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Tech Companies That Bring Economic Opportunity to Inner City Residents

Written by Avery Visser

Many people think of tech companies as takers. They reap the benefits of location incentives and the creative environment offered by inner cities, but do not hire local residents or give back to the local community in any substantive way. While this narrative may be true for some of the larger tech companies, at ICIC we have found successful tech firms that are writing a different story.

Our What Works Webinar in January highlighted cities and companies focused on building an inclusive tech economy. Since 1999, ICIC has also identified 271 of the fastest-growing inner city tech firms as part of our annual Inner City 100 program.  We’ve surveyed these companies and analyzed the mutually beneficial relationships they’re creating with their inner city communities.

Ninety percent of the 2014 Inner City 100 Software and IT winners say that their location in an inner city is a competitive advantage. Their location helps them attract and retain employees, including young, highly educated and motivated employees who desire to live in cities. Computech Corporation, a 2013 Inner City 100 winner that provides IT and consulting services, operates on Wayne State University’s campus in Detroit’s inner city and often employs computer science students already in the area. Greg Cheesewright, president of Computech, reports that access to human capital has been invaluable to his business.

In addition to attracting employees, inner cities spark innovation that is critical to the growth and productivity of the Software and IT industry. Of our 2014 Software and IT winners, 70 percent say that their inner city location provides a creative environment that spurs innovation.

We also found that the 2014 Software and IT winners positively impact their communities in several meaningful ways. Job creation is the most obvious benefit that tech companies bring to the inner city. This year’s winners created a combined total of 350 jobs between 2009 and 2013, and, on average, 27 percent of their employees live in the same neighborhood as the company. Forty percent or more employees are local in four of the ten wining companies, translating into 74 jobs.

Software and IT companies do not just provide jobs for individuals who are highly-trained, with technology backgrounds. They can open up employment opportunities for people with varying levels of education. Tech companies account for 10 percent of employment and business establishments in inner cities. Some cities are helping tech companies hire even more local employees. For example, New York City’s Department of Small Business Services created the New York City Web Development Fellowship to train New York City residents who were unemployed or making less than $50,000 annually to work in the industry.

Cheesewright advises inner city businesses to “know [their] local talent base and adjust requirements to them.” As of 2013, Computech planned to open up a call center and hire locally, a huge benefit for inner city residents. Additionally, 60 percent of this year’s Software and IT winners have local hiring programs, while 50 percent provide internships, fellowships or scholarships that benefit the local community.

Furthermore, when tech employees patronize local restaurants and shops they increase sales and help support additional job creation. One 2012 study estimates that a single job created in the tech sector is associated with the creation of 4.3 additional jobs in local goods and services in the long run.

Another avenue in which tech companies give back to the inner city is through community engagement initiatives. Many large tech companies have already adopted a community-minded outlook and invite others to follow their lead. Our 2014 winners seem to be doing the same. Eighty percent of the 2014 Software and IT winners sponsor community events and sixty percent have a company donation program that goes toward local community organizations.

ICIC’s full analysis of the 2014 Inner City 100 winners as well as their identities will be revealed on October 16th at the Inner City 100 Symposium and Awards Ceremony.  The Symposium will highlight the importance of the Software and IT industry to inner city growth including a kickoff showcase of Boston’s tech icons.  Among featured speakers will be Corey Thomas, president and CEO, Rapid7; Jeff Dickerson, President and CEO, Sonian; and Eric Groves, CEO and Co-Founder, Alignable.  Click here to view the full agenda.

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