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"A radically new approach" to fighting poverty

Drive down just about any major thoroughfare on the East Side and you see economic desolation. Yeah, there are a few pockets of success, but they are the exception. The urban landscape of, say, Genesee Street, is one part Beirut, one part Western ghost town. Haunting and depressing.

There are a lot of reasons for it, among them what Michael Porter, a professor at the Harvard Business School, believes is this nation's misguided policies when it comes to revitalizing inner-city economies. Porter maintains that wealth creation, through investment and business development are what ill turn around the nation's poorest neighborhoods.

Let's hear from him:

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.

In short, getting inner-city economies back on their feet requires identifying and exploiting their competitive advantages, Porter says. Economic development planners have done this for the region, but not for the inner-city.

Inner-cities have four main advantages, Porter says:

  • Strategic location.
  • Local market demand.
  • Human resources.
  • Integration with regional clusters of companies linked by customer or supplier.

How can it work? A laundry service around the corner from the Buffalo-Niagara Medical Campus would be able to provide superior customer service and quicker turn around time than one based out, say, of Amherst.

Suffice to say the politicians and bureaucrats who control economic development in the city don't subscribe to Porter's theories.

Come to think of it, just what theories are they working off?

Since publishing "The Competitive Advantage of the Inner City," Porter has established a non-profit to help regions plan for attracting self-sustainable business, connecting entrepreneurs to capital and training business leaders who can create wealth in the communities that need it most.

You should check out his Putting the Inner-City First: Making the Case for an Inner-City Economic Development Policy.  And here's a piece he did for Inc. Magazine. Some provocative brain food.

And maybe, just maybe, someone in a position to get this guy, or someone from his shop, on a plane to come here and talk to us should get out his or her check book. What do we have to lose, except our status as one of the nation's poorest cities?

This is not to say that anyone should simply buy into Porter's approach lock, stock and barrel. In fact, his thinking about the role of community based organizations isn't exactly progressive. And he can come off as too dismissive of the importance of social welfare programs. 

But his major point - the need to create wealth in poor communities - is a keeper.

(I'd be remiss in not acknowledging the assistance of my daughter Erin, a political science major at Swarthmore College, in developing this blog post. She's smart on this stuff.)

tagged

Economic Development | Poverty
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