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There are anchors and there are entrepreneurs — or so says Joe Cortright, a local economist who studies business clusters. He's been looking at clusters nationally for years (like biotech companies clustered in Boston or high tech companies in San Jose, for example). Now he's turned his attention to Portland's athletic and outdoor cluster. It's a group of companies local economic development agencies are also paying attention to.
The anchors of the industry are the big three: Nike, Adidas, and Columbia Sportswear. The entrepreneurs are the more than 700 firms in the region that are somehow related — albeit some more than others. According to the Portland Development Commission:
Oregon's athletic and outdoor industry, based predominantly in the Portland area, employs more than 14,000 workers statewide; includes more than 700 firms with a payroll that in 2008 totaled nearly $1.2 billion; has average annual wages of more than $80,000; and includes as many as 3,200 self-employed people who generate sales revenues of more than $95 million.
James Curleigh, the CEO of Keen Footwear, says Keen moved to Portland from California because they received so many applications from "people from the 503 area code." Curleigh says "so we thought we'd come to them instead of having them come to us."
A talent pool is one of the key benefits people cite about business clusters. But with all these talented people, are there enough jobs?
Do you work at an athletic clothing company or a bike shop? Does your company make sports equipment or design shoes? What is your experience with the athletics and outdoor industry? And what role does it have, do you think, in the future economic health of the region? Is it the key to the future? Or just one cluster among many?
GUESTS:
- Joe Cortright: president and economist at Impresa Consulting
- Patrick Quinton: division manager for the business and industry team at the Portland Development Commission
- James Curleigh: CEO of Keen Footwear
- Peter Kallen: design director for Nau Clothing
- Matt Cardinal: co-owner of Signal Cycles
- Tane Minnick: MBA candidate and advisor to The Apparel and Footwear Network
- Enrique Washington: founding partner and CEO of the Generator Group
Tagged as: athletics · business · portland
Photo credit: Zack Lee / Creative Commons
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Mmmm...donuts! (Aaaaahhh! (Sound of drooling) Not sure how to spell this particular interjection.)
Has anyone else noticed that the massive wealth transfer to "Uncle" Phil (Knight) has essentially allowed him to buy up the former University of Oregon (now known as the University of Nike)?
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Has Homer given up on Springfield to get closer to Voodoo Eugene? Genius putting a donut shop betwixt 20,000 ravenous, calorie burning, constantly mutating, bubbly brained, vampire groms.
Listened to an interview of Oregon football coach, Chip Kelly, a few weeks ago on the Dan Patrick Show. Kelly referred to Uncle Phil as his boss and the CEO of the university. Kelly's glib and straight delivery made the quote memorable for its kernel of truth.
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As I have said many times before, the problem with the entire U.S. economy is that we no longer make so many products in this country. As long as this continues we will continue to spiral into 3rd world status. The shoe industry, being one of the worst examples of this trend, needs to start manufacturing here at home. With over 90% of our shoes now made in China all they have to do is pull the plug on us and soon we won't even be able to walk anywhere. Use your imagination to consider what might follow.
How about a commitment from Nike et al to actually make at least some of their products here in the states? I also call on Apple to use some of their billions of reserve dollars to start up some American plants. By leading the way companies like Apple and Nike could help turn around the entire economy.
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I agree with OrgunFarmer and others...if the elite would put some of their windfall back into mentoring small businesses and helping them manufacture in the US, it would go a long way to help our nation's recovery.
As it stands, the present administration (national + local) is doing nothing to make this happen. America's resume is looking lazy. We are good at manufacturing guns, cigarettes, and liquor.
In the infamous words of "Rosie The Riveter", We Can Do It. "Yes We Can" now makes me think of canned political lunchmeat. "Yes We Can...Say What You Want To Hear, But Do Nothing About It."
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Making more products in the US would be great, but how many people are willing to pay the price for goods made at US manufactruing wage rates?
The shopping public is always trying to get the best deal for their dollar, just look at the popularity of daily deal sites like Groupon. I don't think American consumers are willing to pay the price for locally-produced goods to be mainstream any time soon.
Lastly, publicly-traded corporations are ultimatly run in the best interest of their shareholders, not the people who work for them. It's just how it is. That means these companies are always going to seek to maximize profits, which means overseas manufacturing.
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Portland is, very quietly, the capital of the snowboarding industry. Less prominent than the 'outdoor' brands, but very impactful. Look inside any of the major 'outdoor' brands in Portland and you see their attitude, leadership teams and key marketing initiatives are derived from local companies like Bonfire, Holden, Nemo...the list goes on. If Nike, Keen, Adidas and the like are the Starbucks of outdoor, the local snowboard companies are Stumptown; the local and creative alternative.
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ebsteward -- are you part of the snowboarding industry? If so, does it make a difference to your business that you're in the same town as Nike, Adidas, etc?
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Nemo is a tent company based in New Hampshire. Isn't Bonfire a subsidiary of Salomon?
I think the whole "outdoor" part of the thing is a bit overdone unfortunately: this just isn't the front range of the rockies.
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Hi Sarah Jane, Yes - I'm the founder of Bonfire Snowboarding. We're one of the oldest brands in snowboarding; with approx 39 distribution offices worldwide—all design and development here in Portland. I think Nike, et al bring an overall benefit to the creative culture of our city; but they're not related to why I started the company here.
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The Nemo to which ebsteward is referring is not the N.H. tent company but Nemo HQ, a brand design agency based in Portland (10 years old) and specialize in active lifestyle brands.
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There is a new trend in Marathons that wil give Phil Knight of Nike nightmares.
It is BAREFOOT RUNNING.
It forces a runner to pay more attention to his feet, the running surface, his gait, his angle of attack and departure of his foot on contact, his posture, how he carries his head and neck, how he pumps moves of his arms, and his kick. Overall a runner gets a better awareness of his enviorment: Water, Temperature, PPT, Soil, Surface, Heat, Dryness. And taking time to care for and heal the feet, probably prevents needless wear and tear of the hips, knees and ankles.
Perhaps heavily insulating feet from the earth leads to less awareness and poorer running technique. The animal kingdom does it barefoot. And Man has run barefoot for millions of years, save the last few centuries.
Nike stands to loose a LOT of money if this trend takes off.
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I'm glad that Portland actually has a strategy to compete in the global marketplace. This kind of thinking is critical to the success of the region. Let's continue to play up our strengths and broaden this cluster. It's the smartest way to continue forward.
I'm interested in hearing about the Portland Center for Design and Innovation, a materials resource lab that the PDC is starting up. Where are we with that?
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A great question, Jerry. Patrick Quinton from the PDC has left now, but I'll try to get an answer for you after the show.
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One of your guests talks about a more balanced tax system. That would be great. Businesses keep crying about the "tax" burden but 30 years ago businesses were paying 16 percent of the general fund and are now down to about 7 percent. There has to be some reason Forbes magazine recently named Oregon the 3rd friendliest for business.
I am concerned that it sounds like the PDC is considering doing things that are starting to smell of "lobbying" for certain sectors. As a publicly funded agency they need to be aware of their limitations.
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I worked for Nike for nearly eight years in their innovation area and left, in part, because I could see the limits of designing/developing/marketing product that is built elsewhere.
The next innovation for all of these companies is to bring the production of materials and goods back to the US.
Are any of these creative companies taking on that challenge?
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The problem with working with any of these brands is them being economic and weather dependent. The outdoor companies can face tough times if winter comes late or not at all. The athletic companies are dependent upon consumer spending, which is at a low. Sure, it is great to work at any of these companies- great salaries, excellent benefits, free/cheap product, but they are so volitile and get rid of employees at the drop of a hat.
It would be interesting to look at how many folks in these industries have been laid off or fired over the past two years, how many are still in Portland and not working, as well as how many new hires the companies have made.
I haven't found working for two of the big three in town to be stable any longer... everyone is always looking out for jobs at other companies and worried about getting laid off. It's not the dream job or industry most people think it is...
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CiloGear, Metolius, Feathered Friends and Omega Pacific are leading manufacturers of climbing equipment making stuff in their local communities like Portland, Bend and Seattle for years.
Something like 65% of New Balance's shoes (by value) are made around Boston. Their prices are comparable to Nike's. Lean manufacturing in the United States is at least a significant part of any manufacturing future.
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Bridging the gap between cycling and clothing - Wabi Woolens is a small clothing company that produces wool cycling jerseys in the Portland area. Customers understand that it is expensive but our prices are competitive with other high end companies that manufacture in Asia. The presence of Nike, Adidas, and other apparel makers mean there are some contract manufacturing facilities in Portland that make a small company like Wabi Woolens possible. The quality here is top notch and customers are increasingly more knowledgeable about global issues and appreciate the Made in the USA label.
Harth Huffman
Owner - Wabi Woolens Clothing Company
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In terms of talent pool, I agree that there is competition in the market for talent, however it is not the "revolving door" that one might think. As the head of Human Resources for KEEN and formerly in HR with adidas and Salomon Sports (I have been in the industry for 10+ years), I believe each organizaton has a unique organizational culture, that becomes the most important factor for people in choosing an employer. Overall, compensation between the companies is level, so that is not a major motivator, unless the job seeker is experiencing a significant promotion in the move. Which brings up another point. It can be a challenge for smaller companies entering the market because they need to keep up with the big companies to hire the best talent. I am happy to comment on air...
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Most shoes, especially athletic and outdoor, are not repairable. Designing shoes that are meant to be repaired would support local "manunfacturing" (job creation for shoe repair shops) and increase sustainability in the footwear industry.
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We make our bags in North Portland from factory scraps and used sails. Portland is a great place for outdoor gear development... we moved to a shop in St. Johns and found the world's best alpine bags (cilogear) being made down the hall. Having such industry experience close by helps, as well as a good photography community, beaches, mountains and rain to test gear in.
http://www.facebook.com/pages/Truce/350125329086
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What about the tool and knife cluster that is here: Leatherman, Gerber, Benchmade and CRTK
Leatherman designs, engineers and manufactures tools and knives in Portland!
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ChimChim
The last two Leatherman products I purchased, have very small de-emphasied print: MADE IN CHINA.
I think they would like you to think otherwise. And if it makes you happy, continue. Apple users like to say their iPhone or iPad was DESIGNED IN CALIFORNIA. (That means Made in China--of course it should be downplayed as much as possible.)
Leatherman designs, engineers (XXXXManufacturersXXXX) tools and knives in Portland!
But Denial is not just a River in Egypt.
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Jacob,
Are you sure you purchased a Leatherman tool or a Chinese produced knock-off? Maybe you are confusing Leatherman with Gerber (Gerber does make the majority of their tools and knives in China)?
There is no denying that Leatherman employ about 350 Oregonians in the only Leatherman factory just off Airport Way and you can take a tour and see them make tools and knives for yourself every Wednesday.
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I am so happy to hear companies talking about more than product and growth. This industry has the potential to be real leaders in re-defining how we think about business and economics - and what it means to look at the bigger picture, including the role of business in broader social movement and community. One important issue mentioned was diversity (Oprah went camping!). Another is children - 90% of kids' time is spent inside, more than 7 and a half of it behind screen technology. One generation from now, most people will likely have spent more time in the virtual world than the real world, which has huge implications for children, our society, our planet - and the outdoor industry. I hope these businesses will join together and get involved in this issue. I wish I'd caught more of the show, but thanks for providing them an opportunity to talk about these issues with all of us. Meg Merrill, producer (www.playagainfilm.com)
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I agree with OrgunFarmer and others...if the elite would put some of their windfall back into mentoring small businesses and helping them manufacture in the US, it would go a long way to help our nation's recovery.
As it stands, the present administration (national + local) is doing nothing to make this happen. America's resume is looking lazy. We are good at manufacturing guns, cigarettes, and liquor.
In the infamous words of "Rosie The Riveter", We Can Do It. "Yes We Can" now makes me think of canned political lunchmeat. "Yes We Can...Say What You Want To Hear, But Do Nothing About It."
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Comments are now closed.
The effect of the AO Cluster seems to directly enrich a few while the rest of us consume the products they create. Wealth transfers from the grubby mitts of the effluent (as opposed to affluent) into the well endowed coffers of Phil Knight, Michael Jordan and Tiger Woods among others. Tiger never sends me a Christmas or thank you card....
The AO Cluster is one key of many regarding Oregon's future. It will help the region if the AO Cluster insinuates itself into making this place one of the physically healthiest places on Earth. Healthy people can be skilled people. Skilled people can procreate more visionary clusters until the whole thing evolves into one giant cluster fluke.
Oregon must diversify its clusters to minimize dependency on single points of failure. Relying on logging, tourism, Silicon Forest, custom bikes, the AO Cluster, or the VDC (Voodoo Donut Cluster) is not diverse enough as we're experiencing today.
Let's think outside the pink donut box, y'all.