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Oakland Fab City 2019 - The Year in Review
- 1. Oakland Fab City2019 - The Year in Review LOOKINGBACKON2019 As we look back from our viewpoint several months into 2020, we see that the Oakland Fab City program has new relevance, but continues to lack critical support which it needs to succeed. The global Fab City program is lucky to have a deep and broad vision, and enough cities around the world have signed on the program to demonstrate that its basic ideas have merit. Unfortunately, it is missing a clear execution strategy. Cities are left to invent their own Fab City programs and structures, and do not receive significant support from the Fab City global organization. In Oakland, we understand that the theoretical nature of Fab City needs grounding in the practical, and have identified key strategies and tactics to move toward our goal - a city where all of us make all we need. In 2019, we recognized and focused on several interrelated problems: - A weakening local manufacturing sector - Scarcity of available capital for manufacturing activities - Lack of individual competency in design and manufacturing - An education system with significantly reduced hands on learning Many of the above are compounded by systemic racial and economic factors which keep opportunity and wealth generation in this sector beyond the reach of many in Oakland. In fact, too many people in this city will never have the opportunity to appreciate the power of design and manufacturing to change lives, and to change our world. Our mission remains relevant.
- 2. To be effective,we will need both focus and persistence. Many of us in the Oakland Fab City coalition spent significant time on a volunteer basis in a push to root this program. We did not achieve all we set out to in 2019, but we as individuals are continuing to dedicate our professional energy to close the gaps above and move this city closer to the Oakland 2054 vision. Fab City is here, but needs support to continue. 2020ANDBEYOND Since the end of 2019, there have been significant disruptions to the US economy. The biggest, the COVID-19 crisis, resulted in a grassroots wave of emergency manufacturing activity here in Oakland and the Bay Area (along with other cities around the world). This was possible because some manufacturing persists in Oakland. While many large manufacturers have left, a tremendous number of small and highly specialized companies have started in recent decades, and startup activity in various manufacturing sectors is robust. This allowed many individuals and small businesses to immediately apply their skills and resources to address PPE shortages. Skills and resources ranged from the obvious (design and fabrication capabilities) to the less obvious but equally important (materials sourcing, fundraising, sales and customer service, personnel management, safety protocol development, etc.). The personal sense of responsibility among many of the participants in this activity carries into other professional relationships, and is often tied to the mission of individual businesses who joined in the effort. This production spun up more quickly than large firms, and was able to invent and iterate on manufacturable designs in short order. By engaging in a transparent way with medical users, we were able to meet this need. In normal times, regulations and concerns about liability would likely prevent this local manufacturing community from participating in this opportunity. The efforts were not entirely efficient. The products were not and are not perfect. But it is clear that meaningful numbers medical professionals slept better, worked safer, and avoided exposure to a deadly virus as a result. We believe that this crisis has the potential to ignite a wave of innovation in certain obvious places, including medical devices and equipment, personal protective equipment (PPE) for consumers and home use. This innovation is also likely to permeate less obvious places - different sorts of home office and other home product needs driven by more work-from-home, commercial office management fixtures, ventilation, and monitoring. thi Retail and restaurant businesses, non
- 3. The economic crisisresulting from these events will increase unemployment, and disrupt commercial and industrial real estate. More trained workers will be seeking opportunity. Some will find it in entrepreneurship. Many will invent new products and services. Other workers will need meaningful work to do, and these new businesses will want to hire them; when a local worker costs a local business the same or less as outsourcing, and solves other problems, businesses will hire locally. There is no better time to invest in a new Oakland manufacturing economy. We have so many assets to build from, and which we need to preserve against future crises. We can do this in a way that also addresses the increasing recognition that policy and systemic economic barriers are not only damaging to individuals and our culture, but also a drag on economic growth. We hope that others see this opportunity and make meaningful commitments to this effort. We remain committed to the Oakland 2054 vision. Oakland Fab City Team
- 4. 2019HEADLINEPROJECTS:FABCITYINNOVATION CENTERANDEMERGINGMANUFACTURERSTUDY FABCITYINNOVATIONCENTER-KEYFINDINGS It is clearthat certain cities have been able to establish productive place-based strategies to increase the pace and impact of innovation. A few of these are integrated to varying extents with impact-oriented education, training and entrepreneurship programming. This is exemplary of Fab City systemic integration. These efforts are largely being conducted outside of FabLabs, and there is minimal crossover between the network of FabLabs and other endeavors focused on commercialization. Here in the Bay Area, there are some facilities which include digital fabrication and services for businesses. Some of these (Highway 1, Playground Global) are true business incubators, where founders trade equity for discounted services or support. As such, these facilities are exclusive, and produce only businesses which are pursuing products of a certain scale. Others are education-focused. These include FabLabs at Laney, College of Alameda, Castlemont and Skyline High Schools, and other educational facilities and organizations like the Jacobs Center for Innovation at UC Berkeley, Lighthouse Charter School, the Bay Area Discovery Museum, among others. More recently, HumanMade has opened its doors in San Francisco, focused on helping individuals acquire skills in digital fabrication. There are many gaps which can be filled by efforts to expand existing FabLab capacity and programming, and clear opportunity for new place-based facilities which focus on supporting the emerging manufacturers in our area, while maintaining dialog and resource sharing with other nodes in this network. As for Fab City generally, communication and referrals between sites and programs is necessary, and providing resources to continue and expand this effort is important. Our recommendations: - Continue to pursue the creation of a new Oakland Innovation Center for Fab City. This will require further partnerships with anchor tenants, finance and real estate. This project is a commercially viable commercial real estate development project. - Support communication between existing FabLabs and other obvious partners, including some of the above. This will require funding to engage individuals skilled in this work.
- 5. EMERGINGMANUFACTURERSTUDY-KEYFINDINGS Manufacturing activity inOakland has declined significantly over the past three decades, from its peak in the 1980s. Heavy manufacturing was concentrated around the San Francisco Bay and various ports, which continue to benefit from great access to rail, road, and air. While electronics manufacturing clustered in the southern parts of the East Bay and the South Bay areas, Oakland continued more prosaic manufacturing in foods, textiles, wood and metals, packaging, and logistics. Contract manufacturing in Oakland and the Bay Area has declined even more in the past decades, as manufacturing businesses have increasingly divested themselves of actual manufacturing capabilities, chasing cheaper land and labor through Asia and into Africa. These trends have been supported by improvements in communications and information, allowing businesses to maximize their market opportunity while reducing the waste of over ordering and warehousing. “Just in time” has permeated all corners of the manufacturing world, and has created global manufacturing centers which are much more highly specialized and efficient than plants of the prior generation which were regionally situated. All the above mean that: 1) Large companies are unlikely to locate their manufacturing activities in Oakland - cost of land and labor means that these facilities will be built in lower cost regional centers (California Central Valley, Inland Empire, and Nevada), national sector-specific manufacturing centers in the midwest or eastern seaboard states, or outside the US (mostly in Central and South America, and Asia). 2) Small manufacturing companies have a hard time taking root in Oakland. Competition for land, labor, capital, and market are fierce. The growing software and tech services industry, as well as well-established health care and other sectors, continue to drive up wages and the cost of real estate In addition to the above, poverty and racism are highly concentrated in Oakland. In the late 20th century, Black and Latinx workers could work at good wage union jobs, in factories making products ranging from silicon wafers to cars, and everything in between. These jobs no longer exist in the area, which has led to the acceleration of displacement, as some families have left the area for better opportunity, and others have remained only to face increasingly dire economic prospects. There is no way that a manufacturing revolution can, by itself, change these factors, but lack of growth in new manufacturing is one of the factors that further exacerbates these conditions. Most manufacturers in Oakland today fit a couple general types: 1) Small entrepreneurs who manufacture a product themselves, and sometimes find ways to scale these activities
- 6. 2) Designers andbusiness people who default to outsourcing their production, because of the challenges of manufacturing locally and staying market competitive The 2019 Fab City Emerging Manufacturer Study studied manufacturers in their earlier stages (idea, pre-market, early market / seed, and growth). Others before us have studied conditions for large manufacturing interests (and have pointed out overlapping inhibiting factors), but this study is the first to directly study businesses who are overlooked when studying large sectoral trends. Small businesses employ nearly half of US workers nationwide, and drive the majority of job growth in recent years. There is no better lever for changing the manufacturing landscape in Oakland or the US than by supporting the emergence and success of small businesses. Small businesses are likely to be founded by individuals who see and meet a need especially relevant in their own community. Because of underrepresentation, women, Black and Latinx people, formerly incarcerated people, and the poor are not well served by existing products and services. This leads to unrealized economic growth, and suppression of wealth generation in these communities. For these reasons, we selected Emerging Manufacturers as the target population to be studied. This study helped unpack some of these forces and tie them to the direct experience of individual entrepreneurs and small business owners. The hypotheses above were supported by this research, and pointed at some insights which might be enough to create more appetite for risk, increased likelihood of success, and more economic activity as a result. We partnered with a team of faculty and student researchers at the Mills College Lorry I Lokey School of Business and Public Policy. This team helped us shape a protocol which would document the situation for a sample of local manufacturers, and identify key actionable findings. FINDINGS 21 businesses were studied, representing food, textiles, arts, cannabis, and custom manufacture. Many businesses were large enough to have employees (part- or full-time) or contract workers as part of their operation. Some were early stage, or staffed entirely by owner/founders. - Most participants were running businesses directly relevant to their personal experience. Their passion and clarity of mission help them overcome key economic and other barriers - Economic barriers to growth and success are abundant: these include lack of capital, contracts, or other funding sources, along with high costs and risk of doing business
- 7. locally. These areparticularly limiting in the context of manufacturing, where equipment and materials are expensive and margins tight. - Regulatory and policy factors have acute effect on studied businesses - small businesses are subject to increasing difficulty starting and growing, and competing for local workers - Racial, cultural, and economic stratification hinder business starts and growth - Passion and mission can overcome some of the barriers faced by these businesses - pure economics are not the decision factor for certain entrepreneurs and business owners; value innovation can drive new activity where cost innovation has driven it away The study team’s conclusions recommend focusing on mission and values orientation to build an Oakland manufacturing economy that is distinct from the declining manufacturing sector that it must replace. This suggests shifting resources and policy to support more innovation and entrepreneurship, and specifically to encourage that activity in women, people of color, and other underrepresented groups. Unfortunately, this is easier said than done. The reality of our capitalist economy is that capital is competitive, and will seek (and create) the best returns. However, we believe that direct action is necessary to counteract current trends; the alternative is the continuing disintegration of our manufacturing economy (not just here in Oakland, but in the entire US), and in ongoing entrenched racial and economic segregation.
- 8. OTHER2019PROJECTS Oakland Fab Citystarted 2019 in a place of optimism. We had recently secured funding from Citibank and The Oakland Fund to pursue programs, and all indications were that we would be able to raise additional funds throughout the year. The actuality of 2019 proved to be a bit different from our expectations. We presented to Mayor Libby Schaaf at the end of 2018 a list of our headline programs for 2019, and asked for her support. Those projects are listed below. EMERGINGMANUFACTURERSSTUDY Partnering with Citibank, Centro Community Partners, Uptima Business Bootcamp, Unity Council and others, document barriers and enablers for local emerging manufacturers. This project was funded from a Citibank grant. See the separate report and cover letter generated at the conclusion of this project in early 2020. FABCITYINNOVATIONCENTER At the outset of 2019, this project was only a vision, but we were successful at securing a grant to conduct some exploratory work to support the development of the Oakland Fab City Innovation Center. That work spanned three major areas: - Travel to comparable US sites - Exploration of local sites and partnerships - Vision development for Oakland FCIC See the separate detailed final report prepared at the conclusion of this project. MAYOR’SHOUSINGCHALLENGE We did not have funding secured to pursue this program in 2019, but Citibank indicated that they might have capacity to sponsor an event which focused on innovative solutions to housing construction and deployment. We prioritized recruiting local teams to participate, to create lasting impact. We were directed to recruit the support of housing experts in the Mayor’s office to secure the Mayor’s participation in this program.
- 9. INSTITUTIONALIZATIONINOAKLANDCITYGOVERNMENT We had directionfrom the Mayor’s office to engage City staff leadership to provide a facility for the Oakland Fab City program to have continued support past the end of the current Mayor’s term (2021). We set out to open dialog with key departments that we recognized had shared goals with the Fab City program. These included: EDUINSTITUTIONALIZATION As we entered 2019, we had conducted an informal convening of Oakland educators affiliated with Fablabs and other makerspaces in K-12 and continuing education. Those teachers spanned OUSD public schools, charter schools, and the Peralta Community College District. All attendees appreciated the opportunity to network with each other and to explore collaborative projects for the broader benefit. Mayor Schaaf expressed excitement about the idea that educators from different schools and districts were coming together - she recognized that this is unusual. We hoped to secure additional funding to continue and grow this engagement, but were not successful in doing so. In the early part of 2019, the Castlemont HS FabLab Adult Ed project emerged as an immediate education project in need of direct attention, and we redirected our resources toward that project. More details below on Castlemont HS. OTHER2019ACHIEVEMENTS WEBSITE&BLOG Launched a web site for Oakland Fab City, to provide basic information, and to drive engagement (through the Fab City Pledge and other referrals). COLLEGEOFALAMEDAFABLAB,COMMUNITYPROGRAMS&EXPANSION College of Alameda FabLab opened its doors in late 2018, and was immediately adopted by CoA students, community members, and the College administration
- 10. TRANSFEROFOAKLANDMAKERSASSETS Oakland Fab Citywas granted the assets of the now-retired Oakland Makers program - this includes their website, mailing list, collected data, and more. DEVELOPED&SUBMITTEDGRANTPROPOSALS&PROJECTBRIEFS We submitted proposals in response to several grant opportunities. These included: - STOPWASTE: ENTREPRENEURSHIP & INNOVATION THROUGH REUSE OF WASTE - SAN ANTONIO CREEK PROJECT AT CASTLEMONT FABLAB - FAB CITY PROGRAMS BRIEF - FAB CITY GLOBAL: PLEDGE, INSTITUTIONAL PLEDGE CASTLEMONTFABLABADULTEDPROGRAM - DESIGNED PLATFORM TO ACTIVATE FABLAB FOR ADULTS IN SURROUNDING COMMUNITY - RECRUITED QUALIFIED TEACHER - SECURED DONATIONS TO REPLACE AND UPGRADE EQUIPMENT - FACILITATED DIALOG WITH COMMUNITY MEMBERS/GROUPS, LEVERAGING EAST OAKLAND COLLECTIVE AND OTHER PARTNER RELATIONSHIPS COMMUNICATIONS&ENGAGEMENT OAKLAND FAB CITY SLACK CHANNEL & MEMBERSHIP - Launched a single Slack channel for all Fab City sites. At this writing, membership in this slack channel is over 125, with over 17,000 messages sent in over a dozen active channels. 2019DEVIATIONSFROMPLAN We did not experience total success on every front in 2019. Some notable examples that held us back from continuing growth in 2020 are captured below. MAYOR’SHOUSINGCHALLENGE-DEFERRED We did not have funding secured to pursue this program in 2019, but Citibank indicated that they might have capacity to sponsor an event which focused on innovative solutions to housing construction and deployment. We prioritized recruiting local teams to participate, to create lasting impact. We were directed to recruit the support of housing experts in the Mayor’s office to secure the Mayor’s participation in this program.
- 11. We spent considerableeffort in the early part of 2019 to frame this activity, but in the end were unable to formulate consensus around how this challenge would work, and what we could meaningfully achieve through conducting the program. We did not pursue additional funding for this program, instead refocusing remaining projects from this list. CITYOFOAKLANDINSTITUTIONALENGAGEMENT-STALLED We started 2019 with a plan to engage key City staff leaders - heads of various departments and their staff. We had in hand the City’s recently adopted Economic Development Policy and other key policy documents, and were able to point out areas of complementary interest. It was, and still is clear that City strategy is not yet grounded by supporting partnerships and action, and that Fab City framing and resources in future can enable Oakland to reach certain key goals. - Economic & Workforce Development Department - Sustainability Office - Department of Race & Equity We found the Mayor’s office was not able to facilitate these engagements as we hoped, and without that support, initial conversations with key City staff contacts were not productive. In late 2019, the Oakland Fab City representative from the Mayor’s office resigned from his position and did not provide for transition to a new contact. This has left the program with no City of Oakland representative as we enter 2020. FUNDRAISING CHALLENGES At the end of 2019, we recognized that no additional funding was likely for Oakland Fab City in 2020, this despite having invested significant effort in funding development in 2019. This resulted in the dissolution of the Fab City board, and the recognition that additional activity was likely to come in the form of individual project grants. There is no program staff in place for Oakland Fab City as of this writing. CITY OF OAKLAND REPRESENTATION The City of Oakland staff representative for Oakland Fab City was located in Mayor Libby Schaaf’s office. We were unable by the end of 2019 to secure non-political staff representatives to this program. Additionally, Jose Corona, who served in the mayor’s office, left that position, and we have so far been unable to secure a new contact with his commitment to our program.