Close

Ways to connect.

Office. 119 West 24th Street, New York NY 10011
Thanks for reaching out

Topic(s)

Close
Technology policy 2019.03.22 This op-ed originally appeared in Inc.

What the Amazon's Break-Up With New York Will Do to the Tech Scene

New York City's tech ecosystem has flourished like no other outside of Silicon Valley. Amazon's HQ2 would have given it a boost for generations to come.

Like a bad breakup, Amazon ended its relationship with New York City on Valentine's Day. This was a short-lived relationship, an engagement that was called off before the ring was purchased--before the house, cars, and kids came along.

But Amazon failed to court all New Yorkers. It wasn't the public that wanted this premature separation--residents of the city overwhelmingly supported the project by a margin of two to one--it was the elected officials. For the next generation of New Yorkers--the millennials, the college graduate who will have six-figure debt, and the underprivileged young professionals of the outer boroughs diving into the world of technology--this will mean 25,000 to 40,000 fewer jobs.

The elected officials opposed to Amazon worked directly against the economic interests of all New Yorkers. They took for granted the technology sector's growth that had been fostered directly through smart economic development planning focused on the industries of the future.

New Yorkers will never know if a union with Amazon would have led New York City to become the global capital for technology. This has, after all, been the unabashed goal of city planners and economic development professionals since Mayor Bloomberg's administration. In the years since, New York's tech scene has flourished as the second global technology capital, becoming the fastest-growing industry in the city.

It wasn't always this way and Silicon Alley's rise isn't a revival, it's a stunning achievement: Of all the cities around the world that have tried to recreate the magic of Silicon Valley, none have come as close as New York City. Boston's Technology Corridor, Route 128, or Skolkovo's Innovation Center in Moscow never quite managed to grow as quickly.

What made New York's approach to attempting to build its own technology hub effective wasn't that it just focused on education, culture, community. New York City--the town where Starbucks are located on every corner--recognized tech here would be served up differently. Where Silicon Valley had Red Rock Cafe--the legendary Mountain View cafe where deals like the WhatsApp acquisition have been made--New York City had the Ace Hotel Lobby or Union Square Cafe. The coffee might be similiar, but the conversations would be different. Coders in New York City wouldn't just talk about technology, but also finance, media, fashion, real estate, and healthcare.

New York doubled down on its legacy industries. It didn't focus provincially on Silicon Alley as it had during the dot-com era when media companies reigned supreme near the Flatiron building with flashy billboards; it ensured tech would be tethered to all of its thriving industries. New York's aims became as ambitious as the immigrants that have settled here for generations.

If Mayor Bloomberg's Applied Sciences NYC initiative--the competition which comparatively drew proposals from universities all over the world to create a technology campus and which led to Cornell-Technion's arrival here--was New York's Erie Canal moment, Amazon's arrival would have been its crowning glory--the point at which New York overtaking Silicon Valley would have been economically inevitable.

Long Island City, the location that I correctly predicted Amazon would select last year, had been prepped for a tech company of Amazon's size to call it home. The elected officials who for years were most opposed to Amazon now swore to support to the tech ecosystem that had been budding in Queens. I sat down with those very same officials eight years ago while working in economic development and read their names on a support letter for Amazon last year. Their immediate volte-face wasn't driven by the public, but by politics and fear of powerful progressives.

The lesson to take away from Amazon's decision is that the political landscape is shifting sharply against Big Tech. Unfavorable media is negatively affecting tech companies, even when their impact is beneficial and the public broadly supports it. When the returns on subsidies overwhelmingly justify their economic impact, and the subsidy is essentially a bulk discount on a post-performance basis, how else do you describe the backlash other than political opportunism of newly empowered opposition? In the age of echo chambers, what else can drive aggressive naysayers more than misinformation and saying the city was putting billions into an already-rich man's pockets?

Amazon was wholly unprepared for the political landscape in New York. It was ready to commit, but these nuptials came with problems--no neutrality on organized labor and no reneging on the agreement. Relationships don't end because of one or two issues; they end due to the culmination of many problems--and this short-lived affair had too many.

The question now is will New York's leaders learn to love tech or will Big Tech become persona non grata? When an industry that's responsible for this country's economic growth over the last decade--and the growth of jobs in the future--is demonized, where should we look to for the next generation of jobs as more become automated and replaced by robots and artificial intelligence?

The future will not be forgiving if we turn away from it.

Close
Tech Economic Development 2019.02.21 This op-ed originally appeared in City & State NY.

In Amazon's wake, New York should double down on tech

The city and state can’t ignore the fast-growing economic sector.

The love that consumers have for Amazon did not translate into support for bringing half the company’s HQ2 to Long Island City among many New Yorkers – including some elected officials representing Western Queens and the newly charged progressive left. While there’s a likelihood that Amazon’s footprint in New York City will still grow, the lost promise of 25,000 jobs is a setback to the city’s hopes of capitalizing on the growth of the tech sector. But the city’s strategy of building a major tech industry was the right one and it should work even harder at it going forward.

Understanding the tech sector in New York requires going back to the mid-1990s dot-com boom. Across the country, towns and cities developed strategies to lure high-tech companies. In Kingston, New York, IBM had settled in, injecting an annual $2.5 billion into the economy of the region only to leave a few years later. Other cities relied too much on internet startups that were doomed by the internet bust in 2001.

New York City suffered a similar fate, due to a different dependency. Silicon Alley, clustered along Broadway in Flatiron and in close proximity to Madison Avenue, relied heavily on media and advertising technology. In 1999, over 500 startups were founded, and by the next year only a few dozen survived in the crash.

The dot-com bust epitomized the early years of the new tech economy. But where Kingston struggled to regain its footing, New York flourished in its revival. In the years following Sept. 11, 2001 – and with then-Mayor Bloomberg and Deputy Mayor Dan Doctoroff fearing a recession – New York City planners prudently sought to bulwark the economy from external forces. A blue-ribbon panel of business, labor, academic and political leaders organized by U.S. Sen. Charles Schumer had released a report focused on addressing the economic needs of the city and its shortage of office space. It would set the groundwork for the city’s efforts to transition New York from its “FIRE” – finance, insurance, real estate – economy to a focus on “ICE” – innovation, culture and education.

Over the next decade as tech in the city grew to become home to the second offices of Silicon Valley’s tech behemoths, and as companies headquartered in New York City like Gilt, Tumblr and AppNexus emerged, it also grew around its strengths in fashion, media and advertising. In the aftermath of the 2008 financial crisis, city officials once again sought diversification for a city dependent on Wall Street and doubled down on using the “ICE” economic model.

New York City’s Economic Development Corporation, or NYCEDC, identified the biggest challenge for tech’s growth and for tech companies: finding brilliant engineers. Rather than filling office space with growing startups, it beckoned these companies and then ensured they would stay by supplying them with talent. The city would make a massive investment into its human capital by attempting to attract a top-tier tech university through a global competition, Applied Sciences NYC. It established a new university, Cornell-Technion, as well as New York University’s Center for Urban Science and Progress and Columbia University’s Institute for Data Science and Engineering. The colleges would join other existing programs to ensure a robust pipeline of engineers.

Today, tech in New York state has expanded faster than any other sector since the Great Depression, comprising 326,000 jobs at over 9,300 tech companies. This is the third largest number of tech workers in any state, behind only Texas and the lead, California, at 880,000 jobs. The growth rate, at 25.5 percent between 2010 and 2016, is impressive enough, but the average tech salary has grown at three times the rate of any other industry in the city. Salaries in New York City’s tech sector average a cool $147,000 annually.

These numbers speak to one thing: The technology sector cannot be ignored. It has played a key role in New York City’s recovery since 2008 as well as its explosive growth. Nationally, the digital economy has been growing at triple the pace – 5.6 percent – of U.S. GDP over the past 10 years compared with 1.5 percent of the economy at large. It is a crucial part of what has driven the stock market to all-time highs and the economy to full employment.

But in the past 100 years, New York City and New York state have never birthed a major tech company on the level of Facebook or Google, and so it has remained second to Silicon Valley. Besides IBM, which was founded in upstate New York in 1911 and is currently headquartered in Armonk, New York, with only a fraction of its workforce there, it doesn’t have the sheer number of these massive world-changing companies as California does.

New York state’s efforts to foster the tech sector has focused on New York City, “Tech Valley,” Buffalo and, recently, Syracuse. “Tech Valley,” an out-of-date marketing name to describe the high-tech corridor encompassing the Capital District and Hudson Valley, boasts a world-competitive semiconductor industry and is the second great example of planning that has worked – though it came at a cost. In 2009, GlobalFoundries’ $4.2 billion chip plant opened in Malta. At the time, it included the largest cash grant incentive package in the history of New York and the United States. Close to $1.4 billion in a mixture of cash and tax incentives were provided to produce 1,400 jobs. Those jobs later quadrupled directly and indirectly and the investment by into the fabrication plant doubled to $15 billion over the years. In that case, New York state didn’t even compete only with other American states and cities, but with China, Singapore, Russia and Brazil, all of which offered comparable incentives. Even Israel has doled out incentives for Intel, underscoring that, in a highly globalized world, any region is a competitor.

Many regions seeking to advance their own tech clusters may falter or fail – Syracuse’s Surge could – but the economic underpinnings of local and regional systems will be bound to tech as the diffusion of technology enterprises and startups move into second-tier regions and cities. Tech-based economic development strategies should be incorporated into the toolkit of city officials and urban planners throughout the state. Developing a culture of entrepreneurship and risk, as well as networks of mentors and investors, is often realized through accelerators, incubators and coworking spaces.

But other strategies are integral to the development of innovation economies: Focusing on ensuring there is ample tech talent – and not just through universities, but also through “code schools”; ensuring that research and development occurs and that there is tech transfer, where new technology can go to market; defining regional strengths and existing industries as competitive advantages, where opportunities for tech-tethering can be advanced; investing in early-stage and maturing companies through “evergreen” funds supported by government that continually reinvest; and incentivizing large-scale technology projects where the measurable economic impact will be compelling. Incentives, though not ideal, are an unavoidable reality, but when approached correctly within tech-based planning, can be immensely positive for a region’s economy and provide win-win scenarios for the public and private sectors.

New York City, though booming by all metrics, shouldn’t ease up on the gas pedal when it comes to tech. If Amazon is gone, it should find a better partner to grow high-paying jobs and transition New Yorkers into the innovation economy.

Close
Technology policy 2019.02.16 This op-ed originally appeared in Observer

How Amazon opponents failed to win public opinion––but won anyway

Some 300 years ago, the Irish statesman Edmund Burke opined that a legislator’s role was not to represent their community’s interest, but the interests of the electorate at large. “You choose a member, indeed; but when you have chosen him, he is not member of Bristol, but he is a member of Parliament,” he trumpeted.

That following election, his constituents repaid him by replacing him.

Thursday’s decision by Amazon to not build its next headquarters in Long Island City, New York, begs this timeless question once more: Is the trustee model of representation—a guiding principle that legislators are entrusted with the autonomy to act in the greater good of the population—an appropriate stance for elected officials to take on the issue of their constituents’ economic future? And even if it is, given the nature of running for office, holding office and the people who attempt both, is it realistic to ever expect them to put the good of the electorate as a whole ahead of the people who can grant or deny them another term?

Amazon’s pull-out curiously followed the release of the second major poll by an independent polling outfit on Amazon’s second headquarters that showed across-the-board support for the project that should have put opponents’ criticisms to rest. After all, an overwhelming majority––56 percent or 23 points more than objectors––approved of the e-commerce giant’s arrival and believed that the performance-based incentive package was justified. A December poll by Quinnipiac University yielded nearly indistinguishable results of approval.

The unspoken lead opponent to Amazon’s second headquarters was none other than Alexandria Ocasio-Cortez. While she held no direct authority over the project, her district neighbors Long Island City, and her looming presence altered the discourse, as well as the decisions of local elected to oppose. From elected officials who copied her logo to the politicians who borrowed her rallying cries, it was all too apparent: They were afraid of being primaried by an empowered progressive fringe player.

Yet, diving deeper into what New York City residents wanted––constituents of hers and opponents––the opposition is perplexing and troubling. Among African-Americans, 70 percent of New Yorkers supported the HQ2, and among Latinos, the support was nearly monolithic––four out of five welcomed the company. Following Amazon’s withdrawal announcement, leaders of the public housing association put out blunt calls of condemnation.

For the handful of local Queens politicians opposing the deal, what people in Manhattan or the Bronx or Staten Island thought didn’t matter. What people across Queens thought about the deal didn’t matter. What voters broadly in their districts thought of the deal didn’t matter. All that did matter were the views of the relatively few people who reliably vote in every Democratic primary. That 10-15 percent of the party calls the shots because they’re the only ones with real world impact over the next election. The political risk wasn’t alienating residents in the center who supported the deal. Those people don’t actually vote. The risk came from the left—and the only way to eliminate the risk was to oppose the project. Everyone and everything else is white noise.

In contrast, guided by the delegate model, an elected official would be mandated to act according to the popular opinions of their constituency. Even then, there are incontrovertible circumstances of race, social justice or moral issues where an elected official should remain disaffected and independent from the worst inclinations and urges of an electorate. And governing and legislating may be a delicate balance of both––understanding what constituencies want and what is in their interests, and what is best for all of society.

However, no elected official should betray their electorate by working against their long-term economic interests. The economic considerations of Amazon’s second headquarters should make it difficult for any New York officeholder to have been unequivocally against the project. In this case, Ocasio-Cortez and opponents didn’t consider that balance and weighed only their own faction’s goals. That may be good politics, but it’s far from good governance.

The long-term perspective of our representatives should recognize the dynamics of a changing workforce and the need to continue developing New York’s innovation ecosystem––what economic development planners and city officials have fruitfully fostered over the last decade. New York comes close to rivaling Silicon Valley, with its own character and presence, because of the investments and initiatives in opportunities like Amazon’s HQ2. Its success story offers a case study for other cities around the world.

The message from these elected officials opposed to Amazon: the public’s opinion doesn’t matter until it does for their politics. They may attempt to believe they are agents of their constituents, but they will continue to act as all-knowing custodians of decision-making, subverting those who elected them in the process.

Close
Technology policy 2019.01.14 This op-ed originally appeared in amNewYork.

Let conversation over Amazon HQ2 take off

Labeling the entire project a corporate windfall is misguided.

In the aftermath of the debate about Amazon HQ2’s arrival and economic subsidies, the notorious helipad the company requested has led many residents and elected officials to rip into the company, labeling the entire project a corporate windfall.

The antagonism, however, is shortsighted. In fact, much of the opposition may be hyperbole and political posturing from elected officials even though many New Yorkers, including Queens residents, support the project. There are authentic concerns, and Amazon critics can more effectively promote the community’s interests. Here’s how:

Change the messaging from “No” to “Yes, with reservations” : Simply saying “No” is an obstinate response to a company that would help cement NYC’s position as a global capital for technology. However, too much of the misguided debate is discouraging dialogue. Instead, promoting discussion would encourage Amazon to consider what it means to be a good corporate citizen and neighbor.

Draft realistic solutions : Amazon detractors have raised transportation, housing, and local employment diversity as critical issues. Although concerns may be valid, critics lack data or credible solutions to resolve them. For example, a diversity proposal with potential partners such as universities and workforce development groups can provide pipelines for local talent. Queens College graduates more engineering students than NYU, Columbia, and Fordham combined while nearly 40 percent of its students are of lower income backgrounds. A partnership with CUNY would provide opportunities for students.

Participate in the Community Advisory Council : Shouting from a podium may capture headlines, but does little to offer solutions. Elected officials opposed to the project would do more for their community and be more effective if they came to the table with their concerns. And if this is truly about Amazon’s impact on NYC, then their participation is necessary.

While Amazon would be lucky to call NYC home, critics of HQ2 should not act hastily and should focus on communicating how the company can help build an equitable, diverse and prosperous New York.

Close
Technology policy 2019.01.06 This op-ed originally appeared in City & State NY.

Why we need more technologists in politics

Tech literacy in government needs to be improved.

When Google CEO Sundar Pichai testified before Congress in December, Rep. Steve King, a Republican from Iowa, asked why negative stories about him appeared on his granddaughter’s iPhone. “Congressman, iPhone is made by a different company,” Pichai replied politely. Just months earlier, Facebook founder Mark Zuckerberg fielded similarly ill-informed questions, amusing and bewildering much of the public.

Few in Congress come from a background in science or technology. The consequent technological illiteracy has had far-reaching and negative consequences. Yet, as technology pervades every aspect of our lives, a greater understanding of the policy implications of new technology is clearly needed in order to formulate the right policies for an age of innovation and an emerging digital economy.

Technologists and scientists are just as scarce among New York’s elected officials. In the Assembly and state Senate, there are only a handful legislators with formal training in the sciences: one geologist, a technology executive, a nuclear engineer, a civil engineer, an electrical engineer and a chemist. The absence is more extreme in the New York City Council, as there are currently no members with any science background. Also, not a single web developer, software engineer or programmer is represented in any of those three main legislative bodies.

Compare this to the overwhelming number of legislators whose sole careers have existed within politics, or the many lawyers who occupy the state Capitol and City Hall. Legislators may be well-trained at winning arguments, but poorly equipped to understand the growing industries they must regulate. The city and state are wrestling with how to manage the growth of vacation rental websites like Airbnb and ride-hailing apps like Uber and Lyft. There are major implications for housing and hotels, cab drivers and mass transit. To enjoy the benefits of disruptive technological innovations while minimizing the negative unintended consequences requires delicately threading a needle. To properly devise or revise regulations for challenges unanticipated by laws passed decades ago, policymakers must understand how these technologies work and how they interact with consumers, employees and the rest of society.

So far, New York City and state have largely been caught flat-footed. The rise of ride-hailing apps has contributed to worsening traffic congestion and has sent the value of tax medallions plummeting, leading to a spate of taxi driver suicides. The New York City Council’s solution is an inefficient and ineffectual cap on the number of ride-hailing vehicles, rather than a reimagining of an evolving traffic and transportation landscape. Imagine what might have been if an enterprising legislator had championed efforts to build an app sponsored by the New York City Taxi and Limousine Commission to compete with Uber and Lyft years ago, before the companies had already become dominant players in the market.

As technology becomes more intertwined in society, culture and politics, shouldn’t the same happen in government? With so much industry transformation as a result of fast-growing technology startups, policy often lags behind and has to react.

Consider blockchain technology, a software protocol that establishes a decentralized public ledger for transactions and which powers digital currencies like bitcoin. Blockchain could one day be used to administer government services like food stamps, track procurement for public works or even voting, decreasing fraud and abuse while increasing transparency and boosting efficiency. Fortune 500 companies like IBM and Google and organizations like the United Nations and the World Economic Forum recognize this potential and are investing heavily into the promise of blockchain. While Bitcoin uses blockchain, some legislators might think the two are synonymous, though one is a highly speculative cryptocurrency and the other is a promising emerging technology. Still, blockchain products, including cryptocurrency, raise new cybersecurity questions that will create another emerging area of complex potential government regulation.

Then there are issues on the horizon that will be raised by products with even more potential to alter society, the economy and everything from the environment to housing segregation. How will autonomous vehicles impact the insurance industry, traffic congestion, mass transit ridership and carbon emissions? Will the privacy of user data be protected by social media companies? Can artificial intelligence be used to remove racism from the mortgage approval process?

While nearly all other major industries or occupations, from educators to small business owners, are represented in state and local legislative bodies, the tech industry has few legislators with the expertise to lead on their issues. There is a dearth of proponents for tech-based solutions to improved governance, how startups can work with government rather than against it, and how the tech sector will undergird or upend New York’s future economy.

The lack of leadership on technology issues has led to a deep misunderstanding that has bred a distrust of technology and of the broader tech sector. Nothing may characterize this more clearly than the recent opposition to Amazon’s second headquarters in Long Island City. The industries of tomorrow will certainly be inextricably tethered to the tech sector. Likewise, advances in automation may arrive sooner than we expect. With automation will come a need to shift labor pools towards technology while retooling the workforce. This will require vision and forethought from government to work with labor unions, the private sector and educational institutions.

In fact, it may not just be knowledge of the tech sector that is missing in New York’s governing bodies, but also the culture, philosophy and enterprising spirit that comes with it. In the world of technology and startups, “lean” or “agile” processes dominate the way of thinking. Government functions using a waterfall approach, in which projects and policies are implemented at scale, leaving them to crash and burn if left untested, while the tech sector applies a scientific method to business, customers, and architecting technical solutions. Using the tech approach within government would mean deploying more lean and limited policies and programs as test cases, which can provide iterative loops by which improvements in services and policies can be made incrementally based on citizen feedback.

Government policy innovation happens only by taking risks. Yet, the bigger risk is when government operations are outdated, policies are maladapted, or modern technology is overlooked. More technologists in government and politics – elected entrepreneurs who do not have an aversion to failure and are risk-tolerant by character and training – could improve policy outcomes while increased tech literacy among legislators may ensure that no tech issue is only cryptically understood.

With the ever-increasing role of technology on politics and policy, scientists, engineers and programmers should begin to view government as the next industry ripe for disruption. They may be surprised to find that running for elected office isn’t so different than running a startup and that citizens are customers who deserve good service. The next great innovation, in fact, may not originate in a garage as code, but rather in the halls of the state Capitol as legislation.

Close
Tech Economic Development 2018.12.12 This op-ed originally appeared Crain's New York Business.

What critics get wrong about Amazon's HQ2

Opposition to the project sets a dangerous precedent for New York

in the runup to 2000’s internet boom, New York’s technology ecosystem—embedded within the media industry—began to flourish. The dot com era of the late 1990s led to Silicon Alley’s first red-hot startups including BuddyMedia and DoubleClick. Following the city’s first major initial public offering for a tech startup, New Yorkers were greeted by a large billboard paces away from the Flatiron Building that read “DoubleClick welcomes you to Silicon Alley."

Today, New York’s tech ecosystem is no longer limited by a geographic moniker and it’s Amazon that will be placing its billboard on the shores of the city. And while opposition to Amazon’s second headquarters remains virulent, it’s important to remember how the city became an enviable technology hub—and the dangerous precedent it sets when elected officials oppose future technology-based economic development.

The arrival of Amazon in New York will likely signify the second inflection point in its storied history—the point at which New York’s Silicon-everything overtakes Silicon Valley. This trend, no doubt, began a decade ago following the recovery of the dot-com collapse and was set in motion by a previous well-publicized competition, the Applied Sciences NYC initiative spearheaded by former Mayor Bloomberg.

Critics continue to clamor that economic incongruencies exist in the Amazon deal and now the New York City Council has called for hearings. How can a company so wealthy be offered a transaction that many have described as corporate welfare by a city with such great income inequality, infrastructure issues and a housing deficit?

In the immediate wake of Amazon’s announcement, the topic instantly went from an arcane policy issue to an overtly political controversy. Nearly all of the elected officials who represent Long Island City or adjacent areas voiced opposition to the project. Alexandria Ocasio-Cortez, who will represent nearby neighborhoods in Congress starting next month, led the ideological march against the project in near perfect anti-corporatist lockstep. Opponents continue to argue that this is about ensuring that a wealthy man and a corporate giant are not beneficiaries of subsidies.

For one, even though there are write-offs for individuals and businesses, these opponents miss the big picture. Amazon isn’t a manufacturer or a casino receiving a subsidy. It’s a technology enterprise being given a tax incentive—typical state subsidies afforded to any corporation doing business in New York—to significantly contribute to the city’s tech sector and economy. Yes, the subsidies to be offered are a considerable sum, but it is a figure that in relative terms is fractionally insignificant and reflects a modest discount in what Amazon will pay in taxes on a post-performance basis. The subsidized amount is representative of the scale and enormity of Amazon’s expected job creation.

The debate over Amazon’s second headquarters typifies an ideological clash between pragmatism and principles. Even if the payoff ensures positive and exponential economic outcomes for Queens residents, small business owners, and local CUNY graduates, and even as the expanded tax base will offset the increased social costs of additional workers to the area, the deal is, in the eyes of anti-Amazonians, a violation of a community’s self-determination and goes against economic justice. But how can those who argue for a community’s political interests neglect the long-term economic interests of that same community—a community where 60% of residents approve of Amazon HQ2 in Queens according to a Quinnipiac University poll?

The uproar also reflects misplaced objections to economic development planning. Take into consideration previous subsidies and how much was paid by New York in capital costs for Yankee Stadium, Citi Field and recent casino developments: a cool $2.5 billion. Never has the same degree of media or political attention been drawn to the unsatisfactory subsidization of entertainment projects and jobs that are low-wage. No political finger and no banner has ever been lifted against these projects even though the development of casinos, according to research and economic development experts, is categorically among the least effective of strategies for local economic development, bleeding communities of economic resources while generating a population of addicts. Can we expect Ocasio-Cortez to also come out against future subsidies for her backyard's Yankee Stadium or Empire Casino?

Amazon HQ2 has become an important discussion about how we plan our city economies and what, and if anything at all, should be subsidized. Subsidies are not sacrosanct, but neglecting the arc of economic history—understanding that the industries of tomorrow will be reliant on the tech sector—places politics above pragmatism. The most devastating impact of the Amazon criticism, however, is the precedent it sets for the public outlook on the tech sector: We will go from believing and investing in innovation-based economic efforts to believing Big Tech is led by robber barons.

Of the dozens of cities around the world that have attempted to recreate the prodigious marvel of Silicon Valley, nearly all have failed, save for one: New York City. Its ascendance is not a mere turn of good fortune, but a direct result of strategic economic development planning advanced through policies and projects stewarded by city planners to foster an innovation ecosystem. For elected officials opposing Amazon: Know that absolute and blind opposition to a tech company like Amazon—without alternatives or reasonable deal making—can become a barrier to our city and state’s economic progress. Be opposed to projects because they are economically bad but support the good technology projects, intelligently and within reason, when they provide anchors to legacy industries or provide a path to a tech-driven future.

The cities of the future will require deep tethering to the technology industry in order to remain competitive. In truth, Amazon HQ2 was never about the subsidies. It has always been about securing New York’s economy and formalizing the city’s position as the global capital for innovation and technology.

Close
Technology policy 2018.09.14 This op-ed originally appeared in the New York Daily News.

A very good deal for New York City: Don't look the Amazon gift horse in the mouth

After 14 months of national pageantry and two weeks of speculation, it turns out Amazon’s second headquarters will be in not one, but two cities­­, Crystal City and Long Island City. Despite dim views of New York’s chances, last year I argued that New York’s outlook was in fact good, and should New York become host to Amazon, Long Island City would surely have the commanding advantage of becoming that site.

Among the 238 competing cities and states, Amazon bargained with each, maximized its own benefits and breaks, and saw no reason to limit its growth to one geographic area. Critics say it is also a classic example of what many have called an unmanageable prisoner’s dilemma: If all of the participants compete amongst each other, even the inevitable winners lose.

Now that the details of the handshake have emerged, what exactly has New York City given away, and will its bargain pay off?

New York announced the largest economic development deal in its history, providing up to $2.98 billion in tax breaks or grants based on the expected creation of 40,000 jobs. Compare this nationally to what Amazon has received since 2000, $1.1 billion in subsidies for dozens of its facilities and distribution centers.

While progressive opposition has been vocal over the past few days — echoing sentiments that trillion-dollar companies don’t need greenback handouts — we know the economic incentives offered to Amazon are standard financial vehicles that are available any corporation relocating to New York. On the state side, the Excelsior tax credit provided per employee and the sheer scale of the number of employees accounts for most of this package: $1.2 billion if 25,000 jobs are produced. (If fewer are produced, that number will shrink.) The New York State Empire State Development corporation is also offering $505 million in capital grants.

The city, for its part, offered $897 million through a standard incentive called the Relocation and Employment Assistance Program over 12 years. It also passed on $386 million as a tax abatement for the modernization of the industrial buildings that it will settle in in Long Island City. All of this, as Mayor de Blasio as noted, is subject to clawback provisions if Amazon reneges on its side of the deal.

In turn, Amazon promises a $2.5 billion investment, $15 million invested alongside the city and state in workforce job retraining, community engagement and support for local housing, an incubator for tech and the arts.

The result will pay enormous dividends: Over 25 years, Amazon is expected to provide a 9 to 1 return on investment, generating $27.5 billion in taxes and providing economic spillover in the form of non-tech jobs.

The sizeable sum offered to Amazon is only a fraction of the expected economic return to the city. Every tech role created results in four new nontech jobs. No matter how you do the math, Amazon will produce unprecedented economic impact.

In truth, Amazon’s deal is not a sui generis corporate subsidy package; it did not receive that much more than what any other corporation would have received. And contrary to claims that Amazon is being given billions, this money doesn’t exist yet and will only exist as a result of the economic output Amazon produces. Critics who make these claims that this money can be spent elsewhere — such as the subway or tuition — fundamentally do not understand how economic development subsidies work.

The deal should be viewed through the lens of a positive sum scenario in that a new tax base will be generated. For every $9 the city will collect in taxes, only $1 is not being collected.

It’s not hard to argue that it was exceedingly likely that it would have expanded its existing office regardless and without the need for excessive trade-offs. But the risks for this type of economic upside would have been too great. Stanford University backed out of talks during the Applied Sciences NYC competition after aggressive negotiations by the city. This competition could have ended on a much more sobering note.

Amazon’s new headquarters will cement New York’s position as the global tech capital; for that, we should welcome its arrival. It will need to be a good corporate citizen and contribute to our city — not just take from it. This means economic reciprocity, community partnerships and job creation.

Close
Technology policy 2018.08.14 This op-ed originally appeared in City & State NY.

To increase voter turnout, bring elections online

E-voting could be more accessible and secure.

New York City and New York state from very low voter turnout rates. New York’s congressional primary this year saw just 11 percent of eligible primary voters participating.

The lack of civic participation, a consequence of antiquated election laws that purposefully lead to voter suppression, has prompted countless calls to action from New York City Mayor Bill de Blasio and The New York Times editorial board.

Recent news that de Blasio has filled the role of the city’s first chief democracy officer, charged with overseeing civic engagement through voter registration drives, demonstrates both the need for innovation in solving New York’s crisis of democracy – and the lack thereof in the solutions currently being pursued, or even discussed.

Appointing a cheerleader for voting misjudges the root cause of the problem. Ayirini Fonseca-Sabune, the newly appointed chief democracy officer, who has been tasked with increasing voter turnout by 1.5 million votes, will be committed to organizing civic lessons and citywide voter registration drives, a Band-Aid offering a temporary fix. At best, this will only move the needle incrementally.

The problem isn’t voter apathy. New Yorkers are some of the most politically engaged and educated American citizens. The problem rests with the inaccessible ballot, not with the voter.

Good government reforms that are promoted by activists and influential voices such as the Times' editorial board, like early voting and automatic registration, recognize that reality and correctly seek to improve ballot access.

But these proposals fail to address the crux of the problem, which Fonseca-Sabune noted when characterizing herself as a busy working parent who missed several elections trying to fit voting her schedule: Many New Yorkers are simply too inundated with their personal and work lives to find the time to vote in person.

In light of that, a simpler and more forward-thinking solution to voter engagement is to invest in election technology and allow for mobile voting. E-voting would provide busy New Yorkers who can’t afford the time to visit a polling site an opportunity to cast a ballot.

Already, over 86.4 percent of adults in New York state have smart mobile devices or access to the internet at home – not including at work – and can pay credit card bills, trade stocks and purchase insurance on phones, tablets or their computers. Why can’t another important decision be available at everyone’s fingertips? This would, like voting by mail, also be fully accessible to people with disabilities. And it would eliminate the arbitrary factors that often shape voter turnout, such as whether it’s raining or long lines at polling places. For voters without internet access, votes could be cast by mail, which is a system that has boosted turnout in states that have adopted it, such as Washington, Oregon and Colorado.

Security is nearly always the counterargument. But the question is: secure relative to what? The current system of hanging chads, lost ballots, voter registrations? Purged voter registrations led to thousands of New Yorkers being told they were not on the voter rolls during the September statewide primary. Consider the mishandled paper trails, mistakes made by election officials, such as the infamous Palm Beach County “butterfly ballot” that may have cost Al Gore Florida in 2000, and the security risks and routine malfunctions of the electronic and mechanical machines that we currently use to count votes. Most alarmingly, the lever machines, which New York used for decades, have an error rate of 3 to 4 percent, while the optical scanners that replaced them still have a 1 to 2 percent error rate, according to a Rice University Study.

Conversely, as Estonia enters its 14th year of online voting, not a single major security incident has been recorded. It is not without its threats, as the Baltic country has had to contend with Russian aggression. But it has demonstrated that internet voting can be secure, accurately counted and private.

Here in the United States, many states have served as laboratories for democracy, entrusting digital means of civic engagement. Thirty-two states offer a voting by email, electronic fax, or an internet browser for absentee ballots cast from overseas. This past primary saw the first application of blockchain voting – technology that creates a public ledger – in a federal election as West Virginians abroad used facial recognition and scanned ID images to submit digital ballots through a mobile app. New York state already allows for voter registration online and much of the election process requires electronic systems, so why not move a step further?

What’s more, the success of online voting for participatory budgeting provides a proof of concept for New York City. This past year, New Yorkers in council districts that opted to democratize budgeting decisions were able to do so not only at a polling place, but online.

This method can and should extend to elections. An option to modernize and improve the citizen user experience by offering online registration and voting, ballot information, and schedules with reminders and alerts is possible if we plan for it. We should begin to imagine a balloting process where a voter can use voice or facial recognition to verify themselves, submit an encrypted ballot on a mobile app, and request a paper ballot or a receipt of their vote – a voter-verified paper or digital trail accessible by only them, the voter.

This is not a call to election officials to rush or act reckless, but instead it is a reminder to invest in the future of democratic processes. Election security and upgrades need to go hand in hand. We can be investing in securing newer technology rather than outdated technology, which is the current plan. The technology for online voting exists and will continue to improve to offer even greater security, anonymity and verifiability. After all, if we can build secure financial systems to protect trillions of dollars, we can engineer secure voting systems to protect millions of votes.

It is very likely that in the near future New Yorkers will be casting ballots online or via mobile devices. So why not begin discussing, investing in, phasing in, implementing and securing an e-voting solution­­ on a limited scale?

The biggest impediment to internet voting isn’t technological, but rather political. And the bigger threat to our democracy in New York isn’t a Russian hacker, it’s voting accessibility.

Close
Technology Economic Development2018.06.15 This op-ed originally appeared in Crain's New York Business.

NYC poised to become the capital of blockchain and other emerging tech industries

For the first time ever, New York City sponsored the launch of Blockchain Week, which joined Fashion Week and Internet Week as one of the city’s trumpeted industry week-long gatherings. It accompanied the announcement of a blockchain resource center, a venue for events and businesses, as well as a public blockchain competition. It not only signals mainstream interest of the underlying technology that powers cryptocurrencies, but more importantly, it hints at the emerging industries of the future as the economic waves begin to ripple.

The tech sector in New York City has become its tower of strength. New York’s tech sector is still ascendant, locking in its place as the second largest tech hub behind Silicon Valley. Its core economic engines—its legacy industries—have not been so much replaced by tech as they have been tethered to it. The tech industry has added more jobs than any other in the city: 47,000 in the last decade.

But what's on the economic horizon isn’t just nondescriptly “tech”—it’s biotech, real estate tech, and now, like wildfire, emerging technology such as blockchain, artificial intelligence, and augmented and virtual reality.

Similar to how software and big data technology has nested itself within legacy industries reinventing them in the process, blockchain and emerging technologies are the next wave of new technologies likely to append or upend industries.

While the application of blockchain technology to solve critical business problems has been led by cryptocurrencies and startups—New York-based companies have received over $200 million this year alone in funding—it’s also for established companies. Global industry leaders made blockchain the highlight of this year’s World Economic Forum in Davos, Switzerland. Blockchain products are being pursued by companies like IBM, Walmart, and MasterCard with solutions for bank-to-bank transfers, smart contracts, distributed storage, and authenticity verification. Even Pfizer has invested heavily to reinvent supply chain management in the pharmaceutical industry.

The impact of this subsidiary tech industry will soon reverberate. According to estimates, blockchain-related job openings have increased by 800% over the last two years. The demand continues to soar as estimates cited by Deloitte suggested blockchain’s global business value by 2025 to be $176 billion. It’s no surprise, then, that senior blockchain developers can command as much as $450 an hour.

This points to the inevitable: Blockchain and other emerging technologies are not trends but will grow by an order of magnitude. And New York City’s prominence as the second global capital of technology offers it the unfair advantage to reel in more blockchain ventures like Brooklyn-based Consensys and establish itself as the blockchain capital.

How can the city help foster this emerging industry—one that can create thousands of new jobs and a new sub-sector to potentially replace many that will be absorbed by automation over the next decade?

For one, the city’s limited investment, or $100,000, in the blockchain center is only a timid start. What's required now is a comprehensive economic development strategy that allows these emerging industries to anchor themselves here and accelerate the industry’s growth.

First, the city can focus on the highly technical workforce that drives businesses to the city in the first place. By partnering with universities and code schools to ensure curriculums related to emerging technologies are taught, it can lay the groundwork for human infrastructure as it has recently by offsetting the costs for a master’s in cybersecurity. Second, it can support research and development within the private sector and institutions, by deploying a significant research and venture capital funding dedicated singularly to emerging technologies like it has offered for life sciences and other industries. The riskiest business pursuit is startup, and a startup founded on new technology eo ipso increases the odds of failure and requires deep financial resources.

Finally, city leaders can help establish the business environment for emerging technologies and advocate for regulations. While financial securities are state and federally regulated, the imprimatur of the city to support BitLicenses or autonomous vehicles in the city are integral to government support and eliminating the perception of impasse.

Not all emerging technology that has drawn feverish excitement will go from backwater to ubiquity overnight. In truth, new tech like blockchain technology may provide use cases to entirely different problems than what we have imagined it for. This is the unpredictable and mutable nature of innovation.

As technology reworks economies, global competitiveness will grow and automation will reduce some industries to shadows of their former selves, putting pressure on urban areas and cities with one-horse economies. The city’s traditional industries may not be supplanted if they evolve and adapt. It will be our investment in creating an ecosystem of innovation that will begin to define the industries of New York City’s future.

Close
Technology policy 2017.09.19 This op-ed originally appeared in the New York Daily News.

Long Island City and Amazon: A match made in tech heaven

Fifty-three years ago, New York City played host to the world as it showcased American culture and technology on the grounds of the World's Fair to over 51 million visitors in Queens. The 1964 World's Fair was conceived with futurism in mind, featuring Jetsons-like Googie architecture on a sprawling, leafy campus.

Today, as cities across the country submit their proposals for Amazon's second global headquarters, New York City finds itself bidding to be another host — this time to one of the world's biggest and fastest growing companies — and Queens as the most promising location for what could become a fairground for innovation for over 50,000 Amazon employees.

No fewer than 50 cities have since expressed interest, and with the rising prominence of New York City as the global economic capital, it's unmistakable — as a recent Moody's analysis has noted — that the city is not just an aspirant but one of the leading contenders in this interurban competition.

New York has been vocal about this opportunity — going so far as to illuminate all of the city's skyscrapers and LinkNYC kiosks orange. In revealing the city's bid in his announcement, the mayor endorsed four locations but cited small business owners affected by the online retailer in later remarks at a town hall.

If the city's chances remain unaffected by the mayor's comments, the question may soon become not which city but which neighborhood within New York offers the most promising new home for Amazon.

Amazon's request for proposals in September highlighted several key decision drivers: The suitability of buildings, capital costs, the labor force, transportation, the business and political climates, and the community and quality of life. With sites in Brooklyn and Manhattan as competing options, Long Island City's suitability is writ large.

The commercial real estate economics play out to Long Island City's advantage: At an average of $38 per square foot, it is significantly less compared with Midtown's $82 per square foot and Brooklyn's $52 per square foot. And with an astounding 8 million square feet being sought — nearly as much as the World Trade Center — both costs and availability of real estate become factors.

Long Island City offers Amazon the opportunity not only for expansion and growth, but for the chance to envisage and develop a state-of-the-art campus more impressive than Apple's Cupertino headquarters or Google's in Mountain View. LIC's rawness — its unique blend of industrial warehouses interspersed with community and culture — gives it a potential yet to be unlocked and without the cost-intensity of Manhattan.

The Queens waterfront offers other benefits. Its accessibility to two major airports, the Long Island Rail Road, eight subway lines, greater New York City including Brooklyn and suburban Long Island by means of the LIE and BQE makes it one of the more transportation friendly neighborhoods. The mental hurdle of traveling to midtown is leaped once one realizes it is a 17-minute train ride while the BQX light rail will one day bind the boroughs of Queens and Brooklyn.

However, while the Mayor revealed four promising locations in its bid, including Downtown Manhattan, Midtown Manhattan, the Brooklyn Tech Triangle, and Long Island City, New York City's biggest real estate developers have given Long Island City their imprimatur after conducting studies and acknowledging its strengths. This governmental and community support, as Amazon has sought in its request for proposals, is directed towards Long Island City.

Yet the most paramount of decisions for Amazon will be its proximity to a skilled and technical workforce-its growth will depend on human capital. New York City's tech ecosystem will outgrow Silicon Valley in decades to come, and Amazon's growing need for software developers and technical talent will be satisfied by the city's top engineering universities including Roosevelt Island's Cornell Tech campus. The immediate potential and synergy between Cornell Tech and Amazon can become realized not only through the close proximity, but through institutional collaboration from Cornell Tech's president, Dan Huttenlocher — a member of Amazon's board.

The 1964 World's Fair was dedicated to "Man's Achievement on a Shrinking Globe in an Expanding Universe." It's fitting then that the world's largest retailer share the vision with a borough and a neighborhood with this rare aspiration.

Close
Technology policy 2017.09.22 This op-ed originally appeared in Crain's New York Business.

How New York became Silicon City

New York has officially marked an inflection point in its history.

In what has been six short years in the making, Cornell Tech unveiled its leading edge campus on the once little known and thin strip of land in the East River, Roosevelt Island. It lays the foundation as a lodestone for the next wave of engineers and entrepreneurs seeking to transform and redefine global industries.

But Cornell Tech isn't just another state-of-the art university campus; it is the physical realization of a grand vision for the future of New York—one set in motion by former Mayor Michael Bloomberg with his Applied Sciences Initiative—that will reshape our city. Though New Yorkers have long anticipated the oversized impact on the city’s tech economy, we have yet to grasp how transformative it will be for our city and for cities around the globe.

Cornell Tech has become a turning point in New York's history for drawing interest among policymakers, educational institutions and the private sector. Up until 2010, the city’s tech economy grew steadily after the undoing of its media-focused tech sector in the 2000s. Applied Sciences garnered attention and excitement for its grandiosity and inclusion—in its ability to incorporate all areas of society, from local community groups to massive tech companies, to dream up and plan its potential. What’s more, it has put tech on the policy agenda of nearly every elected official in New York.

Around the city, developers such as Two Trees in Dumbo and Plaxall in Long Island City have aligned goals with the community. Institutions such as Queens College have launched incubators while dozens of code schools have emerged throughout New York. Local elected officials and the mayor have steadfastly promoted the tech sector’s potential to strengthen the middle class and provide jobs, offering a refreshing alternative to big-box retail development or disinvestment like casinos.

This broad, mutual alignment has catalyzed deep, collaborative partnerships that are a hallmark in a new approach to economic development guided by innovation economics. Cornell Tech teaches us that public-private partnerships and investing in human infrastructure are the sine qua non to replicating the magic of Silicon Valley. Where dozens of cities from Skolkovo to London have tried and failed at adding the Silicon moniker, New York is one of the few that has succeeded in fostering a Silicon Valley-comparable tech economy, thanks to local innovation-based policies.

The expansion of the technology sector in New York is now immutable. Since 2010, it has grown by 25.5%—three times faster than any other industry—and now accounts for more than 280,000 jobs. Technology is irreversibly tethered to every industry, including media, fashion, finance, manufacturing and government, which will catapult New York into the tech capital of the world, surpassing Silicon Valley in the years to come. New York’s tech economy was fostered by government and City Hall, and its continued rise will necessitate even more planning, policy and partnership.

The future will not be kind. As local economies, including ours, wrestle with automation, outsourcing, and growing income inequality, more cities will require innovation strategies to compete in a globalized economy. A paradigm shift in the way we approach economic development will be needed and New York will become our case study.

Close
Technology policy 2014.05.05 This op-ed originally appeared in Crain's New York Business.

Mayor must expand city's tech initiatives

In the 12 Years that New York was led by a tech businessman, it reawakened as a global tech capital. A digital city has been born, catalyzing an innovation economy to the tune of $125 billion a year.

But Mayor Bill de Blasio must make a deeper commitment to tech and leading-edge initiatives to ensure that growth continues. As he introduces his tech agenda this month at Internet Week New York, he can turn to his predecessor and to other cities for replicable strategies.

They include:

Investing in management. To see an aggressive digital agenda through, City Hall will need a disciplined focus. It can look to San Francisco's chief innovation officer and Los Angeles' deputy mayor for budget and innovation, both of whom have laid the groundwork for institutional innovation.

Mr. de Blasio should appoint a deputy mayor for innovation and technology to replace the departed chief digital officer. Elevating this position and hiring another chief analytics officer would embed innovation within government and bring together open data, e-government and economic-development initiatives. These two positions would establish ambassadors and ombudsmen to the tech and business communities, and make technology an administration priority.

Developing tech corridors. New York is no longer limited by a geographic "Silicon" moniker—Silicon Alley, Square or City. While there is a tech cluster in the Flatiron district, there are also ones in Brooklyn and Queens. By designating corridors in each borough, Mr. de Blasio would tap into the city's native diversity. Similar to Boston's Innovation District, it would grow awareness for New York's emergent tech hubs.

The economic spillover would be enormous: For every tech job, four nontech ones are created. Mixed-use live-work spaces would trigger economic activity across industries—construction, services and entertainment—while location-based tax incentives for startups would ensure this growth stays local. Washington, D.C.'s High Technology Development Zone offers five-year tax exemptions to startups.

Leveraging key industries. While Silicon Valley has tech, New York has tech, finance, fashion, media, manufacturing and more. As tech becomes tethered to these legacy industries, fostering its disruptive potential becomes all the more important.

The key will be to establish industry-based partnerships. Cultivating talent within the City University of New York with established companies would provide tech transfer and a pipeline of homegrown engineers. It would create internship and job-placement programs, and build up CUNY's prestige. For instance, Mr. de Blasio can turn to Baton Rouge, La.'s partnership with the IBM Technology Center, which will enable millions of dollars to flow into tech education in Louisiana.

The rise of tech in New York City is no miracle: Its genesis is a direct result of economic-development policies pioneered by cities around the globe and driven largely by innovation economics. Mr. de Blasio's task is to maintain New York's economic transformation and sustain innovation. In turn, all New Yorkers will gain from the unimaginable benefits of technology.

Opinions + Op-eds

No other influence has transformed society and our economy as much as technology. These op-eds highlight the burgeoning tech economy, the policies that have helped foster these ecosystems, and the policy implications of technology on society, politics, government, and business.

Select op-eds.

Are you an editor and want me to write for your publication?

For co-authoring or other questions, please send a note. Reach out