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Economic Development in Inner Cities

Past approaches to revitalizing economically distressed inner city communities have defined the problem largely in social terms, to be addressed with social programs. Efforts to foster economic development in inner cities have been based on heavy subsidies and on distorting or blunting market forces. To build healthy and sustainable inner city communities, however, it is necessary to create healthy economies in and near the communities themselves. Economic development in inner cities must be approached from competitiveness perspective, and be based on business opportunities in the inner city that are genuinely profitable. There are existing and potential competitive advantages of inner cities that can support viable businesses and jobs. The inner city can only prosper if it is integrated into the regional and national economy. The private sector must play the leading role in inner-city business development, motivated by self-interest instead of charity. Inner city distress is as much an economic as a social problem.

The Initiative for a Competitive Inner City is a national, not-for-profit organization founded in 1994 by Professor Porter. The ICIC seeks to spark the revival of inner cities by bringing market-based approaches to economic development in these distressed areas. Its mission is to help inner cities create jobs, income and wealth for local residents.



Mayor Cory Booker - Newark, NJ
accepting the ICIC National Inner City Leadership Award
September, 2012
Federal Reserve Bank of Boston


2012 Inner City Economic Summit highlights and recap.

Recent Presentations, Publications and News ICIC and the 10,000 Small Businesses Initiative


New York City’s Anchor Institutions:
From Social Responsibility to Shared Value

Michael E. Porter
November 14, 2011

A Cluster-based Approach to
Inner City Economic Development

Michael E. Porter
Inner City Economic Forum
October 4, 2011

Anchor Institutions and Urban Economic Development: From Community Benefit to Shared Value
Michael E. Porter
Inner City Economic Forum - Summit 2010
San Francisco, CA
October 26, 2010

Michael Porter on Inner City Businesses
'Companies can benefit their communities simply by doing more business close to home.'
--Michael E. Porter
Bloomberg BusinessWeek
May 27, 2010

How Big Business Can Regain Legitimacy
'Business must find a way to engage positively in society, but this will not happen as long as it sees its social agenda as separate from its core business agenda.'
--Michael Porter
Bloomberg BusinessWeek
May 6, 2010
See also: Michael Porter on Inner City Business
May 27, 2010

Growing Successful Inner City Businesses:
Findings From A Decade of ICIC Data

Michael E. Porter
Inner City Economic Forum Summit
Washington, D.C.
October 15, 2009



10,000 Small Businesses is a $500 million investment by Goldman Sachs to help create jobs and economic opportunity in the United States. Michael Porter will serve as co-chair of the advisory council.ICIC will be a partner institution to the program.

 --press release (November 17, 2009)

 --fact sheet

 --statement from issue experts
Michael Porter: “More than a decade of Inner City 100 winners demonstrate conclusively that growing urban businesses can generate jobs and revitalize disadvantaged communities. The 10,000 Small Businesses program will meet a vital need in disadvantaged communities, which is to provide the training, tools, and relationships, to help local entrepreneurs and their businesses grow and create a self-reinforcing cycle of economic opportunity.”

selected news coverage: Bloomberg, Washington Post,
New York Times, Wall Street Journal

Bloomberg video: Porter Interview on Goldman Small Business Initiative



Special Report: The Inner City 100
From Detroit to New Orleans,
these growth businesses thrive in low-income neighborhoods—and strengthen local economies

Bloomberg BusinessWeek
May 6, 2010


Framework Publications In the News

“The Competitive Advantage of the Inner City”
 Michael E. Porter
 Harvard Business Review, May-June 1995.
The economic distress of America's inner cities may be the most pressing issue facing the nation. The lack of businesses and jobs in disadvantaged urban areas fuels not only a crushing cycle of poverty but also crippling social problems such as drug abuse and crime. And, as inner cities continue to deteriorate, the debate on how to aid them grows increasingly divisive. The efforts of the past several decades to revitalize inner cities have failed. The time has come to recognize that revitalizing the inner cities will require a radically new approach. While social programs will continue to play a critical role in meeting human needs and improving education, they must support--and not undermine--a coherent economic strategy. The question we should be asking is how inner-city-based businesses and nearby employment opportunities for inner city residents can proliferate and grow. A sustainable economic base can be created in the inner city, but only as it has been created elsewhere: through private, for-profit initiatives and investment based on economic self-interest and genuine competitive advantage. 
Order article at Harvard Business Online
This article is also available as Chapter 10 in On Competition.

“New Strategies for Inner-City Economic Development”
 Michael E. Porter
 Economic Development Quarterly 11, no. 1
 February 1997.


Goodwill Enterprising
August 8, 2012

Health care academy a realization of ICIC
Scott Whipple

New Britain Herald

January 11, 2010

The Inner City 100:
Meet the Fastest Growing Companies
June / July 2009
From Amarillo to Akron, our Inner City 100 companies thrive in tough neighborhoods—and help them solve local problems.


More companies tap location, location, location of inner cities
 Del Jones

"Good News, Not Blues, for the Inner City"
 Martha Lagace
 HBS Working Knowledge, May 2001
What's located at the crossroads of a sophisticated infrastructure—containing airports, railroads, and ports—and boasts a large potential workforce of consistently underemployed people? A typical inner city, of course. And, says Harvard University Professor Michael E. Porter, inner cities are already rewriting the map of competitive advantage.

An Inner-City Renaissance (requires free registration)
Aaron Bernstein
with Christopher Palmeri and Roger O. Crockett
BusinessWeek, October 27, 2003

Pitting Markets vs. Poverty (requires free registration)
BusinessWeek, October 27, 2003
Harvard's Michael Porter talks about some surprising strengths in inner cities and how capitalist forces can help improve their lot.

Q&A with Michael Porter
in the Inner City 100 report
Inc. Magazine,
May 2004
Harvard professor and urban booster Michael Porter explains the vital role that growing companies play in the inner city.

Speeches and Presentations

Growing Successful Inner City Businesses:
Findings From A Decade of ICIC Data

Inner City Economic Forum Summit
Washington, D.C.
October 15, 2009

American Competitiveness in a Global Economy
Inner City 100 Luncheon
Boston, MA
May 20, 2009

Putting the Inner City First: Making the Case for an Inner City Economic Policy
Miami, FL
September 25, 2008


The Role of Construction, Housing, and Real Estate in Inner City Economic Development
Inner City Economic Forum
Philadelphia, PA
October 17, 2007

Clusters and Economic Development: Towards a New Model for Regions and Inner Cities
Brownfields 2006
Boston, MA
November 13, 2006

Economic Strategy for Newark:
Opportunity Newark Project

Newark, NJ
April 6, 2006


Recommended Links

ICIC 2007-2008 Annual Report

Includes introduction by Michael E. Porter,
"Why Put the Inner City First?"

Missing opportunities: Ontario's urban prosperity gap
Institute for Competitiveness & Prosperity working papers.
Toronto, Canada.


Opportunity Newark
"The opportunity is to leverage Newark's existing and latent competitive advantages to spur business development in the inner city.When this happens, everyone wins."


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