Industry City CEO on Bringing Brooklyn into the ‘Innovation Economy’

At their peak during World War II, Brooklyn’s three industrial parks were thriving hubs of manufacturing that brought in 125,000 workers a day. But over the next few decades, their 14 million combined square feet of space fell into a state of disuse and disrepair, with employment dropping by more than 95%.

Today, these areas are on the upswing again, thanks to concerted revitalization efforts designed to bring in the types of jobs fueling today’s economy. On this episode of Mastering Innovation on SiriusXM Channel 132, Business Radio Powered by The Wharton School, Andrew Kimball, CEO of Industry City, discusses the measures the organization has taken to transform the dilapidated industrial park into the massive, innovation-powered employment center it is today. Kimball describes the initiatives they’ve implemented to bring in attractive job opportunities, provide effective employee training, connect workers with job placements, and develop internship opportunities for the city’s youth.

An excerpt of the interview is transcribed below. Listen to more episodes here.

Transcript

Andrew Kimball, CEO, Industry City

Andrew Kimball: What is happening [in Industry City] and what happened at the Brooklyn Navy Yard is that the innovation economy took over. I like that term much more than office or manufacturing. We often get hung up on these battles from a policy point of view: is that a white-collar office job or is that a blue- or green-collar manufacturing job? The reality is that the jobs are being created in a new space in the middle having to do with an intersection of design, art, technology, production, and engineering. These are all connected together so that some of the space looks a little more like manufacturing, some of the space looks a little more like office. The key thing is that they are in the growth sectors driving New York City’s economy and so many other urban areas now.

It’s where young people want to be. Young people don’t sit around in Sunset Park or other areas thinking, “Boy, I wish I could have a factory job like in the 1950s.” They want to work in green technologies, they want to work in gaming, they want to work in film and media, they want to work in software development. So the real question is, are you attracting  businesses in those growth sectors and then connecting those jobs to the people who need them the most?

Nicolaj Siggelkow: It’s interesting how you were just describing it. We’ve seen a change in what types of businesses we even talk about and how we classify them. It’s much more of a blend of manufacturing, design, production, office work. Now, of course, that also requires a very different skill set, which brings up the question of who’s going to work there. Are they people who will commute over the bridge, or are they people who live around there but who may not have those skills? You already alluded to this a little bit when you talked about your prior work at the Brooklyn Navy Yard. What are  some activities to get that integration going?

Event space in Industry City
Photo courtesy of IndustryCity.com

Kimball: There’s innovation at many levels. There’s innovation of the companies, and there’s innovation in how we’re handling the real estate and connecting those companies. And you’re touching on the critical issue of how we can innovate how we connect folks to pathways that lead to those jobs. That is a very complicated question, and there are many different strategies that need to be deployed. We’re working on a bunch of them.

“Jobs are being created in a new space having to do with an intersection of design, art, technology, production, and engineering.” — Andrew Kimball

We set up an innovation lab at Industry City four years ago. It’s 7,000 square feet of space. We invited five not-for-profit partners to come in and collaborate with us, plus City University of New York. There are multiple pathways through the innovation lab. One is pure pre-screening and placement. We see 50 people a week there who are looking for a wide variety of jobs with Industry City businesses. We encourage those businesses to give us their listings so we’re aware of them, and our not-for-profit partners do basic pre-screening and placement. So it’s marriage making. It sounds very simple, but it’s not done well very often.

There are lots of folks who can plug directly into the innovation economy or modern manufacturing, whatever you want to call it, without a lot of skills upgrading. In fact, often the companies want to provide that skills training themselves. They don’t want some outside group to do it. Screening is more about, will you show up? Do you have a positive attitude? Do you have a supportive business environment? We place 20 people a month in jobs through the innovation lab. 60% of them have only a GED. The other 40% may have a 2-year or 4-year college degree, and we’re placing them as well. So that’s one track.

A second track is training. Through Opportunities for a Better Tomorrow, we focus on 18- to 24-year-olds who want to bootstrap themselves into the tech economy. They get a very intensive website coding class of six weeks. They then have an internship with one of our businesses. They often stay with those companies, or they go back to school.

The third track is small business development, which we do with another not-for-profit that helps the small companies  coming here to scale up. This is helping communities, and it’s helping us as the landlord. And then the fourth track is internships. We do these regularly with the local high school.

“The reality is that every time we lose a tenant, there are three or four ready to step in and fill that space.” — Andrew Kimball

We’re also discussing a proposal with local elected officials, particularly the local council member, to do a vocational school similar to something that’s happened at the Brooklyn Navy Yard. At the Brooklyn Navy Yard, there’s now a school with 200 students and a very intensive vocational track, everything from coding to woodworking to metalworking to design. It’s got 40 businesses at the Navy Yard which serve on the advisory group. Those students are really getting fast-tracked into the innovation economy, and we hope to do the same thing in Industry City. We’re having those conversations right now.

Siggelkow: Interesting. Now as you mentioned, you have 550 businesses. All of them are small, and what we know about small businesses is that they don’t often last very long. So, you probably have quite a churn in there. How do you manage that from the real estate side? How do you continually attract new people? You already mentioned that you try to provide some help with how to think about scaling, but what are some other things you’re doing to attract businesses?

Kimball: Having done this now for over 15 years in the Navy Yard and Industry City, I constantly get asked, “Are we glutting the market with this kind of innovation space for small businesses?” And for 15 years, through the Great Recession and post-9/11, that class of business has only continued to grow. In fact, the Center for the Urban Future, the preeminent economic development think tank in the city, just did a study on Brooklyn’s innovation economy. It turns out that the growth rate of startups in Brooklyn is higher than any other city in the United States, with the exception of San Francisco. So there is a pipeline of these businesses.

You’re absolutely right that there are operations cost to populating the campus with so many small businesses, because there is turnover and many of them are non-credit, meaning they can’t go and get a bank loan. But the reality is that every time we lose a tenant, there are three or four ready to step in and fill that space. We’re adding about 50,000 square feet of small spaces, 500 square feet to 1500 square feet every 6 months, to the campus. So, of our 6 million square feet of space today, over 800,000 are these really, really small businesses. So the innovation there, again, is a simple concept, but it’s really working here: it’s that mixture of these small companies with three to five employees — typically very young, 25- to 35-year-olds — which create the environment so that bigger companies want to come here. It feeds the bigger businesses. You’re making an investment in the campus to get them here.

About Our Guest

Andrew Kimball is the CEO of Industry City, which is the largest privately-owned industrial complex in New York City. Located on the waterfront in Sunset Park, Brooklyn, the 16-building, 6-million square foot complex is home to 550+ businesses. Kimball has helped the complex grow from 1,900 jobs in 2013 to more than 7,500 jobs in 2019.

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