The apparel manufacturing industry in San Francisco has experienced considerable growth since the late 1980s due to changes in retailing, the increasing flexibility of the industry, the influx of Asian immigrants, and the availability of industrial space adjacent to the central business district. However, the continued growth of the industry is in jeopardy because of rising labor costs in comparison to offshore and Mexico locations, as well as new competition for space in the industrial district from multimedia and residential uses. Current economic development efforts targeted at the apparel industry are attempting to facilitate a transition to higher value-added manufacturing, open up new markets, and foster cooperation in the industry. This article highlights some of the obstacles such endogenous policies face and argues that more traditional supply-side initiatives to reduce land, labor, and capital costs may be necessary first to preserve the industry.
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