Adam Friedman and Joan Byron
High-Tech, High-Touch, y
Manufacturing’s Triple Bottom Line
After decades of neglect, the manufacturing sector is now getting welcome atten-
tion as a critical element in the revival of our national economy. But research and
policy development on U.S. manufacturing have tended to focus on technology-
intensive subsectors and processes, incluido, más reciente, “advanced manufac-
turing.” As defined in a recent $26 million federal funding announcement,
advanced manufacturing is “a family of activities that (a) depend on the use and
coordination of information, automation, computation, software, sintiendo, and net-
working, and/or (b) make use of cutting edge materials and emerging capabilities
enabled by the physical and biological sciences (Por ejemplo, nanotechnology,
chemistry, y biología)."
Thus defined, “advanced manufacturing” takes advantage of our nation’s depth
of engineering talent and offers the U.S. a competitive edge against countries
whose advantages have been based in part on low labor costs.
But for policymakers at the federal, estado, and local levels, a U.S. manufactur-
ing renaissance should not only be about technological leadership and market
compartir; it should be just as much about leveraging the potential of an increasingly
diverse workforce, revitalizing cities and inner suburbs, and maintaining a high
quality of life while reducing the environmental impacts of production and con-
sumption. A narrow technological focus will miss opportunities based on other
competitive advantages, such as sophisticated design, market insight, and the abil-
ity to respond to quick shifts in demand. Además, a narrow definition will not
Adam Friedman has led efforts to strengthen manufacturing in New York City and
nationally since the mid-1990s. As the Pratt Center’s director, he is co-convener of the
Urban Manufacturing Alliance, a national network dedicated to advancing federal,
estado, and local policy and sharing best practices among businesses, investigadores, y
gobiernos.
Joan Byron now leads the Pratt Center’s policy development and advocacy work; her
prior projects include the Center’s Transportation Equity initiative, and support of
local coalitions working for the reclamation of the Bronx River and the removal of the
Sheridan Expressway.
© 2012 Adam Friedman and Joan Byron
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Adam Friedman and Joan Byron
Cifra 1. Subsectors in Large Cities:
Area of Bubble Represents Numbers of Unique 6 Digit NAICS Subsectors
Fuente: US Census 2010
produce the broad-based benefits that we need so desperately to address the
growth in income disparity that characterizes our service-driven economy.
Relatively little research has taken a triple bottom line approach to “new man-
ufacturing” or considered the impact it has not only on our economy but also on
our society and our environment. Desde esta perspectiva, it may be useful to iden-
tify “high-value/high-performance” (HV/HP) subsectors, intentionally including
makers of both “high-tech” and “high-touch” products, and to compare recent
trends in their activity to each other and to the manufacturing sector as a whole.
The high-touch grouping illustrates how performance and value can be created
from attributes other than advanced technology.
The high-value/high-performance rubric takes in everything from technolog-
ically advanced producer goods to high-end consumer products made by tradi-
tional processes. Though companies within these emerging subsectors may be dis-
parate in the products they make, the processes they employ, and the markets they
serve, they have five important characteristics in common:
(cid:2)(cid:1) High value added, which enables high wages (though the actual opportunities
created for different types of workers is likely to vary among sectors and by
lugar)
(cid:2)(cid:1) High value added incorporating a low environmental impact—low-bulk, bajo-
waste, low-transportation impacts—as well as the use of green products and
procesos
(cid:2)(cid:1)High level of innovation, significado:
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High-Tech, High-Touch, and Manufacturing’s Triple Bottom Line
Mesa 1. Selected High-Value/High-Performance Manufacturing Subsectors
◦ A short cycle time for design > prototyping > production
◦ A large proportion of new products
◦ A high degree of customization and response to insights from clients and
markets
(cid:2)(cid:1)High employment multipliers
(cid:2)(cid:1)High level of interaction with other firms and/or clusters
HIGH-VALUE/HIGH-PERFORMANCE MANUFACTURING: A SNAPSHOT
As part of our mission, the Pratt Center for Community Development is exploring
the ways that new manufacturing can make the economies of New York and other
A NOSOTROS. cities not only more competitive but more inclusive and sustainable.
For this project, we selected five large and five mid-sized Metropolitan
Statistical Areas (MSAs), looking for regional and demographic diversity. Nosotros también
considered manufacturing diversity, based on the number of unique six-digit
North American Industry Classification System (NAICS) codes with a substantial
presence in each MSA. We aimed for geographic variety by including MSAs on the
coasts, and in the Midwest and South. We then identified eight manufacturing
subsectors (at the four-digit NAICS code level) that we define as high-value/high-
actuación; these are listed in table 1. Of these, we selected four that produce
high-touch consumer goods, including high-end, design-intensive, high-value
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Adam Friedman and Joan Byron
Cifra 2. Professional Designers by City
Prepared by Pratt Center for Community Development, Julio 2012.
Fuente: US Census, American Community Survey, 2009
products; the other four produce technology-intensive products, principalmente (aunque
not exclusively) producer goods. Both the “touch” and “tech” subgroups include
but are not limited to sub-sectors we would describe as high-value/high-perform-
ance (HV/HP).
It is worth noting that the lines between high-tech and high-touch production
are far from clear and are likely to blur even more as production methods integrate
once-disparate disciplines and methods. Por ejemplo, Crye Precision, a maker of
advanced body armor for military and law enforcement personnel, relies on
sophisticated design and state-of-the-art materials—and on sewing by skilled
seamstresses that the company recruits from neighborhoods close to its Brooklyn
Navy Yard factory.
Our goal was to examine recent trends in employment and small firm activity
in the HV/HP subsectors, and to compare trends among subsectors, across cities,
and against U.S. manufacturing as a whole. We are intentionally creating a snap-
shot, not a comprehensive analysis; rather than providing answers, we aim to raise
further questions and frame directions for future research. Our hypothesis is that
the overall contraction of U.S. manufacturing (and perhaps also its modest
rebound in 2010-2012) masks a much more complicated reality, with quite dis-
parate trends in different cities and sectors.
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High-Tech, High-Touch, and Manufacturing’s Triple Bottom Line
Cifra 3. Accredited Design Schools by City
Prepared by Pratt Center for Community Development, Julio 2012
Fuente: National Associate of Schools of Art & Diseño
We also were interested in factors that may correlate with the emergence and
growth of small firms in HV/HP subsectors. This also was not a comprehensive
analysis of all possible factors but a snapshot of demographic and economic con-
ditions we believe are likely to be conducive to innovation and to the development
of new industries and products. The factors are sectoral diversity, growth in num-
bers of small firms by subsector, concentrations of design and engineering talent,
and the location of university programs in design and engineering.
A further hypothesis is that policies designed to support individual sectors
may not be sufficient to encourage innovation and the emergence of new high-
potential industries. Programs that attempt to focus too narrowly on “the next big
thing” may in fact be targeting “the last big thing.” We suggest that places that are
already sectorally diverse, and that are hubs of design and/or engineering talent,
are the most likely to spawn the next generation of new industry sectors. We think
that the right question is not simply about which industry sectors government
policies should bet on; we also should be asking what policies (federal, estado, y
local) will best support the emergence and growth of high-performance manufac-
turing regardless of sector.
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Adam Friedman and Joan Byron
Cifra 4. Professional Engineers by City
Prepared by Pratt Center for Community Development, Julio 2012
Fuente: US Census, American Community Survey, 2009
Cifra 5. Accredited Engineering Schools by City
Prepared by Pratt Center for Community Development, Julio 2012.
Fuente: Accreditation Board for Engineering and Technology.
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High-Tech, High-Touch, and Manufacturing’s Triple Bottom Line
SECTORAL DIVERSITY
From Jane Jacobs to Ricardo Hausmann, observers of economic development have
cited diversity and complexity as key drivers of innovation and growth.
Entrepreneurs exchange ideas; capabilities cross-pollinate and generate new prod-
ucts. We compared the number of unique six-digit NAICS codes occurring in each
of our large and mid-sized MSAs with each city’s total workforce and total manu-
facturing workforce. Not surprisingly, the largest cities—Los Angeles and New
York—had the largest number of manufacturing subsectors, but several mid-sized
MSAs boast respectable numbers as well.
By this measure, cities like Boston, San Francisco, and Seattle punch well above
their weight in the number of manufacturing subsectors that call them home (ver
cifra 1 on page 120). What makes some cities sectorally prolific?
We mapped concentrations of engineers and designers, and also of universities
with accredited design and engineering programs. The results are shown in figures
2, 3, 4, y 5. Some interesting relationships among these datasets can be noted.
Boston’s manufacturing workforce is 75 percent as large as Houston’s and it has
only about 20 percent as many engineers, but the two cities have equal levels of
manufacturing diversity, as measured by the number of NAICS codes represented
in table 1. Does Boston/Cambridge’s world-class cluster of design and engineering
schools support the proliferation of new industry subsectors? Does the dominance
of the oil industry in Houston crowd out other, emerging sectors? Cities with large
numbers of these professionals, and the university programs that train them, a menudo
house the research centers and incubator spaces that nurture not only individual
startups but the networks that enable innovation. These same cities are also the
locations of “maker spaces,” industrial incubators, and other shared work environ-
ments that serve this network-building function.
SMALL FIRM TRENDS IN THE HIGH-VALUE/HIGH-PERFORMANCE
SUBSECTORS
Finalmente, we looked at recent trends in selected subsectors that include HV/HP pro-
ducción, including technology-intensive and design-intensive producer and con-
sumer goods. We made our selections as illustrations rather than as a comprehen-
sive representation of small manufacturing; we chose subsectors that are likely to
include a high proportion of firms that we would qualify as HV/HP, but at the
four-digit level, the subsectors will inevitably include other kinds of firms as well.
We examined changes in the numbers of small (10-19 employees) and very
small firms (<10 employees) in our ten MSAs between 2003 and 2010. This peri-
od is of particular interest because it reveals how different subsectors have been
impacted by the recession which been best able to recover. Figures 6 and
7 show these trends for small very firms New York. 8 9
show them San Francisco. We did not access firm-level data this preliminary scan, so is
impossible say whether (for
example) some Francisco that previously
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