Overview

Viewed as a whole, New York state’s economy has staggered for over three decades, listing between the prosperity of New York City and the increasingly dire economic plight of upstate communities. While net job growth in the state has been positive, older, higher-paying private sector jobs—frequently found in the manufacturing sector—have been increasingly replaced by lower-paying positions, many of which depend on public funding.  To achieve Governor Spitzer’s goals of revitalizing the upstate economy and accelerating economic growth in every region, the state will need to reform its current policies and regulations, and dramatically restructure its economic development efforts.

The report was produced by A.T. Kearney, a broad-based, general management consultancy, which was commissioned to provide fresh, objective and strategic business perspectives on New York’s economic strategy and the efforts of Empire State Development.

3.5

In New York state, each new Innovation Economy job—those enabled by technology and competing in the global marketplace—generates 3.5 additional jobs.

$35B

If the cost of doing business in New York State was reduced merely to the national average, an aggregate $35 billion a year would fall to the bottom line of the state, its businesses and its residents.

Report Highlights

Overcoming Obstacles to Growth
New York cannot be widely prosperous until something is done about the factors that inhibit private investment—stifling regulation, excessive taxation and the general high cost of doing business.

Innovation Economy
New York’s best hope for the future is to focus both statewide and regional investments on emerging sectors—especially nanotechnology, bioscience and cleantech—which have the potential to create up to 330,000 new jobs by 2014.

New York City
New York City is arguably the state’s most valuable asset. In addition to its preeminent status among the world’s cultural centers, in 2006 it was home to 24 of the Fortune Global 500 companies and is a global hub for financial services, medicine, advertising and marketing and media and entertainment.

Key Takeaways

The state must revise its strategy in order to build long-term economic competitiveness and develop a model for translating strategy into action. This requires encouraging and facilitating broad-based private sector investment and business development and a statewide effort to facilitate and integrate connections between private and public sector forces. Existing impediments, whether stifling regulation, high taxation and costs, or poor communication with economic development agencies, need to be eliminated.