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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.

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

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


New Interest in Bridgeport’s Neglected Neighborhoods
     Terry Pristin, The New York Times
August 1, 2007

Urban Land Institute Report: Retail in Inner Cities (members only)
     James Miara, Urban Land Institute
     January 2007

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
October 27, 2003

Pitting Markets vs. Poverty (requires free registration)
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

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

The Competitive Advantage of Regions (pdf)
     Michael E. Porter
     Presented to The Columbus Partnership
     at the John F. Kennedy School of Government
     Cambridge, MA
     February 27, 2004

The Competitive Advantage of Regions
     Michael E. Porter
     Presented to The Columbus Partnership
     at the John F. Kennedy School of Government
     Cambridge, MA
     February 27, 2004

Initiative for a Competitive Milwaukee: The Time for Action

     Michael E. Porter
     Milwaukee, WI
     September 15, 2003
See also our coverage of the Initiative for a Competitive Milwaukee

Reference Chapters in On Competition

“The Competitive Advantage of the Inner City”

     On Competition, Chapter 10
     Michael E. Porter
See description above for Harvard Business Review article of the same title.


Recommended Links

Initiative for a Competitive Milwaukee
Includes a 60 page report outlining the Cluster Action Plans and Business Environment Strategies for the Initiative.

The Initiative for a Competitive Inner City
The Initiative for a Competitive Inner City (ICIC) is a national, not-for-profit organization founded in 1994 by Harvard Business School Professor Michael E. Porter. ICIC's mission is to spark new thinking about the business potential of inner cities, thereby creating jobs and wealth for inner-city residents.

The Inner City 100
The Inner City 100 is a national listing of 100 of the fastest-growing companies located in America’s inner cities. The annual list showcases businesses that are thriving all over America, creating jobs, income, and wealth for inner-city residents.

The Inner City 100 - UK
The Inner City 100 is a yearly business index and research initiative which locates and celebrates the 100 fastest-growing inner city enterprises in the UK.

Missing opportunities: Ontario's urban prosperity gap
Institute for Competitiveness & Prosperity working paper, June 2003.

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