Economic Development and Sustainability in New York State

New York City and New York State – What is the future of Economic Development? The New York Times has an article today that points to some interesting directions. Years ago, while in graduate school, I noticed the tendency of newspapers to report significant political and economic news in the Saturday paper. The Saturday paper is seldom read. It’s the smallest paper, but often has informative articles with implications for planning activities – especially those by governmental and quasi-governmental agencies. This article highlights the challenges of building sustainable economic development around high-tech in New York State.

“Manufacturing alone is not where competitive advantage lies in the long run,” said AnnaLee Saxenian, dean of the School of Information at the University of California, Berkeley, and author of “The New Argonauts: Regional Advantage in a Global Economy.”

“The key for upstate New York, or any other region, is the ability to build the set of social and institutional relationships that encourage innovation.”

As a cautionary example, Ms. Saxenian points to the once-promising effort to develop a high-tech cluster around Intel’s big chip plant outside Portland, Ore., which seems to have stalled in the last few years.

In upstate New York, as in the nation, pockets of growth are not going to reverse the long-term decline in manufacturing jobs.”

28chip6502.jpgThe State is committing itself to development a high-tech corridor in and around the University of Albany. The development is being done with the collaboration of the private sector – and the goal has been a private:public funding ratio of 3:1.

“The Albany nanotechnology complex passes that test. About $3 billion has been invested in the complex so far, mainly for costly tools and equipment needed for research and development. The private spending has totaled $2.5 billion, while the state has invested $500 million in its push to add high technology as an engine of the state capital’s economy, which relies largely on government and related services.

The state’s bid for the planned Advanced Micro Devices factory shows the rationale for government support for high-technology ventures. The state has agreed to provide the company with $900 million in grants and tax credits. A.M.D. is expected to employ about 1,200 people at the factory, which works out to a hefty $750,000 of state subsidy for each job created.”

Of course, it’s not that simple. There are positives and negatives to any deal of this type. The real question will be with the decline of the manufacturing sector, how will benefits from these agreements be passed through to fuel supports to needy upstate urban communities most adversely impacted by these shifts.

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