Inner-City Economic Development: Adding a New Play to the Development Playbook

December 22, 2014
By Dell Gines, Senior Community Development Advisor


Focus on the creation and growth of local entrepreneurship as a strategy for entrepreneurship-based economic development.  

Inner-city building

Traditional inner cities still struggle with sustainable economic development. The intractable challenges that have existed for decades seem to have no remedy. When development does occur in these areas, it is often through gentrification, which can force long-time residents to move due to increasing property values and the prices of goods and services. Eventually a more affluent population moves in. 

Community centered economic developers who are concerned about inner city development often face a quandary. They are trained in the traditional economic development practice of attraction and retention, which limits their ability to address inner city concerns. And while traditional strategies have no impact, the development playbook lacks alternative approaches. 

One new strategy, or play, is entrepreneurship-based economic development, which is a model that focuses predominantly on the creation and growth of local entrepreneurship. 

When using this strategy to develop inner cities, there are a couple of points that need to be considered.  The first point is inner cities have communities that give it a sense of “place.” Development must focus on this “place.”

“Place” refers to the population’s general perception of what constitutes a community from a geographic, demographic and historical view. For example, people from across Omaha, Neb., recognize the geographic, demographic and historical location of the North Omaha community even if there is no “North Omaha” on the map. 

The second point is aligning local interest with an entrepreneurship-based economic development strategy. This may be difficult to achieve because of the variety of social issues in inner city communities. Issues of violence, poverty and low education attainment often receive more attention from local agencies and influencers, so, prioritizing and financing an entrepreneurship-based strategy will be a challenge. 

A key to a successful entrepreneurship-based economic development model requires a partner to both craft the appropriate place-based geographic region and work to align a collaborative local network of support. Once this is done, a heavy focus on entrepreneurship can create indigenous growth that improves the local area and resists gentrification.

To learn more about entrepreneurship-based economic development, download the Federal Reserve Bank of Kansas City’s Grow Your Own Guide and visit our small business and economic development Web page.