Wednesday, August 24, 2011

NYC Seeks to Grow Jobs through Incubators


It wasn't a big national event. New York City Mayor Bloomberg visited the Entrepreneur Space in Queens, New York last week. With him were City Council Speaker Christine Quinn, Rep. Carolyn Maloney and other elected officials. The main coverage was a local story by the Queens Gazette and a press release and a YouTube clip posted by the Mayor.

However, this visit should get national attention. Bloomberg, after all, knows a thing or two about how to create jobs. Back in 1981, when there weren't a lot of incubators and in the midst of a Fed-induced inflation-fighting recession, Michael Bloomberg parlayed his $10 million Salamon Brothers severance and his shares into a giant company. Last I checked, Bloomberg L.P. had 9,000 employees in the New York City area alone (a lot more than the entire staff of the U.S. Senate). Also, by bringing more transparency to capital markets, the company argues with some basis that it is contributing to growth of jobs outside of New York.

The nation is stuck in liquidity doldrums that Japan has made famous. Creating jobs is today's public-policy Priority One, the Tea Party's debt exorcisers notwithstanding. Mr. Bloomberg’s skill at building a business empire from scratch inspired scared New Yorkers to vote for him after 9/11. They elected an entrepreneur as mayor with the expectation that a successful business leader would surely would help the City hold on to its jobs and create new ones.

So what is the Mayor doing now, ten years after 9/11 and 30 years after he launched his business? He is recognizing the importance encouraging entrepreneurship, and he is also recognizing the fact that few wannabe entrepreneurs have the startup capital he began with, or the training he received at Salamon Brothers.

To assist new entrepreneurs, in 2009 Mayor Bloomberg launched nine business incubators thoughout NYC, hosting more than 500 start-up businesses and more than 800 jobs. The incubatees have raised $39 million in private capital so far. Many are graduating from their incubators.

Some New York City incubators are even exporting their support skills elsewhere. Green Spaces, a green incubator that started in Brooklyn has cloned itself in Manhattan and has now extended its efforts to Colorado, backing the Green Route Festival this Saturday in Denver.

The Entrepreneur Space in Queens is a good example of an incubator. It allows local food-oriented companies to avoid investing in their own commercial grade kitchens. For a fee, it provides four such kitchens, meeting Health Department standards, shared 24 hours a day by 120 businesses. The companies produce organic dog biscuits, ethnic foods, and pies, cakes and cookies. The kitchens are also used by catering services. The public-private Entrepreneur Space partnership includes incubator services funded by New York City - low-cost workstations, mentoring programs and job training.

Excerpts from comments of three elected officials who were on the tour of the incubator follow:

City Council Speaker Quinn:
These workspaces are groundbreaking initiatives, aiding culinary entrepreneurs to expand their businesses while bolstering the multibillion dollar food industry in New York City.
Mayor Bloomberg:
When we launched the first business incubator in 2009 to make it easier for entrepreneurs to turn their ideas into local businesses and jobs, we pledged to open more if it was successful. Now, we’re identifying opportunities to expand the program even further. We want New York City to be the most welcoming city in the country for people who want to start a business.
Rep. Maloney:
I agree wholeheartedly with President Obama that Congress needs to get moving to support job creation: we need to reauthorize the cut in payroll taxes we approved in the last Congress, which will give families an extra $1,000 per year, on average. I’d like to commend Mayor Bloomberg on the success of New York’s business incubators. The small businesses taking root here are truly the future of New York. This kind of innovation is one of the reasons New York is doing better than the national average.

Congratulations to the Mayor. Recent reports suggest that the New York City area has passed Boston in the amount of venture capital money it is raising. NYC is now second only to the Bay Area. Together, NYC and Boston VC funding exceeds what is going into the Bay Area. The hot areas for VC funding are web-focused tech companies. Just as demand from Wall Street drove growth of NYC’s tech companies in the 1990s, today the driver, says Dave Broadwin of Foley Hoag, is the advertising industry.

NYC needs to do everything we can to encourage entrepreneurship in tech development and every industry!