Anchor Institutions Can Play Big Role in Local Job Creation

In the evolving American economy, TBED is increasingly looked to as a potential driver of inclusive competitiveness, expanding and deepening economic opportunity for communities that suffer from poverty and unemployment. The Regional Federal Reserve Banks have been leading efforts to study the linkages between economic and community development and this week hosted a Connecting Communities webinar on Redefining the Rust Belt: The Role of Anchor Institutions and the Arts.

Anchor institutions, the "Eds and Meds" that are usually the largest employers in metro areas, are the foundation of local economies, producing an estimated annual expenditure of over $1 trillion in purchasing of goods and services and providing philanthropic investment in local missions that benefit the community goods. Ted Howard of the Democracy Collaborative argues that anchor institution procurement of local goods and services creates local jobs that cannot be outsourced and, paired with their philanthropic investment, can play a strong role in stabilizing neighborhoods and supporting job creation for struggling communities.

Anchor institutions, which according to Federal Reserve definitions include hospitals, universities, local government, cultural institutions, foundations, sports teams, and faith-based organizations, can work with local economic development professionals to seed the growth of local companies that feed their supply chains. Incubator and accelerator programs, such as the Blue Hills Incubator in Kansas City, can be used to target low-income entrepreneurs and establish cooperative-owned companies (such as the Evergreen Cooperatives in Cleveland) that generate and spread wealth in low-income neighborhoods. Anchor institutions, in turn, can focus their philanthropy toward investments in the infrastructure that support neighborhood stabilization and education improvement and workforce readiness.

The Democracy Collaborative, with support from the Community Affairs program of the Regional Federal Reserve Banks, is working with a host of partners to create an Anchor Dashboard that can establish common metrics, support data collection, and build a national community of practice focused on leveraging the power of anchor institutions to drive inclusive competitiveness and rebuild struggling communities. For supporting briefs and free downloads of the research and report please visit the Democracy Collaborative Community Wealth website.