Anchor-Based Strategies Best Practices Summer Conference, June 22, 2017
Agenda • Anchor Institutions Concept • The Shared-Value Proposition • Anchor-Based Development Application to Small & Mid-Sized Cities Strategies and Implementation Outcomes and Takeaways
Who’s our intellectual “Rock Star”? Jeff Steinhauer Neil Degrasse Tyson Maria Chudnovsky Michio Kaku Debbie Berebichez Michael Porter
Michael Porter’s Better Known Contributions to Economic and Community Development • “Diamond Model” of Competitive Advantage leveraging microeconomic differentiators to gain a competitive advantage as a better productive location for a business sector. (a.k.a. - Target Marketing) • Cluster Theory advocates for aggregating elements of a specialization for competitive advantage (e.g. the Napa Valley wine cluster) Michael Porter
Two Lesser Known Contributions • Anchor Institutions Concept: Established and dominant urban institutions accept a role – even a responsibility – in the social and economic revitalization of their inner cities. • Shared-Value Proposition: A mutual benefit scenario whereby businesses simultaneously achieve Michael Porter competitive and operational value while addressing the economic and social challenges of society.
Agenda • Anchor Institutions Concept
The Classic Anchor Institutions Concept Calls on large (typically non-profit) institutions to accept responsibility for the economic development of their urban neighborhoods. • “Anchor institutions are large place-based organizations that are deeply rooted in their local geographies and that play a integral role in the local economy… • Anchors include universities, hospitals, and medical centers (“eds” and “meds”) , but can also include local government organizations, community foundations, arts and cultural organizations and large corporations .” (large city, downtown centric and institutionally focused)
The Classic Anchor Institutions Concept Applications of Anchor Concepts : West Philadelphia : University of Pennsylvania • Cleveland’s University Circle : Case Western Reserve • University and University Hospitals of Cleveland Midtown Detroit : Wayne State University, Henry Ford • Hospital and Detroit Medical Center (30K, 27K, $1.6B) Others : Johns Hopkins (Baltimore), Harvard (Boston), • University of Chicago (Chicago) (large city, downtown centric and institutionally focused)
The S e Seven R Role oles Anchor ors Play PURCHASER EMPLOYER Anchors as “Contributors”, Contributing to Providing direct and coincidently supporting the economic growth indirect employment especially when for local residents and local economy as they purchases are attracting new talent to conduct their business or sourced from local the community mission. businesses INNOVATOR REAL ESTATE Encouraging innovation DEVELOPER of products, services Creating value and tax Community and processes – both base through land and internally and with Economic building development external vendors Development Adapted from Harvard Business School’s Initiative for a Competitive Inner City
The S e Seven R Role oles Anchor ors Play PURCHASER EMPLOYER Anchors as “Contributors”, Contributing to Providing direct and coincidently supporting the economic growth indirect employment especially when for local residents and local economy as they purchases are attracting new talent to conduct their business or sourced from local the community mission. businesses INNOVATOR REAL ESTATE Encouraging innovation Anchors as “Economy DEVELOPER of products, services Developers”, intentionally Creating value and tax Community and processes – both base through land and leading efforts to advance internally and with Economic building development external vendors and strengthen elements Development of the local economy. WORKFORCE DEVELOPER CLUSTER Providing direction for local skill and DEVELOPER talent development Stimulating the formation and expansion of clusters in products Adapted from Harvard Business and services School’s Initiative for a Competitive Inner City
The S e Seven R Role oles Anchor ors Play PURCHASER EMPLOYER Anchors as “Contributors”, Contributing to Providing direct and coincidently supporting the economic growth indirect employment especially when for local residents and local economy as they purchases are attracting new talent to conduct their business or sourced from local the community mission. businesses INNOVATOR REAL ESTATE Encouraging innovation Anchors as “Economy DEVELOPER of products, services Developers”, intentionally Creating value and tax Community and processes – both base through land and leading efforts to advance internally and with Economic building development external vendors and strengthen elements Development of the local economy. CATALYST WORKFORCE Anchors as “Catalysts”, Anchors leveraging DEVELOPER purposefully leveraging their their collective CLUSTER Providing direction Collective Capabilities to capabilities to for local skill and stimulate community DEVELOPER stimulate and accelerate the talent development development Encouraging the community’s development. formation and expansion of clusters in products Adapted from Harvard Business and services School’s Initiative for a Competitive Inner City
REAL ESTATE DEVELOPER Community Collective C e Capabilities es? Creating value and tax Economic base through land and building development Development • Discretionary policies, practices CATALYST and commitments especially Anchors private sector anchors are in the leveraging their CLUSTER unique position to implement. Collective DEVELOPER Capabilities Encouraging the formation and • Examples : expansion of clusters in products - Financial support – Which causes get funded? and services - Employee benefits – On-site day care, health clubs… - Business commitments – Outsourcing security, IT support… - Procurement practices – “Buy local” vs. “By price” - Operational decisions – Staffing locations
REAL ESTATE DEVELOPER Community Collective C e Capabilities es? Creating value and tax Economic base through land and building development Development • Discretionary policies, practices CATALYST and commitments especially Anchors private sector anchors are in the leveraging their CLUSTER unique position to implement. Collective DEVELOPER Capabilities Encouraging the formation and • Examples : expansion of clusters in products - Financial support – Which causes get funded? and services - Employee benefits – On-site day care, health clubs… - Business commitments – Outsourcing security, IT support… - Procurement practices – “Buy local” vs. “By price” - Operational decisions – Staffing locations But, why How changes in policies, practices and include the commitments are made can have a community? significant and intentional impact on a better community.
Age genda • Anchor Institutions Concept • The Shared-Value Proposition
The Shared-Value Proposition Creating S Shared Value ( (CSV) Michael Porter, defines the concept of Shared Value as “ generating economic value in a manner that also addresses the challenges of our society”.
Shared-Value Insights • Shared Value should be a deliberate management approach for companies to find business opportunities that can be realized while solving social and economic problems. • Shared Value is achieved by finding the competitive or operational value in a range of strategies including new customers and markets, cost savings, talent retention, etc. • Shared Value isn’t social responsibility, philanthropy, or sustainability, but a new way for companies to achieve economic success.
Continuum from CSR to CSV Creating Shared Corporate Social Responsibility (CSR) Value (CSV) Be a good corporate citizen and “give back” Simultaneously realizing Strategic DO NO competitive and operational Philanthropy & Philanthropy HARM advantages while addressing Sustainability society’s challenges CSR comes “off the exhaust”. It’s often the CSV comes “off the engine” of the enterprise – part of its leftovers -- leftover money (donations) and leftover time (volunteering). business strategy.
Agenda • Anchor Institutions Concept • The Shared-Value Proposition • Anchor-Based Development
Agenda • Anchor Institutions Concept • The Shared-Value Proposition • Anchor-Based Development the c con onvergence of of two o con oncepts Anchor-Based Anchor Shared Value Institutions Development
REAL ESTATE DEVELOPER Community Anchor-Based Creating value and tax Economic base through land and building development Development Development CATALYST Anchors is engaging anchors in a leveraging their CLUSTER Collective DEVELOPER purposeful mission that Capabilities Encouraging the formation and leverages their collective expansion of clusters in products and services capabilities to: stimulate community and • economic development It’s the -- while they simultaneously -- Why! improve their operational • and competitive positions
Applying Anchor-Based Development Jason Saul’s Impact Transactions A new dynamic between non-profits and corporations. Finding mutual benefits by connecting real business value with social outcomes.
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