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Economic Development Strategy and the Role of Technology and Innovation in Crafting the Economy of New York City’s Future

Robert K. Steel

Office of the Mayor of New York City

The Bloomberg administration’s economic development strategy is defined by four pillars. The first pillar is a high quality of life characterized by public safety, excellent schools, beautiful parks, clean water, and cultural amenities. The second is a probusiness environment with sensible regulation that ensures safety while encouraging business growth. The third pillar is investment in the future by developing transportation infrastructure, office space, and housing, which are critical for the city’s long-term success. The final pillar is innovation and economic transformation.

For much of its history, New York City was the capital of American innovation. As the American economy has shifted from industrial to information-based, places like Boston and Silicon Valley have surpassed New York City, driven by the strength of their academic research programs. Companies started by alumni of MIT have combined revenues equal to the GDP of Brazil.

After the financial crisis began in 2008, Mayor Bloomberg asked the NYC Economic Development Corporation (EDC) to reach out to hundreds of academics, local business leaders, civic leaders, entrepreneurs, and venture capitalists to understand how the city could make a game-changing impact on the economy. New York City has a fantastic higher education system with more postsecondary students than Boston has people. However, we learned that the city has a deficiency in science and engineering, especially relative



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Economic Development Strategy and the Role of Technology and Innovation in Crafting the Economy of New York City’s Future Robert K. Steel Office of the Mayor of New York City The Bloomberg administration’s economic development strategy is defined by four pillars. The first pillar is a high quality of life characterized by public safety, excellent schools, beautiful parks, clean water, and cultural ameni- ties. The second is a probusiness environment with sensible regulation that ensures safety while encouraging business growth. The third pillar is invest- ment in the future by developing transportation infrastructure, office space, and housing, which are critical for the city’s long-term success. The final pillar is innovation and economic transformation. For much of its history, New York City was the capital of American innovation. As the American economy has shifted from industrial to information-based, places like Boston and Silicon Valley have surpassed New York City, driven by the strength of their academic research programs. Companies started by alumni of MIT have combined revenues equal to the GDP of Brazil. After the financial crisis began in 2008, Mayor Bloomberg asked the NYC Economic Development Corporation (EDC) to reach out to hundreds of academics, local business leaders, civic leaders, entrepreneurs, and venture capitalists to understand how the city could make a game-changing impact on the economy. New York City has a fantastic higher education system with more postsecondary students than Boston has people. However, we learned that the city has a deficiency in science and engineering, especially relative 21

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22 LIVABLE CITIES OF THE FUTURE to the size of the economy. Silicon Valley has four times the concentration of engineers in its workforce as New York City. In December 2010 EDC issued a request for expressions of interest to determine whether academic institutions would be interested in establishing an applied sciences campus in New York City. We heard from 27 institutions from all over the world and the strength of their responses led us to issue a request for proposals in July 2011 to develop a new campus. We offered up to $100 million to assist with infrastructure, buildout, and/or equipment; three city-controlled sites; and technical assistance in exchange for significantly expanding a current academic facility or building a new applied sciences facility. In December 2011 Mayor Bloomberg announced the selection of Cornell University and Technion-Israel Institute of Technology to build a $2 billion, 2-million-square-foot applied science and engineering campus on Roosevelt Island. The new Cornell NYC Tech’s first class of full-time students, in January 2013 in a temporary campus at Google’s Chelsea offices, will begin pursuing a one-year Cornell University master of engineering degree in computer science. In April and July 2012 the city reached agreements with a consortium led by New York University (NYU) to assist in the creation of an additional applied sciences school, the Center for Urban Science and Progress (CUSP), in the heart of downtown Brooklyn, and with Columbia University to sig- nificantly expand its engineering department. Mayor Bloomberg’s applied sciences initiative will generate billions of dollars of economic activity and create thousands of new jobs connected with the campuses’ construction, operations, and spinoff companies. Cornell NYC Tech, NYU, and Columbia will more than double the number of engi- neering faculty and graduate students in NYC over the next decade. Taken together, these three new campuses will dramatically transform the city economy’s ability to compete successfully in the 21st century and beyond.