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Philadelphia Federal Reserve Bank Policy Forum

December 1, 2017

Welcome to the final panel discussion of the day. We are in for a special treat in getting first-hand insight on economic growth and inclusion from our former mayor, Michael Nutter, and Dennis Lower of Cortex Innovation Community, a 200-acre innovation hub and technology district in St. Louis.

With these two inspiring leaders, it is safe to say the Federal Reserve saved the best for last. Mayor Nutter and Dennis will shed light on their considerable experiences with this topic.

But first I would like to spend a few minutes sharing my understanding of inclusive growth and how we at Drexel try to address it.

Let’s start with definitions.

The term inclusive growth is on everyone’s lips these days, but what does it mean?

For me, it means that economic growth isn’t enough. The benefit of that growth has to reach deep into our communities so no one is left behind or pushed out.

It’s an imperative we feel in Philadelphia – and I am sure in St. Louis too – and I feel it particularly strongly in University City.

It’s a core value at Drexel.

Our city has been called a tale of two cities – one Philadelphia is prospering, the other is falling behind. – and nowhere is that more evident than in University City.

University City is one of the fastest-growing technology and innovation centers in the country. Yet, the West Philadelphia neighborhood around it is a federally designated Promise Zone that extends from the river to 48th Street, from the Philadelphia Zoo to Sansom Street. The designation recognizes the area’s high poverty and high potential, and leverages the resources of the many federal agencies to support new solutions.

University City is a vibrant employment center with over 76,000 jobs – a dynamic cluster of universities, hospitals, research centers and innovative companies. Yet, unemployment in the Promise Zone is about 14 percent and the poverty rates in some parts of the neighborhood is close to 48 percent.

The Brookings Institution has called University City an Innovation District. But for some long-time residents born here, the jobs in University City are out of reach. That isn’t fair and it isn’t sustainable.

When we talk about inclusive growth, we usually focus on three areas that have to be addressed if everyone is to benefit from this growth: jobs, housing and education.

But inclusive growth isn’t just a number or a participation goal – though that is part of it. It is a culture change, an expectation that needs to be adopted by employers of this city.

For while the non-profit service sector drives many of the solutions - it teaches and trains; it builds affordable housing potential and helps small businesses – it is the responsibility of government and the business community – including the Eds and Meds – to set the expectation and fulfill the goals.

It has to be baked into institutional structures and business practices.

What does it mean for Drexel?

I’m not going to sugarcoat this: it isn’t easy or intuitive. It takes hard and intentional work.

We are a champion for the great potential of Schuylkill Yards. It is our Cortex with 14 acres, potential 8 million square feet of development and $3.5 billion of investment right next to the third busiest Amtrak station in the country – in the heart of the northeast corridor.

The advent of Schuylkill Yards has caused us to rethink our business practices around hiring and procurement at Drexel and with our vendors.

We put jobs first. We routinely review employee data and see where we have problems with recruitment, turnover and employee performance.

We work closely with our great training partner, the West Philadelphia Skills Initiative, to develop job training programs specifically tailored to our needs. And to recruit talent.

It’s an intentional, thoughtful approach: Drexel identifies and holds the jobs; the Skills Initiative trains; and local residents excel.

It works.

It is not a coincidence that the number of Drexel staff from West Philadelphia has reached an all-time high of 12 percent.

We look at all the angles.

Because we require a high school diploma to work at Drexel, we built a pathway for residents to get that diploma.
The Helms Academy, a partnership with Goodwill Industries and Community College of Philadelphia, helps residents complete a high school certificate and get Community College credits along the way. It is housed at our Dornsife Center for Neighborhood Partnerships, Drexel’s “extension center” – located in Mantua, in the heart of the Promise Zone.

We also know that local businesses tend to hire locally, so when you buy local, you build local wealth and create local jobs.

So we have centralized our procurement function: we now know what we buy and where we buy it. And we coordinate our institutional purchases.

We have rethought our RFP process. We instituted new policies that call for diversity goals in all major contracts. And we ask our vendors to hire and buy locally too.

We think carefully when we bid major contracts so local businesses have a realistic shot at getting the work.

Ensuring housing affordability is another huge issue in Philadelphia right now, and we know that the developments in University City are seen as a threat. Here, the Promise Zone partnership is key and affordability is a pressing priority with the city and local CDCs taking the lead as they should.

Among Drexel’s initiatives, we expanded an existing housing benefit to support the growing number of West Philadelphia Drexel employees with a home renovation grant that helps them with basic systems repairs, so they can stay in their homes.

As part of the larger partnership, our students work with Rebuilding Together Philadelphia and Habitat for Humanity to repair the homes of long-time residents. And our Thomas R. Kline School of Law students address foreclosure and tangled title issues with local homeowners through their neighborhood law clinic.
All of this helps protect against displacement.

We know there is more to be done, though.

This is one of the most difficult issues facing Philadelphia neighborhoods today, and we and our partners are looking to other cities to see how they are addressing this challenge.

In the end, a commitment to inclusive growth is fundamentally about education and this is where we have placed our biggest bet.

We’re an educational institution after all.

Drexel has been working hard for the past 7 years to support a cradle-to-career pathway for children in the Promise Zone.

We’re at the table with a group of committed partners, including local civic leaders and key community organizations like People’s Emergency Center to create experiences and opportunities for youth that will raise their ambitions and expose them to the jobs of the future.

As a place-based institution, we have put our stake in the ground to improve our local District neighborhood schools – and create new ones. Schools that enrich their neighborhood and create opportunities for all the children who live there.

As we speak, 180 5th and 6th graders are learning in the dynamic hands-on classrooms of the new Science Leadership Academy Middle School, a neighborhood school housed temporarily at the Dornsife Center.

Our School of Education faculty and students support instruction at the nearby McMichael Morton and Samuel Powell schools. And we are working furiously to establish a university-assisted K-8 campus on the University City High School site, in the heart of University City Square.

In the complicated world of education reform, our commitment is simple: if we are to support residents living in the Promise Zone, then we will support the schools in the Promise Zone as well.

Indeed, as the lead agency for a collaborative $30 million Promise Neighborhoods grant, we are really leaning into this one.

And we are enabled by the partnership of such leading civic institutions as the Philadelphia School Partnership, the William Penn Foundation and the Lenfest Foundation.
As a university, we can’t do it alone.

For Drexel, all of this is inclusive growth.

Schuylkill Yards and the Promise Zone may seem worlds away, but for us, they are two sides of the same coin. And I would say that education is what holds that coin together.

It’s what unites Schuylkill Yards and University City on the one hand and the Promise Zone on the other. Both depend on good schools and educational opportunity.

Philadelphia won’t continue to grow and prosper if we can’t provide a quality public education for our residents - all of them. Those that can leave will. Those who can’t will suffer.

Any plan for inclusive growth has to have public education at its core.

I’ll end with a vision that we at Drexel keep foremost in our minds.

Imagine a little girl growing up at 39th and Parrish, near the 40th Street Bridge that takes you from Fairmount Park and Centennial District into University City.

She is 4 years old and lives on a block with few standing houses, in a home with a leaking roof, uncertain electricity, and no computer or internet service.

Now imagine her in 20 years, when Schuylkill Yards is fully built. She’s a software engineer working in a company that designs wearable technologies that monitor heart rates and blood pressure.

It’s a long path from that Mantua block to Market Street, and every step matters, from childcare to third grade to high school and to higher education and beyond.

Our work as a city and as a society is to be sure she gets there.