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How Cities Can Nurture an Industrial Renaissance

More and more, innovative companies that make things want to be in the city. Their needs are different from those of yesterday's manufacturers.

An improv comedy show at an old warehouse in Pittburgh's Lawrenceville neighborhood.
More than 130 cities are now in the hunt for Amazon's second headquarters, which carries a Megabucks-like payoff -- and equally long odds. Regardless of where Amazon goes, the company will need to hire tens of thousands of software engineers, most of them from somewhere else. My bet is on Toronto, not only because it is big and cosmopolitan and has an established base of tech workers but also because Canadian visa regulations make it easy to hire talent from other Commonwealth countries like Australia, New Zealand and Singapore.

Cities would have a much better chance of putting their own citizens to work if, instead of long-shot recruiting like the frenzy to land Amazon, they focused on growing their own companies, especially those that make things. There's an industrial renaissance going on this country, particularly in the business-to-business sale of highly-engineered, high-value parts, and it's accompanied by an industrial return to the city, with companies moving back to be close to the next generation of talent. In many ways, this new generation of industrial companies offer us the best prospects for rebuilding our middle class, particularly with high-skill technical jobs that don't require a college degree.

The challenge is that, in many communities, you cannot use the word "industrial" without calling up memories of job loss and production-line jobs that were often dull, dirty and dangerous. Much of industry is different today: The companies that have survived have done so by updating their marketing and management methods, using advanced materials, and installing digitally-controlled machinery that may require 10 hours of setup time for every hour of run time. Yes, there are fewer workers, but those who remain are highly skilled, often earning in the mid- to high five figures.

There's also a new generation of companies that design and make smart, connected devices for the Internet of Things, a category that is likely to explode over the next five years. And there's a new generation of artisanal manufacturers making premium-priced food, fashion and furnishings. This is a yeasty mix of the old and new, the hands-on and the automated, very unlike your father's Oldsmobile factory.

Most of these new-generation companies can't go into the "innovation districts," the spaces devoted to software-engineering startups and business incubators that are the flavor-of-the-month idea for economic development. The new generation of manufacturers needs inexpensive workshop space that includes a combination of offices, design studios, prototyping and production areas, storage space, and even loading docks. And if they want to attract the next generation of engineers who want to live in hip inner-city neighborhoods, they can't be more than a bicycle ride away.

This combination of factors has already led to the renaissance of industry in San Francisco's "Dogpatch" neighborhood, the Brooklyn Navy Yard, Pittsburgh's Lawrenceville and East Liberty neighborhoods, and the city of Somerville, just north of MIT in Boston. For the most part, this renaissance is beyond the lofts where the public now goes for once-a-month gallery nights.

There are two key principles for supporting this industrial renaissance: Serve existing customers first, and humanize the place. In most cases, both the zoning and the infrastructure in these places is outdated. Often, thanks to zoning regulations, a craft brewery can't open a tasting room. The homeless may have taken over the streets. It's usually unsafe for a woman to come out after dark and walk to her car. Someone who wants to bike to work probably risks getting flipped while crossing railroad tracks, if they aren't picked off by a truck first. You can probably avoid all these problems in the modern business park on the edge of town, but that's not necessarily where the latest generation of smart, small industrial companies wants to go.

How can you, as an urban leader, get started in supporting this industry? The answer is simple: Take a walk on the wild side. It has probably been years since anyone other than a code inspector has been inside the buildings in these places. Park your car and walk up and down the streets, looking for signs of what goes on behind the doors. When you see a name, look up their website and see what they do. Don't be afraid to knock and ask for the owner or manager. They'll probably be so surprised to see someone senior from government that they will invite you into their offices.

Tell them that you are exploring and would like to hear from them what difference government can make for their businesses. They may be so dumbfounded by your presence that they don't know what to answer, but the odds are that they will tell you a story about their work that will open your eyes to a new world of business and your city's role in that world. Wouldn't that change in perspective be worth the trip?

Principal with Business Street
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