Engine Failure

In 2003 Joel Kotkin co-wrote (with Jonathan Bowles) Engine Failure about the Nyc Challenges in Urban Development, esp post-WorldTradeCenter.

  • Despite its storied past as an Entrepreneur-ial center, New York lags seriously behind other cities as an Incubator of growth companies and a recipient of Venture Capital. Too many of the city's fastest-growing entrepreneurial endeavors - from immigrant-owned manufacturers of specialty food products to innovative software and biotech firms - choose to expand elsewhere. Many other cities, including heavily urbanized places like Chicago and Los Angeles, have done much better than New York in retaining jobs in traditional industries like wholesale trade and manufacturing.

  • Compared to many other cities, New York is not producing or holding onto enough fast-growing businesses. One reason is that over the years, the city has neglected smaller firms (SmallCo) with potential to grow by failing to address the fundamental issues hampering business growth in the city, such as permitting (Red Tape), business taxes and policies that spur exorbitant real estate speculation.

  • One of the best things the city could do for all the boroughs is to maintain high levels of basic services like police, sanitation and education, and invest in infrastructure projects that spur private development and make it easier for people and goods to move throughout the city. Arguably, these are the things that government does best. "Government needs to invest in the broad preconditions for success: Infrastructure, education, housing," says CUNY's John Mollenkopf. "It's better at doing this than picking winners."

  • There's a strong inverse relationship between Real Estate prices and entrepreneurial activity. Not surprisingly, the greatest period of entrepreneurial growth in the city's recent history occurred during the early 1990s, a period when there was a glut of vacant office space around the city, particularly in lower Manhattan. Emerging new media firms chose to locate downtown, not because of government handouts, but because rents were affordable and most of the entrepreneurs lived in the city.

  • Businesses in New York also face a daunting regulatory (Red Tape) environment, in which firms are required to get licenses and permits from as many as a half-dozen agencies, most of which are understaffed and few of which coordinate with each other. It's no wonder that a cottage industry of fixers and go-betweens has developed in the city: businesses hire these individuals to help them wade through the maze of bureaucracies in applying for permits, licenses and other dealings with the government.

  • summarizing issues


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