New York City has several large industries which have for years been the backbone of the city’s economy. From Wall Street to the booming fashion industry, worldwide attention is focused year-round on one or the other of the Big Apple’s big earners. But what happens if one of these industries falls into a slump?
Why not rely on big industries?
The need to diversify became apparent after the recession of 2001 when a huge percentage of the city’s payroll was negatively affected. According to the NYCEDC, more than three quarters of the population’s payroll comes from four industries – finance and insurance (38%), professional and business sectors (21%), health and social assistance (10%), and retail and wholesale trade (8%). This reliance translates into significant payroll losses should any of these industries hit a downtrend, which both the finance and retail industries are prone to doing.While these industries continue to support millions of New Yorkers, the need for other industries to grow and remain stable is critical for the city’s economy to achieve long-term stability. Avoiding major economic disaster when one industry has a bad year can be accomplished only by making sure that no one industry holds the city’s economic future. The government of New York City is endeavoring to do just that by making a number of resources available for small businesses, job-seekers, startups, and homeowners across the five boroughs.
Bloomberg’s Answer to Diversification
In 2002, Mayor Bloomberg implemented his Five Borough Economic Opportunity Plan. The plan has three key aspects: creating jobs for today, creating jobs for tomorrow, and building attractive and affordable housing (for both individuals and businesses) in all five boroughs.In order to create jobs for today the former mayor’s plan focused on three topics – helping people, helping businesses, and investing in infrastructure. Career centers such as Workforce1 assist people in finding the right jobs while websites such as NYC Business Solutions assist startups with funding, office space and assistance in hiring and training the right people. The plan also covers investing in the city’s infrastructure by doing things such as implementing federal stimulus projects and using regulatory and incentive-based initiatives to create green construction jobs through energy retrofits.When it comes to creating jobs for tomorrow, the initiatives shift to investing in commercial and retail spaces to encourage new business growth as well as a number of initiatives specific to individual industries. Examples include partnerships with the private sector related to high tech and media innovations, advancing the green sector by funding projects such as the five-story Navy Yard in Brooklyn, or supporting the bioscience and life science industries at locations such as BioBAT in Brooklyn and the East River Science Park.The last aspect of the economic opportunity plan is to make neighborhoods more affordable and attractive for both homeowners and businesses. To accomplish this, the initiative will implement changes to transportation hubs, improve sidewalks and lighting, and improve the general infrastructure in all five boroughs. The more attractive the neighborhoods become for business and living, the easier it will be to encourage people to move to NYC for work and innovation.
Diversification Successes
Both the Five Borough Economic Opportunity Plan and the mayor’s other diversification initiatives have seen a lot of success, specifically in growing industries such as film and tech.The film industry has grown 83% since Bloomberg’s initiatives were first implemented in 2002. A notable driving force for entertainment and media was the Made in NY initiative which was created in 2005. This included tax cuts and benefits for film production occurring in the city in exchange for sharing what a great production hub New York City is.After seeing the success of Made in NY for the media and entertainment industry, Made in NY was expanded in 2013 to include benefits and incentives for New York’s tech industry. Some of the components of the initiative include low-cost or free digital training to students and entrepreneurs, a digital job map to connect New Yorkers in the tech industry to potential employers, and resources, benefits and programs aimed specifically at helping tech startups.Other key industries the city is keen to help grow include green technology, manufacturing and distribution, and the bioscience industry. You can expect to see additional initiatives to support these industries as more time and financial resources become available.
Government Programs to Support NYC’s Diversification
A number of other government funded programs and organizations are in place to encourage the diversification and growth of the economy.The Center for Economic Transformation (CET) aims to develop the city’s major business sectors by implementing initiatives that address current issues faced by each industry, create jobs for New Yorkers, and promote entrepreneurship. Over the last year, the CET has introduced 60 initiatives designed to support entrepreneurship across all industries while at the same time helping legacy industries – such as fashion – make the transition to 21st-century business models.The New York City Industrial Development Agency (NYCIDA) works to expand existing companies and help them to create or retain jobs. The NYCIDA accomplishes this by assisting companies in accessing tax-exempt bond financing or tax benefits that make capital attainable via purchasing real estate, purchasing new equipment, or renovating their facilities.
Following Bloomberg
The big industries in New York City will most likely continue to be among the primary sources of payroll and economic growth in the city of New York for many years to come, and thought leaders in the city are aware of the importance of diversifying the city’s economy.The candidates expected to run for the mayoral office certainly have the credentials. A number of the candidates have held high positions under the Bloomberg administration, including Christine Quinn, speaker of the New York City Council, Bill De Blasio, the New York City Public Advocate, and Joseph Lhota, Chairman of the MTA. All three have proposed big changes to make housing more affordable, help small businesses thrive and change current tax policies that have the city giving more to the United States government than it receives in federal aid.While all of these aspects would make the city more livable, there are a number of issues facing the international community that we hope the next mayor will address. We would like to see more organizations reach out to the international community to make New York an easier and more approachable place to do business. We also are hopeful that more organizations and agencies that have helped New York remain sustainable will introduce international departments focused on helping immigrants create innovation right here in New York.In the meantime, there is some assistance provided by the mayor. For job seekers, homeowners and small businesses, here is some information on how to take advantage of the initiatives. The NYCEDC also has a number of programs available to small business owners and entrepreneurs, which you can find here.