May 31, 2011

Upstate Economic Rebound Crucial

By: by


Something shocking happened last year in Buffalo: The regional economy grew much faster than it did on Long Island. Albany, Binghamton, Rochester and Utica also grew faster.

Of course, this news is shocking only because the upstate economy has been in the doldrums for so long. Once an industrial powerhouse, the area of New York north of Albany and west to Pennsylvania has seen employment melt away at such one-time mainstays as Carrier, IBM and Kodak. The state prison jobs that support many smaller communities are slated for cuts. Gloversville is no longer the center of the glove trade, just as the Erie Canal is no longer the nation's jugular vein connecting New York City to the heartland.

Upstate's economic woes matter on Long Island. With New York so dependent on the downstate economy, taxpayers here bear a greater burden than they would if upstate could start growing strongly again. Without an influx of youth and brains into upstate counties, their aging residents will become ever more dependent on the rest of us.

Recent signs of economic life upstate reflect the lack of a housing bubble there -- and should encourage policy-makers to focus on the region, which is gorgeous, affordable and studded with colleges and universities. It has ample water, hydropower and natural gas. And many upstate cities, while not growing, have stopped hemorrhaging.

Like the rest of the state, upstate soon will be covered by some of the planned regional economic development councils backed by Gov. Andrew M. Cuomo, agencies that will compete for state funds to promote job-creation. These sound promising, but New York is already covered with hundreds of development agencies whose track record is weak. If upstate is going to rebound, it needs a fresh approach. Unfortunately, reviving its economy won't be as easy as throwing money at the problem.

What does a growth strategy look like for such a place? The key to prosperity almost anywhere is skilled people, which is why the best long-term strategy upstate is to invest in human capital. Improving education is essential -- particularly community college education focused on technical skills. That can help the region build on its strength in sophisticated manufacturing -- in lasers, imaging and chip-making, for example.

Let's stop subsidizing businesses that create few new jobs. Instead, let's expand upstate higher education -- especially technically oriented departments and institutions, whose scientists and graduates can start the innovative firms that are the engines of growth. One example: the public-private partnership fueling nanotechnology research at the University at Albany. More autonomy for the SUNY campuses would also help.

Upstate isn't bad at retaining college-educated workers, but lags at attracting new ones, which is vital. It also needs more immigrants, such as those from Bosnia and Herzegovina who've already brought their skills and energy to the Utica area.

Upstate immigrants are relatively well-educated, too. Unfortunately, upstate cities like Buffalo and Rochester get much less immigration than downstate, simply because newcomers naturally go where jobs are most plentiful. Regional marketing and homesteading programs aimed at attracting graduates and immigrants might be a cheap way to inject new life into upstate communities.

Upstate must also make better use of its cheap hydropower, and a bill to do that was signed into law by Gov. Andrew M. Cuomo in April. New York was already using cut-rate power to attract and retain firms, but the program faced annual legislative renewal, so companies couldn't be sure they'd have the power from year to year. The new law expands the program and enables firms to get seven-year commitments.

With time and smart policy choices, upstate New York can capitalize on its assets. For our own sake, let's hope it succeeds.