Universities and hospitals are major economic forces in many American cities. Despite this reality, few, if any, regional economic development strategies are built around these stable and rooted “anchor” institutions, and fewer strategies still seek to harness these institutions’ economic power to create opportunities for low-income people.
Through their hiring, purchasing and other activities, anchors generate billions of dollars in economic activity with the potential to benefit low-income people directly. Through its Integration Initiative, Living Cities has partnered with several cities seeking to work with anchors to realize these potential benefits. A key learning from this work has been that, in order to achieve population-level results for low-income people, anchors cannot act alone but rather must be part of a broader system whose actors align their efforts and investments. At its March 2012 Design Lab, Living Cities convened over 60 leaders from anchor institutions and the nonprofit, philanthropic and government leaders who work with them to explore how actors in regional systems can create this alignment and achieve greater impact.
One promising area of work highlighted at the Design Lab was anchor procurement – more specifically, efforts to target anchors’ purchasing towards local businesses that are owned by minorities and women and/or are likely to employ low-income, lower-skilled workers. At the request of Living Cities, we explored the current state of practice around anchor procurement efforts and sought to identify issues that must be addressed for this work to create significant numbers of local jobs. More specifically, we conducted background research and practitioner interviews in October – November 2012 to gather thoughts on the state of local procurement efforts specifically among universities and hospitals (“Eds and Meds”).
The analysis included a review of related research and phone interviews with Living Cities’ staff and key practitioners identified by Living Cities, with a particular focus on cities participating in Living Cities’ Integration Initiative. This report presents our key findings along with potential action steps and examples of promising practices, followed by recommendations to the field for moving forward.