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Drumming up business for the inner city Urban expert lists advantages of doing business in poor areas


The salvation of Baltimore's inner city lies in persuading businesses that the city is a good place to do business and then making sure it lives up to its billing.

That was the message brought to Baltimore yesterday by Harvard University Professor Michael E. Porter, an apostle of the position that the staggering problems of America's inner cities have to be attacked through business, not just socially.

"It is not inevitable that the inner city is a bad place for business," Dr. Porter told about 30 of Baltimore's business elite at a morning meeting at the Sheraton Inner Harbor. "A lot of it is self-inflicted." The author of 14 books and an expert on competitiveness, Dr. Porter argued that contrary to popular belief, inner city neighborhoods are good places to do business.

Using an overhead projector and marking liberally with a felt-tipped pen, Dr. Porter, who teaches business administration at the Harvard Business School, outlined the inner city's advantages, including strategic location, local market demand and being part of regional "clusters" of similar businesses.

And even though inner city residents have lower incomes than their suburban counterparts, the density of the population and the dearth of businesses actually mean the potential is greater, Dr. Porter said.

"There is not enough retailing in the inner city. There's not enough grocery stores," he told the group. "That represents a major economic opportunity."

But the key to attracting businesses is not government subsidies. Instead, he said, cities must attack the problems that plague companies, such as crime, taxes and over-regulation.

"We've kind of accepted the disadvantages and offset them by subsidies."

Dr. Porter's presentation was part of an effort to establish a Baltimore office of his nonprofit Initiative for a Competitive Inner City.

The group already has one office in Boston and another under development in Oakland, Calif.

The Baltimore venture already has one big supporter -- Stewart Bainum Jr., chairman of Manor Care Inc., a Silver Spring-based nursing home and hotel company with $1.7 billion in annual revenues.

Mr. Bainum, a former state delegate and senator from Silver Spring, said he feels strongly enough about the effort that he is willing to personally put up more than half of the $150,000 to $200,000 a year that it would take to establish such an operation.

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