze Leung of the Boston Foundation’s Skillworks program described how this collaboration between philanthropy, government, community organizations, unions, and employers was moving the needle on unemployment. Out of the 4500 job-seekers enrolled, over ⅔ found work as a result of their participation in the program. Using real-time employment data and feedback, they’ve created a program that’s adaptable, scalable, and continually effective.
At the end of her presentation, Ms. Leung stated, “Effective policy advocacy requires investment, relationships, and a clear message fitting the zeitgeist.” No program exemplifies this truism better than Columbus State Community College’s LogisticsART program. Cheryl Hay painted a picture of the program that further showed that sector-specific, targeted workforce development could work. Piggybacking off Columbus’ status as a Logistics hub, the community college worked with various actors in the logistics supply chain to create a 3 week course that’s resulted in job placements ranging up to nearly 6 figures and a 75% placement rate.
BY Sathya Vijayakumar on September 20th, 2012
TAGS: inner city economic summit | summit | workforce development | workforce | the boston foundation | jvs
Live at ICIC's Inner City Economic Summit: Building a Successful Inner-City Workforce
Written By Alex Abboud
Lee Fisher began the session's second panel, on workforce development, by focusing on the talent dividend, which defines the close correlation between college attainment and income growth. As part of CEOs for Cities' City Dividends, a workforce dividend is under development, which I am eager to see once completed.
The major takeaway from this panel is the importance of focusing on your local market, or as was said, "knowing what you're good at". Of the three panelists, one stood out the most for me in this area.
BY Guest Blogger on September 20th, 2012
TAGS: ask the expert | workforce | workforce development | economic development | cities | icicsummit
Live at ICIC's Inner City Economic Summit: Four Lessons on Building a Local Food Cluster
Written By: Alex Abboud
The final panel of the What Works for Cities session focused on food clusters in Boston, Cleveland, New York City, and Detroit. From these four cities, we can draw four distinct lessons:
- A Successful Cluster Goes Beyond Production The processing and production side of the business has long been one of Boston's strengths, but two aspects outside of this stood out for me. The first is the city's expanded focus on seeing growth in niche and emerging businesses. A bakery cluster has emerged in the Hyde Park area, and the city is seeing the benefit of the growing craft beer and spirits market. In the past year alone, five new companies in this field have opened their doors in Boston. The second aspect that stood out is the importance of knowledge. Proponents recognize that proper storage and care of local, fresh food is imperative. They are taking steps to educate local vendors who are new to stocking local products at their market.
BY Guest Blogger on September 20th, 2012
TAGS: food | food cluster | economic development | community development | icicsummit | ask the expert | boston | cleveland | detroit
Live at ICIC's Economic Summit: Equity and the Changing Demographics of America
Angela Glover Blackwell of PolicyLink kicked off the second day of the ICIC Summit with a keynote address focused on equity, and its importance to America's future.
- More than 6,000 Latino and African-American students will drop out of school today. Last week's Measure of America report on disconnected youth noted 1 in 7 youth age 16-24 in the 25 largest metros is neither working nor in school. For African-American youth, it's 22.5%, and for Latinos, 18.5%, compared to the overall rate of 14.5%.
- It's expected that 45% of jobs in the future will require at least an Associate Degree. Today's attainment rates are 27% for African-Americans, 26% for native-born Latinos, and 15% for non-Latino immigrants.
- From the 1980 to 2010 censuses, the proportion of Americans who are people of color grew from 20% to 36%. By 2042, America will be a majority-minority country. Already today, a majority of babies being born are people of color, and by the end of this decade, the majority of those under 18 will be.
BY Guest Blogger on September 20th, 2012
TAGS: equity | economic development | economic opportunity | jobs | business | diversity | youth | inner city economic summit | summit
Live at ICIC's Economic Summit: Getting Creative with Eds and Meds
Written By Alex Abboud
The Summit kicked off with the "What Works" session, focusing on 11 case studies on inner-city development. The first of three panels focused on procurement in inner cities.
Eds and Meds are popular anchor institutions for economic growth in cities, and they figured prominently in all four case studies.
Marilyn Higgins of Syracuse University spoke about the Salt District in the city's Near Westside. Ranging from arts and culture to green building, the school is investing in revitalizing one of the city's oldest areas. She spoke in particular to the "power of participation", of engaging local residents instead of taking a top-down approach.
BY Guest Blogger on September 19th, 2012
TAGS: anchors | urban revitalization | clusters | business | inner city economic summit | summit
Ask the Expert: Martha De La Torre of El Clasificado
Martha De La Torre, President and CEO, El Clasificado. Photo courtesy of hispanicprwire.com
For a while now, everyone has talked about the booming marketplace amongst Hispanic consumers. With significant population expansion coinciding with growth in purchasing power, Latinos have become incredibly powerful within the United States culturally, politically and economically. Such power has led to the growth in the number of Hispanic-owned enterprises to outpace that of non-Hispanic-owned businesses by incredible margins, according to the Minority Business Development Agency. Many of these firms are also finding success in appealing to the local community, much of which is often comprised of many Latinos of all nationalities.
One such company, El Clasificado from Los Angeles, has found success in appealing to this market. They have made the Inner City 100 on six separate occasions and most recently finished #79 on the 2012 Inner City 100 list. El Clasificado is a Spanish-language weekly newspaper that acts as a “Classifieds” section targeting a Hispanic audience. We had the opportunity to speak with CEO and Co-Founder Martha De La Torre recently to discuss how her firm has been successful in penetrating the Hispanic marketplace and adapting for growth.
Tell us about the founding of El Clasificado.
I was first inspired to create a Spanish publication while working at Arthur Young and then as the CFO of La Opiniόn. It was the 80’s and the Hispanic population was growing dramatically. At that time, I realized that the Latino population in Southern California was underserved and felt that a free classified publication like the Pennysaver, but in Spanish, was desperately needed. However, the product vision was not to make it just a shopper, but a source of concise “how-to” articles to help the Hispanic community adapt to U.S. culture. I wanted to provide the type of content that would have made my parents’ lives easier when they first arrived from Ecuador in the 1950’s.
We discovered a niche. My husband, Joe Badame, and I estimated an initial capital need of $600,000, but we only raised $350,000. We plunged ahead anyway and launched an undercapitalized company in 1988. We made many sacrifices. Joe had to work two jobs to keep us afloat for many years before we finally started generating positive cash flow, and neither of us took a salary for the first 10 years.
BY Alex Rodriguez on September 17th, 2012
TAGS: ask the expert | ic100 | entrepreneur | small business | business
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