Hub's inner city ranks high in booming firms

Boston has more of the fastest-growing inner-city companies than all but one other US city, according to a report due out today.

Five companies on the annual Inner City 100 list, compiled by Inc. magazine and the Initiative for a Competitive Inner City , a group founded by Harvard Business School professor Michael E. Porter , are based here. Three are owned by minority women, which Porter said reflects a national explosion in the number of minorities becoming entrepreneurs. Only Detroit, with six companies on the list, bested Boston.

Boston likely fared so well because the makeup of its inner-city neighborhoods, as defined by the report, mirrors trends fueling the larger minority business boom, said Deirdre Coyle , the initiative's senior vice president. Boston's inner city, which includes all or parts of Allston , Brighton , the South End , South Boston , Jamaica Plain , Dorchester , Roxbury, and Charlestown , has a population that is 69 percent minorities and one-quarter immigrant. Nationally, only about 12 percent of people in inner cities are foreign-born, Coyle said.

The report, Coyle said, foreshadows a shift that will force corporate America to drastically alter how it does business.

"In 10 to 20 years, we will be an extremely heterogeneous population everywhere, and we will be majority ethnic-minority. If you're a business owner or you're a corporation and you're not doing business in the inner cities now, you're missing an opportunity," she said.

To qualify for the Inner City 100 list, companies submitted audited books and tax returns proving steady revenue increases between 2000 and 2005, and minimum revenues of $250,000 in 2000 and $1 million in 2005. On average, the firms had $39.9 million in revenue . They grew between 21 percent and more than 200 percent on an annual basis during those years.

The companies also had to be based in inner cities, which the initiative defines as neighborhoods with 20 percent or more people living below the poverty level, where poverty or unemployment was 50 percent greater than in the surrounding metropolitan area, or where median income was less than half of that in the larger region.

The five Boston companies listed were ARGUS , a 13-employee advertising firm that had revenue of $2.9 million in 2005 ; Roxbury Technology Corp. , a 42-employee producer of toner for printers and copy machines, with 2005 sales of $11 million ; Commonwealth Worldwide Chauffeured Transportation , an Allston limousine service with 270 workers and $21.7 million in sales in 2005; Payne/Bouchier , a Roxbury custom residential contractor with 68 employees and 18.7 million in revenue in 2005; and Flour Bakery & Cafe in the South End, which had 32 employees and revenue of $1.7 million in 2005.

Executives cited varied reasons why they believed their firms have thrived in Boston's inner-city. Elizabeth Williams , an African-American and chief executive of Roxbury Technology, noted the city's demographics, but also said that many service-oriented firms might be benefiting from an influx of wealthy empty nesters who are returning to the city.

Dawson Rutter , who is white and president of Commonwealth Worldwide, said Boston and New York, where he operates, suit his business because executives and entertainers frequent those cities.

Both said inner cities are producing new businesses because the high percentage of ethnic minorities living in them provides a large worker pool.

"We only have a handful of white employees, the rest are all black, Hispanic, Arabic, women, across the board," Rutter said. "We would not have a very effective workforce if we had to depend on white people."

Keith Reed can be reached at reed@globe.com.