REVITALIZING THE INNER CITY: A HOLISTIC APPROACH

Usha Nair Reichert*

The economic and social distress of America's inner cities is one of the most challenging problems of our times. There are many diverse and often conflicting views on how to break the debilitating cycle of economic poverty, psychological despair, and violence that has crippled and blighted these communities. Despite investment of considerable resources and skills, extensive government programs for inner-city revitalization, such as Urban Renewal, Model Cities Community Block Development Grants, CETA, Small Business Administration (SBA) and Enterprise Zones, efforts by social nonprofit groups and other private initiatives have met with limited success. Few would deny that there is a critical need to reexamine these efforts, analyze the reasons for their successes and failures, and develop a new thinking on solutions to the inner-city problems. The inner city with its history, culture and enormous human resources is an integral and vital part of our country. Its continued deterioration places the economic, political and social fabric of our nation at great risk. For this reason, Michael Porter's "Competitive Advantage of the Inner City" is a welcome initiative. Let us first examine the significant contributions of Porter's model to the debate on inner-city revitalization. His article has helped refocus attention on the pressing problems of the inner city and highlights factors necessary for successful revitalization efforts. This is especially important in light of the current debates on welfare, health reform, and affirmative action programs, all of which may have major implications for innercity communities. His research helps to highlight profitable private business opportunities available in the inner city at a time when private business initiatives in the inner city are somewhat scarce. It also provides a well-documented survival guide to succeeding in the inner-city business * I would like to thank John Pomery, Don Reichert, Tom Reichert and Jon Willner for some interesting discussions.

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environment. He identifies the kinds of businesses that are more likely to succeed in the inner city. His research shows how market-based policies can be used to revitalize and reclaim the competitiveness of inner-city America by providing appropriate incentives. It focuses on overcoming the disadvantages of the inner city, as well as on the strengths of the inner city, and attempts to leverage these strengths into vehicles for economic development. The change in focus also places the inner city in a more positive role as compared to many existing models. Instead of being passive recipients of welfare and other forms of aid, and being unemployed and perceived as unemployable, this model calls for a new approach towards inner-city communities and their latent strengths in the process of rebuilding. New attitudes would in time help to end the economic and social isolation of the inner city, build bridges across community boundaries, and attract resources and skills into the community. Porter also argues that the negative attitudes of government and social agencies are often impediments to attracting business ventures into the inner city. This indicates a need for continued dialogue between the government and private businesses to restructure inner-city business development programs. So, what are the missing pieces to this picture of inner-city revitalization fueled by private business initiatives? It is a rather significant leap of faith to assume that private businesses will vigorously pursue opportunities available in the inner city, if they are not obstructed by government and community organizations. There is also no concrete evidence as yet that Porter's approach is distinctly superior to other programs for innercity revitalization. Before dismantling or restructuring other developmental programs in the inner city, it is necessary to conduct pilot studies of Porter's model in selected inner-city communities, to ascertain its applicability, strengths, weaknesses, and sustainability as compared to other models. Porter's model sharply distinguishes between economic and social policies and argues that the role of government and community agencies should be to support private business initiatives. He also argues against race-based minority support programs. But his model does not propose any alternate methods to promote social justice or ensure that minorities are afforded a reasonable opportunity to participate in the new business prosperity. Although Porter's research offers valuable directions and resources for inner-city revitalization, it does not fully address the inner city's complex and wide ranging problems that are deep rooted in its unique social and economic dynamics. For example, his plan for inner-city revitalization

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focuses on business development and consequent job creation as the engine of inner-city revitalization. He argues that "Over time successful job creation will trigger a self reinforcing process that raises skill and wage levels. ''l It is very difficult to imagine that workers earning $6-$10 per hour at low-skill jobs will be able to enhance their job skills, raise stable families, become upwardly mobile, and break the crippling cycle of poverty. The ultimate objective of any inner-city development program should be sustained revitalization of all positive aspects of the inner-city community, as opposed to anticipating that the effects of business development will over time permeate the inner-city community. What is really needed is a critical mass of diversified and sustained economic activity that will jump-start the inner-city economy. Let us outline a few key aspects of a more holistic approach to inner-city revitalization: an approach based on the competitive advantages of the inner city, as discussed by Porter, but also incorporating within its framework the unique social dynamics of the inner city and the need to promote social justice. INNER-CITY R E V I T A L I Z A T I O N : T H E KEY F E A T U R E S What is our vision of sustained revitalization of all positive aspects of the inner-city community? It involves redefining inner-city revitalization in a holistic manner by focusing on the economic, social and psychological needs of the inner-city communities, coordinating developmental efforts, and efficiently allocating available resources so as to allow for sustained growth. The problems involved in coordinating a game plan that addresses several complex needs are undeniable; yet previous experience has shown that piecemeal efforts offer only temporary solutions and do not eliminate the cause of the problems. We need to rebuild the social and economic fabric of inner-city communities so that inner cities are vital, dynamic, self-sustaining engines of growth. Part of our holistic vision implies that we need to define a set of long-term goals and plans and dovetail our efforts to be consistent with these goals, instead of focusing on potentially short-term, piecemeal remedial measures. The growth of businesses as envisaged by Porter is certainly a vital part of this vision; but it is not the whole vision. The inner city needs to be transformed into safe neighborhoods where families can live in peace and harmony without fear of crime. We need to empower inner-city communities to value their gifts and abilities, to develop a strong sense of self-worth, and to create a core set of positive social values that

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encourage good citizenship. The inner-city youth need positive role mode l s - a d u l t s who care and are willing to reach out and touch the lives of young people who may otherwise slip through the cracks. A holistic vision of inner-city development is a complex one. What are some additional measures that will enable us to develop a more complete picture of a revitalized inner-city community, on a stable path to sustained growth? INTEGRATING SOCIAL JUSTICE INTO THE FRAMEWORK OF INNER-CITY REVITALIZATION The first step towards a holistic vision may be the need to integrate social justice into the framework of inner-city revitalization. This implies that inner-city residents are empowered to participate fully and enjoy the benefits of the development process. How does Porter's model address this issue? It highlights opportunities for businesses in the inner city, but forces of competition do not necessarily lead to economic, social and distributive justice. His model does not ensure that inner-city residents have a reasonable chance to participate in new opportunities as entrepreneurs and owners, rather than merely as workers. It does not address the specifics of how the wealth generated by exploiting the competitive advantages of the inner city can be used to largely benefit inner-city communities, instead of being enjoyed only by wealthy entrepreneurs. Porter also argues that the antibusiness attitudes held by workers, community leaders and social activists are debilitating. He critiques community leaders as "mistakenly viewing businesses as means of directly meeting social needs; as a result they have unrealistic expectations for corporate involvement in the community. ''2 It may be advantageous to businesses to accept social responsibility along with the rest of the community, so long as it is in a way that does not threaten their economic viability. It is neither prudent nor feasible to judge each and every new business plan solely on the basis of its redistributional effects. However, it is important to remember that equity issues may be an integral part of any sustained developmental effort. Let us examine how empowering the local communities, restructuring affirmative action programs and targeting vulnerable groups such as teenagers and women can create a more holistic framework for inner-city revitalization.

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EMPOWERING LOCAL COMMUNITIES Local residents and communities should be an integral part of the ongoing effort at community building. The 1992 OECD Conference on the Economic, Social and Environmental Problems of Cities has observed that "Community spirit, civic pride, and the opportunity to influence decision making are key elements in creating the sustained momentum required to improve our cities. ''3 Thus, it is argued that individuals and communities should have a voice in the process of change that affects their lives. As the Committee for Economic Development argues "failure to enlist local institutions and citizens as partners in problem solving leaves essential resources untapped, ignores local priorities, and misses opportunities to strengthen communities' own problem-solving capabilities. ''4 Porter notes that the inner-city entrepreneurs with their specialized knowledge of the local community have the unique ability to understand and address the needs of the inner-city markets, create employment opportunities and build a loyal customer base. He acknowledges that social service providers, social, fraternal, and religious organizations represent a vast pool of entrepreneurial talent and energy. They also have wellestablished, long-lasting roots in the community. Porter envisages that community development organizations can use their intimate knowledge of and influence within inner-cities communities to promote business development. They potentially can help to change community and workforce attitudes, create workreadiness and job-referral systems and facilitate establishment of businesses within the community. While this idea has considerable merit, a partnership between CBOs, businesses, local communities and the government that uses all available resources in an efficient and coordinated manner, may be more sustainable and productive in the long run. In addition to expecting support from CBOs and government agencies, private businesses may also have a responsibility to be good citizens of their local communities. R E S T R U C T U R I N G A F F I R M A T I V E ACTION P R O G R A M S Porter's arguments on the role of affirmative action programs assume a special significance in view of the debate on policies based on location and economic criteria versus those based on race. While Porter acknowledges the importance of the role of minority businesses, he argues that government programs that support businesses on the basis of race, ethnicity

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or gender rather than economic need are inherently inefficient and can direct resources away from the inner city. They also "reinforce inappropriate stereotypes and attitudes, breed resentment and increase the risk that these programs will be manipulated to serve unintended populations." Government assistance should be based on location in the inner city and employment of a significant percentage of its residents. 5 As we argue about the merits of affirmative action programs, we need to ask ourselves some key questions. Do minority entrepreneurs face severe and unique hardships based on their minority status, over and above those who are financially disadvantaged? Is it fair to say that after about thirty years of affirmative action, we have created a more equitable business and social environment, where minorities no longer face significant discrimination? Or can we say that even though the playing field is far from level, these programs are so inefficient and costly that it makes economic sense to permit the marketplace to function independently, in anticipation that the benefits of wealth creation will eventually reach the disadvantaged sections of society? The answer largely depends on how we define our goals for inner-city revitalization. If the ultimate objective of inner-city development is sustained revitalization of all positive aspects of the inner-city community, then there may be a legitimate role for affirmative action programs. In their absence, minorities may have access to only a disproportionately small fraction of new growth opportunities. This might lead to a widening disparity between the economic and social conditions of the minority and the nonminority communities. We may not want to abandon the goals of affirmative action completely; rather, it may be appropriate to find a more efficient and socially acceptable way to achieve these goals and create a level playing field for all members of our society. Special efforts may be made to help vulnerable groups in the inner city, such as teenagers and single mothers, to avoid high-risk behavior. CONCLUDING REMARKS Porter's work provides a welcome opportunity to rethink the issue of inner-city revitalization. His extensive research offers insights on the scale and scope of potential private business initiatives in revitalizing the inner city. His views on the role of affirmative action programs and the benefits of private business initiatives are valuable contributions to the current debates on these issues.

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If the ultimate objective of inner-city development is sustained revitalization of all positive aspects of the inner-city community, then we need to add a few other dimensions to Porter's model. A more holistic approach should not only create opportunities, but also raise the expectations of the people, forge bonds of community and trust, improve social justice and equity, and establish a sense of accountability and ownership within the community. Our vision includes justice, both social and economic, education and training, special programs for vulnerable children in schools and colleges, job creation, rebuilding infrastructure, and providing a safety net for the disadvantaged during the transition period. The complex and wide-ranging problems faced by the inner city are deeply rooted in its unique social and economic dynamics. We may need to develop a critical mass of integrated policies that lead to sustainable, long term solutions. This can perhaps be best achieved by a broad-based community building effort, which involves pooling of resources and commitment by government and community-based organizations, local residents, and private businesses. NOTES 1. M. Porter, "The Competitive Advantage of the Inner City," Harvard Business Review, May-June 1995, p. 62.

2. Ibid., p. 65. 3. OECD (1994), "Cities for the 20th Century," OECD, Paris. 4. Research and Policy Committee of the Committee for Economic Development (1995), "Rebuilding Inner-City Communities: A New Approach to the Nation's Urban Crisis," CED, New York. 5. Porter, op. cit., pp. 67-68. REFERENCES Bates, T. (1994). "Utilization of Minority Employees in Small Businesses: A Comparison of Non-Minority and Black-Owned Urban Enterprises." Review of Black Political Economy (Summer): 113-121. (1989). "The Changing Nature of Minority Businesses: A Comparative Analysis of Asian, Non-Minority, and Black-Owned Businesses," Review of Black Political Economy (Fall): 25-41. Katz, M. (1995). "Improving Poor People: The Welfare State, the 'Underclass,' and Urban Schools as History." Princeton, N.J.: Princeton University Press. OECD (1994). "Cities for the 20th Century," Paris: OECD. Porter, M. (1995). "The Competitive Advantage of the Inner City." Harvard Business Review (May-June): 67--68. Research and Policy Committee of the Committee for Economic Development (1995).

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Rebuilding Inner-City Communities: A New Approach to the Nation's Urban Crisis. New York: Committee for Economic Development. Vidal A.C. (1995). "Reintegrating Disadvantaged Communities into the Fabric of Urban Life: The Role of Community Development," Housing Policy Debate 6(1): 169-230.