Abstracts of recent major presentations of the International Development Research Council (IDRC), the world?s preeminent corporate real estate association.
?New New Strategies for Inner-City Economic Development,? Keynote Address by Michael Porter; IDRC New England World Congress, Apr. 26, 1999: ?The inner city is becoming the new hot spot,? offering location strengths, major pools of available labor and large underserved markets, explained well-regarded Harvard Business School professor Michael Porter.
Porter, chairman of Initiative for a Competitive Inner City, a nonprofit organization he founded to build healthy U.S. inner city economies, asserted that inner cities should be ?the dream location? for operations that rely on inbound raw materials and transportation infrastructure access, including processing, printing, storage and distribution. In fact, such sectors have become ?the [business] clusters of the inner city, . . . which the only place where we have any [U.S.] labor left,? he said.
Porter stressed, however, that ?inner city economic development must be approached from a business strategy perspective. Businesses must be genuinely profitable without ongoing subsidies and mandates.? He also strongly advised against ?separating inner cities as ?special zones.? That never works. The only way that a part of our economy becomes prosperous is to get connected to the rest of the area.?
This report also includes remarks by Massachusetts Gov. Paul Cellucci and Boston Chief Economic Officer Thomas O?Brien. *
?Major Corporate Real Estate Trends: Results from North American and European Professionals,? IDRC New England World Congress, Apr. 27, 1999: One of this workshop?s meatier portions came when Barry Varcoe, Johnson Controls? director of performance measurement and strategic facility research, presented the ?1998 Annual Survey of Corporate Real Estate Practices,? a joint effort by Johnson Controls, IDRC and the UK?s University of Reading.
1998?s study of 150-plus firms found that real estate on average represents approximately one-third of all corporate assets and 14 percent of annual operating costs, Varcoe said. Corporate real estate teams? most critical initiative, the study found, is space restructuring and rationalization, he added.
1998?s study found a disparity between the real estate focus in North America, where the priority is maximizing return on assets, and in Europe, where the emphasis is on providing services that support business objectives.
Almost half the firms studied are using some form of alternative workplace strategies.
CORRECTION: Due to a print mixup, our last issue incorrectly listed IDRC?s newly elected secretary, who, as we know, is Jeffrey L. Elie, Kaplan Educational Centers? vice president of real estate and facilities. Our apologies for the snafu.
