Research and Analysis
Understanding the urban economic ecosystem
Columbus Woodruff, founder and CEO of the full-service printing and design shop Hotcards.com, looked for opportunities to supply the Cleveland Clinic for many years.With an annual budget of $5 billion, the Clinic is a major “anchor institution” that offers an enormous market opportunity for local Cleveland businesses. Through the local Chamber of Commerce, Woodruff met Clinic purchasers and impressed them with Hotcards’ offerings. The Clinic has since become one of Hotcards’ largest customers, and the company has leveraged the Clinic relationship to attract other large clients, including LiveNation, Budweiser and Anheuser Busch.
Anchor institutions like the Cleveland Clinic are large organizations, typically educational, medical or cultural, that are deeply rooted in their local geographies and play an integral role in the local economy. Nearly every city has a college, university or hospital, and these institutions collectively spend over half a trillion dollars on goods and services annually. Anchors invest in their local communities because they rely on viable local communities to support their efforts in attracting clients, talent and funding.
As engines of local economic growth, anchors play several distinct roles within their communities, including purchaser, workforce developer and community infrastructure builder. These roles present opportunities for local urban businesses to grow revenues significantly, recruit and train employees and seek low-cost, world-class advisory and consulting services to build business capacity.
The Initiative for a Competitive Inner City (ICIC) and Staples offer three tips on how you can “anchor” your urban business:
- Become a trusted supplier of goods and services to local anchor institutions. Many anchor institutions actively direct their institutional purchasing to local or diverse businesses. From the anchor’s perspective, these purchasing initiatives spur healthy competition, encourage innovation and build local relationships that have the potential for greater flexibility. To successfully supply these purchasers, make the business case for why your local anchor should work with your business and research anchor institutions’ procurement policies and goals for local and diverse businesses.
- Use anchors to help identify and train your employees. For any small business, having the right talent is critical. Educational institutions, in particular, develop human capital as part of their core mission, and they can help you find and build talent. Many of these institutions, including the community colleges that enroll nearly half the nation’s college students, are located in the immediate local community. To leverage these resources, use local educational institutions to identify qualified job candidates, find job training opportunities for your existing workforce and create specialized job-training programs.
- Receive world-class advisory and consulting services from anchor institutions. Anchor institutions often look for ways to use their human capital and expertise to help build capacity in the local community. Many offer advising, consulting or mentoring to small, local businesses. Seek advising, networking and mentorship opportunities from local faculty, students and executives.
Successful small businesses are constantly exploring new avenues to grow revenues, improve operations and increase profits. With such a high concentration of anchors in cities, businesses in these areas can take advantage of resources right in their own backyards, while helping anchors meet their own business and community development goals.