In an uncannily prophetic article originally published by The New York Times in 2003, New York City's approach to economic development was called "obsolete".The article, drawn from a report based on a study done by the Center for an Urban Future (CUF) and financed by the Rockefeller Foundation, pointed out that the industries on which New York City had depended for its economic well-being were losing ground and could not create the new jobs the city needed.
The CUF recommended abandoning the "doomed strategy" of favoring a handful of big industries, like finance, which made the city vulnerable to an economic downturn.
The CUF favored instead encouraging small businesses and entrepreneurs, tapping the immigrant population, capitalizing on the city's academic and research institutions, and improving basic services.
New York's future growth, according to the CUF, depended on restoring "entrepreneurial vitality" and growing small firms.
The report argued against the tactic, dating from the 1990s, of using tax abatements and real estate development subsidies to keep big companies in the city.
According to one contributor to the report, New York's economic development strategy has been driven by real estate and threatened corporate move-outs and job losses, rather than job creation.
The CUF found that the finance, insurance and real estate industries, which accounted for 1 in 6 of all city jobs before 9/11, were rapidly losing both jobs and market share in 2003, and that other industries important to the city, such as professional and business services and technology, trailed the country and the region in job creation.
The CUF ranked New York as among the worst environments for entrepreneurs and growing firms, with high real estate costs topping the list of negatives.
It also found that New York businesses faced daunting regulatory challenges, feeding a "cottage industry" of expediters, fixers and go-betweens.
The CUF recommended that the city address basic issues like permitting, business taxation and real estate speculation, and encourage immigrant and minority-owned businesses in all five boroughs.
Finally, the report supported increasing housing stock and maintaining and improving law enforcement, sanitation, public transit, education, parks and the infrastructure -- to retain the middle class.
According to the CUF, the city's post-1950's strategy of ever-intensifying real estate speculation, over-investment in selected sectors and 'Capital of the World' rhetoric could only continue eroding the city's competitiveness, straining its financial resources and widening the gap between rich and poor.
Spot on.
The report on the CUF Website:
http://www.nycfuture.org/content/articles/article_view.cfm?article_id=1088&article_type=0
