For the past three years, Living Cities has been testing the hypothesis that local “anchor” institutions like universities and hospitals can contribute meaningfully to the creation of economic opportunity for low income people in cities.

Our largest learning laboratory for this work has been The Integration Initiative, an $85-million effort which supports leaders in five sites who are working to overhaul long obsolete systems and fundamentally reshape their communities and policies to meet the needs of low-income residents. Almost all of the cities participating in The Integration Initiative (specifically, Baltimore, Cleveland, Detroit and Minneapolis- Saint Paul) have developed strategies involving anchor institutions – mainly focused on real-estate development (“placemaking”), hiring and procurement – a subset of a broader range of anchor institution activities including research and development and faculty engagement. In 2012, drawing from the work we have supported through The Integration Initiative, we held a Design Lab to explore what anchors and other leaders in a metropolitan region can do collectively to further leverage these anchor business functions. Our hope is, if we can determine whether and how these strategies work, the lessons can be applied to a broader array of institutions.

Today, we are releasing a paper summarizing what we’ve learned to date from these investments. The report finds that these efforts hold great promise for disrupting long held assumptions about what is possible but the question of the potential scale of the impact remains. For example,

  • Placemaking strategies, particularly those encouraging anchor employees to “live local”, are helping to attract people and businesses to target neighborhoods in ways that common wisdom long thought impossible, like on Detroit’s Woodward Corridor.
  • Efforts by anchors to boost their hiring of low-income neighborhood residents, for example, have placed several hundred people into jobs across the four Integration Initiative cities pursuing anchor strategies.
  • Efforts to strengthen local procurement have shown signs of incremental progress (e.g., capturing slightly more of anchors’ spending locally).

These findings are, to an extent, to be expected: Institutional change is highly complex, and the economic challenges facing our cities are too vast and complex for any one institution or strategy to address on its own. At the same time, for those engaged in this work, the report provides some useful lessons that can help achieve more of the potential that anchor strategies may hold.

The report highlights some promising approaches, lays out some of the barriers we are encountering, and suggests some potential ways these barriers might be addressed. At a high level, we believe that the potential of these strategies will be maximized when:

  1. Anchors come out from “under the microscope:” Anchor strategies can have greater economic impact when a broader array of stakeholders, such as government, lenders and the local business community, treat them like the economic powerhouses they are. In many cases, that means intentionally aligning their own policies, practices and investments to leverage the anchors’ roles as employers, buyers of goods and real-estate developers.
  2. Expectations of anchors are realistic: Expectations about what anchors can do to improve an economically challenged city can often be unrealistic. Fundamentally, anchors must operate within a sustainable business model. Understanding the limitations that this imposes and acknowledging that they aren’t charities is important.
  3. Anchors are engaged in broader system change strategies: Anchors alone are not a panacea for a region’s economic challenges. We also need to fix systems like small business development and workforce development that would enable anchors to contract with more local vendors and hire more local workers. Overhauling these systems with the anchor as a customer in mind will matter.

If we are going to restore cities as engines of economic opportunity for all, we have to learn how to tap into as many of their economic assets as possible. Better understanding the possibilities and limitations of strategies to better leverage the business functions of anchors is an important piece of this work. As we share these learnings, we add to the growing conversation others in the field are having about achieving this better understanding. We look forward to your reactions and future conversations our findings may generate.

Read the Report