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CLASS OF 81
It was the first day of her internship
when a Wharton undergraduate informed the president of a 94-year-old manufacturing
company that he had incorrectly identified the market for its products.
dropped. But later that day, the executive conceded that she was right.
The outspoken intern, whose classmates spent the summer fetching coffee
on Wall Street, went on to produce fresh ideas and $75,000 in sales for
this small Philadelphia firm.
stories like this one that Dr. Gregg Lichtenstein C81 GrW92 likes to
tell when he discusses his work with the Urban
Industry Initiative, helping to boost and retain Philadelphias neighborhood-based
the project was started three years ago by the Philadelphia Industrial
Development Corporation, using a grant from The Pew Charitable Trusts,
Lichtenstein has served as a hands-on project consultant and something
of a visionary, dreaming up ways to help the companies work together and
then seeing them through. He owns his own private consulting business,
Collaborative Strategies in Margate, N.J., but has devoted a significant
portion of his time to the Initiative.
far the target zone has been a 10-square-mile section of Northeast Philadelphia
which is home to more than 330 firms employing 13,000 people and selling
more than $3 billion in products and services. More than half of these
firms have less than 25 employees, and as Lichtenstein has tried to demonstrate,
to flourish they must build what he refers to as social capital.
[past] strategy in many cases had been one of helping inner-city companies
become more profitableand then they would leave. We felt the best way
of helping them become more successful, and then rooting that success
in the community so they are motivated to stay, was to create networks
the project began, Lichtenstein says, Weve gotten companies to engage
in a lot of improvement efforts, both individually and collectively. When
companies get to know one another and see what is possible, it opens their
early meetings, Lichtenstein learned that 11 companies were seriously
considering leaving the area over the next five years. So he started helping
them connect with each other, a few firms at a time, to improve local
then, for example, one group of about 40 small companies has banded together
to clean up their properties and eventually build a new industrial park.
The initial leaders of that project met with former city mayor Ed Rendell
C65 to request funds for a security force and cleanup crew. He looked
at the group and said, Youre not asking for enough money, and gave
them 40 percent more.
to Lichtenstein, the mayor explained, Most people walk in here and complain.
You walked in here representing a group of companies, and you analyzed
all of your problems, had a solution and had budget numbers next to that
Urban Industry Initiative has placed interns from Wharton and other local
business schools in marketing positions with some neighborhood manufacturers
to expose the companies to fresh ideas and the students to potential places
of employment they otherwise might have overlooked.
is also encouraging companies to jointly accept contracts that they cant
complete by themselves. It requires a changed mindset, he explains.
Most of them are not direct competitors, but they dont work together
typically. Someone has to come in as neutral third party; otherwise theyre
firms have pooled together to bid on electricity service, taking advantage
of their power in numbers.
addition, about a dozen companies are developing new products with assistance
from the urban initiative. One of them is a 109-year-old manufacturer
of rope-twisting equipment, for which, Lichtenstein explains, there has
been no technological advancement in at least 90 years.
owner had told him, Im going to die if I dont get into a new application
or business. So we hooked him up with the technology center at Drexel
University; professors at the center had produced a design for a composite
reinforcement bar [a synthetic, rust-resistant building material]. But
the problem was, they were braiding it, and braiding is very slow, so
it was not commercially viable. When they walked into the plant and saw
how twisting works, they realized that if they could twist the material,
they would be in business. Since then, the company has licensed the design
for this material from the professors. It is now working with the Urban
Industry Initiative to pursue federal funds for product development. One
future application may be the production of light-weight and rust-resistant
the meantime, the company has landed a contract to produce composite materials
of another kind in a joint venture with the Drexel professors, using this
companies were on the leading edge a hundred years ago, Lichtenstein
says, so were trying to help them reinvent themselves.
these strategies been successful? Lichtenstein certainly believes so.
To date, none of the companies that had initially considered leaving the
area have moved.
other cities have experimented with networking, Lichtenstein says, Were
probably the first place in the country that has tried such an intensive,
multipronged approach. Out of 330 companies, were working with 120 companies.
As we get more money, were going to expand that penetration rate.
the best sign of the projects effectiveness is that companies are beginning
to take the initiative to network. Were excited, he says, that companies
have begun meeting with each other without us.
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Pennsylvania Gazette Last modified 4/28/00