San Jose has the tools to bring back manufacturing

After the recent demolition of the San Jose Medical Center, only a rickety, abandoned warehouse remains on the site along St. John Street. This unlikely monument to tech manufacturing once housed IBM's first West Coast operations in 1946, ushering in an era of rapidly rising living standards for thousands of blue-collar workers throughout Silicon Valley.

The valley's most recent resurgence, however, appears as troubling as it is impressive. It has exposed wide disparities in opportunity. High-skilled engineers and professionals prosper, yet San Jose's unemployment rate still exceeds 8 percent.

Many hope that a nascent "re-shoring" trend in manufacturing -- spurred by rising wages and fuel prices in Asia -- will bring jobs that will boost the fortunes of thousands of still-struggling U.S. families. Yet few expect manufacturers to flock to high-cost cities like San Jose to mass-produce cheap, simple widgets.

Rather, San Jose must exploit its advantages in high-value-added manufacturing. Local manufacturers like Solar Junction, which makes the world's most efficient concentrated photovoltaic cells, excel by marrying innovative technologies with the region's exceptional educational and business ecosystem. This enables companies to move rapidly from prototype to product.

How can San Jose ride this wave of re-shoring to more manufacturing jobs? By focusing on three essentials: sites, skills and sales.

Manufacturers need industrial sites, which are increasingly scarce. Over decades, San Jose has converted thousands of acres of industrial land to housing. The recent revision of the city's General Plan instead provides for housing through denser residential growth along transit corridors. City officials must resist the powerful political and economic forces that eroded similarly well-intentioned general plans in the past.

Recent arrivals in San Jose such as Bestronics, Vitron and Zoll want to locate manufacturing operations near design, research and engineering to hasten the feedback loop that spurs innovation. City Hall can help by providing spaces for demonstration and testing of early-stage technologies.

Within months, ProspeCT SV will launch, transforming a city-owned warehouse into manufacturing, laboratory and office space for cleantech manufacturers to develop prototypes. Unlike past RDA-funded incubators, sophisticated partners like Applied Materials and Lawrence Berkeley National Laboratory will drive this effort.

The city also can expand the use of its streetscapes and buildings as public laboratories to demonstrate local manufacturers' prototypes, as Transportation Director Hans Larsen has pioneered with LED smart-lights, low-emissions concrete and electric car-charging stations.

Finally, San Jose must sell itself as the prime location for tech manufacturing. Let's tell any manufacturer that its plant will get permits within 45 days or we'll refund the fees. Let's build bridges to other dynamic economies by partnering with local organizations like The Indus Enterprises, SVG Accelerator and China SV, and let's promote visa programs to attract foreign investment. Let's enlist our tech executives to sell their peers on San Jose's advantages, such as the tax-favored status of manufacturers located within our Enterprise Zone and Foreign Trade Zone.