Rebuilding Urban Neighborhoods: Entrepreneurship & Community Development Leaders see entrepreneurship as key to saving economically troubled areas

Even in today’s lean
economic times, most news
stories about entrepreneurs
tend to focus on the "whiz
kids" at technology companies
and places like Silicon Valley
where these businesses thrive.

By Erik Pages Entrepreneur.com

But entrepreneurs don’t just
live in high-tech meccas. In
fact, America’s inner cities
may be a more promising
environment for entrepreneurs
than the classic suburban
corporate campus. That’s one
finding from a recently
completed eight-year $18
million program, known as the
Rebuilding Communities
Initiative, that targeted new
investments in five distressed
city neighborhoods across the
United States.

The Rebuilding Communities Initiative (RCI) was launched in 1993 by the Annie E. Casey
Foundation http://www.aecf.org/ The program targeted neighborhoods in five cities: Boston, Denver, Detroit,
Philadelphia and Washington, DC. And it began with an audacious goal: "to transform troubled,
economically disenfranchised neighborhoods into safe, supportive and productive environments
for children, youth and their families." This transformation would occur through what the
foundation called "collaborative neighborhood governance," in which residents themselves
would lead change as opposed to responding from direction set by government or other outside
players.

"What does this have to do with entrepreneurship?" you
might ask. When RCI first began, the answer probably was not
a lot. After seven years of effort, however, the leaders in each
community have recognized that entrepreneurship will
ultimately be a primary driver in re-integrating troubled
neighborhoods back into the economic mainstream.

Resident empowerment–bringing neighborhood residents into agenda-setting, leadership and
decision-making positions–is the theme that links all the disparate communities supported
through the RCI initiative. This finding proved to be something of a surprise to the program’s
designers, who originally were seeking ways to improve service delivery in distressed
neighborhoods. They soon found that to many people, "improved service delivery" means more
government dictates. Thus, RCI needed to do more than improve service delivery–it needed to
foster direct community involvement in defining and solving local problems. Finding ways to
encourage and engage local leaders proved to be a major challenge. This is a time-consuming
process that requires extensive cooperation within the community.

Creating this sense of local leadership and capacity are the key building blocks that must exist
before local entrepreneurs can grow and thrive. Many of the projects originally funded through
the RCI program are now embarking on aggressive efforts to support and nurture
community-based entrepreneurs. In Detroit, for example, the Warren/Conner Development
Coalition http://www.warrenconner.org/ has established School to Work/School Based Incubators in six local schools. Through
these incubators, local youth are learning the nitty-gritty of running a business and critical skills
like information technology. Similar projects to promote youth entrepreneurship are up and
running at Washington, DC’s Marshall Heights Community Development Organization http://www.mhcdo.org/ and
Denver’s NEWSED CDC http://www.newsed.org/

These developments are positive signals about the potential for new entrepreneurial initiatives.
But good intentions are not enough. Government and nonprofit agencies serving inner-city
neighborhoods must also bring a new mindset to the table. In a recent meeting with
Massachusetts-based entrepreneurs, NCOE staff heard a litany of complaints about interactions
with local politicians and community development corporations (CDCs). These concerns took
many forms, but the bottom line was simple: Entrepreneurs want a clear-cut "business-like"
relationship with service providers. Decisions on loans and other forms of assistance need to be
made quickly and efficiently. Red tape and slow decisions are the kiss of death for new business
owners. If they apply for aid, there should be an explicit time limit placed on agency decisions.
Moreover, the process for decisions must be transparent so that all sides can fully understand it.
At present, guidelines and procedures are fuzzy at best. As one Boston-based entrepreneur put
it, working with city agencies is like "navigating through a dysfunctional family."

At the same time, service providers should reach out to community-based businesses as partners
in the community development process. Local businesses should sit on lending committees and
should help design loan review processes so they are "business-friendly." They should also
consider creating an "Entrepreneur’s Team" that serves as an ombudsman for helping new
businesses obtain assistance or wind their way through government regulations and licensing
procedures.

Thanks to initiatives like RCI, formerly distressed urban neighborhoods are revitalizing and
embracing entrepreneurship as core development strategy. If CDCs and city agencies become
entrepreneurial themselves, the prospects for truly dynamic change are promising.

Erik Pages is policy director with the National Commission on Entrepreneurship http://www.ncoe.org/ a Washington,
DC, nonpartisan organization funded by the Kauffman Center for Entrepreneurial Leadership
that focuses on public policy on entrepreneurship.

http://www.entrepreneur.com/Your_Business/YB_SegArticle/0,4621,297664-8—-,00.html