u.s. senator charles schumer delivers internet week new york
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U.S. Senator Charles Schumer Delivers Internet Week New York.
New York, NY (June 06, 2011) –
I would like to thank chairman David-Michel Davies and Internet Week New York for inviting me to give today’s keynote address. This is an exciting event, and I couldn’t think of a better venue to talk about what it is that I want focus my remarks on today – how to sustain and expand New York’s role as a high tech center as we move forward into the 21st century.
In many ways, Internet Week captures exactly what is so great about New York, and why I continue to believe as strongly as I do in the future of this city. The first Internet Week in New York was just four years ago, and it has exploded. This year, Internet Week will include over 200 events at more than 70 venues across the entire city, with nearly 30,000 participants, involving some of the biggest names in the Internet world but also, and even more importantly, engaging so many of the small firms, and invested individuals who are the key to the future growth of this sector, and the economy.
More than anything, the people here today, and who will be participating this week, represent why, more than any other city in the country, New York has thrived even under the most adverse circumstances. We have always attracted young, talented, ambitious, entrepreneurial young people, people with diverse skills and diverse talents. Wherever human capital is the key ingredient, New York, and New Yorkers, succeed and flourish. Where other cities hope to be preeminent in one industry or one area, we are in so many – whether finance, or publishing, or law, or fashion, or media, or art, or education, or, now, high tech.
This diversity and flexibility has enabled our city, and our region, to reinvent itself over and over again as circumstances have demanded. A city that began as a fur trading outpost, had become by the early 19th century, the dominant trade center in the United States, and one of the most important port cities in the world. As the American economy matured, we continued to thrive – as a finance center and, often overlooked, as a manufacturing center. In fact, for much of the 20th century, New York had more manufacturing jobs than any other city in the world.
But once again, when the economy shifted, and manufacturing moved, first to other parts of the United States, and then overseas, New York was forced to adapt as well. While many of the other older industrial cities in this country went into decline, and have never recovered, we maintained or status as a global economic capital, both because of our existing diversification, but also by expanding into other, newer industries, whether media, or business services.
Our ability to adapt to changing times has been one of the keys to our region's s success and vitality over the last three hundred and fifty years, and enabled us to meet and surmount the challenges we have faced,
Today, I believe we stand at another one of those turning point in our history, facing another challenge – how are we going to adapt for the 21st century innovation economy? This is a challenge for us, both as a nation, and as a region.
And I think the people who are participating in the events this week represent the answer to that challenge. You are the entrepreneurial men and women – some of you from New York, many of from across the country and around the world, but all New Yorkers now - who are creating the jobs and the industries of tomorrow.
What we need to is figure out the right ways to nurture you, to encourage more people like you to come here and to support you and those that join you so that the businesses represented here today can thrive, and grow.
And this is what I want to focus on in my remarks today – what it will take to ensure that New York will become not just a high tech center, but the American high tech center for the next 100 years.
I realize that when you talk about high tech centers in the US, people don’t necessarily think of New York. Yet, by many measures New York is number one or two when it comes to employment or investment in the entire sector.
We are now the second largest recipient of high-tech venture capital in the country. We passed Boston this year, and only trail Silicon Valley in the amount of high tech venture capital invested.
And - this is the statistic that I think is most amazing - by some measures, the New York metropolitan region actually has more workers in the high tech industry than any other region in the country – over 300, 000 men and women, and nearly 22,000 firms that are classified as high technology companies. That’s right – we have more than Silicon Valley, more than Boston, more than Washington.
Part of this is that many of the traditional industries in which New has always been a leader – like financial services, and retail, and business services – are more and more becoming high tech industries as well. In 2007 JP Morgan Chase had more actual programmers than Microsoft did. This year alone, Macy's is adding hundreds of jobs in New York because of the dramatic growth in its online business, jobs that might have in the past gone elsewhere, to Boston, or San Francisco.
But even more importantly, the nature of the evolution of high tech plays exactly to New York’s advantages. While the first phase of high tech development was hardware, software is the second phase, and software depends on New York’s strengths, creative fields like advertising, marketing, media, design, fashion, even law and finance. In a software and content driven world, New York is a natural center.
There’s a reason Google invested $2 billion dollars to buy a NY headquarters in Chelsea last year. There’s a reason that so many of the venture capital firms that are based on the West Coast now have offices here. There’s a reason that high tech firms are actually relocating to New York. Just look at the sponsors of this event – Google, Microsoft, Yahoo, AOL. It is no longer optional to be in NY. It’s a necessity.
And it is not just the large tech firms that are making homes in New York – we are home to small start ups too numerous to count, many of which are showing signs of breaking through to become even more successful. As software development has increasingly surpassed hardware development as the primary engine of growth in the Internet sector, New York will do better and better, both absolutely, but also vis-a-vis other high tech centers, because our creativity is our fundamental strength.
To me, the perfect example of the transformation of this sector in New York is what is happening right across the East River, in Dumbo. Fifteen years ago, Dumbo was a community of warehouses and underused industrial buildings, many of which had been languishing for decades. Now, it is one of the most vibrant mixed used neighborhoods in the city. It is a neighborhood transformed. And what is the main industry in Dumbo? Internet companies. The largest employer is Huge, a company that builds digital platforms for some of the biggest companies in the world, and has over 300 employees in Brooklyn. At the same time, there are more and more small start ups and midsized companies that have found affordable collaborative work spaces, creating exactly the sort of synergies that give rise to companies with similar growth potential. I wasn’t surprised when last week when it was announced that the first public Wi-Fi network in the city is in Dumbo. And I would not be surprised if the next Google or the next Facebook is born in one of these Dumbo buildings
All of these firms, the large and the small, need to be supported and nurtured. And if we do what we need to do to, if we continue to nurture the strengths of the city, if we do it right, I do not think it’s a stretch to think we will compete, and perhaps even displace, Silicon Valley as the industry leader. In fact, let me go further – that should not be simply a hope, but a goal – that, in 25 years, by 2035, New York should surpass Silicon Valley as our nation’s major high tech center.
How do we do that? It will require a multipronged, well-considered, focused effort. So today I am asking Mayor Bloomberg and Governor Cuomo to join me in convening a working group geared towards making this happen. We must bring together leaders from across New York industries - the high tech sector, the financial sector, the real estate sector, the media, the educational and medical research centers – so that we make it a true public private effort. And it will require resources – at the local, state and federal level.
Accomplishing this goal will not be easy. But if we leverage the advantages we possess, and we make the right investments, I believe we can accomplish this goal. When New Yorkers set their mind on something, we get it done.
There are certain things that we need to continue to do to grow the high tech sector in New York. First and foremost, we need to make sure New York continues to be a magnet for talented young people all across America. This has always been the secret to New York's success – that we are always attracting the best and brightest from everywhere. More than anything, people want to be here, to be part of New York, of our energy, and of our success. Right now, if you're a middle-class family with three kids living in Denver, or Phoenix, or Chicago, odds are pretty high that one of them wants to come to New York. One of things I like to track is how many of my colleagues have children living here. Last time I counted, more than a dozen US Senators had children living in New York City!
We have to make sure that doesn't change - that we continue to keep New York a city that people find a welcome place to live and to work. That means providing the services that government provides, and doing them well. The decline in crime rates in this city has been one of the most transformative things I have ever witnessed in all my years as a New Yorker. It has made us an even more appealing destination. And it is to the Mayor and Commissioner Kelly's credit that even as the economy worsened, the crime rates did not. That has to stay true.
We must continue to support our great universities – like Columbia and NYU, and City University – which every year are seeing more and more applicants from across the country and around the globe. These are ambitious young people who come to New York for four years and often stay for a lifetime. We need to support our school system, and to keep housing affordable so people who come here when they are young can afford to stay when they settle down and have families.
But we also have to maintain the things that make New York unique, most notably we have to continue to support the unparalleled cultural life this city has to offer.
One of the most democratizing aspects of the Internet is that it is not just an opportunity for those with technical skills, like programmers, but also for designers, for writers, for artists, for creative people with all sorts of talents. And that creativity is nurtured by the vibrant cultural life of our city, a cultural life that exists nowhere else on the globe.
There can be no question that young people are drawn to New York by the diversity of our cultural life, and the creative energy that inspires. I can give you a story to illustrate how true this is. As many of you know, I like to bike around New York. A few summers ago, when I was on a ride through Williamsburg, I suddenly found myself surrounded by thousands of young people near East River State Park. I wasn't sure what was going on, and it turned out they were all there for a free concert. These young people from literally every part of the country who had made their way to Brooklyn to enjoy the top rung of indie music as well as one another’s company. Their enthusiasm was amazing. And I thought to myself, 'you know, this is the best of New York. This is why people come, and it's why they stay.' But we also had to battle to keep those concerts going. We need to make sure that we preserve and encourage events like this, and that we recognize that the arts are as vital a part of the fabric of New York as anything else.
And as importantly, we have to make sure that young people continue to be aware of the opportunities that await them in New York. When I talk to people in the Internet industry, one of the things they tell me is that when they go recruit at colleges and universities, many students are surprised to learn how much activity there is in the high tech sector in New York. They often end up in Boston or on the West Coast because they didn't even know to consider New York as a destination. While that is slowly changing, we have to accelerate the pace of that change, and make sure the best and brightest know of the job opportunities that await them in this sector in New York. That's something we in the public sector can do. In the same way we use our tourist agency to make sure people around the country and around the world know about New York as a tourist destination, we must use the resources at the cities disposal to make sure graduates and professionals in the field know about high tech job opportunities in New York. The city should be sponsoring job fairs, and sending emissaries from New York’s high tech industry to the schools that are producing the best engineering and software graduates. We must keep raising our profile. This is also something all of you here today need to do as well – make sure when you cast your net for talent, you are casting it widely, and getting the word out – that if this is the career you are looking for, New York is the place to be.
But along with being a magnet for young people, we must support the infrastructure of innovation that enables people to good ideas into great companies.
And that requires us to keep investing in our future–at the federal, the state, and the local level. I know that in many quarters, government spending is a dirty word. But the simple truth is that we cannot expect to compete in the next century if we do not invest. If not for government investment, there would have been no Internet, let alone no Silicon Valley.
For New York, investing in an infrastructure of innovation for high tech means that we have to foster a few key areas where, simply put, we have not been as successful. For all the things New York has always done well, we have never sufficiently capitalized on the research institutions we have in this city and region. The success of high tech in Silicon Valley and biotech in Boston is not because they have smarter people, or better schools, or more skilled investors than we do, but because they have done a much better job of fostering a culture of entrepreneurialism around their scientific and research community.
For all our tremendous assets - the elite universities and the top notch medical research center sand the skilled investment community - we have never done a good enough job of transforming the scientific and technical knowledge this city and region have into commercial endeavors that lead to cutting edge firms and jobs.
There's no reason we cannot do that as well. In fact, one does not have to look much further than up the New York State Thruway to see how this can, and should, be done.
Many of you may not know this, but the fastest growing center for nanoscale engineering and computer chip fabrication in America right now, and one of the leading centers in the world, is in Albany, New York. That's right, Albany. Because ten years ago, thanks to the tireless efforts of one professor, Alain Kalyeros, and a significant investment dollars from NY State, we now have the most impressive public/private partnership in the country – the College of Nanoscale Science and Engineering at SUNY Albany. In fact, in 2006, Advanced Micro Devices chose Saratoga County as the location for their $5 billion next generation chip factory – Global Foundries, the largest private construction project in the nation – largely because of their desire to locate near SUNY Albany.
And Albany is constantly developing new technologies and new applications for them. Now they are turning their focus to photovoltaic cell technology, which is the key technology for turning solar energy into electricity. It turns out the same processes that are used to make computer chips underlie the creation of photovoltaic cell as well. They have just received a major government grant will allow them to turn their basic research into commercial applications. The award will help make New York the nationwide nerve center for solar research and development.
I was just in China, and visited a facility that is trying to do the exact same thing over there – and I can tell you they are pouring money into technology projects like this one. In fact, they were talking to me about what was going on in Albany. What Albany has been able to do in hardware, New York City should be able to do in software and similar fields.
But if we are to do this in New York, the sine qua non will be to improve our engineering schools. When I talk with high tech leaders, they always tell me the same thing –New York lacks enough high quality engineers.
It is why I think that Mayor Bloomberg's plan to bring an applied sciences school to New York is spot on. Even as software becomes more and more economically important, we still need a cadre of top-notch engineers to work with designers, to turn creative ideas into commercial products. Introducing another world class engineering and applied science school to go with Columbia and NYU-Poly that will churn out talented engineers will only serve to strengthen the city and the region.
Mayor Bloomberg deserves tremendous credit for recognizing this, and making his bold proposal. That's why I have told him I will do everything I can to support his effort. It is one of the most important things we can do to strengthen the region’s employment for the next generation.
But I also think we can be even bolder. My understanding is that the proposals that the City has received so far in response to its request for simply interest are exciting and potentially transformative. Given that the main contribution the city will offer the institution that it selects is land, I think there is no reason we need to limit ourselves to one institution. That is why I think we should double down – if the quality of the applicants is as high as I believe it is, then I think choosing two winners, and doubling our opportunity, makes complete sense. We should recognize that different applications will have different strengths. One winner clearly has to be focused on providing graduate level engineers across fields. But I think it makes sense to make sure another winner has an emphasis on undergraduate engineering and applied sciences as well, so that we capturing talent at every stage of its development.
In addition, we need to make an extra effort to bolster the high tech sectors where we continue to lag. While the Internet sector is booming, we should also be a leader in biotech. We have some of the foremost scientific research institutions in the country here in New York. But for too long, much of the research that was patented in New York has been transplanted elsewhere. Ideas that started here are now the backbone of firms across the country, but not here.
We have some good projects underway. The Alexandria Science Park seems, where firms like Eli Lilly, Pfizer and Imclone are working together with New York’s major research centers in New York, is a good start. It is exactly the sort of public private partnership we should embrace – the city donating the land, state making a basic investment, the federal government providing research dollars, and the private sector putting up most of the capital costs. And the Biobat incubator in the Brooklyn Army Terminal, which when completed will have over half a million square feet of early stage space means that there biotech start ups will have the space in the city itself to try to turn their research into practical applications . And this is essential. We have to continue to find new and creative ways to make sure those firms stay here. Because not only are those jobs vital, but those are the firms that may well one day blossom into something even bigger. It's good to be an incubator, but we want to make sure that when those chicks hatch, they settle in nests nearby. We do ourselves no good if we spur innovation, and then let another part of the country reap the rewards.
These are the right models, but I believe we need to make an even more concerted effort in the biotech space. In particular, we need to do a better job of bringing together New York's biotech sector and venture capital. Despite being the nation's leading financial sector, New York's biotech industry has not been a focus of New York venture dollars. In fact, by some measures, we trail not only San Francisco and Boston, but San Diego, Washington and Philadelphia. We need to take Boston as our model, where both industries have matured together, and created a feedback loop. As more venture capital dollars are dedicated to biotech firms, those firms grow and reward their investors, who in turn look for more firms to invest in, and so on.
At the same time, the medical and university research centers in New York need to make encouraging entrepreneurialism a higher priority. Too often, in New York, institutions have focused on the short term goal of maximizing revenue for their discoveries, even if that means selling a patent out of state, when licensing to a New York start, while less lucrative, would have meant more opportunities and jobs in the region. The goal should be building out the sector, which will benefit all the institutions in the long run.
Similarly we have a great opportunity to make New York a center of clean technology and alternative energy research and development. Why? Because as much as anything, energy efficiency is a key to our energy future.
Let me give you an example of the significance of energy efficiency. Do you know which state has the most energy efficiency per capita in the nation? It’ll surprise you – it’s California. Why? Because in the 1970s, before many of you were born, Governor jerry Brown, in his first go round, back when he was being lampooned in Doonesbury as Governor Moonbeam, recognized that if you put building codes in place that make energy efficiency a priority, you’d save an enormous amount of energy. While we often focus on cars and gas when we think about energy efficiency, the truth is that buildings are the single largest users of energy. Nearly 40% of our energy use is consumed by residential and commercial buildings. Thanks to Governor Brown, California today has about the energy consumption of Denmark.
Energy efficiency is going to be a central component of moving us towards a clean energy future. There are already a number of clean tech firms in the five boroughs – some focusing on solar, some on energy management for residential and commercial buildings. We need to do more to spur these firms on. I have proposed energy efficiency laws in Congress the past, and will do so again. But there’s no reason New York has to wait. The more local building codes incentivize efficiency, and green building, and encourage experimentation, the more innovation we will see. We should turn New York into a laboratory for energy efficient innovation. This will not only be good for the city’s energy efficiency, but it will be a boon to the clean tech and alternative energy sectors. There are already efforts underway in Syracuse to focus on energy efficiency, but we need to bring this downstate too. We would spur more innovation, and give these firms a chance to test their ideas and products, and potentially, an important first mover advantage that could make this one of New York dominant future sectors.
Finally, there is a clear Federal role in spurring on high tech as well. The grant that we are providing in Albany is a model for what we need to do more of – it is a grant that is designed for second stage technological development. In other words, it's funding that will allow them to bridge that 'valley of death,' between the research stage and the more advanced stage where they are far enough along to be confident about finding private investors. We need more funding like this, and it is something that is a great priority of mine. We must continue to invest in those things that will generate long term economic growth, and I will continue to fight for those dollars.
In the same way, we must continue to invest in Science, Technology, Engineering and Math (STEM) education. I have long been a proponent of getting more talented math and science teachers in the schools. It is one of the most important things we can do if we want to continue to produce the top notch engineers and scientists we need to remain competitive. We cannot expect to continue to lead the world in innovation if we do not have an education system that matches our needs.
And last but not least, we need real immigration reform. There is nothing more important or urgent that Congress can do for the high-tech industry in New York than to ensure that we have a functioning immigration system that allows our companies easy access to the best and the brightest minds that the world has to offer. More than anywhere else, New York will benefit from real immigration reform that allows the world’s most talented men and women to come here and stay.
As New Yorkers, we know better than anyone the value of immigrant entrepreneurs. We see it every day. And nationwide, immigrants were the chief executives or chief technologists at one of every four technology and engineering companies started in America from 1995 to 2005, and 52 percent of Silicon Valley start-ups. Today, our worry is all the bright, ambitious immigrants who come here to get an education or take a job, and then are forced by our outdated immigration system to leave. Too many of these men and women end up leaving the United States and returning home to create new jobs elsewhere, often in India and China. It makes absolutely no sense.
I have legislation that will change that. Our goal is woo skilled immigrants to the United States, and make it easier for them to stay. My framework will award a green card to any immigrant who has received a PhD or Master’s degree, or perhaps even a BA, in science, technology, engineering, or math from an American university. And we will create a new visa for immigrants who are coming to the United States to startup companies and employ American workers. We need to reward entrepreneurialism, not push it away.
It is imperative that we keep our status as the world’s most attractive place for a smart talented person to come to work and create a better life. There is no doubt our region will be the biggest beneficiary of immigration reform. As New Yorkers, we have long seen the economic benefits that energetic, skilled immigrants bring to the region. We have a culture of diversity that has always embraced new arrivals, no matter where they are from. We want them to bring their skills, their talents, their desire for a better life and all the economic benefits that come with that to our city, to our region, not elsewhere.
The vitality of the city has always been a draw for people from everywhere who want to come and share in that, and feed on it. That has long been what has allowed New York to thrive and adapt when other places have not. But it does not happen without effort, without foresight, and without commitment. Human capital and innovation are the keys to success in the 21st century. These have always been our city, and our region’s, strengths. But we need to make sure we provide the infrastructure to support the innovation that we are trying to spur. I believe that if we do the things I have discussed today – that if we educate, and innovate, and make sure the best and the brightest continue to flock here and are able to stay here, there is a real chance that New York is not simply a leader of the industries of today, but the center of tomorrow’s industries as well.
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