December 14, 2017

4 ways cities can help their maker economies flourish

Local governments have an opportunity to create growth by supporting small-scale manufacturing businesses

Detroit's Eastern Market Corporation connects young chefs with available kitchen space to support their food-based businesses. Photo by Flickr user VasenkaPhotography

Maker microbusinesses serve key roles in our economy and local government should pay attention. These businesses are often how new, scalable production businesses (one person making a product at home) launch or provide an essential second or third income to a household. These entrepreneurs may sell their product to other businesses, like laser cut engravings with a business’ logo, or they may sell directly to consumers through a pop-up, holiday, or farmer’s markets or online. As they scale, they become small-scale manufacturing businesses and provide contract production for external designers thereby expanding their reach and economic impact.

The recently released action guide, Discovering Your City’s Maker Economy, co-authored by National League of Cities (NLC), Etsy, Recast City, and the Urban Manufacturing Alliance, profiles a series of best practices to help local government support this growing sector and build an inclusive and resilient local economy.

A number of cities are engaging maker entrepreneurs purposefully to expand economic opportunity across racial, ethnic, and language barriers within the community.

  • Rocklin, California, partnered with Sierra College to launch a makerspace for community college students and local youth. Students gain access and experience with laser cutters and 3-D printers and learn how to work in manufacturing sector jobs and production-based businesses.
  • Detroit works with the Eastern Market Corporation to connect young chefs with available kitchen space to launch food-based businesses. They partner with local churches and neighborhoods groups to reach those underrepresented in the business ownership community.

  • Portland, Oregon, launched a $2 million Inclusive Startup Fund, funded by government and private sectors together, to provide microloans to women and entrepreneurs of color, including production-based businesses.

Many communities are also updating economic development and real estate policies and programs to encourage this sector to flourish. The action guide recommends that local government focus on four main areas of engagement:

1. Create a supportive business environment for makers and manufacturers.

The most essential first step to support maker microbusinesses is to find them and bring them together. Most communities know that this sector exists, but have not put in the leg work to track them down, meet with them, and understand their needs. There is no shortcut or database that can tell you this answer. Meeting one on one or in small groups with these business owners will allow a community to understand if they need improvements to their government systems (do you need a one-stop shop online for small business or an ombudsman to help them through local permitting?), or if local owners would benefit from convening regularly to mentor each other and share experiences.

Check out MadeBy in Memphis for a great example of how to engage local maker business owners.

2. Drive demand for locally made and manufactured products.

Maker microbusinesses often sell online and to local consumers or other businesses already. But they will all benefit from the opportunity to be highlighted in local downtown advertising, tourist information, and connected to local anchor institutions that may be able to buy local for some procurement. A local brand platform, such as a “Made in …” campaign can raise awareness about these businesses and support both their success as well as community pride in the business community.

Check out Made in Baltimore for a thriving local brand.

3. Provide access to affordable and safe production spaces for makers and manufacturers.

These businesses often thrive when they can locate near other producers. The businesses partner on products and learn from each other. That is why many communities now look at micro-retail space (about 400-700 square feet) to create affordable space for local makers to produce and sell onsite. The businesses attract foot traffic by providing an experience to shoppers, and they keep good paying jobs within the neighborhood. Also, a number of community development corporations are expanding beyond housing to invest in multi-tenant production space or commercial shared kitchens for small producers to keep these businesses within neighborhoods.

Check out Brick City Makes as a great example of a shared use building for scaling maker businesses.

4. Advocate for state policies that support makers and microbusinesses.

Cities and counties can support these businesses directly, but in some cases, may need changes in state policy to best retain this sector. A state sales tax exemption program for artisan and maker microbusinesses can expand sales for this sector. Additionally, state cottage food laws can make it easy for food-product businesses to expand significantly at home before needing access to a commercial kitchen.

Check out the Rhode Island Art Sales Tax Exemption as an example for state-wide engagement.

These best practices, and many others, are available in the action guide, Discovering Your City’s Maker Economy. Communities can start today: talk to a maker entrepreneur in your community; find out about their business–what works or doesn’t work; and buy local as much as possible. Your maker business community is out there–discover it today.

Ilana Preuss

Recast City

Ilana Preuss is the founder of Recast City, which brings together small-scale manufacturers and community developers to strengthen neighborhoods, build value in real estate, and create job opportunities for residents. With nearly 20 years of experience in city development, Preuss works with local leaders to go from idea to plan to action to build great places. Preuss is an experienced speaker, see her TEDx presentation, “The Economic Power of Great Places,” and her presentation “The Coming Revolution: Small-Scale Urban Industrial Development” at Meeting of the Minds. She is a regular press spokesperson featured in the New York Times and USA Today.