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Spirit of enterprise can assist in re-birth of the inner cities

Encourage the revival of urban communities, says foundation PUBLIC money that is ploughed into inner-city areas has notably failed in fostering and supporting enterprise, according to the New Economics Foundation, a body that seeks to support social enterprise.

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To help bridge that gap, the foundation runs the Inner City 100 awards scheme, which highlights the fastest-growing businesses located in deprived inner-city areas throughout the country. The inner cities are being targeted because they have suffered disproportionately high levels of unemployment following the collapse of traditional industries. Some economists say that rather than subsidising corporations to open assembly plants next to motorways only to see the work shifted to lower-cost centres overseas, it can make sense to encourage growth in urban areas. Championed by chancellor Gordon Brown and sponsored by Royal Bank of Scotland, the Inner City 100 can trace its roots to programmes developed by Michael Porter, the Harvard Business School professor. Porter has said: ''Inner cities are not forgotten places you see in the rear-view mirror. Many of the logistics of the new economy, such as instant service and just-in-time delivery, play to their strengths.'' By celebrating the success of such businesses, the foundation aims not only to support their efforts, but also to inspire other businesses to look again at locating in some of the areas stereotyped as disadvantaged and playing little part in the economy. Arthur Colquhoun, an ironmongery wholesaler based in the Gorbals area of Glasgow, was one of the 100 companies that received an award at the annual ceremony in November. Michael Gregan, the current managing director, is the third generation of his family to run the business, his grandfather having taken over from Arthur Colquhoun, who founded the company in 1912. The business may date back 90 years, but Gregan says it continues to reinvent itself and keeps at the leading edge of technology. He has just completed a refurbishment of its premises at Bridge Street. In addition, Colquhoun has turned a listed building into a showroom, restoring it to its former glory. The storeroom is kitted out with designer products, such as door handles which came off the drawing board of architects such as Norman Foster, and includes a meeting room where clients can discuss their requirements and look at samples. Gregan recently invested heavily developing a website, www.iron-monger.com, that will allow customers to place orders online. He was delighted to receive an inquiry from Texas shortly after the website went live. Gregan, 28, has run the business for six years after being catapulted into the hot seat when his father suffered a heart attack. The move into e-commerce was sparked in part by his brother, who is a customer relations manager with IBM, but Michael Gregan says it also fits with his father's advice. ''My father always taught me that the two most important things are winning the business and getting paid for it. The beauty of e-commerce is that it takes care of both these things in one fell swoop.'' Arthur Colquhoun, which employs 11 people, including Gorbals residents, was selected after hitting turnover of £ 815,000 in the 2000-2001 financial year, a 133% growth on the previous year, and up from £ 350,000 in 1995. Gregan hopes to top the £ 1m mark in this financial year. He said being selected for the award had meant a boost for his business and has given him the chance to meet people running businesses in similar situations. He rejects suggestions the award and the Royal Bank's sponsorship of it are more to do with public relations than helping the inner city areas. Gregan said: ''People wouldn't be critical in that way if they were sitting in the Gorbals looking for work and there was no investment in the local economy. ''This scheme has been good for our business and is an attempt to do something in inner city areas.'' Allan Watt, head of public affairs at the Royal Bank of Scotland, said: ''There is a PR aspect for the bank, but the important thing is that we are showing that businesses can be successful in inner city areas and, hopefully, encouraging other people to give businesses a go.'' Recognition for Colquhoun was particularly pleasing. ''A lot of the businesses that win awards are start-ups or fairly young businesses. It was great to see a business that has been around for a long time being given a new lease of life and enjoying such growth.''

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