May 7, 2004

Professors Present Report on Upstate Economy

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Tuesday, state legislators in Albany will hear City and Regional Planning Professors Rolf Pendall, Susan Christopherson and Matthew Drennan present their research findings on upstate New York’s economic woes. At a time when Cornell and other major players upstate hope to improve the region’s economy, two series of reports aim to outline the best policy measures.

The Syracuse-based Metropolitan Development Association, a group representing the area’s business leadership, published its “Essential New York Initiative” in February. President Jeffrey S. Lehman ’77 sits on the report’s steering committee, along with newspaper publishers, business leaders and other university presidents from the central upstate region..

Pendall, who specializes in affordable housing policy, land use planning and growth management, has spearheaded a series of papers on the region’s economic health for the Brookings Institution’s Center on Urban and Metropolitan Policy..

“Many of the reports [on] the upstate economy don’t look at a wide range of issues,” Pendall said of his motivation to include population, poverty and inequality, sprawl and K-12 education analyses to persuade policymakers to tackle issues in a comprehensive, region-wide manner..

Careful efforts in one area can translate into wider benefits, Pendall said. Making it easier to pursue development in and around cities and villages would lessen sprawl and reduce the local tax burden that results when physical infrastructure is extended to serve low-density areas. To boot, such efforts would also “preserve the scenic qualities that many people value in upstate [New York],” Pendall said..

These scenic qualities and the region’s quality of life for educated young college graduates are one emphasis of the MDA’s report. The MDA hopes to coordinate and encourage efforts in 12 counties, an area which ranges from Seneca and Tompkins Counties to the North Country’s St. Lawrence County..

The MDA’s report also urges the region’s leadership to help key economic clusters and growing companies in such fields as environmental technology and biosciences, to improve technology transfer from the area’s many research universities and to foster an entrepreneurial culture in a region that often fails to attract investors..

Where the two reports differ is on how to best attract educated, skilled young workers. The MDA report retained Catalytix, a consulting firm founded by Carnegie-Mellon university professor Richard Florida. Florida has argued that this young “creative class” — defined by Catalytix as “those who get paid to think for a living” — is increasingly first choosing a region that offers a desirable lifestyle, and then seeking a job there. Catalytix therefore chose to compare Central Upstate New York to such destinations as Austin, San Francisco and Raleigh-Durham, according to Rob Simpson, a staff member at the MDA..

Mark Savage, director of engineering co-op and engineering career services, said he has noticed that students are often drawn away from upstate New York because “they’re looking for a lifestyle that’s found in larger metro areas.”.

But while lifestyle issues can be important to economic development, Christopherson said, policymakers must look first to raising the region’s low wages..

A forthcoming report in the upstate New York series “will show conclusively that it’s the best-educated people whose wages are lowest compared to the national average for others of the same race, age, sex and education level,” Pendall said..

The “creative class” strategy, Pendall added, can thus only work if a graduate’s lifetime earnings in the upstate economy will be comparable to earnings possible in other regions..

A report by researchers at Georgia State University and Rensselaer Polytechnic Institute recently examined where Ph.D. recipients chose to enter the industry workforce. From 1997 to 1999, the report found that only 20 percent of Cornell’s industry-bound Ph.D.’s remained in New York State, a percentage which includes those headed to New York City. The only greater job placement outflows among large universities occurred in the Midwest, and numerous schools in California saw over 60 percent of their Ph.D.s at industry jobs remain in the state..

For undergraduate job destinations, precise statistics are difficult to find at Cornell. The distinctions between New York City’s economy and that of upstate New York is fuzzy in Cornell’s statistics, and Career Services does not have the “bells and whistles” needed to systematically study which destinations are most attractive for recent graduate said Rebecca Sparrow, director of Cornell Career Services..

For example, post-graduation career surveys have students self-report their job location, with a box for the New York Metro Area and space in which students can write in their location if they are upstate, Sparrow said. Thus where “downstate” ends and “upstate” begins is not clearly delineated, as it is in Pendall’s studies, which consider the Hudson Valley as downstate..

Both reports can agree that the problems are acute: the region, which has depended heavily on manufacturing jobs, has yet to recover from a long nation-wide decline in that sector..

“In the 1980s upstate lagged behind the nation’s growth, but in the 1990s upstate collapsed” relative to the nation’s economic performance, Drennan said, resulting in depressed levels of personal income and average annual earnings..

The recent recession has provided an extra kick in the teeth for the region: from December 2000 to December 2002, Syracuse lost 6,500, or 15 percent, of its factory jobs, the MDA said..

The job growth of the 1990s in the service sector has only partially replaced manufacturing losses and the replacement is an unequal one, as the region’s new service jobs have lower wages, Drennan noted..

“If I were to convince legislators of only one point, it would be that they should raise the state minimum wage in New York,” Christopherson said, noting that the region’s cost of living is above the national average in every major category but home purchase, and that surrounding states have all enacted a higher minimum wage..

For a region with a high concentration of college students, another statistic is particularly telling; one study cited by the MDA showed that Syracuse’s suburbs had the single-greatest decline in its under-35 population out of the nation’s 100 largest metro areas..

To drive a renewed economy, the MDA has emphasized greater technology transfers between universities and their regional economy. Cornell averaged less than four new start-up companies per year between 1998 and 2000, while Stanford and the Massachusetts Institute of Technology averaged 12 and 22 start-ups respectively, according to the MDA. Venture capital availability, proximity of a large labor pool and strong economic clusters in California and Massachusetts are key to explaining this gap, the MDA argued..

The upstate economy also desperately needs efforts to improve infrastructure, from high-speed rail to broadband fiber optic networks, Drennan said..

Drennan recalled a doctor’s office conversation with a Cornell engineering professor who was involved with a technology company. The company had a plan in place that, should it grow quickly in a short time, it would look to leave Ithaca, Drennan said..

Career advancement for skilled workers depends on being able to move from firm to firm. And if workers feel they are unable to be mobile in the Ithaca market, small, growing companies will be compelled to look elsewhere for a good regional labor force, Christopherson said..

Only by “connecting University research with industry needs,” collaborating on regional research efforts and helping build an entrepreneurial culture can Cornell and other universities improve the current technology-transfer situation, the MDA report argued..

But it remains to be seen how Cornell’s role in the upstate economy will change. Simpson said that the MDA is at work on initiatives to bring local employers to a centrally-located job fa
ir in the region, and to facilitate area-wide internship programs..

“What we need,” Christopherson said, is “to move away from is the heightened competition among places that waste tax money encouraging firms to move from one county to another within the state.”

In its efforts to help the upstate economy, “Cornell can’t lose sight of its primary function and values in a race for patents, licenses and industrial funding,” Christopherson added, noting that maintaining educational quality, including in the humanities and social sciences, remains essential for the University..

For Pendall, Cornell’s charge in revitalizing the economy is to work “as part of a network of institutions rather than as a ‘lone wolf.'” “No one institution can do everything,” Pendall added..

Drennan and Christopherson were interviewed Wednesday for a documentary on the economy of upstate’s Southern Tier region. That show will air May 26 at 8 p.m, on WSKG in Binghamton.

Archived article by Dan Galindo
Sun Senior Writer