Mike Bloomberg Outlines Steps to Spur Innovation in NYC and Across US
By NYC.gov - MAR. 11, 2011
Read Mayor Bloomberg's speech as prepared for the Stanford Institute for Economic Policy Research, in which he details how New York City is becoming the first major city in the country to create an innovation index to track performance in key areas like VC investment, patents, federal research grants and jobs:
“It’s an honor to be part of such a distinguished program – and with the parade of stars you’ve heard from today, you may be wondering why I’m the big finish. Well, did Alan Simpson have a role in the new Matt Damon movie – for 8 seconds? (If you see the movie – don’t blink.) Did Hernando de Soto write a book called “Bloomberg by Bloomberg” that is currently 341,125 on the Amazon.com list? And I don’t remember George Schultz meeting Beyonce and Lady Gaga. So here I am.
“It’s great to be at a university founded by a New Yorker. That’s correct – Leland Stanford, for those of you who may not know, was born in Watervliet, New York – right outside of Albany, our state capital. (And if any of you have been following Albany politics in recent years, you understand just how smart he was to leave when he did.)
“Leland Stanford did what many bright, ambitious people of his generation did: they went West. They went in search of opportunity, work, and the next big thing. That’s the history of America over the past two centuries – from the railroads, to the gold rushes, to the oil booms, to the technology revolution. When Americans looked ahead, they looked West, with one, very large exception: New York City.
“New York has always been a frontier town: a place of promise and possibility, a place where people go in search of a better life. The millions who pull up stakes to come to our city usually arrive with little more than the capacity for hope and hard work. That was true of my ancestors – and it is true today.
“Tonight, I’d like to talk a little bit about what it means to be a frontier town in the 21st century, and what we are doing to continue attracting the pioneers who will explore it and redefine it. That includes many of you here in this room.
“Let me begin by putting the dimensions of the new frontier in context. When I graduated from college in 1964 – I know what you’re thinking, ‘He looks so much younger!’ – the World’s Fair was in New York City. And one of the big attractions was a technological breakthrough developed by Sony: The world’s first electronic, desktop calculator. It took until the 1970s for the pocket calculator to arrive, another decade for the home computer to enter the mainstream, and almost two decades for cell phones to become common.
“But today, the pace of innovation is moving so fast that when today’s seniors were freshman, ‘apps’ were still something you ordered before dinner. Now, we can hardly remember how we survived without Shazam and Angry Birds – or how we delivered speeches without iPads.
“A student graduating from Stanford this spring literally has the world at his or her fingertips. And many seniors are looking for jobs that did not even exist when they first arrived on campus. Markets are moving at an unprecedented pace, because the pace of technological innovation is speeding up by the minute. And that will not change.
“It’s an incredibly exciting time, not just to be young, but to be an innovator of any age. The opportunities are endless, and the more today’s pioneers forge ahead, the wider the frontiers become.
“In this new age of innovation, the question for cities and countries is a simple one: How do you attract more pioneers?
“I believe the answer starts with creating a place where people want to live and work. That means safe streets, quality public schools, beautiful parks, and exciting art and cultural opportunities. That has been priority number one for us in New York – and in every category, we’ve made huge gains. Cities with a great quality of life – like New York and San Francisco – give their companies a substantial competitive advantage in the market for global talent, and I’ve always believed that talent attracts capital more effectively than capital attracts talent.
“Creating a great place to live and work is just one part of our strategy to attract more pioneers. We are also taking huge swaths of old industrial land that had been ignored for decades and opening it up to new private investment, especially along our waterfront. New York actually has 520 miles of waterfront, which is more than San Francisco, Portland, Seattle, and Chicago – combined. (Not that I’m bragging – a New Yorker would never do that.) Some of that underused waterfront is on the Far West Side of Manhattan, which is full of old warehouses and train yards right now. So we’re building a subway expansion to the area – the first new subway track to be funded by the City in more than 50 years. It will open up Manhattan’s last physical frontier to enormous amounts of new commercial and housing development – and help attract the next wave of innovative companies.
“We are also working to make one of our strongest talent magnets even more powerful: our universities. Believe it or not, New York City is America’s largest college town, with more than 600,000 post-secondary students. We have more college students than Boston has people – and we’re still growing. Right now, New York University, Fordham University, the City University of New York, and Columbia University are all in the midst of major expansions, and Columbia’s huge new biomedical research campus is going to make it an even bigger player in a field that keeps growing.
“But we want our universities to grow even more – and we want to be sure that one field, in particular, helps lead the way: engineering and applied sciences. I was an electric engineering major at Johns Hopkins. I actually started out as a physics major, but there was a German language requirement, and I said, ‘Danke, but no Danke.’ Even though I didn’t go on to practice engineering, I never could have built my company without some very talented computer engineers. And of course, most companies today that produce something – even if it only exists in cyberspace – rely heavily on engineers.
“Engineering and the applied sciences will continue to be enormously important drivers of the innovation economy – and as everyone in Silicon Valley knows, where innovation occurs, job growth follows. We want more of those innovations, and more of those jobs, to be in New York City. And so we are offering the world’s great universities a simple proposition: Build a world-class engineering or applied sciences research center – and we’ll work with you to provide the land, as well as some of the funding.
“This may be one of the best deals for higher education since the federal government passed the Morrill Act in 1862, establishing a land grant program for new universities. The Morrill Act was intended to promote innovation and expertise in agriculture and engineering – because Congress recognized those fields were critical to the nation’s economic growth. Today, New York City is taking the same approach on a micro-level – and we are very optimistic about the potential upside.
“If you’re wondering why a university might open a satellite campus in New York City, just ask Cornell. Cornell is about 200 miles northwest of New York City – but years ago they decided to build a world-class medical school on the East Side of Manhattan: the Weill-Cornell Medical Center. And they would tell you it’s one of the best decisions they’ve ever made. As economic success becomes increasingly correlated with talent and intellectual property, universities become more valuable than ever.
“The initial response we’ve gotten from universities has been very encouraging.
“We’re particularly pleased that Stanford – which has a top-flight engineering school – is considering the idea. And why not? It’s a phenomenal, once-in-a-lifetime opportunity for a world-class university to get a toe-hold in the world’s greatest city.
“The offer we are making to universities is just one part of the work that we’re doing to foster an innovation economy. When the financial crisis hit in 2008, a lot of people predicted a lot of negative things for New York. After all, they said, this is the financial capital of the world and this is the worst financial crisis in more than 80 years. And for as long as anyone could remember, when Wall Street sneezed, New York City got a cold. As you know, losing Lehman Brothers and Bear Stearns was a lot more than a sneeze.
“My response – and people were skeptical when I said this on the day Lehman went under – was that no matter what we were about to face, I would rather have New York’s hand to play than any other city’s. And in fact, we weathered the collapse on Wall Street and the national recession better than anyone expected – because our economy has grown more diversified than most people realize.
“Last year, we even led the nation in job growth – and despite what you might guess, none of that job growth came in the finance sector. It’s come from the industries that are driving the innovation economy, like information technology, education, and health care.
“People think of us as a world financial capital – and we are. But we are also a fashion capital – with more than twice as many fashion houses as Paris. We are a health care capital – with some of the finest hospitals in the world. We are also increasingly a capital for bioscience research and development, an industry we have made large investments in. We are a cultural capital – which is the main reason why we have topped Las Vegas and Orlando in tourism for the past two years. And we are a media capital – not just print and television, but electronic media too. Google bought a square-block building. Facebook is expanding in New York. And Microsoft has 2,000 employees there.
“These businesses – and businesses like Bloomberg and Reuters – are all growing. And I believe that it is only a matter of time before New York City becomes the IT capital of the world. We’ll get there because – more and more – we are also a technology start-up capital. We’re now the number two recipient of VC funding for tech startups, having passed Boston last year.
“I know how hard it is to start a company – how many obstacles you have to overcome, not to mention all the doubters you have to ignore. The venture capital community knows how risky it can be – but also how good ideas tend to grow out of face-to-face communication and collaboration among fellow entrepreneurs. To encourage more of that communication – and to help entrepreneurs deal with one of the biggest challenges they face: the cost of real estate – we’ve created incubators in a range of industries. The incubators – which are generally partnerships between the City and the private sector or universities – provide discounted office space as well as some administrative support. That lets innovators do what they do best – focus on commercializing their ideas.
“We’re also supporting start-ups with something else they find pretty helpful – capital. Taking a page from Silicon Valley, last year we created the NYC Entrepreneurial Fund. It combines City money with private venture capital to make investments in some of the most promising early-stage companies in the city. It’s the first public-private fund of its kind outside of Silicon Valley – and it’s an example of how we’re determined to find new ways to promote innovation.
“Anecdotally, we know there has been a big uptick in innovation activity in New York City, but now we’re also seeking to quantify our progress. By partnering with academia and venture capitalists, we’ll become the first major city in the country to create an Innovation Index. The index will track New York City’s performance in a number of key areas, including VC investment, federal research grants received, employment in the fields of science and engineering, new patents and the commercialization of technology emerging from our local universities. This data will help us focus our efforts around innovation, and refine the strategies and policies we use to promote it.
“The work that we’re doing to fuel innovation and entrepreneurship will help bring new companies to life – and one of them may even be the next Google. But the reality is, if we don’t fix our country’s broken immigration system, the next Google won’t be starting anywhere in America. Like so many of the new companies that define the 21st century economy, Google was co-founded by an immigrant. In fact, studies show immigrants are more than twice as likely as native-born Americans to start companies. Immigrants also create the small businesses that are so essential to employing low-skill laborers – both immigrant and native-born.
“Right now, there are more than 13 million unemployed Americans – and millions more who have just stopped looking for work. In New York City, we’re connecting our job-training programs to our economic development programs, so we can connect people to the companies that are hiring now – not five years from now. We’re also tailoring these programs around immigrant communities – so that language barriers are not barriers to employment. As a result, we’ve put record numbers of people in jobs, even in the depths of the national recession.
“One of the arguments against immigration reform is that immigrants take jobs from Americans. It’s exactly the opposite: immigrants create jobs for Americans. And many do jobs that Americans won’t.
“There’s an old story about an Italian immigrant arriving in New York City. He had heard the streets of New York were paved with gold. And he says: ‘When I got here, I learned three things: First, the streets were not paved with gold. Second, the streets were not paved. And third: I was expected to pave them.’
“Now, it’s quite possible that that immigrant started paving, then bought his own equipment with his savings, and then grew the business. That’s the American dream! And there are countless stories like it in cities like New York and San Francisco.
“History shows that every generation of new Americans has fueled the economic engine that made the United States the strongest country in the world. And today, whether it’s doing back-breaking or mind-bending work, we need more immigrants to help our country grow.
“Other countries are desperately seeking more immigrants – even offering incentives to attract them. Chile is offering American entrepreneurs $40,000 and a one-year visa to stay in the country. China has recruited thousands of the entrepreneurs, engineers, and scientists they know they need.
“I’ve proposed that we give a green card to anyone who graduates from a U.S. college with an advanced degree in science, engineering, and other important fields – and to give a visa to any entrepreneur who wants to come here and has backing to start a business. Yet instead, the federal government is literally turning them away by the thousands – or making the visa process so torturous that no one wants to endure it.
“The more difficult we make it for foreign workers and students to come and stay here, the more likely companies will be to move jobs to other nations. Just look at what’s happened here in Silicon Valley. Many companies that have not been able to get workers into the country have been forced to move jobs to Vancouver. Just as troubling, more and more foreign students are reporting plans to return home because of visa problems. We educate them here – and then, in effect, tell them to take their knowledge to start jobs in other countries. That just makes no sense whatsoever. Our immigration policy is a form of national suicide – and I know this audience understands all too well just how many jobs the current laws are killing.
“But the problem with the immigration debate in Washington is that there’s very little discussion of economics. It’s all about ideology and buzz words. Politics and platitudes. We need more facts and data – and once we’re actually discussing them, something happens: people on both sides of the aisle actually agree.
“Last year, together with Rupert Murdoch – himself an immigrant from Australia – I launched a group of mayors and business leaders called the Coalition for a New American Economy. Our goal is to put sensible, immigration reform back on Congress’s agenda. More than 150 business leaders have joined us – and I hope many of you will join us.
“Immigration is by no means the only major policy reform where we need strong leadership in Washington. Over the course of the day, you’ve heard a very distinguished group of leaders talk about the need for new approaches in many different areas.
“I mentioned earlier that there are no limits to America’s new frontier – but there is actually one: government paralysis and partisan gridlock. In the 19th century, the federal government was instrumental in creating incentives and conditions that led pioneers to push westward – and forward. Today, we need government to understand the new pioneers – the conditions they need, the incentives they value, the obstacles they face. That’s the great challenge confronting all governments today, and I can tell you there is not a place in the world that will do more to confront that challenge head-on, to embrace the new frontiers wherever they lead, and to create a dynamic new America, than New York City.
Building on the progress he made as the 108th Mayor of New York City, Mike continues to foster innovation in cities around the world.
IN MIKE'S WORDS
Innovation involves taking risks and trying new ideas, which doesn’t come easy. But more and more cities around the world are embracing the challenge.
70% of the world’s population will live in cities by 2050.
As centers of innovation and progress, cities are the key to solving many of the world’s biggest challenges.