LEADING INNER CITY BUSINESSES continue to thrive;

vast majority plan workforce expansion, icic index reveals

 

Despite Challenging Economic Environs, Inner City 100 Companies

Posted Collective Average Annual Growth Rate of 62 Percent

 

BOSTON, April 5, 2004 – Despite their challenging economic environs, the nation’s leading inner city businesses continue to thrive, collectively achieving an average five-year compound annual growth rate of 62 percent, according to the sixth annual ICIC-Inc. magazine Inner City 100 released today.

 

The list, a ranking of 100 of the fastest-growing businesses in inner city areas around the country, reveals that virtually all of these companies are profitable and planning to expand their workforces.  These companies, which were responsible for creating more than 11,600 new jobs between 1998 and 2002, paid an average hourly wage of $13.80, and most offered attractive benefits.

 

Merrill Lynch, the international investment and business financial services firm, returns for the second consecutive year as the Inner City 100 national program sponsor. "In our 20 years of providing lending and cash management to small and midsize businesses - many of which reside in the inner city -- Merrill Lynch has seen a shift toward entrepreneurs choosing to grow their businesses in inner city communities, ultimately shaping the fabric of these communities," said Dave Tralka, Chairman, ML Business Financial Services. "Merrill Lynch applauds the ICIC/Inner City 100 program in its championing of inner city businesses that ultimately have a tremendous impact on the economy."

 

Companies included in the list range from Union Packaging, a Kansas City, MO-based packaging materials company with $1.2 million in annual sales to Belkin Corporation, a Compton, CA-based computer components company with $398 million in annual sales and multiple offices in the U.S. and overseas.  Companies on the list average close to $26 million in annual sales.

 

“The entrepreneurs who have chosen to locate in some of our nation’s most economically disadvantaged areas have demonstrated that it’s possible to operate highly successful businesses in these areas,” said Michael Porter, a Harvard Business School professor who founded The Initiative for a Competitive Inner City (ICIC) in 1994 to understand and promote inner city businesses.

 

“The owners of these businesses are true corporate heroes as they are contributing to the growth of the communities in which they are located and have chosen to address, rather than ignore, deep rooted economic and social problems.  They represent the leading edge of a new approach to America’s urban revitalization – an approach that relies not on charity but on the practical competitive advantages businesses can find or create.”

 

To qualify for the Inner City 100, companies needed to have at least 51 percent of operations located in economically distressed urban areas; have 10 or more employees; and have a five-year operating-sales history that included sales of at least $200,000 in 1998, an increase in 2002 sales over 2001 sales, and 2002 sales of at least $1,000,000.  The specific ranking was based on total revenue growth over the five-year period.  An economically distressed urban area is defined by ICIC as having a 50 percent higher unemployment level, 50 percent higher poverty level, and 50 percent lower median income than the metropolitan statistical average.

 

Nearly 7,000 companies were nominated this year by a diverse group of organizations, including the U.S. Conference of Mayors, national program sponsor Merrill Lynch and business and minority organizations across the country.  Nominating partners include the Small Business Administration, New America Alliance, National Women’s Business Council, and National Association of Manufacturers.  In 1999, the first year of the list, just 215 companies were nominated.

 

Nominations for this year’s list were received from 155 cities, with the winning companies based in 55 cities.  Chicago and Boston have the most winners with six, followed by Rochester (five) and El Paso and New York with four. 

 

The 2004 Inner City 100 winners will convene on April 12-13, 2004 at the Inner City 100 Summit in Boston.  The Summit is a two-day event that this year features seminars for Inner City 100 owners and managers at Harvard Business School, a reception at Fenway Park, and culminates in a gala awards dinner, where more than 1,000 guests are expected.

 

Highlights of Inner City 100 company profiles include:

• Twenty-three percent of the list is minority-owned and thirteen percent of the list is owned by women;
• Eighty-one percent of business owners have considered expanding or relocating their company, but virtually all are considering doing so in an inner-city area;
• Fifty percent of company employees live in the inner city, of which all but 10% are mid-level employees and senior management ;
• Ninety-three percent said they were planning to hire for new positions in the next six months, and 26 percent said they planned to hire for more than ten new positions;
• The average age of a CEO at the time their company was founded was 33; 56 percent of all CEO’s have completed at least four years of college; and 81 percent live or have lived in an inner city;
• Close to a fifth of the owners say they intend to sell part or all of their company to their employees.

 

The 2004 Inner City Almanac contains all the statistics.  For a copy of this document, please contact Deirdre M. Coyle, 617-292-2363 x242 (dcoyle@icic.org).

 

Editor's Notes:

ICIC - Inc Magazine Inner City 100 Sponsors

                Merrill Lynch - national program sponsor

Staples Foundation for Learning, Staples

                PricewaterhouseCoopers

                The Ewing Marion Kauffman Foundation

               

About Initiative for a Competitive Inner City

The Initiative for a Competitive Inner City (ICIC) is a national, non-partisan, not-for-profit organization founded by Harvard Business School Professor Michael E. Porter in 1994, following several years of pioneering research on inner-city business and economic development.  With significant on-the-ground activities in many cities, ICIC has rapidly established itself as a national force in inner city economic development. By identifying the competitive potential of inner cities: strategic location, local market demand, growth opportunities via integration with the regional economy, and availability of labor; ICIC aims to build the business case for doing business in America’s inner cities. ICIC's mission is to promote new thinking that inspires public and private leaders to build jobs, income, and wealth for inner-city residents and communities.  For more information, please visit our Web site at www.icic.org.

 

About Inc

Inc is the leading magazine written for the men and women who own and manage small-to-midsized, fast-growing companies.  Published 12 times a year, Inc helps its 1.5 million readers by providing expert advice and practical solutions as they face the opportunities, pitfalls, and rewards of growing a company. inc.com (www.inc.com), the Web site for growing companies, was named Best Online Magazine by Folio and Best Overall New Publication (all media) by the Computer Press Association.

 

About Merrill Lynch

Merrill Lynch is one of the world's leading financial management and advisory companies, with offices in 36 countries and total client assets of approximately $1.1 trillion. As an investment bank, it is a leading global underwriter of debt and equity securities and strategic advisor to corporations, governments, institutions and individuals worldwide. Through Merrill Lynch Investment Managers, the company is one of the world's largest managers of financial assets. For more information on Merrill Lynch, please visit www.ml.com.

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