By Mike Schmidt, AEM Industry Advisor Editor
The rise of small-scale manufacturing in urban areas is one of the defining trends of the industry today, and the increased prevalence of facilities in cities speaks volumes about the needs, wants and preferences of the modern manufacturer.
Companies are increasingly finding themselves opting for smaller spaces in urban areas – instead of large facilities that employ hundreds, or even thousands, of people – when looking to expand or relocate. According to a recent Lehigh Valley Business article published last month, U.S. manufacturers today are often seeking facility spaces ranging from 5,000 to 75,000 square feet, and many are finding their ideal locations in cities and urban locales across the country.
One particular area where the urban manufacturing movement is thriving is New York City. Once all but dead in the Big Apple, the manufacturing industry has experienced a renaissance there in recent years. According to a July article featured in The Economist, there are 78,000 manufacturing jobs in New York today, and experts predict the industry will contribute an increasing share of the area’s economy in the years to come. In addition, a number of other cities around the U.S. are said to be encouraged by what they've seen and are considering the New York model, one which seems to be well-suited for areas with a rich history of manufacturing and ties to a strong local economy.
A number of significant forces are acting as key drivers behind the urban manufacturing movement, and chief among them is manufacturers’ ability to gain close proximity to workforce. As the Lehigh Valley Business piece explains, approximately 60 to 70 percent of the workforce employed at manufacturing companies located in one block in Allentown, Pennsylvania are residents of the city. Such a statistic underscores the mutually beneficial relationship between Allentown and the companies that call it home. The city benefits by attracting a company to offer well-paying jobs with benefits to folks in the area, while the manufacturers are able to secure access to a wealth of potential employees simply by establishing a facility there.
The evolution of technology has also contributed to the rise of small-scale manufacturing in cities today. As companies embrace and invest in cutting-edge technologies such as 3D printing, the ways in which they produce their offerings have undergone a significant transformation. In an era where smaller runs and custom offerings are becoming the norm, manufacturers are more apt to want to run their operations out of smaller facilities. And now, perhaps more than ever before, they are finding those facilities in urban areas.
A wealth of federal, state and local subsidies being offered to manufacturers of all types and sizes to help compel them to invest in a facility in urban areas, and their important roles in driving the urban manufacturing trend in the U.S. cannot be overlooked. These programs, along with local geography-based tax incentives, often act as deciding factors in convincing companies looking to relocate or expand to invest in facilities in certain cities.
Manufacturing is thriving in the U.S. today. The industry has experienced job growth, and output has been quite strong in recent years. As manufacturing grows and technology evolves, the companies within the industry serve as drivers of change. Manufacturers now require smaller spaces that are aligned with technology, and they need ready access to an employable workforce. Many urban areas in the U.S. are equipped to meet the needs of the modern manufacturer, and the case for investing in facilities in cities is strengthened further by the availability of numerous subsidies and tax incentives.
All of these factors have combined to give rise to the urban manufacturing boom, one which continues to gain steam with time. And while the long-term future of any business trend is never guaranteed, the demands of the modern manufacturer appear poised to propel this one to sustained relevance and prominence for years to come.