Urban Economic Development
Insights and strategies for leaders in urban economic development
Strategies and best practices for growing inner city economies and creating jobs
ICIC has studied inner city economies in 100 U.S. metropolitan areas since 1994 and conducted on-the-ground consulting engagements in 20 inner cities. We have identified a set of strategies and best practices for growing inner city economies and creating jobs:
- Utilize a cluster-led approach to identify market opportunities and focus business attraction and retention efforts.
- Promote and leverage anchor institutions as key economic and community drivers.
- Accelerate inner city business development by improving access to capital, providing business and management education for business owners and connecting businesses to procurement and supply chain networks.
A cluster is a group of companies and industries in a geographic area whose activities are interrelated enough to function as an economic “ecosystem.” Transportation and Logistics is an example of an industry cluster. So are Education, Business Services and Healthcare.
Cities that utilize a cluster-led approach to economic development make their clusters the center of business development investment and execution. ICIC has identified a set of initiatives that are effectively employing a cluster-led approach:
- New York City’s Department of Small Business Services (SBS) utilizes a sector-led strategy to manage its career centers located in the five boroughs of New York City. The centers serve businesses in three target sectors - transportation, healthcare and manufacturing - and are led by experts with ties to the private-sector industries they support.
- U.S. Economic Development Agency Innovation Clusters is a federally funded effort to promote and execute cluster-led economic development strategies throughout the U.S. The initiative is being supported by the development of a national research center for business clusters and a grant program to support cluster-led initiatives across the country.
- Boston Back Streets Program is a cluster-led business development and retention program developed to support Boston’s industrial and commercial businesses. The city provides support ranging from solving space and industrial land needs to educating Boston’s industrial firms about the permitting and licensing processes.
- Opportunity Newark is the comprehensive city-led cluster approach to economic development for Newark. Opportunity Newark has developed and executed corresponding business and workforce development action plans for four target clusters: Transportation, Logistics and Distribution; Health Services; Education and Knowledge Creation; and Entertainment, Arts and Retail.
- Cluster Mapping Project, developed by the Institute for Strategy and Competitiveness at Harvard Business School and funded by the U.S. Economic Development Adminstration (EDA), provides cluster profiles and performance for various geographic areas.
- Economic Investment Opportunity Study of Southeast Louisiana This study analyzes the cluster development priorities of Southeast Louisiana post-Katrina and assesses how well the activities of the region’s local capital markets are aligned with the region’s economic development goals. The study provides recommendations on the role that Seedco Financial-Louisiana can play in bridging the gaps that may hinder the region’s growth and cluster development.
Inner cities are home to more than their share of America’s greatest anchor institutions, universities, medical centers and cultural facilities, which spend billions on goods and services. 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 cities with the opportunity to leverage their anchor institutions as key economic drivers for their communities. ICIC has uncovered a set of papers, initiatives and resources for cities that want to work with their local anchors.
- Local Officials Convening Anchors Citywide, produced by ICIC and the U.S. Conference of Mayors' Council on the Metro Economies and the New American City to help advise city Mayors on how to utilize anchor institutions in economic development efforts.
- Leveraging Colleges and Universities for Urban Economic Revitalization, developed by CEOs for Cities and ICIC, is the initial framework that outlines the roles that universities can play in their communities.
- Anchor Institutions and Urban Economic Development: From Community Benefit to Shared Value, is an updated framework, created by ICIC and Harvard Business School professor Michael Porter, detailing the specific roles healthcare institutions play in their communities. In addition, the resource describes best practices for each role that can be replicated in other communities.
- Anchor Institutions: An Untapped Resource, developed by ICIC and the U.S. Conference of Mayors Council for the New American City, outlines how mayors and economic development officials can utilize anchor institutions to create jobs in their communities.
- How to Behave Like an Anchor, a white paper by CEOs for Cities and Living Cities, examines how six institutions - five universities and one cultural center - function as community anchors and developers.
- Anchor Institutions as Partners in Building Successful Communities and Local Economies, produced by the Penn Institute for Urban Research, outlines a new role for the Department of Housing and Urban Development (HUD) serving as a facilitator and catalyst for anchor institution-community collaborations in cities and metropolitan regions, focused on housing, economic and community development, healthcare, schools and culture.
- The Road Half Traveled, written by Rita Axelroth and Steve Dub on behalf of the Democracy Collaborative at the University of Maryland, looks at a cross-section of 10 urban colleges and universities to evaluate whether their anchor initiatives take issues of economic inclusion into account, assess how these programs are organized and identify promising practices.
- Penn IUR Roundtable on Anchor Institutions convenes leaders from anchor institutions and other community stakeholders for full-day roundtable discussions and local case study evaluations. During the sessions, stakeholders work together to review strategies, uncover best practices and apply learnings for improving communities through leveraging anchors.
Accelerants of inner city business growth
Business growth is a core driver of urban economic development. Understanding what firms need to grow and thrive in urban communities will ultimately help drive the success of inner city economies. ICIC has identified three accelerants of inner city business growth -- improving access to capital, providing management and business education for business owners and connecting businesses to procurement and supply chain networks. ICIC has provided a set of key papers and initiatives for economic development practitioners wanting to learn more about each.
As a leading authority on urban economies, ICIC advises cities and anchor institutions how they can leverage one another's resources to spark economic development and create local jobs. Read more about ICIC's advising services.
West Louisville: Which industries to bet on for Park Hill?
- Background: The Park Hill corridor of West Louisville has a steady business economy, but not enough activity. And too much local employment is tied to declining industries.
- The challenge: City officials need to identify industry clusters that can build on the area¹s existing assets and generate long-term job and income growth.
- ICIC’s role: Working with the city of Louisville, ICIC analyzed local business clusters with the potential to expand regionally and developed a strategy to target national industry clusters that would capitalize on local strengths.
- Results for West Louisville: Louisville economic developers and community leaders developed a coherent long-term strategy to attract and develop business clusters that reinforce each other – rather than chase individual firms. In 2010, Mayor Abramson kicked off the first phase of the Park Hill Industrial Implementation Strategy, which focuses on a cluster-led approach and provides business support services to companies in the Park Hill Corridor.
ICIC Advises Anchor Institutions
As a leading authority on urban economies, ICIC advises anchor institutions on how they create a shared value with their local communities.