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High Tech Still Getting Low Priority in NY Despite All the Cheerleading

reprinted from Crain's New York Business, October 28, 1996
Susan Shaw remembers her time in Cannes not for the food, or the grand hotels, but for the 20-hour workdays. Ms. Shaw, who owns a small Manhattan company imaginatively named Hyperspace Cowgirls, journeyed from Manhattan to the Cote d'Azur earlier this year to pitch her new-media products to an international gathering.

Like other small firms from New York, Ms. Shaw couldn't afford to exhibit, but had to tout her goods in the halls, in restaurant, in hotel rooms.

Meanwhile, many small companies likes hers, from California and others from Europe, were set up in prime exhibition space at this important show, Milia `96. The difference was they had government backing.

This shouldn't be so surprising because new media is one of the world's fastest-growing industries. Governments are hopping on the bandwagon, eager to aid small companies in an industry that is creating jobs rapidly.

Except in New York. Here we've managed to muster little more than cheerleading for this burgeoning business, despite compelling evidence of its importance.

For three years now, industry officials have been talking to the state and city about creating a New York presence at the international high-tech shows to boost small companies and enhance the city's reputations as a center of cutting-edge industries. But the talk hasn't gone very far, and another year is likely to pass without much involvement from government.

It's hard to tell whether this is inertia, politics or ignorance. Earlier this year, the state, which runs several programs to encourage exports by small companies, asked the New York New Media Association to submit a proposal for a New York expedition to Milia in 1997. The trade association envisioned something similar to the pavilion of small companies that California sets up for the show. But the proposal now seems lost in limbo -- or maybe cyberspace -- says Lori Schwab, who runs the trade group.

Another organization, the New York Information Technology District Corp., which is trying to promote downtown Manhattan as a new-media center, is taking matters into its own hands. It is organizing a New York exhibit at an upcoming show. The city has kindly offered to send some of its economic development types along for the ride. But when it comes to money, the meat of the matter, the organizers must try to round up private sponsors to finance the exhibit and subsidize small businesses that desperately need to be at this event.

In a time of economic austerity, it's hard to imagine a better way to leverage precious economic development money, especially funds targeted directly for encouraging exports, than in high technology. By touting New York products to the expanding world market, or working to lure other companies to our technology districts, officials can help import capital from other places, rather than just moving it around the local economy.

Economic development, however, is often not about what makes the most sense, but what is most politically palatable.

While high technology has become an attractive mantra for local officials because it makes them sound progressive and even hip, so far it seems they're mostly just paying lip service.
by Steve Malanga

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