But as the demographic shift continues, cities must find ways to accommodate growth. Economic development initiatives are at the forefront of cities’ agendas: how can we promote equitable urban revitalization and foster job growth and economic opportunity for all residents—new and old alike?

There is no one answer. Indeed, solutions will flow from the public, private and nonprofit sectors—and will often need the collaboration of all three. In some cases, cities will lead the way. In others, the private sector or anchor institutions such as hospitals and universities might be the vanguard of action. What’s clear is that we need to identify what’s working in cities across the nation in order to learn from others and implement variations in our own cities.

This is why today, after many discussions with our national partners and with attendees of the Inner City Economic Summit, ICIC is launching its What Works: Solutions for Cities campaign.

At the heart of What Works is the compilation of best practices being employed to address some of the nation’s greatest economic and businesses development challenges in cities....

There’s no denying it: rapid business growth is great for companies that can accommodate increased sales.  It leads to new job creation and an influx of dollars in to the local economy.

At the same time, it raises eyebrows of competitors who may seek to acquire the fast growing business before it hinders the growth of their own company.

This is exactly what happened to 2011 Inner City 100 winner Salar, Inc.

Salar, based out of Baltimore, provides electronic filing services for the health care industry. They integrate information and documentation systems for doctors and hospitals, enabling health care providers to move from paper-driven processes to electronic data tracking and storage.  

CEO Todd Johnson and his co-founder, Meir Gottlieb started Salar right after graduating from Cornell. The two opted to start their own company rather than trying to work for someone else. They graduated at the height of the dot-com boom, making an internet start-up a wise decision. Initially, they offered a software development service that attracted a few health care service clients. As a result, they began to develop a keen understanding of the digital serviced in high demand by health care customers.

Move over urban gardens. It’s food truck time.

The latest rage sweeping our cities is the food truck movement. In formerly barren neighborhoods, food trucks are popping up left and right. In downtowns and in neighborhood squares, these trucks serve quick, convenient food for passersby.

So what’s behind the movement?

In some cities, the cost of doing business has grown so high that it prevents new companies from entering the market. By some estimates, it costs an average of $275,000 to open a new restaurant; a food truck can cost as little as $10,000 to get up and running.  Given the tight credit market over the past few years, it takes more up-front capital to start new businesses. This makes the food truck market easier to enter than the traditional restaurant business.

Once in operation, the food trucks are a way to introduce consumers to new foods. From vegetarian-only vendors to Thai-food vendors, the trucks draw people from the traditional fast food joints they might otherwise frequent during lunch. As food truck licenses increase, new options abound. Food trucks serve (pun intended) as vehicles for cultural dissemination.

• Anchor:  Anchors are reference points around which negotiations evolve. As this working paper by Professor Adam Galinsky of Northwestern University recommends, negotiators should anchor aggressively and make the first offer in most circumstances. Why do anchors work so well even among educated negotiators?
  
  “The answer lies in the fact that every item under negotiation (whether it's a company or a car) has both positive and negative qualities—qualities that suggest a higher price and qualities that suggest a lower price. High anchorsselectively direct our attention toward an item's positive attributes; low anchors direct our attention to its flaws.”
   
• Frame:  Make sure you “frame” the context of the debate in a positive perspective. The excerpt below from “Negotiation Strategy: 6 Common Pitfalls to Avoid” profiles research by prominent Stanford Business School professors and provides a telling comparison of how framing makes a difference in an argument.
  
  “For example, you are a purchasing manager renegotiating an hourly wage contract with a subcontractor. The subcontractor currently makes $10 an hour. You are willing to elevate the subcontracting firm to $11 an hour. Another organization recently boosted its rate with your subcontractor to $12 an hour. You know that when the negotiators for your subcontractor hear your $11 offer, they may think they are going to have to give up a dollar an hour.
  
  You must get them to focus on the point you are starting from — $10, not $12. You frame the issue positively by talking about all the ways your contract is different from the others. Your contract has some advantages outside of the hourly pay. The other side will be more willing to risk lower wages for the purported other benefits. A common mistake is negotiating from a negative frame: "The other firm's deal offers more, but we can afford only $11.”

Year in and year out, we honor the 100 fastest growing inner city companies. Part of the year-long process in finding and awarding these firms includes both quantitative and qualitative surveys and interviews of the CEOs. Through this process, we learn about how inner city companies come to fruition, what some of their business challenges are, and how CEOs finance their companies.

This year, like each year in the past, we are coming across a trend: overwhelmingly, most inner city companies view access to capital as one of their most prohibitive obstacles to growth. Yet, these companies are still growing and finding success.

How?

One thing the CEOs have attributed their growth to is their strong relationships with their bankers. In one of my most recent interviews, the CEO explained that he and his banker go out to lunch once a month just to chat, to address the needs of the CEOs business. Another CEO said he is a customer at a large bank that doesn’t understand his needs, and therefore, is shopping around to smaller competitors.

Location, location, location! We’ve all heard that, for many small businesses, one of the keys to success lies in landing the right real estate.  But the reverse is also true: Small businesses are essential drivers of America’s cities, and your company and others like it have the capacity to make your city a prime location, location, location!

As businesses invest in their community, the community grows and becomes healthier.  Businesses then reap the benefits of being part of a thriving community. This principle of shared value – creating economic value while also creating value for society – lies at the very heart of economic success.

Here are five ways your business can increase its competitiveness by helping to re-energize your city.

We know that small businesses drive inner city economic growth. From mom and pop shops, to manufacturing firms, inner city companies employ local residents, invest in community programs, and add value to their neighborhoods. This is why ICIC has been honoring the fastest growing inner city firms for the past 13 years.  

And we’re at it again!

After months of outreach and applicant review, we have identified the 100 fastest growing inner city companies. The 14^th Annual Inner City 100 list will be published in Fortune magazine this spring. The list is comprised of 59 new firms in an array of industries: ranging from organic food manufacturing and distribution, online pet moving services to a NYC-based microbrewery. The diversity of companies is matched by diversity in location—this year’s list includes businesses from every corner of the United States.  Through sound business practices, every member of the 2012 Inner City 100 grew at rates that defied national trends.

The award allows Inner City 100 winners to take part in a full day of management education at Harvard Business School, with presentations by Boston University and Babson College, among others. The final unveiling of the list will occur on May 9, 2012 at the Inner City 100 Symposium and Awards dinner. For the first year in the program’s history, you will be able to join this dynamic group at a discounted rate:  To find out more about the event, access our agenda and register today.

In the meantime, we wanted to provide a glimpse of some of our Inner City 100 winners...

We’ve all heard the stories: one mistake can ruin your life if you wind up with a criminal record. From misdemeanors like possession of marijuana, to more serious crimes like assault and battery, those who err may not just end up in prison, but they will forever have to check off the “offender” box on job applications, all but guaranteeing their application is bypassed.

In Baltimore, the incarceration rate has become profound.  When released, failure to become gainfully employed often leads these ex-offenders back to a life of crime.

Johns Hopkins Medical (JHM) took note of this phenomenon: each year, there are as many ex-offenders released from Maryland’s prisons as are the number of people employed at the entire Johns Hopkins medical complex in East Baltimore. If JHM could find a way to reintegrate these people back in to society though meaningful employment at the anchor institution, it would certainly help reduce the rates of recidivism. 

To do so, they have a keen eye on small business development.  In a recent blog entry, John Moon, Assistant Director of Capital Formation in Living Cities, identifies the key findings of the small business framing paper. Specifically, they find that small businesses are so diverse that a "one size fits all" approach to addressing their needs is not sufficient.

Small Business: One Size Does Not Fit All

By: John Moon

As the country and policy makers focus on job creation and economic revitalization, they eventually look to small businesses. There are strong reasons to do so. Almost 99% of all US firms are small businesses (defined by the Small Business Administration as firms with fewer than 500 employees); they contribute 50% of the US GDP and are the source of most new job creation. Besides creating jobs, small businesses also help build the local tax-base, create and contribute to a sense of place, and provide an important source of wealth creation. Hence, if you want to address unemployment and improve economic vitality, strategies that support small businesses must be considered.

Public-Private Partnerships:  Making Things Work

By: La-Verna Fountain

Sometime in early 2008, the Executive Vice President for Columbia University’s Facilities Department, Joe Ienuso and the Commissioner for New York City’s Small Business Services, Rob Walsh met to discuss the possibility of Columbia University and Small Business Services joining together  to address a common challenge.  Joe wanted to increase the amount of construction dollars spent with minority, women and locally-owned (MWL) businesses.   Commissioner Walsh wanted to increase the amount of city contracts awarded to minority- and women-owned businesses operating in the City. 

The challenge facing both the City and Columbia was the fact that they were large, bureaucratic institutions.  In the nation’s largest city, too few minority and women owned businesses are equipped to handle the administrative and financial complexities of large institutions to compete with majority-owned construction trade firms.