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UKCES explains: What is an anchor institution?

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This is part of a series of short articles explaining the labour market, technical jargon, and the skills system. The following is based on a recent literature review commissioned by UKCES and completed by Professor David Smallbone of Kingston University.

What is an anchor institution?

An anchor institution is one that, alongside its main function, plays a significant and recognised role in a locality by making a strategic contribution to the local economy.

Anchor institutions share a number key characteristics:

  • Spatial immobility: these organisations have strong ties to the geographic area in which they are based through invested capital, mission and relationship to customers and employees
  • Size: anchor institutions tend to be large employers and have significant purchasing power. Both these factors influence the level of impact these institutions can have on the local economy
  • Non-profit: these institutions tend to operate not-for-profit; it is much simpler for private businesses to move, meaning there is no guarantee they will continue serving the local community in the long-term. However, there are examples of for-profit organisations playing the role of an anchor.

Where did the concept first originate and why?

In the US in the 1960s the wellbeing of urban communities came under threat from deindustrialisation, globalisation and neo-liberal trade policies that placed the domestic manufacturing sector under pressure, according to the Anchor Institutions Task Force (AITF), a US think-tank.

The 1970s and 1980s brought worsening urban conditions to the US, with resources becoming increasingly scarce. By the 1990s, higher education institutions could no longer ignore the conditions of the communities in which they were operating. As a result, explains the AITF, these institutions began to take responsibility for the successful development of their local communities, and created partnerships with other local organisations to address the complex socio-economic challenges faced by the local community.

The concept of anchor institutions then, although to this date still an imprecise and evolving one, emerged as an attempt to structure the role and responsibility that place-based organisations hold with respect to their local community.

Anchor institutions are much more widely recognised in the US but the concept is becoming more popular in the UK too. In 2013 the Witty Review called for more British universities to pay more attention to the “third mission”, requiring universities to go beyond knowledge transfer and assume a responsibility for facilitating economic growth (Witty Review, 2013). The conclusions of the review reflects the broader localism trend in the UK, which involves giving local authorities more freedom and flexibility in decision-making.

What kinds of anchor institutions are there?

Anchor institutions come in all shapes and sizes. They can be universities, public libraries, hospitals, large corporate institutions with strong local links (ie, banks), performance arts facilities, religious institutions, utility companies, military bases, medical centres, museums, and sports teams.

Again, although the range of anchor institutions in the US is quite broad, in the UK the concept has been mostly used to talk about universities. Other institutions in the UK that play this role (or could) are local enterprise partnerships, further education colleges and local chambers of commerce.

What are some examples of work done by anchor institutions?

  • Between 2004 and 2011 the University of Lancaster ran LEAD 2 Innovate, a programme aimed at promoting business growth by developing the leadership abilities of small business owners.
  • Nottingham University Business School initiated a partnership with the city council to deliver the Growth 100 Programme, helping small firms in the local area to devise and successfully implement business plans.
  • A local enterprise partnership in the North East of England is setting up a Business Growth Hub in partnership with business networks, universities and professionals. The Hub will target micro and small firms in the region, signposting where support is available, especially for hard-to-reach businesses in rural areas.

The UK Futures Programme, run by UKCES, is currently looking for applications from anchor institutions in the UK to develop innovative ways of supporting small firms in their local area develop entrepreneurship and leadership skills. For more information and to apply, see the competition brief.

More information on anchor institutions.




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