This is the second in a series of three of posts about the new working paper, The Capital Absorption Capacity of Places: A Research Agenda & Framework._ We view this paper as the basis for continuing dialogue and invite your reactions and comments. Please respond below in the comment section or by emailing Robin Hacke at firstname.lastname@example.org. _
Last summer, as part of the first phase of our research on capital absorption, my colleagues Katie Grace and Katie Doherty at the Initiative for Responsible Investment at Harvard University and I conducted a series of interviews with community investment practitioners and other stakeholders in Atlanta, GA and Chicago, IL. The goal was to compare perspectives from two different cities, and so perhaps to learn something about how local systems function.
The new working paper, The Capital Absorption Capacity of Places, reflects some of what we have learned from that initial work. Here are three things from those interviews that may provide some context for where we’ve gotten to so far:
1. Interviewees from both cities inevitably placed their analysis of capital absorption in historical context . When asked about capacity, they talked about issues such as the growth of local industry, the relationship between local government and community activists, local race relations and the civil rights movement, the emergence of philanthropic strategies – all these took shape over time, and bear the stamp of particular people and institutions. More than one Chicago stakeholder answered a question by starting with World’s Fair in 1893. It’s an obvious point, but worth highlighting nonetheless: Efforts to improve capital absorption capacity will have to take these histories into account.
2. Interviewees from both cities, and from all sectors, emphasized the need for a common table where stakeholders could meet and focus on community investment as an issue. In many but not all cases, foundations were identified as central conveners. In retrospect, this stands out. I went into the interviews expecting to hear about institutional capacity, municipal focus, problems coordinating across jurisdictions, the importance of civic advocacy, and so on – and we did. But I was surprised a bit by how often the importance of intentionally staged dialogue on community investment came up.
3. We still need to work on what we mean by community investment. How targeted to underserved communities must investment be in order to count? How do we deal with gentrification? How productive is it to focus on community investment at the expense of broader economic development – especially as community investments can be swamped by economic crisis?
These are questions that came up frequently in our set of interviews, and they helped push us to think about community investment in terms of functions rather than actors. That doesn’t mean we think we’ve resolved them.
David Wood is the Director of The Initiative for Responsible Investment at Harvard University
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