Carrying St. Louis’s Manufacturing Legacy into 2030
"Manufacturing in St. Louis" is undergoing a renaissance in the context of regional planning efforts and documents, such as Greater St. Louis, Inc.’s 2030 St. Louis Jobs Plan.
But this renaissance labors under a much broader, newer definition of “manufacturing” that is not limited to heating or bending metal, and also embraces concepts of economic complexity and the development of complex products. Agricultural inputs as well as the expert services typically bundled with them is considered an increasingly important part of the St. Louis manufacturing story.
In this article, Mike Fabrizi provides an historical introduction to St. Louis manufacturing, addressing its decline in the twentieth century’s latter decades, and then discusses its more recent renewal around new sets of information- and knowhow-intensive industries.
Early Years to the Mid-Twentieth Century
The Very Early Days
St. Louis manufacturing traditions go back to fur-trading and pioneering days in the eighteenth and early nineteen centuries. Nonetheless, these traditions’ characteristics changed several times in response to technological and political developments.
In the very early days, prior to widespread use of railroads, industry focused on light, easily transported goods such as beer (St. Louis remains prominent in beer brewing to the present time) and flour, which could be produced with agricultural commodities arriving via river-borne traffic (or originating in the nearby fertile farmland) and then exported via the Mississippi and Ohio rivers. Heavier and bulkier inputs, such as copious iron ore deposits just 80 miles south, could not be profitably transported to the city for milling and manufacture due to the inordinately high cost of overland transport and the fickle nature of the Mississippi River.
A Watershed: The Railroads
Only a few hundred miles of railroad track had been laid in the United States as of 1835. Meeting at the St. Louis courthouse that year, a conclave of several prominent Missourians discussed the construction of two lines to be built from St. Louis and appropriated funds for a survey. The following year, an additional $500K was appropriated for initial construction. Three more railroads were built by 1838. While progress was temporarily slowed by a national economic depression, it resumed in 1846. In the next decade, eighty charters had been granted for railroad lines running “to or through every hamlet in the state.”
Railroads were a watershed in that they offered an affordable and reliable, year round means of transporting bulky, heavy iron ore, lead, coal, and other inputs for primary metals production and for exporting similarly heavy manufactured goods. Moreover, railroads, unlike inland waterways, could be constructed where needed.
As a result, commercial networks were able to expand first to a regional and then a continental scale. This expansion was somewhat stunted during the Civil War, especially by the actions and policy of Secretary of the Treasury Samuel P. Chase, who, to aid his own presidential ambitions in a challenge to Abraham Lincoln, supported and enjoyed the support of C.H. Ray, a prominent Chicago business executive and part owner of the Chicago Tribune.
Mr. Chase threw “an iron ring around St. Louis’ commerce”, which, in concert with Chicago’s remoteness from the Civil War carnage and preferential freight rates on eastern-owned railroad lines, enabled the Windy City to seize the lion’s share of trade with the upper midwest. Thereafter, St. Louis merchants often used the Missouri Pacific railway to focus their attention upon a “rapidly expanding hinterland” from Mississippi to the New Mexico territory and from Colorado to the Rio Grande.
These areas were, in comparison with both the eastern seaboard and upper midwest, thinly populated, landlocked, and less affluent. Not the very best stock from which to forge an empire. Chicago —not St. Louis— became the largest and most important metropolis between the coasts.
The Late Nineteenth Century and the Changing Face of St. Louis
The nineteenth century economic expansion is reflected in steel and commodity chemical manufacturing facilities, many of which were located in the city. These early industries were dependent on burning soft coal, giving the area (especially the city core) a dirty, gray character. The exteriors and facades of many older buildings still bear soot from this era. Other industries of mention from this time included soap and candle making, heavy machinery and steam-engine manufacturing, brickmaking, construction, men’s clothing, cigar making, and stove making.
The Twentieth Century and the Automobile
Fast forward now to middle years of the twentieth century. American demand for durables, such as automobiles, which had been dampened first by the Great Depression and then by the Second World War, rapidly accelerated. The trend was to locate production outside the city core and rely upon the automobile and the new Interstate Highway System as a means by which to transport workers to and from their jobs. Both places of employment and places to live tended to be located in car-dependent suburbs.
Indeed, the post WWII years really only continued a trend away from public transportation that had started after the previous World War. Andrew D. Young, writing in St. Louis Streetcars (1996), notes that public transportation ridership peaked as early as 1916 (though it would recover and then peak again during the next world war). Young notes of the post WWI era (especially during the 1920’s),
“Though it took years to realize it, for public transit the parade had already gone by. New roads, new suburbs and new automobiles were the reality of metropolitan life in post-World War One America, and St. Louis was not exempt from this national trend.”
Decline, Blight, and Renewal
Brittle Economies and Systemic Racism
A previous article in this publication notes the decline of manufacturing in St. Louis and similar cities starting in the late twentieth century. Simply put, cities in a region known as the Great Lakes Megaregion overspecialized in a few heavy industries, most notably automobiles, trucks, and related items.
This overspecialization tended to crowd-out secondary industries and made business ecosystems and information/knowhow networks less innovative with respect to creating new products. Regional economies were thus insufficiently resilient with respect to changes, especially the production elsewhere (i.e., Japan, Germany) of rival products and diminished demand for the region’s primary exports.
In the language of complexity, the region’s economy came to lack variation and overlapping niches. It became brittle. Research by the Regional Plan Association notes that St. Louis, Detroit, and Youngstown lost 92,000, 281,000, and 30,000 manufacturing jobs, respectively, all large percentages of their manufacturing and employment bases.
A contemporaneous trend (starting in about the early 1960’s) included a backlash against civil rights progress, such as “white flight” in which many of the more well-off Whites relocated to racially homogenous suburbs. When combined with already challenging regional economics, we got the urban blight with which parts of the St. Louis area are still afflicted.
Renewal and New Entrepreneurialism
Fortunately, the region’s fortunes are not shackled to declining industries. The last years of the twentieth century saw an upsurge in entrepreneurialism, especially with respect to information- and knowhow-intensive areas that leverage the area’s core competencies and deep resources (financial, intellectual, social, and other). Our article from a few months ago, the primary focus of which was megaregions, addressed this renaissance. Here, we will focus on the renewal as it relates to the 2030 Jobs Plan.
St. Louis Jobs Plan
The Plan identifies five clusters that have the potential to drive regional job growth in the future:
Advanced Business Services, consisting of a large finance and insurance sector and benefiting from close connections with the IT and software sectors.
Biomedical and Health Services, which spans biomedical and pharmaceuticals to bioscience and agtech startups.
Advanced Manufacturing and Production, which includes advanced software engineering, manufacturing, consumer products, and food production.
Aerospace, Automotive, and Defense, which is anchored by Boeing and General Motors and includes the manufacturing, servicing, and advanced production of automotive, commercial aviation, and defense products.
Transportation and Logistics, which orchestrates multimodal freight to serve customers around the world, is concentrated in the Metro East area, and includes the US Transportation Command (TRANSCOM) and Scott Air Force Base.
The Plan further identifies three next-generation sectors as catalyzing twenty-first century job growth and economic development:
Fintech, or the use of advanced technology to increase the efficiency of financial systems and services. St. Louis currently ranks 26th worldwide out of 230 cities in 65 countries. A promising development here is Square’s decision to expand operations north of the downtown area and build a fintech innovation district.
Geospatial, or the advanced collection, processing, dissemination and usage of location data. The decision by the National Geospatial Intelligence Agency (NGA) to build out a new facility in north St. Louis, the Next NGA West (N2W) is a noteworthy development, and may add 27,000 jobs and $4.9B in regional economic activity. A new innovation district, the Downtown North Insight District, will incubate and support geospatial startups and other firms. Geospatial intersects with and enhances other industries, notably the agtech sector.
Agtech, or the use of a wide variety of technologies and advances in fields such as plant science, agronomy, genomics, and artificial intelligence (AI) to improve the yield, efficiency, sustainability, and profitability of agriculture. The regional agtech community employs over 15,000 people (including over 1,000 plant science Ph.D.’s) and includes over 400 research and development companies. The Donald Danforth Plant Science Center, the country’s largest independent plant science research center, is an anchor institution for agtech. Substantial facilities (lab and office space as well as shared workspaces) are made available to startups and transplant companies via the 39 North Innovation District and the corporate BRDG Park. Corporate presence includes Bayer Crop Science (which acquired the Monsanto Company), Bunge, Benson Hill, Novus, and hundreds of smaller firms. It is noteworthy that over 50 percent of all food produced in the country is grown within 500 miles of St. Louis. Precision agriculture, or the use of remote sensing and analytics to improve agricultural efficiency and decrease its environmental footprint, is an intersection of geospatial with agtech.
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Where Are We Now
The Patchwork Landscape
St. Louis area manufacturing spans several industries and includes older, legacy firms as well as emerging-industry startups.
Legacy industries along with a few representative enterprises include (this is by no means an exhaustive list):
- Aerospace and defense, with a strong presence by Boeing (which acquired McDonnell Douglas) and General Dynamics.
- Automobiles (General Motors)
- Primary metals (US Steel)
- Agricultural inputs and processing (Bayer Crop Science, Bunge)
There are myriad next generation growth sector firms, which have been incubated by the region’s innovation districts and funded with local or external capital sources. For example:
- Benson Hill: Founded in 2012 by photosynthesis researchers Andrew Benson and Robin Hill, Benson Hill emphasizes improving crop yields by increasing photosynthetic efficiency and carbon fixation. Under the leadership of CEO Matthew Crisp, the company went public in 2021, and is now valued at more than $2B. In addition, Benson Hill is a leader in applying AI to plant genomics. The center of gravity for AI research in the US is the Bay Area, not St. Louis. However, by emphasizing a very specialized, niche application, Benson Hill has become a leader in the use of this technology to solve important plant science problems. Benson Hill was nurtured by the Danforth Plant Science Center, and is located in the 39 North neighborhood.
- CoverCress: A more recent addition to the St. Louis startup scene is that of CoverCress, which stemmed from a Danforth Center presentation about the commercial potential of pennycress, a common weed. This presentation caught the attention of former Monsanto executives Vijay Chauhan, Dennis Plummer and Mike Roth, who sought and obtained backing from BioGenerator, a local financial provider and incubator for agtech companies. Twenty-five percent of CoverCress is now owned by Bayer Crop Science in a collaborative arrangement that also includes Bunge and Chevron. Bayer provides marketing-to-farmers expertise, Bunge crushes the CoverCress crop to extract its oil, which is subsequently refined by Chevron into biodiesel fuel. In addition, the crop enhances soil, making it better for traditional plantings such as soybeans, wheat, and corn, and can be planted at times of the year that do not interfere with these. CoverCress is now a 25-person company located in Creve Coeur, Missouri.
An Imperative to Increase Economic Complexity and Inclusiveness
St. Louis is on the road to reinvigorating its industry in areas that leverage regional expertise and various types of capital. Increasingly, new economic activity is a collaborative arrangement between academia (especially the area’s research universities), innovation districts and anchor institutions, providers of capital, startups, and legacy firms.
In addition, the synergies among fields such as agtech and geospatial deserve mention. In a prior article, we noted that increasing economic complexity is a demonstrated means by which to increase an area’s affluence.
Increasing regional fortunes are likely to result from collaborative arrangements among highly skilled people who and enterprises which use their information and knowhow to produce products available in few other locales.
An example here is Benson Hill’s use of AI to solve problems in plant genomics. This may be a unique “product” not widely available elsewhere and that was assembled from competencies, information, and knowhow accreted in the St. Louis area.
However, St. Louis’ reinvention journey is by no means complete. The scars of systemic racism (past and present) remain. As noted in the 2030 Jobs Plan, future economic growth must better leverage all the potential offered by the region’s people, including those traditionally bypassed by rising affluence and prosperity.
Traveling the journey to shared prosperity will require collaboration among the region’s educational institutions (including high schools, vocational/technical training institutions, junior colleges, and research universities) and employers as well as community outreach efforts to those currently under represented in the industries spoken of above. The under-represented must be made aware of the area’s strengths, provided with the wherewithal to make an impact, and nurtured increasing, their confidence to pursue STEM careers.