Michael Porter applies his logic of competetive advantage to America’s inner city.
Harvard business school professor Michael E. Porter has made his career studying competitive advantage – how to create it, how to sustain it – starting with individual companies, then vaulting to entire nations. Now, he says, he’s begun an intensive study of the toughest unit there is for creating competitive advantage: the American inner city.
It is at the top of the agenda for the 1990s: figuring out how to combine economic growth and social unity. In the United States, the core of the problem is centered in the core of the cities. Everybody agrees something needs to happen, but nobody holds out much hope. The solutions feel tired – even those yet to be tried.
Porter looks at the problem differently: America’s urban centers are comparable to developing nations. He believes that the paradigm that he developed in his multiyear study of national competitiveness, The Competitive Advantage of Nations, fits the inner city as well.
“A new model for inner city economic development,” argues Porter, “must be driven by an economic rather than a social perspective and it must be centered on the private sector, not the government. Companies, individuals, and capital providers must operate in inner city areas out of economic self-interest instead of charity.”
Porter asserts that conventional wisdom on the subject is unhelpful. His alternative approach, like his “diamond” framework for nations, focuses on the unique advantages of the inner city and how cities can turn those advantages into “exports” to the larger economy. In preliminary looks at Boston, MA and Los Angeles, CA, Porter has identified eight general areas – among them location, human resources, market demand conditions, and related and supporting industries – where unique advantages can be leveraged into opportunities.
“The key to growth lies in uniqueness, not in a single formula or in emulating any other regions,” Porter says. “The only way to create sustainable economic development in the inner city is to frame the problem in terms of competitive advantage.”