Foreword to the Mechanism report “Prototyping Equity: Local strategies for a more inclusive innovation economy”

Adam Friedman

Co-Founder & Board Member | Mechanism

Sr. Strategy Advisor | Better World Group

September 2025

When the Equitable Innovation Economies (EIE) Initiative was launched in 2014, it felt safe to assume that the extraordinary depth, breadth, and power of the innovation ecosystems in U.S. cities would continue to drive growth. These ecosystems are the networks of entrepreneurs, engineers, designers, schools, makers, and manufacturers that contribute to economic growth, primarily through knowledge, design, technology, entrepreneurship, and increased productivity.

Our assumption back then was that the concentration of great universities and research institutions, of highly skilled labor which was often immigrant, of community colleges which provided skills and entry to well-paying jobs, and the density and diversity of city neighborhoods would continue to fuel innovation and economic growth in urban areas.

But the foundations for the future vibrancy of our innovation ecosystems and their ability to drive growth are weakening, and critical actors in them are under attack.

The most obvious attacks are federal budget cuts to higher education, community colleges, vocational training programs, and basic and applied research. Federal programs under the National Institute of Standards and Technology that help manufacturers acquire new technology and train their workforce are also being threatened with cuts. Restrictions on international travel are reducing student enrollment and shrinking opportunities for intellectual exchanges between faculty, researchers, and businesses.

Perhaps the least obvious yet most alarming threat is the disparagement of science, expertise, data, empirical investigation, and even the nature of knowledge and facts. Innovation is sparked by challenges in the real world, and it can only drive growth if it is actually tested and works in the real world.

These policy changes at the federal level are wreaking havoc on the ground at the city and community levels. For example, community colleges are points of access to the innovation ecosystems we described in this report. They bring opportunities for advanced skills training to virtually every city and town across the U.S. But they are suffering collateral damage in the war against academic institutions. Their students will only be hurt by cuts in tuition assistance, which means local businesses will face even more hiring crunches – there were roughly 400,000 unfilled U.S. manufacturing jobs in mid-2025 – as the workforce pipelines anchored by community colleges wear down.

The “Prototyping Equity” report was written almost a decade ago, when the outlook for these ecosystems didn’t seem as precarious. But the lessons we learned then as we looked at efforts in Portland, Indianapolis, New York, and San Jose are still relevant now because they provide signposts for how to create a holistic, effective production ecosystem at the local level.

No matter the political landscape, manufacturing (or “local production,” as we’re now calling it) has been and will continue to be a critically impactful mechanism that connects the innovation economy to residents in the surrounding communities. To truly leverage growth from this economy into community well-being, we have to re-anchor production in enduring, north star values that explicitly lift up strong labor standards, family-sustaining wages, safe and healthy workplaces, community ownership, and a culture of craft and innovation that strengthens the identity and resilience of the places we call home.

The imperative to connect non-traditional manufacturing communities with innovation ecosystem careers is greater than ever. As we observed back when we first published this report in 2016, America continues to grow more diverse, yet the racial wealth gap persists and has even gotten worse.¹

Certainly, the existing economic model that these ecosystems operate within has delivered modest social gains by lessening poverty in some places and expanding mobility in others. But this approach doesn’t scale. Even if successful, any initiative has to be reinvented each time and in each city. As Mechanism, we are committing to spreading the ideas and strategies to make a shift in the underlying “default” settings. For example, as these four cities demonstrated, economic investment should be twinned with workforce development at the local level, not as “bells and whistles” but as a core component.

So what should an equitable innovation economy look like today? It includes a holistic ecosystem approach to economic growth; a commitment to building the capacities of universities and community colleges; support for manufacturers to acquire new technologies; and building strong relationships between all the actors and stakeholders in these economies, especially at the community level. Without those pieces in place, economic growth will be diminished, the wealth gap will grow and, in effect, future resiliency and prosperity will be lost.

Thankfully, the types of efforts we documented here show that, at the local level, there have already been great partnerships driving us toward a more fair kind of innovation economy. That gave us hope in 2016, and it still gives us hope now.

1. Andre M. Perry, Hannah Stephens, and Manann Donoghoe, “Black wealth is increasing, but so is the racial wealth gap,” The Brookings Institution, January 29, 2024.