Written by Amanda Maher
Boston’s knowledge sectors, including financial services and health care, are undoubtedly major determinants of the strength of Boston’s overall economy. However, the success of these sectors, especially in the 1980s and 1990s, paralleled with the decline of Boston’s industrial sector and Back Street businesses, which include manufacturing, logistics, wholesale, construction, food processing, and commercial services. Boston’s industrial land was converted to commercial and residential land, decreasing 38% between 1962 and 1999.
However, a report published by ICIC and the Boston Consulting Group helped policymakers understand the value of Boston’s Back Street businesses, which provide well-paying jobs for Boston’s inner city residents. This study found that Boston’s 4,000+ Back Street businesses employ 21% of the city’s entire workforce and pay over $30 million annually in taxes.
As a result of these findings, then-mayor Thomas Menino established the Back Streets program in 2001 to protect and serve Boston’s Back Streets businesses and the industrial sector. First, the City created industrial zones and dedicated $5 million to their infrastructure improvements, and promised to only allow rezoning in areas where industrial zoning was no longer suitable for the rest of the neighborhood if an equal amount of industrial land was added in another more appropriate location. The City also created the Back Streets Office (BSO), which provides a host of services to Back Street businesses, including conflict resolution with neighbors who complain about industrial noise, help navigating the City’s permitting process, training for employees, and access to investment capital.
Boston’s two-part approach to help preserve and grow Back Street businesses has been a great success. In 2013 alone, the BSO worked with over 90 Back Street businesses, which helped to create or retain more than 700 jobs.
The Back Streets program model has since been adopted in other cities. In 2005, New York City Mayor Michael Bloomberg created the Mayor’s Office of Industrial and Manufacturing Businesses. New York City invested $17 million in the industrial sector for services such as relocation tax credits, enhanced sanitation services and employee training programs. It also created Industrial Business Zones where industrial land would be prevented from conversion to residential use.
In 2010, ICIC and Interface Studios conducted research on behalf of the Philadelphia Industrial Development Corporation in order to identify the City’s industrial assets and create a plan for preserving the sector. The study found that production, distribution and repair industries accounted for more than 100,000 jobs and $322 million in direct annual tax revenue in Philadelphia. The study also helped to survey 20% of Philadelphia’s land, including 90% of its industrial land, in order to create a strategy for Philadelphia to protect and increase the employment and tax revenue generated by industrial businesses.
Around this same time, SFMade launched in San Francisco in order to protect and build their City’s economic base through local manufacturing. Like the Boston Back Street’s Office, SFMade engages directly with business owners to provide industry-specific education, networking opportunities and to connect them with resources like access to capital and job training. For instance, in 2012, SFMade’s “Hiring Made Better” initiative provided 55 firms with one-on-one hiring consultation, and helped connect firms with underserved residents, which resulted in the hiring of 47 employees who faced significant barriers to employment.
Boston’s Back Streets approach also is making an international impact. In 2013, cities from across the globe traveled to Boston to learn about the program. Made in Montreal, a Canadian non-profit advocacy firm that is similar to SFMade, reached out to the Back Streets program staff to discuss best practices regarding how the public sector could assist privately-owned businesses and ways to leverage public sector tools such as zoning in order to protect industrial land. Similarly, a Chinese delegation visited Back Streets’ program manager Sal DiStefano to gain knowledge on how the program functions.
The strength of the industrial sector is its ability to provide well-paying jobs accessible to inner city residents. The creation of offices dedicated to supporting and protecting the sector, especially in cities like Boston, New York City and San Francisco, which are dominated by the knowledge sector – demonstrates how vital it is to urban economies.