Building on strengths: Five cities, five plans of action

By Michelle M. Murphy
Free-lance writer in West Hartford, CT

From June through December of last year, more than 200 business, government and community leaders from Bridgeport, Hartford, New Britain, New Haven and Waterbury met for thousands of hours of research, analysis and discussion to come up with the best plan for spurring economic growth in each of their inner cities. Their focus: Nurture the growth that is already emerging in these cities — the waterfront development in Bridgeport, for example — rather than worry about what isn’t. Call it the "glass half full" approach.

And that is a key difference from past urban revitalization efforts.

"The old view was that one should see the inner cities as a charity. Now they are seen as business opportunities," says Anne Habiby, executive vice president of the Initiative for a Competitive Inner City (ICIC), a nonprofit organization founded by Harvard professor Michael Porter, who conceived the "cluster" strategy of economic development.

Led by a "corporate champion" and guided by professionals from the ICIC, each city team interviewed local companies and pored over demographic and other data in an effort to discern their city’s natural strengths — those things that are already working well — and the best ways to build upon them.

The governor unveiled the results of their efforts in May, when he announced state support for the new "Connecticut Inner City Business Strategy." An offshoot of the state’s industry cluster approach to economic development, the strategy views the inner cities of Bridgeport, Hartford, New Britain, New Haven and Waterbury as a cluster ripe with economic opportunities.

"This is about business development, about people development, about taking a positive view of the business growth that’s going on already in the inner cities and realizing social value by tapping into it," explains William Kaufmann, chairman and chief executive officer of the Connecticut Economic Resource Center and a senior adviser at the state Department of Economic and Community Development.

"The inner cities are our own emerging markets," he continues. "We want people to look at the opportunities that are available. They are just sitting there, waiting to be tapped."

Here are a few highlights of each city’s plan of action.

Bridgeport

• Encourage growth of a metal manufacturing cluster, through the formation of the Metal Manufacturing Education and Training Alliance (META). Ten companies have already joined. Although it’s the second-largest employer in Bridgeport (6,500 jobs), this industry has been stagnating here, yet growing in other parts of the country.
  
  
• Nurture an entertainment/tourism cluster springing from ongoing waterfront development. The completion of Harbor Place and the Arena is expected to boost the number of visitors from 1 million last year to 10 million in 2004. "We want to help local businesses get some of these construction contracts, and also recruit some restaurateurs to come in — we’d like to get a ‘restaurant row’ going here, like the one in South Norwalk," says Mickey Herbert, president and chief executive officer of the Bridgeport Bluefish and the corporate champion for Bridgeport. "And we’re working on changing the perception of crime — in the three years that we have been operating, there have been no safety incidents in or around the stadium."
  
  
• Attract office services companies. Bridgeport has a large supply of unemployed and underemployed workers, and locating back-office operations in the inner city could siphon off many commuters from I–95. "We’re focusing on some of the e-commerce companies that like the funky space we have to offer," says Herbert.

Hartford

• Create the Hartford Enterprise Partnership (HEP) as the go-to place for inner-city businesses. A kind of clearinghouse for business services and information, the HEP will offer both familiar support from a range of existing city groups as well as new services (such as incubator space or pro bono professional advice) to help entrepreneurs capitalize on emerging opportunities, especially in financial services and health care. "We looked at what works, what doesn’t, what’s missing, what must be improved," explains Hartford’s corporate champion, Arthur Marquardt, president and chief executive officer of CTG Resources. "We’re not talking about competing with existing providers. We want to complement the support and services that companies already have from other organizations."
  
  
• Attract more retailers. The Hartford research team found that there is $25 million to $75 million in untapped demand for inner-city supermarkets, and $50 million to $60 million in untapped demand for department stores. In other words, residents are spending that much money outside the inner cities — even though there are lots of vacant commercial buildings right in their neighborhoods. The HEP, the Hartford Economic Development Commission and the Neighborhood Revitalization Zones will use examples of successful ethnic and specialty retailers or strip malls to encourage further inner-city development.

New Britain

• Expand two business incubators. The incubator at Central Connecticut State University’s Institute for Industrial Engineering and Technology (IIET) will expand to include companies in commercial services, metal manufacturing and health services. Also, the addition of a freight elevator would double the size of the Connecticut Enterprise Center incubator, located in a factory building at CW Resources; the facility currently houses 16 companies in the metal manufacturing, food packaging and distribution industries.
  
  
• Create a regional health-care training center. "With all the health-care facilities we have — New Britain General Hospital, the Hospital for Special Care and a number of nursing homes, among others — we sensed this was a huge employer," says New Britain’s corporate champion, Gregory Howey, president of OKAY Industries. Indeed, this cluster employs more than 25,000 people in New Britain. The facility would offer job training, certificate training, continuing education and career-path advice.

New Haven

• Capitalize on opportunities to serve the knowledge-based economy. Efforts will be made to coordinate a leadership umbrella made up of existing business-development organizations, to streamline and simplify access to capital and technical assistance, and to work on developing clean, buildable sites, lab space and "smart" buildings. Also, the Greater New Haven Chamber of Commerce will organize private-sector leaders in key clusters, which include arts, entertainment and tourism; manufacturing; commercial services; construction; and retail/distribution, in addition to knowledge-based companies.
  
  
• Leverage federal Empowerment Zone resources to improve workforce skills. Empower New Haven Inc. will work with other agencies to develop job training and placement initiatives, including training geared toward key clusters. "Our effort is unique because we have the Empowerment Zone funding," says Robert Mills, director of market development for United Illuminating. "So there are lots of resources at the foot of the organization. The agencies are in place. We’re quite optimistic."

Waterbury

• Promote manufacturing with a new cluster leadership group. With about 8,000 employees, the precision metal manufacturing industry makes up about 10% of the region’s workforce. And the industry is growing here, even though other manufacturing sectors aren’t. "The strategy used for this approach was a very rigorous, quantitative methodology that analyzed hard data, so we knew exactly what we were dealing with," says Waterbury’s corporate champion Frederick Luedke, president of NEOPERL Inc. "That was very appealing because it ensures that you are working on the right problems. You know exactly where the strengths are. It’s a very no-nonsense approach."
  
  
• Improve opportunities for entrepreneurship. Ways to do this include creating a revolving-loan fund to provide small amounts of capital, employing a bilingual counselor at the Small Business Development Center, and creating an incubator in the city’s Information Technology Zone (ITZ). In addition, more sites must be cleaned up and made available for business development and expansion in the ITZ and throughout the city.

Editor’s note: The complete report of the "Connecticut Inner City Business Strategy," including each city’s action plan, can be downloaded from the Web at http://www.state.ct.us/ecd/urbanclusters/Default.htm.

Sidebar:
New strategy aims to nurture Connecticut’s inner-city ‘cluster’

Viewing inner cities as a "glass half full" of economic opportunities and finding ways to fill it is the approach behind the state’s new Connecticut Inner City Business Strategy. "This is not just a different approach; this is the right approach," says James Smith, chairman and chief executive officer of Webster Bank and co-chair of the Governor’s Council on Economic Competitiveness and Technology. "It is not about subsidies. It is about building on the natural strengths of the inner cities themselves. You don’t want to just tell people: ‘Rejuvenate your cities.’ It must be based on economic elements."

The "half-full" perspective toward inner cities is an offshoot of a statewide effort, under way for several years now, to nurture developing industry "clusters" throughout Connecticut. The cluster strategy, in a nutshell, is to recognize and build upon an area’s natural economic strength — the strength that emerges when companies in the same industry are located near one another, sharing ideas and resources for their common good, with input from local schools and government agencies.

Connecticut has had a de facto tourism cluster for years; more recently, the Department of Economic and Community Development, in partnership with the governor’s competitiveness council, created formal clusters in biosciences, aerospace components and software/information technology. Others are in the planning stage.

Inner cities seen as economic cluster

And now, the inner cities of Bridgeport, Hartford, New Britain, New Haven and Waterbury are being considered a cluster unto themselves. Together, they are home to more than 300,000 people and 10,000 businesses, yet they do not have the robust growth seen elsewhere in the state. Their combined unemployment rate was 7.6% in 1998, when the statewide rate was 3.4%, and they had a 47.5% combined poverty rate (which refers to the percentage of households with incomes below $20,000). Indeed, the average median household income in these inner cities was $22,331, compared with $52,415 in the rest of the state.

The mission of the inner-city strategy is to create jobs, income and wealth for inner-city residents. "We want to reach out and help everyone [in Connecticut] enjoy the same economic prosperity," Gov. John Rowland said in May, when he unveiled the new plan. He added, "We are in the most perfect position to try to revitalize our cities. We have 3% [statewide] unemployment, our cities are affordable, and we have people living in them with tremendous, tremendous initiative."

Driven by corporate champions, local businesses

The Inner City Business Strategy resulted from about 18 months of work by several hundred private- and public-sector leaders, guided by professionals from the nonprofit Initiative for a Competitive Inner City (ICIC). It began with the appointment of five "corporate champions," who are the heads of local companies responsible for spearheading the effort in each city. They were assisted by research teams and advisory boards made up of community leaders, economic development professionals and academics; these people — a total of about 200 among the five cities — conducted a thorough analysis of each inner-city business community, based on the model provided by the ICIC. The goal was to find out what was already working in each place and then determine the best way to make it even better.

"I like the focus on growth from within, where you already have a foothold," says Kenneth Decko, CBIA’s president and chief executive officer. "It’s a real bootstraps effort. And I think it will work because it is working on the local level, building from the bottom up — slow, steady progress is usually what works best."

From June through December of last year, the teams analyzed data and interviewed about 50 companies in each city to find out what they thought was best and worst about their inner-city location. Each city pinpointed its own strengths and weaknesses, and came up with its own action plan.

Cross-city commonalities

Still, there were some conclusions that were common to all five cities. They all found their major advantages to be strategic location (near major transportation and in the middle of other developing industry clusters), a large and diverse pool of labor (although one in need of training), and a good deal of untapped purchasing power. And they all believed that their biggest disadvantages are the high cost of doing business in the inner city and the perception of crime. But even these hurdles were not seen as insurmountable. "We were pleasantly surprised that among the 250 inner-city businesses we interviewed, the perception of crime [as a problem] far outweighed the reality of it," says William Kaufmann, chairman and CEO of the Connecticut Economic Resource Center. "It’s a matter of getting that word out."

Gov. Rowland has committed $5 million over the next two years to support the specific action plans of each city and to launch statewide efforts to address issues that affect all five areas. Those efforts include supporting cluster activation within the cities; streamlining municipal services (such as permitting); providing employer-driven training for employees, entrepreneurs and executives from inner-city companies; and taking steps to create an inner-city business environment that fosters growth — for example, by remediating "brownfields" (abandoned, contaminated buildings) to expand the supply of suitable business sites. In addition, Webster Bank said it would invest $1 million in the Community and Economic Development Fund, which is a partnership created in 1994 between the state and financial institutions to provide financing for various projects.

Connecticut in the forefront

"One of the very interesting challenges for inner cities," says Anne Habiby, executive vice president of the ICIC, "is that there is often federal support [for cities] or very local support, like foundations, but it’s not often that you see state support. We are working with a number of other places around the country, and Connecticut is the only instance where there were multiple cities in one state working together; it’s somewhat extraordinary. In other states, it’s a city here, a city there. And in no case is there an example where the state took the initiative and asked the cities to join in. We would love to be able to use the Connecticut experience as a model for other states."

"Mark Twain once said that everyone complains about the weather, but no one does anything about it; the same has been true of our cities," Rowland said. "Well, our complaining days are well behind us. ... This is what we can point to when people say, what did you do in the best of times for the future of Connecticut?"

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