Report: Untapped Opportunities for Newark Manufacturers

Newark’s manufacturing businesses face several challenges but can nevertheless become a significant engine of economic growth for the city, according to a report by a prominent Washington, DC-based think-tank released Tuesday.

The report, “Newark’s Manufacturing Competitiveness,” was prepared by the Brookings Institution and discussed during a conference at the New Jersey Institute of Technology attended by Mayor Cory Booker, who was the keynote speaker.

The report found that Newark’s relatively small manufacturing base -- the city’s approximately 400 firms employ just 10,000 people out of an active workforce of 140,000 -- enjoys significant advantages thanks largely to its location. The city lies at the heart of the nation’s largest market, is home to a major seaport and airport, and is the junction for several railway lines and highways.

That, plus New Jersey’s highly educated workforce -- the state has nearly 30 scientists per square mile, the highest such concentration in the world -- means “Made in Newark” has the potential to become a global brand in the 21st century, a hub for “just-in-time” supply chains.

“Together, these assets—location, density, scale, and diversity—have the power to support new product development and processes, facilitate expansion into new markets, and create more and better-paying career pathways in Newark and its region,” the report’s authors wrote. 

But the city’s makers of furniture, clothing, metal goods and food products, as well as its printers and packagers, are for the most part small businesses, hampering their ability to export their wares around the world, the report also stated.

“Newark manufacturers ….  are more likely than manufacturers in other industries to primarily serve the New York-New Jersey metropolitan area and the Northeast, rather than global, markets. The manufacturers in this demographic report a desire for greater visibility and more forums for structured networking and marketing across the greater region that could help boost the competitiveness of their products.” 

Their size also makes it difficult for the companies to invest in research and development or  upgrade to environmentally sustainable manufacturing methods. Other barriers include the city’s 700 brownfields sites -- which companies are often reluctant to invest in due to the potential for high cleanup costs -- and a local workforce that often has poor reading and math skills and little real-world workplace training.   

The report suggests a variety of remedies, including creating a “citywide” strategy for the food and packaging industries; making the city a more appealing center for research and development; working with the Port Authority of New York and New Jersey, as well as local universities, to help strengthen the city’s role as a link on a global supply chain of goods; and improving the education and training of the city workforce, such as by offering English as a Second Language (ESL) classes.

The full report can be read here.