GOVERNOR PATERSON OUTLINES VISION TO MAKE NEW YORK GLOBAL LEADER IN NEW ECONOMY

BOLD STEPS TO THE NEW ECONOMY: A JOBS PLAN FOR THE PEOPLE OF NEW YORK

Kicks-Off Statewide New Economy Leadership Tour

Jobs Plan to Capitalize on Federal Stimulus Dollars with Investments in Clean Energy, Technology, Health Care Sectors to Drive Economic Recovery

Governor David A. Paterson today unveiled Bold Steps to the New Economy: A Jobs Plan for the People of New York. Speaking at the New York Academy of Sciences in lower Manhattan, the first stop on his statewide New Economy Leadership Tour, the Governor highlighted the emergence of a New Economy based on knowledge, technology and innovation – and outlined his vision for how New York will lead this New Economy. The Governor’s Jobs Plan capitalizes on federal stimulus dollars to drive economic recovery in the fields of energy, environmental protection, technology and health care.

Governor Paterson announced the creation of an Innovation Economy Matching Grants program that will provide a 10 percent match for every stimulus dollar the federal government awards through competitive grants to research facilities in New York State. New York will allocate $100 million over several years for this program which is expected to leverage one billion dollars in federal research funding. This program will help ensure that new research centers are built in New York which will position the state for future federal grants and private investment.

“When I took office, I knew an economic crisis was coming. I knew it wouldn’t be enough to respond with just a few tweaks. Instead, we responded to this crisis with dramatic emergency measures which are now largely in place and which have begun to lead us down a path towards recovery,” said Governor Paterson. “Now, it is time to take bold new steps to prepare New York to lead the New Economy. We need to start by creating a fertile environment for entrepreneurship, and building a new infrastructure for innovation which means lowering the cost of doing business and building up our knowledge base.”

“At this critical moment in New York’s history, it is our responsibility to act, and to act with the interests of future generations in mind. We are a state rich with resources, the most impressive of which is our human capital,” added the Governor. “A new economy is emerging: an economy based on knowledge, technology and innovation. Our state has led the world’s economy for the past hundred years, and we are poised to lead for the next hundred. We have the brightest minds, the best universities, the most dynamic companies, and a thriving tradition of innovation and entrepreneurship.”

In addition to the creation of the Innovation Economy Matching Grants program, Governor Paterson announced several other new initiatives:

Renewable Energy: New York State will urge the Public Service Commission to release $100 million from our Renewable Portfolio Standard program by the end of the summer to ensure we have shovel-ready projects in the pipeline that can compete for stimulus funding for renewable energy programs.

Smart Grid Technology: New York will capitalize on federal stimulus funding for smart grid technology. Through the stimulus, the federal government will provide up to 50 percent of project costs for smart grid. Governor Paterson today called on the Public Service Commission to review New York’s utility proposals for smart grid deployment and approve matching funds before applications are due on July 29. 

Scientific Research: A life science innovation cluster will be created that brings together venture capital companies, medical schools, academic health centers, and research institution partners to develop the health care products of the future. Under Governor Paterson’s leadership, New York State has already created the Empire State Stem Cell Fund which has already invested $118 million to support vital stem cell research at institutions across the state.

These new initiatives build on steps that Governor Paterson has already taken over the past year to build a new economy for New York including:

• Establishing a 45 x 15 clean energy goal which is projected to create up to 50,000 jobs for New Yorkers;
• Reforming the Empire Zone program;
• Creating a $600 million Empire State Stem Cell Fund;
• Establishing the Governor’s Task Force to diversify New York State’s economy through Industry - Higher Education partnerships;
• Creating the SUNYGREENSNY initiative which is a partnership among Alfred State College and seven partners to develop clean energy technology training across the State;
• Restore NY through which the state invested $300 million over the past three years to improve the state’s infrastructure

“The time for bold thinking is now. This is the time for encouraging businesses that are thriving and for investing in the industries that hold promise for the future. Through coordination among our innovation-promoting state agencies and the new programs we announced today, we will put our greatest resources to work for the people of New York,” said Governor Paterson.

Capturing the New Innovation Economy and Creating Jobs for the People of New York

According to the Council on Competitiveness, approximately 50 percent of the recent US annual GDP growth is attributed to an increase in innovation. New York has the tools needed to succeed in a number of key innovative industries – life sciences, cleantech, and nanotechnology.  In the Kauffman Foundation’s 2008 State New Economy Index study, New York ranked highly in several areas, including: broadband telecommunications, science and engineering, patent development and alternative energy use. 

By helping to grow these industries, Governor Paterson will work to ensure that quality jobs are created in and imported to New York.  The innovation economy lends itself to higher paying jobs. The average salary of an individual who works in the innovation economy is over double that of an individual who works in the non-innovation economy.  New York State ranked second in the nation in the number of “gazelle” jobs – jobs at the fastest growing companies. In addition, in New York State, innovation economy industries produce a higher “multiplier effect.” For every one job that is created in the innovation economy, 3.5 jobs are created overall. Every job created in the non-innovation economy leads to the creation of only 1.7 jobs.

Innovation Economy Matching Grants Program

We will commit up to $100 million to create the Innovation Economy Matching Grants Program.  The National Institutes of Health, the Department of Energy, National Science Foundation and other federal agencies will soon make American Recovery and Reinvestment Act (ARRA) dollars designated for technology and research available for competitive distribution. New York institutions and companies are poised to successfully compete for these funds. In order to leverage these ARRA funds, and to enhance the competitive position of New York applicants, the State of New York is committing up to a 10% match in State funds for each ARRA awardee in strategic areas. We will prioritize applications from the most promising sectors of New York’s innovation economy: renewable energy, clean tech, and smart grid; nanotechnology; stem cell, biomedical, and life sciences; advanced manufacturing; broadband, information technology, and cyber security.  We expect that the State will invest up to $100 million over several years, thereby leveraging over $1 billion in federal research funding.  The Governor’s Stimulus Cabinet, which has been closely monitoring opportunities for competitive funds, will determine the parameters of the grants program and oversee its administration. By prudently allocating the State’s limited fiscal resources, we can have a dramatic impact on our ability to tap into important ARRA funds, thereby accelerating our economic development efforts across the state.   

In addition to the $1 billion in federal research funding, the American Reinvestment and Recovery Act includes nearly $8 billion of funding for smart grid technology, renewable energy and clean energy projects.  New York will be able to utilize available Recovery Act dollars to accelerate the pace at which the Governor’s 45 by 15 clean energy goal is achieved.

We have reason to be hopeful as this approach has already worked in New York.  In the one known major ARRA program for which a 10 percent State match was committed, the Department of Energy Frontier Research Centers (EFRC) awarded the state with five grants that will infuse over $95 million in federal funds to New York-designated centers.  The 10 percent match made by New York entails only approximately $477,000 in cash outlays in FY 09-10.

Examples of the investments we will make through this matching program are:

Cutting-Edge Research in Medicine and the Life Sciences

• New York is already a leader in cancer research, and if we combine the mega-watt talent that resides in this state, we can find better cancer treatments and get them to patients sooner.  There are six NIH National Cancer Institute Centers in New York State: Albert Einstein College of Medicine; Cold Spring Harbor Laboratory; Herbert Irving Center at New York Presbyterian Hospital, Columbia University; Memorial Sloan-Kettering Cancer Center; New York University Cancer Institute; and Roswell Park Cancer Center.  We will identify specific advances in cancer treatments which have come from these efforts and which are underway today.
• In diabetes research, New York State has NIH designated Centers at Memorial Sloan-Kettering, Columbia University and Albert Einstein School of Medicine.  Key to future efforts will be integrating the work of other specialties from other institutions to explore new collaborative efforts for breakthrough discoveries.
• We will foster the creation of a life science innovation cluster, building off of private sector assets such as the East River Science Park, which will house and attract leading life science and venture capital companies, and the strengths of our leading medical schools, academic health centers, and research institution partners, resulting in a collaborative state-wide research initiative.

Commercialization of Science and Technology

• The Federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, administered by NYSTAR, allocate and set aside a portion of federal R&D funds for small business to develop and commercialize innovative technology (In 2009, federal agencies set aside $2.9 billion in SBIR & STTR program funds). Awards are made by respective Federal Agencies in phases, with initial awards of up to $100,000 for six months, and subsequent awards of up to $750,000 for two years made to small businesses.   While New York has ranked in the top 6 States for receiving federal SBIR and STTR awards, New York applications for federal funding have trailed well behind states such as California and Massachusetts.  Both the submission of applications and receipt of awards are expected to increase if additional matching funds are provided by the State.  The Task Force on Industry-Higher Education Partnerships will identify ways to maximize the effectiveness of awarded funds.

Universal Broadband

• Governor Paterson has articulated a goal of achieving universal access to high-speed broadband Internet coverage in all corners of the state. By Executive Order 22, the governor is creating a Broadband Development and Deployment Council that will articulate and execute a broadband policy for New York and guide the State as it invests funds received through ARRA. With universal broadband access, all 19,000,000 New Yorkers will become equal and full participants in the information an age and information economy. 
• The ARRA includes $7.2 billion for broadband development, and our New York State Universal Broadband Strategy lays the groundwork for the state to maximize these funds.  ARRA funding would allow the state to build the next-generation of broadband networks, support affordable Internet connections, and develop digital literacy training programs for low-income households to increase household adoption rates.
• Our broadband goals are designed to: leverage existing state-owned and privately held assets; exploit state procurement practices; foster public/private partnerships to maximize use of services offered over the Internet for citizens; and create jobs through innovative community-based digital literacy and technology training programs to increase household technology adoption rates.  These goals can only be achieved by reaching and maintaining speeds and coverage levels that will sustain our competitive advantage. 

Nearly $8 billion in Recovery Act dollars are available for smart grid, renewable energy, and clean energy projects.  Opportunities available for energy matching grants include:

Leveraging Recovery Act Dollars for Smart Grid Technology Deployment

• A Smart Grid consortium will bring together more than 16 industry partners and research institutions to position New York in applying for federal smart grid ARRA funding.  Partnering New York’s research strengths in areas such as sensing and IT architecture, which is critical to the realization of a Smart Grid, will lead to numerous opportunities for manufacturing the necessary technology components, and enabling the acceptance of other clean energy technologies – i.e. solar, wind and hybrid vehicles.

• Under the federal ARRA, there is $3.375 billion available nationwide for deploying smart grid technology.  The U.S. Department of Energy will pay up to 50% of the project cost for selected projects.  Applications are due July 29.  As this infrastructure is built largely by utilities regulated by the Public Service Commission, the Commission must approve any matching funds.  In an effort to ensure New York’s utilities are well positioned to compete for ARRA funds, we requested that utilities file smart grid project plans with the PSC by April 17.  Utilities submitted projects totaling $1.3 billion for PSC review.  It is essential that the PSC act swiftly to finish its review of these project proposals, and approve appropriate matching funds before the utilities’ applications are due on July 29. 

Leveraging Recovery Act Dollars for Clean Energy and Renewable Energy Projects

• The ARRA also makes $2.5 billion available nationally for clean energy and renewable energy projects.  And for projects that commence construction in 2009 or 2010, the ARRA provides a tax credit up to 30 percent of the project cost.  In order to ensure there are shovel-ready projects in New York State that can take advantage of the federal tax credit and ARRA funding, NYSERDA must issue a Request for Proposals by the end of the summer, making available over $100 million in state incentives for eligible renewable energy projects under our Renewable Portfolio Standard program.