Growing a More Equitable Economy

New York City is at the forefront of a national urban manufacturing renaissance.

Manufacturing is at the core of a burgeoning 'innovation economy' characterized by specialized markets, flexible business models, cross-sectoral linkages and an emphasis on creativity. But perhaps more crucially, the manufacturing sector is a proven source of good jobs for individuals with barriers to employment in many distressed communities.

For example, manufacturers in NYC’s poorest borough, the Bronx, pay $42,675 on average. Over 14,000 Bronx residents employed by local manufacturing companies live in neighborhoods with exceptionally high unemployment rates.

While domestic manufacturing has in recent years added jobs and shown promising signs of growth, the sector’s renaissance has been particularly robust in several U.S. cities. This success is largely attributable to the ingenuity of new small urban manufacturers. Although they produce goods in a wide range of fields, these companies have several common characteristics. Unlike the large plants at the heyday of the U.S. industrial sector, these companies are small, often employing 20 people or less. They do not operate vertically integrated factories but are instead parts of webs of production and distribution, allowing for fast turnaround and rapid circulation of locally and regionally sourced goods. They produce specialized products demanded by niche markets – from high-tech medical equipment to artisanal food products — and serve a range of customers and markets. Lastly, they tend to be more environmentally sustainable, a result of business strategies, less material-intensive production needs, proximity to market, and new technologies – all of which enhance their bottom line.

Small urban manufacturers also provide critical economic benefits to – while also profiting from – their locations. Urban centers favor the characteristic organizational form of 21st-century production: supple, peer-to-peer networks, rather than large, multitiered entities. Synergies between these decentralized networks promote the spillovers and knowledge-sharing that not only help businesses innovate, but in turn help build stronger, more adaptable urban economies. Recent research has shown, for example, that manufacturers in urban areas are more productive than those in less dense areas. They are also indispensable partners to other industries, forging strong linkages within metropolitan economies and generating multiplier effects across regions.

While economists regularly report on the demise of manufacturing in NYC, and at the same time trumpet the growth of tech, design, entertainment and media, and arts and culture, the fact is that many of the companies in these sectors are doing some manufacturing. Lines between sectors are rapidly blurring, driven by technological advances that shrink the size of manufacturing equipment and make that equipment easier to use. No city in the U.S. approaches the depth and breadth of NYC’s market or creative assets, including existing clusters in food, fashion, furnishing, film, entertainment, the arts and construction, as well as nationally renowned educational institutions..

Yet NYC manufacturers face a number of challenges in tapping the city’s unique assets, including: (1) the limited availability of affordable and suitable real estate as competition for land with non-manufacturing users raises rents to cost-prohibitive price points; (2) a building stock that does not fit the needs of smaller firms, as many industrial sites are developed for single-occupant firms or polluted from previous occupants; and (3) strained transportation networks that drive up the cost of transporting goods and ensuring on-time delivery of products.

Through policy advocacy, business assistance, and coalition-building, Pratt Center works to capitalize on the growing interest in urban manufacturing and catalyze a strong local economy characterized by: (1) space for production; (2) economic development services that strengthen the relationships between manufacturers, markets, and the financial and intellectual resources that generate new products, as well as residents who need employment opportunities; and (3) a 21st Century infrastructure that facilitates the environmentally sustainable distribution and production of goods.