Considering that StartupNY is overly fixated on real estate (one of its primary requirements is that the company locate on university property), the skillsets have more overlap than you might imagine.
Of course, this fixation on real estate and exogenous goals is probably a big contributor to the failure of StartupNY to produce meaningful jobs in sufficient quantities.
Not when you factor in that this program revolves around the startups using state owned and run real estate facilities. To be eligible for the program, you must locate your company on a designated "campus." So, you get incentives...but the state gets new tenants and fat profits, since most of the spaces offered to house a startup are recently renovated warehouses and empty university space.
Has such a top-down approach to attracting startups ever worked?
IMHO, startups are attracted to the right environment and capital (monetary and talent). The government, therefore, needs to change its laws and create the right environment.
For example: California's law that nullifies non-compete clauses. That alone has been responsible for so many startups, as people left Fairchild to start Intel, Intel to start AMD, Cisco, etc. and Cisco to start Juniper, and on and on.
This is why I really don't think there will be another start up hub in the US other than Silicon Valley, and to a lesser extent, Boston. Top schools attract and breed top talent that start companies, which create new capital, and invest that back into the community.
Also: AMD wasn't started by anyone at Intel, it was founded less than a year after Intel by 8 employees of Fairchild.
I'm not sure what your sentence about "top schools" has to do with your parents' comment about non-competes.
There is definitely a feedback loop with successful alum from top schools in the bay area and Boston investing in graduates from their schools, many of whom then become successful themselves and do the same, but it isn't clear (to me) whether that has more to do with the talent of those graduates or with their increased likelihood of receiving investment due to the feedback loop itself. If it is the latter, the cycle could be broken by smart investors paying less to invest in the same level of talent, without the same pedigree.
Yeah, I'm guessing you are from Boston or s.v. How about Seattle, Austin, Portland. How many large successful companies do you need before it's a startup hub? Boston is prob. not a great example.
In terms of software startups that is definitely true and easy to do because NYC has several orders of magnitude more people than Boston. Boston owns the healthcare and biotech startup sector though - it's basically SV East for those industries.
From the article: "This is a program which provides very generous benefits in exchange for real commitment to create new jobs. ... In the first full year of operation in 2014, 76 jobs were created statewide. At a cost of more than $40 million for advertising and marketing..."
No wonder this was criticized by the state auditor.
State job-incentive creation programs are generally ineffective. CBS reported that the typical Government expenditure per job is $475,000.[1] In many cases, jobs are not created, just moved.
Amazon managed to get $2.3 million per job out of the State of Texas.
Tesla's "Gigafactory" opens soon. I'm looking forward to finding out the actual employee count. I suspect it will be far smaller than the promotional numbers.
> Amazon managed to get $2.3 million per job out of the State of Texas.
That $2.3mm number ignores the 2,500 jobs and $200mm in capital investments that Amazon agreed to pay to wave off the $269mm in uncollected sales tax. [1] They've actually gone above and beyond those numbers (3,500 jobs and $300mm invested as of 2014) in addition to actually paying sales tax in the state, which yielded another $327mm in sales tax revenue just from 2012-2014.[2] So discounting the tax revenue that they're now receiving, Texas paid $16,571 for each of those 3,500 jobs.
Yes, states seem to do incentives like that on a "trust me" basis. You'd think they'd dispense the incentives after they got copies of the tax witholding forms showing the wages of the employees in the newly created jobs, but no.
State job creation works when you simply pay people to do stuff, like the WPA did in the 30s. The problem is that these days you have a dozen heavy machines to do what hundreds of people did, and the machines are very expensive.
"In the first full year of operation in 2014, however, 76 jobs were created statewide.
At a cost of more than $40 million for advertising and marketing..."
~$500,000 to create a single job. It would be cheaper to straight up pay someone $50,000 a year to sit and do nothing and you'd have created 800 jobs instead.
Job creation does not need to be enclosed in quotes as though it is a magical concept -- it does happen, and we know how to make it happen. The problem in this case was the assumption that throwing money at a problem, without knowing how to accurately deploy it, would magically produce long-lasting jobs.
Just because another government handout/kickback scheme has failed doesn't mean basic income is the right solution.
I'm as cynical as anybody, but by the same token you're making an assumption that the goal was to throw money at it. I chose to take a good-faith interpretation, though I realize the program's results may be lacking regardless.
I think overall my point is to ask whether it makes a difference what their intent was. Do the results indicate that we actually do know how to create jobs? I mean, there's the WPA and that kind of thing, but beyond that, has any politician really ever created jobs in the way that you say we already know how to do? Not trying to be antagonistic, just curious about the details.
> it does happen, and we know how to make it happen.
I mean this entirely seriously with no sarcasm: enlighten me.
How do you create jobs when your economy is approaching steady state, your population is on a decline glidescope, and technology is providing deflation better and faster than a central bank can create inflation?
A job is created when there is an opportunity to make (more) money, and that opportunity requires human labour beyond what can be provided by the person who realizes that opportunity.
It fundamentally comes down to that dynamic. So to create jobs, you need to:
a) Increase potential for opportunities, or opportunities themselves.
b) Reduce costs for realizing those opportunities.
Notice the greed component (which is a feature, not a bug, of capitalism) -- there must be an incentive to make MORE money in order for this to kick off.
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[ 3.0 ms ] story [ 69.1 ms ] threadNo doubt Cuomo was focused 100% on how this would affect his 2016 and/or 2020 presidential run, not how it would affect the state of New York.
Of course, this fixation on real estate and exogenous goals is probably a big contributor to the failure of StartupNY to produce meaningful jobs in sufficient quantities.
IMHO, startups are attracted to the right environment and capital (monetary and talent). The government, therefore, needs to change its laws and create the right environment.
For example: California's law that nullifies non-compete clauses. That alone has been responsible for so many startups, as people left Fairchild to start Intel, Intel to start AMD, Cisco, etc. and Cisco to start Juniper, and on and on.
Also: AMD wasn't started by anyone at Intel, it was founded less than a year after Intel by 8 employees of Fairchild.
There is definitely a feedback loop with successful alum from top schools in the bay area and Boston investing in graduates from their schools, many of whom then become successful themselves and do the same, but it isn't clear (to me) whether that has more to do with the talent of those graduates or with their increased likelihood of receiving investment due to the feedback loop itself. If it is the latter, the cycle could be broken by smart investors paying less to invest in the same level of talent, without the same pedigree.
NYC has a bigger startup ecosystem than Boston at this point.
No wonder this was criticized by the state auditor.
State job-incentive creation programs are generally ineffective. CBS reported that the typical Government expenditure per job is $475,000.[1] In many cases, jobs are not created, just moved.
Amazon managed to get $2.3 million per job out of the State of Texas.
Tesla's "Gigafactory" opens soon. I'm looking forward to finding out the actual employee count. I suspect it will be far smaller than the promotional numbers.
[1] http://www.cbsnews.com/news/do-subsidies-and-tax-breaks-real...
That $2.3mm number ignores the 2,500 jobs and $200mm in capital investments that Amazon agreed to pay to wave off the $269mm in uncollected sales tax. [1] They've actually gone above and beyond those numbers (3,500 jobs and $300mm invested as of 2014) in addition to actually paying sales tax in the state, which yielded another $327mm in sales tax revenue just from 2012-2014.[2] So discounting the tax revenue that they're now receiving, Texas paid $16,571 for each of those 3,500 jobs.
[1] http://comptroller.texas.gov/news2012/120427-Amazon.html [2] http://www.mystatesman.com/news/business/did-texas-big-amazo...
The state got 272.
http://www.rgj.com/story/opinion/voices/2016/03/01/one-view-...
At a cost of more than $40 million for advertising and marketing..."
~$500,000 to create a single job. It would be cheaper to straight up pay someone $50,000 a year to sit and do nothing and you'd have created 800 jobs instead.
Disclaimer: These are the sorts of problems we face as we come to terms that its better to hand out cash directly then try to "create jobs".
EDIT: If $500K can't create a job for someone, what else is there? Why spend that (or more) when its cheaper to pay them directly as a cash transfer?
Just because another government handout/kickback scheme has failed doesn't mean basic income is the right solution.
I think overall my point is to ask whether it makes a difference what their intent was. Do the results indicate that we actually do know how to create jobs? I mean, there's the WPA and that kind of thing, but beyond that, has any politician really ever created jobs in the way that you say we already know how to do? Not trying to be antagonistic, just curious about the details.
I mean this entirely seriously with no sarcasm: enlighten me.
How do you create jobs when your economy is approaching steady state, your population is on a decline glidescope, and technology is providing deflation better and faster than a central bank can create inflation?
It fundamentally comes down to that dynamic. So to create jobs, you need to:
a) Increase potential for opportunities, or opportunities themselves.
b) Reduce costs for realizing those opportunities.
Notice the greed component (which is a feature, not a bug, of capitalism) -- there must be an incentive to make MORE money in order for this to kick off.
The program's website [1] lists 157 companies and 4,278 new jobs. The missing job report for 2015 is two months late.
[1] http://startup.ny.gov/companies