By Dave Gatton
April 28, 2003

The Initiative for a Competitive Inner City, Inc. Magazine, and the U.S. Conference of Mayors released their fifth annual 2003 Inner City 100 list of the fastest growing companies in America's cities at a major celebration on April 24 in Boston (MA).

Digital View Display Technology of Atlanta, Georgia, took the top honors with a 5-year growth rate of 4,800 percent and a compound annual growth rate (CAGR) of 165 percent. Atlanta Mayor Shirley Franklin, along with ICIC founder Michael Porter and Inc. Magazine Editor John Koten presented the award to an audience of over 1000 businesses and supporters of inner-city entrepreneurs.

The awards ceremony was kicked off by U.S. Conference of Mayors President Boston Mayor Thomas M. Menino, who told the audience that the nation's future economic prosperity depended on the growth of businesses in cities. "Cities are the engines of the American economy," he told the businesses, most of which started in inner city, underserved markets.

The average annual growth rate for 2003 Inner City 100 companies—representing businesses in the service, manufacturing, retail and wholesale/distribution sectors—was a remarkable 647 percent for the five-year period 1997-2001, eclipsing by more than a hundred percentage points the average growth rate of businesses on last year's list.

The 2003 list, according to ICIC officials, shows that despite a sagging economy and its negative effects on many of the largest blue chip companies, top performing businesses operating in America's inner cities continue to have strong records in revenue growth, profits and job creation.

Michael Porter, who also teaches at Harvard Business School, said that the 2003 IC 100 "shows that inner city business operators have learned how to adapt their businesses to the challenges of a down economy, and to identify growth opportunities. The reality is, they are the leading edge of a new business model," he said.

The 100 companies collectively employ more than 17,000 workers, and generated more than 9,000 jobs over the last five years. The companies pay above-average wages ($13.80/hour). In a survey, 99 percent said they expect no lay-offs for the next six months.

Thirty-eight of the 100 business owners are minorities: 16 Latino, 12 African-American, 9 Asian, and 1 of Middle East origin.

Ninety-seven percent of the winners provide health care benefits, 76 percent offer 401(k) plans and 71 percent offer life insurance.

Forty-five percent of employees of Inner City 100 companies live in the inner city. Of these, 30 percent hold senior management positions, and 30 percent work in mid-level management or skilled jobs.

The median level of start-up capital was $20,000, with most of that (84 percent) coming from personal assets.

Mayors Luncheon Honors IC 100

Earlier in the day, the U.S. Conference of Mayors hosted a luncheon with ICIC and Inc .Magazine to honor the Inner City 100 businesses.

In opening the luncheon, Conference Executive Director J. Thomas Cochran congratulated the companies and told them they were the "centerpiece" of revitalizing city neighborhoods. "We honor you for your entrepreneurial work," he said, "even in a period when our economy is going through many challenges, from 9/11 to war to SARS. You are the winners and we thank you for the vitality you bring to our cities."

Atlanta Mayor Shirley Franklin gave the welcoming address saying that cities relied on the entrepreneurial spirit of the Inner City 100 and that the work of ICIC and Inc. Magazine was pivotal in demonstrating to business that real markets and real profits exist in inner city neighborhoods.

Over 1,000 businesses were nominated by 155 of the nation's mayors for the 2003 listing. The 100 winners are based in 59 cities. Porter encouraged the businesses to become more involved in city affairs and to work more closely with the mayors in rebuilding communities.

Honored at the luncheon were Pittsburgh Mayor Tom Murphy, whose city placed seven companies in the Inner City 100, followed by Boston with six and then New York City, Denver, Hartford and Rochester tied with four each. Joining Mayors Franklin and Murphy at the luncheon was Norfolk Mayor Paul D. Fraim. Hartford Mayor Eddie Perez helped honor his tenth placed IC 100 Company, Rego Realty Corporation.

Angelides Keynotes

California State Treasurer Phil Angelides keynoted the mayoral luncheon and later that day received the 2003 National Inner City Leadership award by ICIC and Inc Magazine. Angelides was honored for the work he has done in investing California's public pension funds in emerging markets and underserved markets.

In his address he stressed the importance of capital investment in neighborhoods and communities that provided opportunities for a wider segment of the American citizenry. He cautioned against a dual society of rich and poor, citing Aristotle's belief that the greatest danger to democracy was poverty.

Through Angelides' work hundreds of millions of public pension funds have been devoted to affordable housing, small business development and public/private projects. His concept of the "double bottom line" holds that good business investment and returns are compatible with social benefits when public/private cooperation is creatively fostered.

Former recipients of the award include Earwin "Magic" Johnson, NBA basketball star and successful businessman; Franklin Raines, former OMB Director and now Chairman and CEO of Fannie Mae; and Henry Cisneros, former Secretary of HUD and president of several successful national corporations.