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Clear equity goals, cross-sector partnerships and strong government-led action can foster a more inclusive innovation economy.

Despite the economic success and prosperity of Houston, the question of inclusivity and equitable growth has often been overlooked. According to a new report from the Urban Manufacturing Alliance (UMA) and TXRX Labs, Houston leaders are taking notice and have begun major efforts to diminish these inequities at, the report argues, a pivotal time for the city as it confronts existing social and economic disparities. 

Last April, TXRX Labs, the Kinder Institute, Houston Exponential and others convened with the UMA at the Equitable Innovation Conference. The conference – the catalyst for the report – was attended by government officials, philanthropic organizations, academic institutions, community-based organizations, planning organizations and small business, among others. The conference participants shared current challenges in the innovation economy, learned about national promising practices, and discussed local assets to better leverage. 

A clear impetus for diminishing social and economic disparities in the increasingly relevant innovation economy is the resurgence of small urban manufacturers (SUMs). Manufacturing is considered an opportunity industry, offering middle-class wages and benefits without requiring a four-year degree. In fact, in 2012-2013, the average non-college educated worker in manufacturing earned 10.9 percent more than similar workers in other industries. However, it is important to understand while opportunity industries offer on average higher wages in cities like Houston, there also tends to be a smaller share of good jobs for sub-baccalaureate workers in cities like Houston.  

Manufacturing gives workers without a four-year degree or higher an opportunity for higher wages and the ability to contribute to the innovation economy. The continued prosperity of the region is conditional on the inclusion of traditionally under-resourced communities to the innovation economy. 

But while manufacturing is a solution, it is not a silver-bullet. Small urban manufactures are susceptible to unique barriers given their small size. SUMs produce small customized products in sectors such as food, electronics and hardware, additive manufacturing, craft breweries and apparel. These businesses generally have fewer than 20 employees leading to significant costs in healthcare, time and resources for permits and subsidies to grow their businesses. 

Place-based inclusive economic development strategies could be the key to shared prosperity in Houston and helping business grow within local communities. 

What is needed, according to the report? 

  1. Cross-sector partnerships delivering STEAM focused education and exposure. This means makerspaces and using educational institutions as drivers for learning opportunities and industry partners to develop translatable skills. 
  2. Committed partnerships and targeted services to produce a workforce pipeline prepared for careers in manufacturing and innovation. For this to happen, Houston needs connected service providers, dedicated financial resources to support the ecosystem, industry partners to communicate business needs, and reliable transportation for job and training among other wraparound services. 
  3. A coordinating body to meet the needs of SUMs. The “ombudsman-like” entity would develop support services unique for SUMs, shepherd businesses through the myriad resources, programs and other organizations to help the business grow. 
  4. Neighborhood-based hubs that would tap the latent innovators in under-resourced communities and by making awareness and accessibility key priorities in regional initiatives. 
  5. Develop affordable space for manufacturing and industrial use in diverse neighborhoods. Remove the barriers such as industrial and manufacturing zoning mandates, introduce incentives to acquire and redevelop properties. Create affordability by maintaining non-profit management and tax incentives for small manufacturers. 

The report details each strategy to improve inclusion in the innovation economy and covers local assets to be leveraged and promising practices to replicate from across the nation. In Houston eight percent of total employment is in manufacturing and offers wages higher than the local living wage at $20/hour. As this industry continues to grow, regional leaders will be challenged to secure inclusive growth – this white paper is the the beginning of the conversation.