San Francisco is one of the world’s great destinations known for tourism, fantastic vistas, fine dining, and sourdough bread. But manufacturing? In San Francisco?
I’ve recently learned there is a burgeoning manufacturing movement in San Francisco led by a 501(c)(3) non-profit organization called SFMade. Hopefully, other municipalities will be inspired by this story.
When I first learned about SFMade, I recalled the rather oxymoronic idea of salsa being made in New York City advanced by the Pace Picante salsa commercials back in the 1990s:
"Manufacturing Is Surprising Bright Spot In U.S. Economy," the New York Times wrote in January. While many stories focus on the shifting of manufacturing jobs to China and Asia, the Times noted that "amid signs that the overall jobs climate was improving, manufacturing stands out as an area of strength in the American economy." This certainly is true in San Francisco.
Mark Dwight, CEO of Rickshaw Bagworks, conceived the idea for SFMade in 2009 and kicked it off with a dozen companies. SFMade was incorporated in 2010; Kate Sofis is the founding Executive Director. Here's what she told us about the program:
SFMade is the only organization of its kind focused on building and supporting a vibrant manufacturing sector within San Francisco. It sustains companies producing locally made products, encourages entrepreneurship and innovation, and creates employment opportunities for a diverse local workforce.
SFMade’s vision is a more diverse and sustainable local economy, where companies that design and manufacture products locally thrive, and, in turn, create quality jobs for people from all walks of life who contribute to the overall economic and social vibrancy of the city of San Francisco.
Local manufacturers represent some of the most diverse and innovative businesses in San Francisco. They design and manufacture products for consumers (B2C), specialty products for other industries, or are established contract manufacturers. The businesses span a wide range, from traditional manufacturers who have been in operation for more than 100 years to entrepreneurial startup manufacturers that have chosen to establish themselves in San Francisco in just the past year.
The heart and soul of these San Francisco-based manufacturers is their workforce—the skilled craftspeople, technicians, and product designers who enable San Francisco companies to offer higher quality, differentiated products, shorter lead times, more responsive customer service, and more frequent new product offerings, as compared to much larger, cost-driven national or international competitors. Eighty percent of the workers within these companies are immigrant workers with high skill levels and a strong work ethic required to manufacture artisanal products.
Manufacturing consistently offers better wages and more benefits for even the most basic job roles, providing pathways to economic self-sufficiency for individuals with less traditional skills and education. Manufacturers in San Francisco play an especially important economic role in some of San Francisco’s most disadvantaged neighborhoods where many companies are now located.
Local manufacturers understand there’s a certain pride that comes from actually making a product within a defined geographic, social, and historic region. San Francisco plays an integral part of the overall value proposition of these companies, their brand, and their products. SFMade will be an important part of the branding of these locally made products. There will soon be a SFMade store in the San Francisco International airport so travelers will have the opportunity to purchase locally produced products.
Companies that manufacture locally do so at a higher cost. Each company has made a conscious decision to embrace local manufacturing as a vital component of their business strategy despite the added expense of keeping their operations within the San Francisco city limits.
So what are the key elements of the SFMade value-add to members and/or prospective members?
- Single point of contact
- Access to SFMade brand
- Customized services for members
- "Hiring made better" program for all levels that provides opportunities for people coming out of jobs programs
- Infrastructure support: finding affordable space that is zoned properly, as SFMade is a licensed real estate broker; help companies take advantage of city and state enterprise zones
- Policy and advocacy programs, not as a trade organization or lobbyist, for members, e.g., zoning for product, distribution, and repair business types.
- Helping shape legislation in the city and county of San Francisco via strong partnerships with the mayor and local government officials
- A manufacturing economic development arm
Twenty percent of SFMade's annual budget of $500,000 comes from various government sources; another 20-25 percent comes from banking partners by way of Community Reinvestment Act Funds. Corporate sponsors include Wells Fargo, Bank of America, and other corporate partners such as Google and Banana Republic (owned by GAP), which has provided space for an "SFMade" store inside its San Francisco store. SFMade also offers member-focused seminars and workshops; since it is a nonprofit, it is eligible for grants and philanthropic donations.
SFMade’s year-one membership goal was 30 companies; they ended the year with 105. The year-two goal was 200 companies; they ended the year with 302. There is no charge for membership; members do pay for some member-focused workshops. SFMade’s near-term membership goal is about 400 companies, each employing 20-30 people.
SFMade is beginning to attract a lot of attention. The focus on manufacturing is pretty unique. Great media coverage has created interest in the SFMade model in Copenhagen, Sydney, Melbourne, Norway, the urban manufacturing alliance in New York state launched at the Clinton Global Initiative, Chicago, Los Angeles, Philadelphia, Atlanta, Cleveland, Memphis, Allentown, Newark, and others locales. Most major cities have a subset of what SFMade offers. There is a "Made in Chicago" organization; probably the closest peer to SFMade is the New York Industrial Retention Organization: MadeInNYC.
What advice does Kate Sofis have for others thinking of emulating SFMade?
- There is no "one-size-fits-all" solution; look at your local strengths and build on them
- Build a strong relationship with your mayor and local government officials
- This can’t just be a government-led initiative—the private sector must be on board.
—Author Dave Gardner is a management consultant, speaker, and blogger who resides in Silicon Valley. His firm helps clients eliminate business execution issues that threaten profitable and sustainable growth. He can be reached through his website at www.gardnerandassoc.com or via Twitter @Gardner_Dave. Mark Dwight and Kate Sofis were interviewed for this article. Sign up for Dave Gardner’s highly acclaimed weekly "Thank God It’s Monday" and/or his "Business Execution Insights" newsletter here.