Targeted Investment Creates Fabric of NYC’s Fashion Cluster

Written by Amanda Maher; Above: Early rendering of Brooklyn-based Fashion, Manufacturing Incubator via psfk.com

In an effort to support entrepreneurship, cities everywhere are investing in business incubators. The term is used loosely, usually when referencing any joint workspace that combines affordable rent, mentorship and a collaborative environment.  Sometimes the incubators are run by nonprofit organizations, other times they are run by the private sector. But it seems most often, city governments foot the bill for at least a portion of an incubator’s startup costs.

This is particularly true in New York City, where the NYC Economic Development Corporation (NYCEDC) has at least 20 incubators scattered throughout the five boroughs. Most recently, NYCEDC pledged $3.5 million to open a fashion incubator, The Manufacturing Innovation Hub for Apparel, Textiles & Wearable Tech.

But NYC policymakers are approaching their investments with a different mindset. Whereas many cities have bootstrapped incubators that attract high-tech and high-skilled entrepreneurs, NYCEDC is taking a targeted, cluster-based approach when investing in its incubators.

NYCEDC’s new fashion incubator is designed specifically to encourage local manufacturing and to support small-scale designers who may otherwise be priced out of the market. This is the latest investment by NYCEDC to grow the fashion cluster in an inclusive way.

Unlike the Council of Fashion Designers of America’s (CFDA) Fashion Incubator, launched in 2009 and located in Manhattan’s Garment District, the newest fashion incubator will be a 160,000-square foot facility in an industrial park in Brooklyn. More than 110,000-square feet of this space will be reserved for labor-intensive manufacturing. In total, the project is expected to create or retain at least 300 local jobs. Manufacture NY, which provides support to small fashion brands and promotes local garment manufacturing, has already signed on as the incubator’s first tenant.

Both the Brooklyn incubator and the CFDA incubator reflect NYCEDC’s thoughtful cluster-based strategy for growing the garment industry.

Already, more than 6% of the city’s workforce is part of the $55 billion fashion industry. Collectively, it generates more than $2 billion in annual tax receipts for the City. But when NYCEDC released a report called FashionNYC2020, which brought to light the challenges facing the City, then-Mayor Michael Bloomberg and his team made a concerted effort to invest in and build upon the City’s competitive advantages in order to maintain its place as a global fashion capital. In 2010, while still in the midst of an unstable economic environment, the City announced a multi-pronged approach to grow the cluster, starting with investments in six bold initiatives:

• NYC Fashion Fund: A fund designed to increase access to capital for production financing, and to match emerging designers with highly-qualified, pre-vetted manufacturing companies.
• Project Pop-Up: An annual competition to promote new and innovative retail concepts.
• NYC Fashion Draft: Much like a sports draft, the NYC Fashion Draft brings together high-achieving students from local universities for a week of structured interviews with NYC-based fashion companies in order to assist with recruitment of top talent.
• Fashion Campus NYC: Connects fashion and retail management professionals with business seminars, networking opportunities and additional resources to move into the industry.

• NYC Fashion Fellows: Whereas traditional fashion fellowships recognize creative talent, this program taps 30 rising stars in business-related functions and connects them to high-level mentorships and networking opportunities. As the CFDA incubator learned early on, many designers lack the management background needed for success. These leaders fill that gap.
• Design as Entrepreneur: Helps emerging fashion designers launch their own businesses.

A complementary Fashion Manufacturing Initiative, also funded by NYCEDC, was created to nurture, elevate and preserve garment production in NYC. The new Brooklyn fashion incubator, focused on manufacturing, is a natural extension of these efforts.

By taking this multi-faceted approach, the NYCEDC is not only trying to cultivate opportunity for the best and the brightest; it’s also opening the door to lower-skilled and lower-income residents. Locating the manufacturing facility in Brooklyn was intentional: it’s designed to draw inner city residents, from an inner city community, into a high-growth cluster.

What’s more, NYCEDC’s investments are being made in a traded cluster. Traded clusters are those that compete to serve national and international markets. This is important because traded clusters generate more benefits for inner city economies than local clusters: while net job creation tends to be higher in local clusters, traded clusters offer higher wage jobs with higher productivity and innovation potential.

As cities search for ways to support entrepreneurship and firm creation – via incubators and otherwise – it’s worth looking to NYCEDC as a model for its targeted approach and intentional cluster development. Such strategies will realize greater benefits versus traditional, opportunistic piecemeal investments.

Read more about NYEDC and CDFA’s Fashion Incubator: What Works: A Fashion Incubator Tailor-Made for NYC’s Garment District