President Trump is gung-ho about the U.S. producing more goods. But what, exactly, should cities be making in the 21st century?
When President Donald Trump announced his Manufacturing Jobs Initiative last month, he was moving forward on a promise he made over and over during his campaign: to make America great at making stuff again.
“America became the world’s dominant economy by becoming the world’s dominant producer,” the then-candidate said during a campaign stop in Monessen, Pennsylvania, in June 2016. Lambasting globalization and trade pacts as “economic surrender,” he pledged to restore the country to the glory days of thrumming assembly lines: “We will make America the best place in the world to start a business, hire workers, and open a factory.”
Whether lost manufacturing jobs can return in an era of increasing automation is a subject of skepticism among many analysts. After all, America is building more than ever; the manufacturing sector just doesn’t employ as many people. But it’s clear that this administration will continue to at least create the impression that it is bringing back goods-producing factory jobs.
So, where do cities fit in with this? With their limited space, dense population, and high costs, modern urban areas are no longer the industrial powerhouses they were a century ago. But they do still have some key advantages over small towns, rural areas, and spread-out exurbs. CityLab asked experts how American cities can play to their strengths to ramp up production, and learned a few rules of thumb.
The first is no surprise: Don’t bother wooing widget-makers. With higher land values and thus less room for production facilities than the exurb up the highway, the 21st-century city isn’t the best place to make commodity goods on a vast scale.
“What cities are good at are things that turn out, often, to be shorter-run, more customized, [meet] a particular need, and drive off the innovation-high nature of cities,” says Peter Hirshberg, a co-author of the book Maker City. “That’s very different than, ‘We have a big assembly plant where a bunch of humans are doing the same operation over and over again.’”
Adam Friedman, executive director of the Pratt Center for Community Development in New York, agrees. “The dividing line [between appropriate and less appropriate industry for cities] … is less around size and more around value added. It’s the difference between commodity products, like Sweet‘n Low—which just closed in New York—versus high-value-added products, which could be anything from architectural metalworking to all the artisan foods, but also including ... furniture and fashion.” So, yes to the artisanal sauerkraut-maker, no to the industrial food factory.
These days, people assume that technology must be the differentiator, Friedman continues, but that’s often not the case. “It can also come from design, or proximity to market, or how well you serve your market.” Friedman’s example of a manufacturer well suited to its urban location is very old school: Steinway & Sons, which employs about 300 people in Queens. Concert-quality pianos are the ultimate “high-touch” product, and proximity to the music schools and arts organizations of a cultural center like New York is a big advantage.
A high-tech example Hirshberg cites is Crye Precision, which designs and produces body armor for the armed forces in the Brooklyn Navy Yard. The manufacturer employs designers, engineers, seamstresses, and more—a cross-section of talent that would be tough to find outside of an urban area.
High-value products have higher margins, which translates to better pay for workers, Hirshberg notes. Urban production facilities are often accessible by public transportation, a plus for both workers and employers. And they tend to be places people don’t mind living next door to, as opposed to the clanking tool-and-die shops of yesteryear. “Modern manufacturing is increasingly a clean, high-tech, desirable activity that can fit into a [city] neighborhood,” says Mark Muro, a senior fellow at the Brookings Institution.
Focus on what you’re good at
There probably isn’t a city out there that wouldn’t like to be the next Silicon Valley. But cities will do better focusing on their distinctive assets and helping a manufacturing scene grow organically.
Take Cincinnati. In the mid-19th century, German immigrants settled in the city’s Over-the-Rhine neighborhood and started brewing lager and opening beer gardens. By the end of the century, Cincinnati was one of the country’s top beer producers, and 17 breweries dotted Over-the-Rhine and the adjacent West End. Many of them had deep basements or tunnels to ensure the cool temperatures desired for brewing lager. Nearly 50 brewing-related structures have survived from this period.
Locals established the OTR Brewing District in the early 2000s as the neighborhood struggled with crime and vacancy. At first, they concerned themselves only with clean-up and safety efforts. But “very quickly, we seized on the fact that this brewing heritage was an amazing asset,” says Steve Hampton, the nonprofit’s executive director. They started leading brewing-history tours in 2006.
Since then, Over-the-Rhine has undergone a remarkable revival—prompting concerns about gentrification—and has attracted various kinds of maker businesses. Not surprisingly, they include four operating breweries, but also an incubator kitchen where food entrepreneurs can lease space by the hour, and First Batch, a manufacturing accelerator that works out of the Moerlein Ice House, once part of the Christian Moerlein Brewing Co.
Hampton says some of the old brewery structures are “funky” and hard to turn into condos, but they lend themselves to light industrial uses. And the area’s architecture and brewing history are rich enough to draw locals and tourists eager for a look, who then patronize local retailers. “We continue to do a lot of projects around promoting [the brewing] heritage and using that as an economic development tool to bring visitors and their dollars to their neighborhood,” Hampton says.
Look beyond incubators
Everyone is setting up small-business incubators and maker spaces these days. They’re important, Muro says. Maker spaces with shared equipment allow budding entrepreneurs “to do a limited manufacturing run, without buying hugely expensive modern manufacturing tools.” He sees networks of such spaces emerging now—“an actual, decentralized infrastructure to really support meaningful city-based manufacturing.”
But support has to go beyond the gestation phase. In St. Louis, Brick City Makes is a new venture based in a six-story 1912 warehouse where hats and chairs were once made. A partnership between St. Louis Makes—a nonprofit that supports manufacturing entrepreneurs—and DeSales Community Development, the still-unleased facility is aimed not just at small, but also mid-sized businesses.
“Brick City Makes is not an accelerator and incubator,” says its executive director, Marc Bowers. Instead, it is “targeted at companies in that elbow of the curve where scalability is the issue.” By solving these companies’ real-estate problems both large (the need for more space) and small (the frustration of leaky roofs and busted lights), Bowers hopes to free up entrepreneurs to concentrate on growth. Plus, being part of a hub, they can use their fellow entrepreneurs as a sounding board for pitches when they’re hoping to land new accounts.
St. Louis’ manufacturing heritage “rests on really old-school materials like metal and wood,” Bowers says. The future mix of tenants is still unclear, but he foresees “largely industrial manufacturers in metals, woods, [and] plastics,” as well as some more artisanal businesses. “We don’t see it as being an artists’ community,” he says. DeSales owns the warehouse outright, and from its perspective, the joint venture complements other strategies to revitalize the city’s neighborhoods.
Bowers has a name for the type of space he offers: “tweener space.” Lee Wellington, the executive director of the Urban Manufacturing Alliance, calls it “step-up space,” and says it’s essential as cities move forward on manufacturing. “Incubators can be sexy, but I also think we can’t lose sight of the need for businesses that grow to the point they need to control everything in their space usage.”
Wellington says cities—especially expensive ones—need to work to preserve or create spaces for production. However, “you don’t have to cling to every last space that’s zoned for manufacturing and make sure it stays that way.” She points to Cincinnati, which rolled out special “urban mix” zoning in the Brewery District that allows light manufacturing and residential uses side by side, but doesn’t prohibit former industrial buildings from being adapted for something different. Other cities that are working on flexible, production-friendly zoning include Nashville, Indianapolis, and Somerville, Massachusetts.
There are best practices for fostering a city’s manufacturing workforce, Wellington says, like expanding apprenticeships and introducing school kids to the trades. Nonprofit housing developers can play a role, as DeSales now does in St. Louis, by integrating industrial renewal into their neighborhood revitalization approach. If an industry cluster emerges, that can burnish a city’s brand; Boulder, for example, is now known as a food-company hub. But local leaders must learn that industry’s needs and offer targeted support for the cluster to thrive, Wellington says.
“Really dive into clusters and understand potential weaknesses in the supply chain,” she advises. “[Take] the time to have a very detailed approach.” For instance, “[if] you have a growing soft goods sector, understand if there are limitations around the repair of facilities for sewing machines, and address that quickly, to make sure that sector grows.”
The jobs question
Finally, the big question: Can a manufacturing base composed largely of these boutique businesses really generate a significant number of the kind of stable, middle-class manufacturing jobs that once flourished in post-war America?
One-person operations are taking up a bigger share of manufacturing businesses nationwide. In 2014, there were more than 350,000 manufacturing establishments with no employee besides the owner, an increase of almost 17 percent from a decade earlier. Establishments with other employees were down 12 percent over the same period.
The internet makes it easy for solo entrepreneurs to find a market, as well as business support services (such as web design and accounting software). All the paperwork required to bring on a first employee can be daunting. On the other hand, there comes a point for every successful small business when just working a few more hours yourself isn’t an option, and you have to hire help.
“You’re seeing this phenomenon of small manufacturing start-ups, and there are now many more resources available to support these guys,” says Muro. “Only in the last couple years have I really thought it was taking on a robust form that can actually generate jobs in a serious way. I think that’s beginning to happen.” In cities where start-ups can tap into bigger distribution networks, “some of these very plucky and sophisticated creative endeavors may have a chance to blow up and go national.” Plus, brands founded on authenticity and craft may be more resistant to automation.
At the same time, he says, don’t expect to see millions of new jobs in urban manufacturing. Most enterprises will remain small-scale, serving local and regional markets. Instead of chasing unrealistic job targets, “I think celebrating localism and local authenticity and fresh local ideas is the right approach,” Muro says.