In the fall of 2013, New York City Economic Development Corporation (NYCEDC)’s Industrial Desk team, led by VP for Industrial Initiatives and Income Mobility Miquela Craytor, released the State of Local Manufacturing report under the banner of NYCEDC’s NYCrafted program. The report provides a detailed but accessible snapshot of what the sector looks like today: from the average makeup of manufacturing businesses that are choosing to make things in the city today, to which areas of the sector that are growing, to how New York stacks up against other major cities across the country. The following is an edited transcript of a conversation between Craytor and OHNY, and is part of an ongoing series of Q&As with experts on urban manufacturing that augments OHNY and NYCEDC’s’s Making it Here series.
Looking at the State of Local Manufacturing, it seems like, after a long period of decline, the city’s manufacturing sector is actually starting to stabilize; some sectors are even starting to grow again. What areas of this sector, specifically, are growing right now, and what does the success of those subsectors tell us about how manufacturing in the city is changing?
Food and beverage manufacturing is the bright shining star right now, and there are a couple of potential reasons for that growth. Part of it is the rising interest in food security, part is the interest in eating food that is locally grown or produced. You see this in the growth of farmers markets, and markets in general. Markets have definitely contributed to that sub-sector of manufacturers finding a really strong foothold here in New York City. A place this dynamic and large has a very opinionated customer base, so there’s naturally a larger set of people demanding that kind of smaller niche product.
Another interesting piece of data that we came across is that, across the manufacturing sector, there are fewer employees, but there are more firms. [This is enabled by larger trends in] technology and design: with the growing accessibility of design tools, open source resources, and online marketplaces like Etsy, businesses are able to rapidly get their products to market without some of the barriers that have traditionally made it more difficult for newer companies to break into the marketplace. The city also has a really great talent pool of designers and design appreciators. That doesn’t necessarily apply to one cluster or sub-sector, but you see a lot of new niche manufacturers emerging now as a result of that base.
There are also a lot of older firms that have adopted new forms of technology in order to survive. That is often overlooked or understated, and has happened more frequently than the average New Yorker, to the extent that they think about this stuff, might have necessarily realized. You might think that if a company has been around for fifty years they’re probably antiquated or old-school. Sometimes that’s the case, but more often than not, legacy manufacturers have had to adopt some sort of new technologies, whether it’s managing their inventories and implementing more just-in-time manufacturing processes, or becoming more efficient in the materials they’re using. This is not necessarily a new trend, but it’s a piece of the puzzle that we became familiar with as we worked on this report.
How is all of this impacting the physical spaces that manufacturers occupy, both in terms of the buildings that they’re in and the neighborhoods where manufacturing is taking place?
Manufacturing companies, as they become more efficient and adopt new technologies, are able to reduce their environmental impact. In a very densely populated place like New York City, that makes it possible for these businesses to coexist with other uses in a way that doesn’t create as many conflicts as it may have eighty plus years ago. So the increases in efficiency in manufacturing are not just about the overall operational efficiency of a given company, they can reduce that company’s environmental impact, so that it can be seen as a better neighbor, and a source of less conflict [within a mixed-use area].
One continued challenge is less about what happens inside your facility and more about how you get your products out to market. Manufacturers are more willing to go to upper stories than they once were, but for any industrial business that’s trying to move goods around this city, our streets are already packed; trucks have a difficult time navigating here, and they’re not necessarily ideal when you consider things like the city’s attempts to encourage biking and the greening of space. We’re not going to be able to build a bunch of new streets, so that’s an ongoing challenge that the city needs to think more thoughtfully about.
As manufacturers become more attracted to different types of vertical mixed-use spaces, and digital platforms—you mentioned Etsy—make it easier for more small, niche firms to enter the market, is it fair to say that urban manufacturing is actually getting more diffuse?
In terms of the trend where we’re seeing more of these innovative start-up companies, New York City is a very attractive place for them largely because of the talent pool that is here, but also the supply of buildings that have that sort of creative essence that these types of groups want to be in. A lot of these firms are really turned off by the idea of working in a high rise, even if it was a class B commercial space. In terms of thinking about building typologies that are appropriate for companies in this new wave of manufacturers, being in a multi story building is not a bad thing. There’s a sense of community in many of these [retrofitted industrial buildings] that new companies want to be a part of, and that sets them apart from more traditional manufacturers.
That works for a while at a certain stage of your growth as a company, but it will be interesting, looking toward the future, to see how and whether can we make sure that, if these companies hit growth spurts, we can still have spaces that they can move into. That’s something that we’re looking at here at NYCEDC, on the policy side, so that the city can continue to support these companies through their whole life trajectory, not just during their start-up phase.That brings us to an interesting subject that a lot of New Yorkers probably know very little about: the Industrial Business Zone. What, exactly, is an IBZ?
Industrial Business Zones were a policy program that was started back in late 2005 and went into effect in 2006. Initially the city created a total of 16 IBZs; in the past year we’ve added five more. These 21 areas are located in all of the boroughs except Manhattan. IBZs can only exist within an area that’s zoned for manufacturing, aka an M-zone; they do not change the existing land use. The process to define the boundary lines of these areas is somewhat rigorous, and is governed by the city’s administrative law code. [IBZs aren’t actually formal zoning rules, but] if the city wants to create new IBZs or expand or contract existing IBZs, they have to follow a set of very specific steps in order to consider those changes or modifications.
The IBZ program was primarily created as an outcome of many businesses being concerned that the areas where they were located were going to be rezoned to other uses, like residential, and that they would be pushed out of the city. The program is a way of telling industrial business communities that they are still valued, and that we still want them around.
How do you explain to people why, at a time when it can be so much more profitable to build a condo tower or a hotel, it’s important for the city to make space for manufacturing?
Manufacturing companies tend to pay, on average, a much higher wage compared to other industries where you don’t need a four-year degree. Looking at that wage trajectory, and ensuring that the types of companies that offer good wages for someone without a degree, from a policy perspective, is something that this administration really believes in. The overall benefit to the city of having these jobs here is that these are living wage jobs; there is so much talk about the hollowing out of the middle class, and these are the jobs that can create some level of stability for the New Yorkers who are still pursuing that so-called American Dream.
We think that the city is at a very exciting inflection point. With the new administration, we’re at that point at which we can really send strong indicators to this part of the city’s economy and ensure that these companies feel welcomed and encouraged to stay, and also that they have access to additional tools and resources to grow to the extent they want to, and to become sustainable in the full sense of the word—not only for their bottom line, but for the communities which they’re a part of. There are a lot of things that go into that, and what’s exciting about the Making it Here series of tours, and the conversations that are coming out of them, is that it is helping to re-paint [the picture that New Yorkers have of] what the city’s industrial landscape looks like, how it’s evolved, and where it’s potentially headed.