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.
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.
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.”
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.
News, Not Blues, for the Inner City"
Martha Lagace HBS Working Knowledge, May
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.
(requires free registration)
with Christopher Palmeri and Roger O. Crockett BusinessWeek, October 27, 2003
Markets vs. Poverty
(requires free registration)
BusinessWeek, October 27,
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
Inc. Magazine, May 2004 Harvard professor and urban booster Michael Porter
explains the vital role that growing companies play in the inner