Somerville’s emerging industry cluster

On September 3, 2010, in Latest News, by The Somerville Times

By William C.  Shelton

(The opinions and views expressed in the commentaries of The Somerville News belong solely to the authors of those commentaries and do not reflect the views or opinions of The Somerville News, its staff or publishers.)

Somerville’s economic golden age was driven by people who made useful things—automobiles, bricks, baked goods, brass tubes, garments, soap, ceramics, mattresses, machine tools, and many more.

Some people designed the products, the packaging they came in, the graphics used to sell them, and the buildings required to house their firms and workers. Others fabricated them.

They lived, shopped, and raised kids in Somerville. They gave their time to voluntary organizations, participated in the city’s political life, worshiped in its churches and synagogue, formed fraternal and civic organizations, and often looked out for their neighbors. Their enterprises contributed to municipal fiscal health by paying commercial property taxes, which are about 50 percent higher than residential rates.

Then, over 160 manufacturing firms closed or left. City government allowed developers who were congenial with local politicians to convert factory buildings to lucrative apartments and condos, which generate twice the municipal costs as commercial uses. City government went on welfare, and city residents went elsewhere each day to work.

But now we’re starting to make things again. Globalization and less-than-fair trade policies have vastly reduced the kinds of products that Americans can economically manufacture. Yet we still have significant advantages in their design, and Somerville is becoming an enclave for design enterprises.

Massachusetts has the greatest number of architects and designers per capita in the nation. And while long known for its many artists, Somerville has quietly developed the second-highest density of design and architectural firms in Massachusetts.

What economists and business strategists call an “industry cluster” is emerging—a geographic concentration of interconnected businesses, suppliers, knowledge centers, and skilled professionals. When such concentrations reach a critical threshold they can endow the location with a sustainable competitive advantage. They drive innovation in the field, increase the productivity of existing local companies and stimulate the creation of new ones.

In April 2009, I wrote a column (http://www.thesomervillenews.com/archives/1838) about how Somerville could fair relatively well on the other side of this economic tempest that engulfs the world—relative to other American locales, not to the bygone era of American affluence. It’s a little too early to begin counting our unhatched jobs, tax revenues, and startup enterprises. Two-thirds of Somerville’s 124 architectural and engineering firms, for example, have four or fewer employees.  But the essential elements required by a cluster to thrive are here.

Nearby institutions like MIT, the Harvard Graduate School of Design, Art Institute of Boston, MassArt, and Wentworth help to produce a skilled workforce, while faculty research pushes the state of the various arts. A regional venture capital cluster supports hundreds of early-stage companies that need help turning ideas into competitive products.

Design firms, in turn, need vendors like GPI, a company that builds architectural models for clients across the U.S., but is located on Prospect Street. Somerville’s many artists exchange ideas and inspiration with local designers, who do the same with each other.

If this emerging cluster’s economic potential were only to create high-wage jobs for design professionals, it wouldn’t be very interesting to those outside the field. But as these firms grow, they can create jobs for support staff and technicians. They can expand demand for vendors that serve them, such as printers, photographers, and fabricators. Their employees can become customers for local retail and service establishments.

Encouraging growth of the cluster and not mucking it up requires understanding what drew its incumbents to Somerville. The number-one attraction was the affordability and availability of workspace that could be configured to their needs. They prefer former industrial buildings with their high ceilings and broad spaces between support columns.

Buildings like the old Comfort Pillow factory in Davis Square, or the former Ford Plant in Assembly Square would have made phenomenal high-tech and design firm incubators, stimulating the local economy far more than the condos and big-box strip mall that they became. Those and many similar opportunities are gone forever. And similar spaces cannot be built at a cost affordable to startups. So we need to do everything we can to protect the remaining stock.

Another attraction is Somerville’s location—near the airport, I-93, Harvard, MIT, downtown, the Red Line, and in a few years, the Green Line.

Surprisingly to me, Somerville’s economic and cultural diversity is also a factor in design professionals’ location decisions. They report that the city’s cultural interplay is creatively stimulating and it feels more “open.”

The skilled workforce that they need thinks that Somerville is “cool,” markedly different from the attitude of their parents’ generation. Of course, once it achieves critical mass, the cluster itself becomes a powerful attractive factor.

What puts designers and architects off about locating in Somerville is related to the factors that attract them. Locations not served by the Red Line often lack parking that can accommodate clients and employees. The city’s parking-extortion regime has worsened attitudes about this issue.

Accurately or not, they also perceive licensing and permitting processes to be more burdensome than in surrounding cities. One architect reported in a survey conducted by a Rappaport Institute fellow, “In Somerville, I’ve watched lots of other projects. I’ve seen many things stall out…From what I see, I would be advising my clients to stay away.”

And of course the “cool” that they value is undermined by the arrival of professionals who are drawn to it, but who bid up the cost of housing beyond what less affluent but more diverse residents can afford.

Nevertheless, Somerville’s growing design-business cluster may signal the city’s return to being a great place to work, and not just a great place to live. Local designers are beginning to work with firms that are part of what may be Somerville’s second emerging industry cluster—green businesses. But that’s the subject of different column.

 

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