- JPMorgan Chase is investing $US30 million over the next five years in the Greater Paris region of Seine-Saint-Denis.
- The money will be in the form of grants for job training and mentorship.
- It is the first investment of the $US500 million global AdvancingCities initiative.
- This article is part of Business Insider’s ongoing series on Better Capitalism.
JPMorgan Chase announced Monday that starting January it will begin a five-year, $US30 million dollar investment in Seine-Saint-Denis, a region of France to the northeast of Paris. It’s an area marked by high unemployment, crime, and homelessness, and has 28% of its population living below the poverty line.
It also, however, is on the cusp of two developments that JPMorgan wants to take advantage of: the 2024 Olympics – Seine-Saint-Denis is home to France’s national soccer and rugby stadium – and the Grand Paris Express rapid transit line that will connect Greater Paris
As Stephanie Mestrallet, JPMorgan’s vice president of global philanthropy in Europe, told Business Insider, “OK, we know that there are these issues, we know that a lot of people are going to invest in these areas – can we add to this effort that is currently happening?”
The money will go toward apprenticeship programs for young people, job retraining programs for older adults, and small business development.
The investment is a continuation of JPMorgan’s philanthropic commitment to the region and will be the first made from the $US500 million AdvancingCities initiative when it begins in January. AdvancingCities is itself a five-year program that the bank developed as an extension of investments into Detroit in 2013, after CEO Jamie Dimon decided to assist the city after it declared bankruptcy.
The bank found its Detroit project so successful that it made similar investments in Chicago, Washington, DC, and the New York City borough of the Bronx. Advancing Cities is built upon the lessons learned in these American cities over the last five years.
The initiative has two components, involving a competition among cities around the world that want help with kickstarting their economies, as well as investments outside of the contest. Seine-Saint-Denis falls into the latter, and Peter Scher, JPMorgan’s head of corporate responsibility, said that the 150-year anniversary of JPMorgan’s involvement in France (when JPMorgan’s business partner opened a firm there) this November was a great occasion to move forward with a project they deemed ready to go.
JPMorgan had sent 16 employees to the area this past spring to get familiar with the area and see if there were necessary conditions for successful investments. They decided there indeed were. And though the AdvancingCities competition is still fielding proposals from more than 1,000 cities for the rest of the month, Scher said, “When we feel like we’re ready and we can make the investments we do.”
Using lessons from Detroit and London
When Scher explained AdvancingCities to us in September, he said that one of the key takeaways from their initial work in Detroit was that the level of partnerships on the ground is contingent on the success of the investments. That is, the bank’s team has to rely on business and government leaders in each respective region to determine where money will be best spent and loaned.
In Seine-Saint-Denis, the French President Emmanuel Macron’s administration is involved in the project, and the minister of employment, Muriel Penicaud, will join Dimon on Tuesday in an announcement press conference at the Les Compagnons du Devoir (LCD) charity in the region. JPMorgan partnered with the charity last fall and made a 460,000-euro investment into apprenticeship programs.
The AdvancingCities initiative as a whole utilises both low-cost loans and philanthropic spending, but this upcoming $US30 million investment will be entirely in the form of grants. They will support more apprenticeship programs like those offered by LCD, as well as small business accelerators like Impact Partenaire and Pact PME.
Scher said the JPMorgan will send around 100 employees from its global offices to assist with these programs over the next five years, as it has done with its previous city investments.
He said that the Great Paris initiative’s success will be measured by effects on employment rates and small business growth, particularly in the poorest sections of the region. The AdvancingCities team is using its insights from its American projects, as well as how the bank’s investments in East London during the 2012 London Summer Olympics affected the city’s economy, for Seine-Saint-Denis’ benefit.
“I think it demonstrates that not just the challenges are quite similar wherever you go, but many of the solutions are quite similar,” Scher said.