In a recent interview, Gary Pisano and Willy Shih of Harvard Business School outline the importance of maintaining manufacturing capabilities in the United States. They argue that the loss of manufacturing in the United States endangers our ability to innovate and that American students presently misperceive manufacturing to be all brawn and no brains. We agree and would argue further that focusing on improving opportunities for manufacturers to locate in urban environments can help stem this tide.
Pisano and Shih offer the manufacture of flat panel displays as an example of an activity that does not take place on American soil and thereby hampers our ability to innovate. Basically, when an industry ceases to produce, a firm understanding of the product ceases along with the production. The likelihood of theoretical innovation in an industry falls off a cliff when researchers cannot be part of the commercialization process.
They also point out that the American university system has put a premium on "knowledge" work and has at the same time separated manufacturing from that classification. That effort has stigmatized the process of making things. Fortunately, there seems to be renewed interest from students in getting into making and hacking, evidenced by the popularity of Make magazine and television shows like Mythbusters.
We think that industries should not only return their manufacturing to the United States, but focus on dense urban environments when locating production facilities. "Knowledge work" industries understand this, choosing to locate in New York, Philadelphia, Austin and other cities. Because manufacturing is, in fact, knowledge work, manufacturers stand to gain many of the same innovation benefits by being in urban environments, principally the chance interactions between like-minded individuals and the well-documented creative class density.
Tuesday, April 26, 2011
Thursday, April 21, 2011
Lehigh Valley Commercial Real Estate
Today, the Greater Lehigh Valley Chamber of Commerce hosted a Commercial Real Estate (CRE) Luncheon, which included some awards given by the Chamber and a CRE Outlook presented by NAI Summit. AEDC tweeted from the event (follow along at #commRE).
Three of the awards piqued our attention. Spillman Farmer Architects received an award for their design of the Sigal Museum, a former opera house in Easton converted to a historical museum. St. Luke's Hospital Network received an award for their healthcare conversion of a retail site in a small, urban environment. Finally, Serfass Construction received recognition for their Oral Dynamics Cosmetic Dentistry project, part of which was financed from AEDC's Enterprise Zone Revolving Loan Fund. The projects were of note because they represented reuse of existing sites in urban environments, one with economic development financing assistance. The St. Luke's project is a harbinger of things to come, and underscores the importance of healthcare and educational institutions to continued investment in our urban areas. St. Luke's, Lehigh Valley Health Network, Sacred Heart Hospital and Good Shepherd Rehabilitation Network will all have a significant impact on Allentown and the Lehigh Valley as they make decisions about providing healthcare to the citizens of the region.
NAI Summit's outlook confirmed much of what we have already seen in the Lehigh Valley and didn't do much to buck conventional wisdom. Industrial and office vacancy are on the decline, stabilizing or driving up rates in existing spaces as few speculative office or industrial sites are planned. With capital not yet returning to the region, speculative construction will remain on hold. There was a clear tension between the allure of brownfield sites like LVIP VII and the potential greenfield sites on the outskirts of the Lehigh Valley. We have a strong belief in brownfield reuse and would encourage developers to consider urban sites when planning future speculative construction. Allentown has a very attractive KOZ site on Hamilton Street in the Colonial Theatre Site that would work well for an office site given its proximity to other downtown businesses. There are also many opportunities in Allentown for revitalizing existing industrial sites for further industrial uses.
Three of the awards piqued our attention. Spillman Farmer Architects received an award for their design of the Sigal Museum, a former opera house in Easton converted to a historical museum. St. Luke's Hospital Network received an award for their healthcare conversion of a retail site in a small, urban environment. Finally, Serfass Construction received recognition for their Oral Dynamics Cosmetic Dentistry project, part of which was financed from AEDC's Enterprise Zone Revolving Loan Fund. The projects were of note because they represented reuse of existing sites in urban environments, one with economic development financing assistance. The St. Luke's project is a harbinger of things to come, and underscores the importance of healthcare and educational institutions to continued investment in our urban areas. St. Luke's, Lehigh Valley Health Network, Sacred Heart Hospital and Good Shepherd Rehabilitation Network will all have a significant impact on Allentown and the Lehigh Valley as they make decisions about providing healthcare to the citizens of the region.
NAI Summit's outlook confirmed much of what we have already seen in the Lehigh Valley and didn't do much to buck conventional wisdom. Industrial and office vacancy are on the decline, stabilizing or driving up rates in existing spaces as few speculative office or industrial sites are planned. With capital not yet returning to the region, speculative construction will remain on hold. There was a clear tension between the allure of brownfield sites like LVIP VII and the potential greenfield sites on the outskirts of the Lehigh Valley. We have a strong belief in brownfield reuse and would encourage developers to consider urban sites when planning future speculative construction. Allentown has a very attractive KOZ site on Hamilton Street in the Colonial Theatre Site that would work well for an office site given its proximity to other downtown businesses. There are also many opportunities in Allentown for revitalizing existing industrial sites for further industrial uses.
Friday, April 15, 2011
Advantages of Urban Manufacturing
The recent Brookings Institution report on small, urban manufacturers has such an unbelievable wealth of information that presenting it will take up many blog posts here. One of the sections discusses the advantages and challenges of urban manufacturing.
Among the advantages posted by Joan Byron and Nisha Mistry is that cities "provide unparalleled access to workers of every level and variety of skill." They cite the ability of transit in cities to deliver workers to central locations and the availability of a variety of educational programs for training. In larger cities, competition promotes innovation in management practices and the tremendous diversity of national origin in cities promotes global perspectives.
It's true that transit helps to deliver workers to central locations, and in many cities the proximity of manufacturing sites to residential neighborhoods permits connected manufacturers to source labor from around the corner. Manufacturing in these environments means employees that can walk to work, receiving the benefits of a healthy, car-independent lifestyle which accrue to the manufacturer. It's probable that absenteeism rates decline in shops that have an urban presence, as winter weather is less of a factor in the employee's ability to get to work.
Cities like Allentown, PA not only have a wealth of academic resources available in the heart of the downtown, but also benefit from a concentration of workforce development programs in urban environments. Manufacturers can easily take advantage of both resources, keeping their employees well trained.
Historically, cities grew with immigrant populations that helped to define the character of the place where they landed. Immigration is still one of the major drivers of population growth in the United States, and is helping cities to maintain population. Integration of immigrant populations into urban manufacturing helps those companies innovate as different perspectives come along. They also provide insight into competing in global markets.
Cities provide an overwhelming advantage to urban manufacturers. Learn more at urban-made.org.
Among the advantages posted by Joan Byron and Nisha Mistry is that cities "provide unparalleled access to workers of every level and variety of skill." They cite the ability of transit in cities to deliver workers to central locations and the availability of a variety of educational programs for training. In larger cities, competition promotes innovation in management practices and the tremendous diversity of national origin in cities promotes global perspectives.
It's true that transit helps to deliver workers to central locations, and in many cities the proximity of manufacturing sites to residential neighborhoods permits connected manufacturers to source labor from around the corner. Manufacturing in these environments means employees that can walk to work, receiving the benefits of a healthy, car-independent lifestyle which accrue to the manufacturer. It's probable that absenteeism rates decline in shops that have an urban presence, as winter weather is less of a factor in the employee's ability to get to work.
Cities like Allentown, PA not only have a wealth of academic resources available in the heart of the downtown, but also benefit from a concentration of workforce development programs in urban environments. Manufacturers can easily take advantage of both resources, keeping their employees well trained.
Historically, cities grew with immigrant populations that helped to define the character of the place where they landed. Immigration is still one of the major drivers of population growth in the United States, and is helping cities to maintain population. Integration of immigrant populations into urban manufacturing helps those companies innovate as different perspectives come along. They also provide insight into competing in global markets.
Cities provide an overwhelming advantage to urban manufacturers. Learn more at urban-made.org.
Tuesday, April 12, 2011
Federal Role for Urban Manufacturing?
The Brookings Institution' Metro Policy Program recently published a report on urban manufacturing. You can read the full text here, but the basic recommendations to the federal government are as follows:
- Develop a new narrative about manufacturing and metropolitan economies and use it to inform and guide its policies and programs
- Support small urban manufacturers' role in regional cluster development
- Ensure that small urban manufacturers have the physical assets that they need to thrive
Sounds pretty good to us and consistent with our goal of promoting urban manufacturing through Urban Made. The greater detail calls for federal support for researching regional supply chains, strengthening of workforce policies to help workers get the needed skills, designing export initiatives at the state level, and more.
We are glad to see organizations like Brookings investigating the role of urban manufacturing in regional economic development and look forward to future research. What are your thoughts on this work?
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