NYC Jobs Blueprint - PARTNERSHIP for New York City

 
NYC Jobs Blueprint - PARTNERSHIP for New York City
NYC Jobs Blueprint

PARTNERSHIP
for New York City
NYC Jobs Blueprint - PARTNERSHIP for New York City
Partnership for New York City — Board of Directors
Lee S. Ainslie, III                           Robert Greifeld                                  Ian C. Read
  Managing Partner, Maverick Capital            Chief Executive Officer,                          Chairman of the Board &
Ajay S. Banga                                   The NASDAQ OMX Group, Inc.                        Chief Executive Officer, Pfizer Inc.
  President & CEO, MasterCard Worldwide       Gerald L. Hassell                                James D. Robinson, III
David Barger, President & CEO,                  Chairman & CEO, BNY Mellon                       Co-Founder & General Partner, RRE Ventures
  JetBlue Airways Corporation                 Glenn H. Hutchins, Co-CEO, Silver Lake           Julio E. Rojas, Chief Executive Officer,
Candace K. Beinecke                           Kenneth M. Jacobs                                  Americas, Standard Chartered Bank
  Chair, Hughes Hubbard & Reed LLP              Chairman & CEO, Lazard Ltd                     Wilbur L. Ross, Jr.
Frank A. Bennack, Jr.                         Jill Kaplan                                        Chairman & CEO, WL Ross & Co. LLC
  Executive Vice Chairman & CEO,                  Publisher, Crain’s New York Business         Michael I. Roth
  Hearst Corporation                          George S. Kaufman                                  Chairman & CEO, Interpublic Group
Stephen Berger, Chairman,                       Chairman, Kaufman Organization                 Steven Roth, Chairman, Vornado Realty Trust
  Odyssey Investment Partners, LLC            Charles R. Kaye                                  Howard J. Rubenstein
William H. Berkman                              Co-President, Warburg Pincus LLC                 President, Rubenstein Associates, Inc.
  Managing Partner, Associated Partners, LP   Klaus Kleinfeld, Chairman & CEO, Alcoa Inc.      Mitchell E. Rudin
Mark T. Bertolini                             Henry R. Kravis, Co-Chairman & Co-CEO,             President & CEO, U.S. Commercial
 Chairman, CEO & President, Aetna Inc.          Kohlberg Kravis Roberts & Co.                    Operations, Brookfield Office Properties Inc.
Jeffrey L. Bewkes                             William P. Lauder, Executive Chairman,           William C. Rudin, CEO & Vice Chairman,
  Chairman & CEO, Time Warner Inc.              The Estée Lauder Companies, Inc.                 Rudin Management Company, Inc.
Leon Black                                    Rochelle B. Lazarus                              Pete Ruegger
  Founding Partner, Apollo Management, L.P.     Chairman Emeritus,                               Partner, Simpson Thacher & Bartlett LLP
Michael W. Blair                                Ogilvy & Mather Worldwide                      Kevin P. Ryan, Chairman, Gilt Groupe
   Presiding Partner, Debevoise & Plimpton LLP Richard S. LeFrak                               Linda S. Sanford, Senior Vice President,
Lloyd C. Blankfein                                Chairman & CEO, The LeFrak Organization         Enterprise Transformation, IBM Corporation
   Chairman & CEO, Goldman Sachs & Co.         Martin Lipton, Senior Partner,                  Stephen A. Schwarzman
Jeff T. Blau, Chief Executive Officer,          Wachtell, Lipton, Rosen & Katz                   Chairman, CEO & Co-Founder,
  The Related Companies, L.P.                 Terry J. Lundgren                                  The Blackstone Group
Kathy Bloomgarden                               Chairman, President & CEO, Macy’s, Inc.        Jerry I. Speyer
  Chief Executive Officer, Ruder Finn, Inc.   Howard W. Lutnick                                  Chairman & Co-CEO, Tishman Speyer
Glenn A. Britt                                  Chairman & CEO, Cantor Fitzgerald L.P.         Mark A. Standish, President & Co-CEO,
  Chairman & CEO, Time Warner Cable Inc.      Bridget A. Macaskill                              RBC Capital Markets, LLC
Tory Burch                                       Chief Executive Officer, First Eagle          Frederick O. Terrell
  Chief Executive Officer, Tory Burch LLC        Investment Management, LLC                      Vice Chairman, Investment Banking,
Kevin Burke                                   Vikram Malhotra                                    Credit Suisse
  Chairman, President & CEO, Con Edison          Chairman of the Americas,                     Mary Ann Tighe
Kenneth I. Chenault                              McKinsey & Company, Inc.                       Chief Executive Officer,
  Chairman & CEO,                             Joel S. Marcus                                    NY Tri-State Region, CBRE, Inc.
  American Express Company                      Chairman, CEO & Founder,                       James S. Tisch
H. Rodgin Cohen                                 Alexandria Real Estate Equities, Inc.            President & CEO, Loews Corporation
  Senior Chairman, Sullivan & Cromwell LLP    Theodore Mathas                                  John B. Veihmeyer
Stephen J. Dannhauser, Former Chairman,         Chairman, President & CEO,                       Chairman & CEO, KPMG LLP
  Weil, Gotshal & Manges LLP                    New York Life Insurance Company                George H. Walker
Philippe P. Dauman                            Sherilyn McCoy                                     Chairman & CEO,
  President & CEO, Viacom Inc.                  Chief Executive Officer, Avon Products, Inc.     Neuberger Berman Group LLC
Anthony J. De Nicola, Co-President,           Bill McDermott                                   Christopher J. Williams, Chairman & CEO,
  Welsh, Carson, Anderson & Stowe                Co-Chief Executive Officer, SAP AG              The Williams Capital Group, L.P.
James Dimon                                   Harold McGraw, III                               Robert Wolf
  Chairman & CEO, JPMorgan Chase & Co.          Chairman, President & CEO,                       Chief Executive Officer, 32 Advisors, LLC
                                                The McGraw-Hill Companies                      Deborah C. Wright
Irene M. Dorner
   President & CEO, HSBC Bank USA             Eric M. Mindich                                    Chairman & CEO, Carver Bancorp Inc.
                                                 Chairman & CEO, Eton Park Capital             Kathryn S. Wylde
Joseph J. Echevarria, Jr.
                                                 Management, L.P.                                President & CEO,
  Chief Executive Officer, Deloitte LLP
                                              Edward J. Minskoff                                 Partnership for New York City
Roger W. Ferguson
                                                President, Edward J. Minskoff Equities, Inc.   Tim Zagat, CEO & Co-Chair, Zagat Survey LLC
  President & CEO, TIAA-CREF
                                              Thomas Montag                                    Strauss Zelnick
Laurence D. Fink
                                                Co-Chief Operating Officer,                       Chief Executive Officer,
  Chairman & CEO, BlackRock, Inc.
                                                Bank of America Corporation                       ZelnickMedia Corporation
Alan H. Fishman
                                              Deanna M. Mulligan                               Mortimer B. Zuckerman
  Chairman, Ladder Capital Finance LLC
                                                President & CEO, Guardian Life Insurance        Chairman & CEO, Boston Properties
Jay S. Fishman                                  Company of America
  Chairman & CEO,
                                              K. Rupert Murdoch                                Ex-Officio
  The Travelers Companies, Inc.
                                                 Chairman & CEO, News Corporation              William C. Dudley, President & CEO,
Mark T. Gallogly
                                              Duncan L. Niederauer                               Federal Reserve Bank of New York
 Managing Principal, Centerbridge Partners
                                                Chief Executive Officer, NYSE Euronext         David W. Heleniak
James P. Gorman
                                              Richard D. Parsons                                 Senior Advisor, Morgan Stanley
  Chairman & CEO, Morgan Stanley
                                                 Senior Advisor, Providence Equity Partners    Stephen R. Howe, Jr.
Barry M. Gosin
                                              John Paulson, President, Paulson & Co., Inc.       America’s Area Managing Partner,
  Chief Executive Officer,
                                              Charles E. Phillips, Jr.                           Ernst & Young LLP
  Newmark Grubb Knight Frank
                                                Chief Executive Officer, Infor
Jonathan N. Grayer                                                                             Founding chairman
  President & CEO, Weld North LLC             Peter J. Powers, Chairman & CEO,
                                                Powers Global Strategies, LLC                  David Rockefeller
NYC Jobs Blueprint - PARTNERSHIP for New York City
Contents

 2   Introduction

 4   Executive Summary

10	Section 1 — New York City 2002–2012:
    Steady Growth in an Era of Turbulence

16 	Section 2 — The Bloomberg Principles:
     Long-Term Vision and Data-Driven Management

24 	Section 3 — The Decade Ahead:
     Vulnerabilities and Challenges

38 	Section 4 — The Blueprint

58   Conclusion

61   Endnotes

68   Acknowledgements
NYC Jobs Blueprint - PARTNERSHIP for New York City
Introduction

2    NYC Jobs Blueprint Partnership for New York City
NYC Jobs Blueprint - PARTNERSHIP for New York City
New York is the world’s premiere city of opportunity. It is the economic powerhouse that
sustains America’s position of leadership in the global economy and provides a universal
gateway to the upward mobility that is uniquely possible in this country.
Mike Bloomberg, New York’s first “businessman mayor” in more than a century, was unique-
ly qualified to preside over the city’s successful transition to the New Millennium economy.
No mayor of New York governs without any detractors. But Mike Bloomberg’s supporters
and critics generally agree that his financial and political independence enabled his admin-
istration to attract exceptional talent to city government, make decisions on the basis of
data-driven analysis, and to undertake long-term, often visionary, planning and investment.
At the end of this year, Bloomberg will leave the city far more energized and entrepreneurial
than he found it in 2001.
This NYC Jobs Blueprint intends to lay the groundwork for the actions and partnerships that
local government, organized labor, the private sector and civic groups will need to under-
take in order to maintain New York’s status as the pre-eminent city of opportunity over the
next decade. It focuses on the five pillars that support the contemporary urban platform for
opportunity: more and better jobs; better educated and skilled workers; infrastructure that
provides greater connectivity and accessibility; a safe and affordable living environment; and
an efficient, disciplined and well-run city government.
To prepare this Blueprint, the Partnership for New York City relied upon input from its mem-
bers, who represent the city’s business leaders and private sector employers, as well as a
number of respected urban experts. It draws on information and analysis provided by the
Brookings Metropolitan Policy Program and fact-based research and analytical support from
McKinsey & Company. Together, we took a deep dive into demographic and economic data
that has not been previously aggregated for comprehensive analysis. The result is a fresh look
at the trends and developments of the last decade and projections that suggest how those
will play out over the next ten years.
The incoming Mayor will encounter an economic and fiscal context that will be different and,
in many respects, more challenging than the Bloomberg era. There will be more competition
from other cities and greater internal demands on City resources. There will likely be less
aid from Washington, DC and Albany. To cope with these pressures, the next generation of
municipal leaders will need to focus on what unites the diverse elements of the city, not what
divides us.
The aspirations of this plan are simple: a city economy that is growing in ways that generate
more high quality jobs and a broader tax base; an excellent, fully integrated system of edu-
cation, workforce development and job placement; and a safe, affordable and productive
urban setting in which to live, work and build businesses.

Laurence D. Fink                  Terry J. Lundgren                    Kathryn S. Wylde
Chairman & CEO                    Chairman, President & CEO            President & CEO
BlackRock, Inc.                   Macy’s, Inc.                         Partnership for New York City

Co-Chairman                       Co-Chairman
Partnership for New York City     Partnership for New York City

                                             Partnership for New York City NYC Jobs Blueprint          3
NYC Jobs Blueprint - PARTNERSHIP for New York City
Executive Summary

4    NYC Jobs Blueprint Partnership for New York City
NYC Jobs Blueprint - PARTNERSHIP for New York City
A current snapshot of the New York City economy reveals a vibrant center of
commercial activity, creative output, and innovation. Despite two recessions,
a global financial crisis and the terrorist attack of 9/11, the economy is
growing at an annual rate of 3%, outpacing that of the United States and
most developed countries. New York ranks as America’s safest big city, its
top tourist destination, and its second largest and fastest growing technology
cluster outside of Silicon Valley. Population and private sector jobs numbers
are at all time highs.

The city has grown stronger as a result of         of its largest employers, but the economy is
more rigorous management of municipal              diversifying at a fast pace. The most rapidly
services and forward-looking investments           growing contributors to economic output
in public infrastructure and amenities. More       over the past decade are high-tech, creative
than 36% of the city’s land area has been          industries and tourism, although their share
rezoned1 and is ready to accommodate               of the overall economy remains small. The
development of at least 80,0002 new                city’s waterfront has been rediscovered
housing units and 41 million square feet of        as an urban amenity. Neighborhoods
new commercial space.3 Columbia, New               and secondary business districts across
York and Cornell Universities are poised to        the five boroughs are more vibrant and
invest tens of billions of private capital in      attractive than at any time in modern history,
significant institutional expansion, as are        increasingly accessible by bikes, ferries and
many of the city’s nonprofit healthcare,           Bus Rapid Transit. Brooklyn has emerged as
research and smaller educational institutions.     the borough of choice for a new generation
                                                   of urbanites and both Lower Manhattan and
The financial services industry is still the
                                                   the Far West Side are being transformed
city’s economic engine and healthcare one
                                                   into model live-work communities.

                                               Partnership for New York City NYC Jobs Blueprint     5
NYC Jobs Blueprint - PARTNERSHIP for New York City
The NYC Jobs Blueprint outlines a set of recommendations for
    collaborative actions that the public and private sectors might take to
    insure that New York remains a strong, inclusive city of opportunity.

                            Recent history and trends, however, suggest     The next decade will bring more intense
                            that the city’s economic strength and           global and domestic competition. Industries
                            forward momentum cannot be taken for            that anchor the economy—financial and
                            granted. Despite an uptick in the past two      professional services, media and technology,
                            years, population growth over the decade        health and education, fashion and retail—
                            has been weak. Unemployment is too high,        are undergoing dramatic, often disruptive
                            as is chronic poverty. Less than a third of     change. Federal and state aid to the city is
                            public high school graduates are deemed         becoming less certain, while the demands
                            college or career ready. Productivity—long      for public infrastructure investment and
                            the essence of the city’s value proposition     municipal services are increasing, putting
                            for business—is falling behind competing        extraordinary pressure on the local tax base.
                            business locations. The city is losing both
                                                                            This NYC Jobs Blueprint summarizes how
                            upper and middle class families because of
                                                                            the city economy has developed through the
                            high taxes and the rising cost of housing.
                                                                            last decade and how the policies employed
                            Although the city is a hotbed of digital        by the Bloomberg Administration were
                            startups, few young companies are scaling       used to achieve job growth and diversified
                            up to more than 30 or 40 jobs in the city. In   economic activity across the five boroughs; it
                            fact, over the last decade, there was no net    outlines the challenges to continued growth
                            increase in the number of businesses em-        that will confront the next Mayor; and,
                            ploying more than 50 people locally.4 Rising    finally, it outlines a set of recommendations
                            costs of living and doing business and a dif-   for collaborative actions that the public and
                            ficult regulatory and legal environment are     private sectors might take to insure that
                            wearing on residents and employers alike.       New York remains a strong, inclusive city of
                                                                            opportunity.

6    NYC Jobs Blueprint Partnership for New York City
NYC Jobs Blueprint - PARTNERSHIP for New York City
Measures of Success: What the City Must Strive to Achieve by 2020

Real GDP Growth
                                                                   Supporting rationale

  3.1%                        3.4%            3.8%                 International peer cities (Shanghai,
                                                                   Singapore, Hong Kong, London, Toronto,
  % CAGR per year since        Modest         Ambitious            Sydney, Paris and Berlin) have grown
  the recession (2009–                                             real GDP at 3.4% per year over the past
  2011), up from 1.7% per                                          decade (2002–2011), and have grown at
  year over the decade                                             4.3% since the Recession (2009–2011);
  (2002–2011)                                                      3.8% is roughly the mid-point of these
                                                                   growth rates.
  Recent historical trend

Productivity Growth
                                                                 Supporting rationale

  1.1%                       2.7%            3.0%                The “modest” aspiration matches Silicon
                                                                 Valley’s productivity growth of 2.7% over
                                                                 the past decade (2002–2011); 3.0% is the
   % CAGR from                Modest         Ambitious
                                                                 productivity growth necessary to reach real
   2002–2011                                                     GDP growth of 3.8% while maintaining
   Recent historical trend                                       employment growth relatively in line with
                                                                 historical norms (0.8% per year would be
                                                                 needed; New York City had 0.6% per year
                                                                 employment growth from 2002–2011).

Middle-wage Job Creation
                              Jobs Target          Jobs Target                  Supporting rationale

  -2.3%                     +61,000 +101,000
                                                                                61,000 jobs would restore
                                                                                the number of middle-wage
                                                                                jobs to 2005 levels, 101,000
    % CAGR from 2008–        Modest (4.3%)         Ambitious (7.2%)             jobs would restore to the
    2011, 101,000 jobs                                                          peak of middle-wage jobs
    Recent historical trend                                                     in 2008.

Unemployment Reduction
                                                                     Supporting rationale

  9.5%                          4.6%           4.2%                  4.6% was the low during the last
                                                                     business cycle (12/07–6/09), both for
   as of January 2013           Modest          Ambitious            New York City and for the U.S. as a
                                                                     whole; 4.2% was Silicon Valley’s low
   Recent historical trend
                                                                     during the last business cycle (the
                                                                     lowest among peer U.S. cities).

                                                         Partnership for New York City NYC Jobs Blueprint      7
NYC Jobs Blueprint - PARTNERSHIP for New York City
Challenges Ahead

      Obstacles to Business and Job Growth                     Infrastructure Modernization and
      • High costs and a tough regulatory and legal            Maintenance
          environment make New York City the most              • There is an estimated $6.4 billion of additional
          expensive place in the country to build a              capital work needed to achieve a state of good
          business. Overall costs are 1.5 times the national     repair of infrastructure assets (exclusive of transit
          average; office rent and electricity are double        and public housing stock).
          the national average.                                • The city’s infrastructure and transportation
      • New York City firms are not scaling up. Between          systems require significant investment to
          2003 and 2010, New York City saw no net                address vulnerabilities revealed by Superstorm
          growth in the number of firms with 50 or more          Sandy and to expand services to new centers of
          employees. Of the 220,000+ businesses in               employment.
          the city, 195,000 or 88%, have fewer than
          20 employees.                                        Threat to the Middle Class
                                                               • Job growth is primarily in high-wage and low-
      Education/Jobs Mismatch                                    wage categories, with middle-wage jobs at risk
      • There is a growing shortage of qualified workers         due to competitive pressures on employers and
          for available jobs. There will be an estimated         availability of skilled workers at a lower cost in
          21% increase in NYC jobs that require an               other regions.
          associate degree or higher by 2020.                  • Middle class households (annual income of
      • In 2012, only 28.6% of students graduating               $35,000–$75,000) cannot keep up with rapidly
          from public high school were deemed ready for          rising housing costs.
          college or a career; almost 80% of those who
          were admitted to community college required          Structural Budget Deficit/Reduced
          remedial education.                                  Federal & State Aid
      • In 2011, there were twice as many graduates of         • In 2015, the City is projected to have a budget
          local colleges and universities with degrees in        shortfall of at least $2.4 billion.
          the humanities as in STEM majors, while the job      • Reduced Federal and State aid is likely to
          demand is heavily weighted toward technology           increase pressure on the local tax base.
          and math skills.                                     • NYC’s tax burden is already the highest in the
                                                                 country.

8   NYC Jobs Blueprint Partnership for New York City
NYC Jobs Blueprint: Key Proposals

More & Better Jobs
• Build Urban “Tech Campus”                       • Promote Tech Startups
    Developments in Every Borough                 • Champion Diversity in the Tech Sector
•   Replace Non-Strategic Economic                • Establish Industry Partnerships
    Development Programs with                        for Economic Development
    Jobs Tax Credits                              • Create a Commercial Rent Tax Credit
•   Reinforce the Financial Services Sector       • Establish a Resource Center
•   Accelerate Sector Diversity                      for Job Creators
•   Expand Export Intensity                       • Create a Permanent Innovation
•   Encourage New Manufacturing                      Advocacy Organization
    & Artisan Enterprise

Better Educated & Skilled Workers
• Launch NYC 2020 Jobs Challenge—                • Coordinate Education, Workforce
  A Partnership between Employers                   Development & Job Placement
  & Educators                                       Functions under a Chief Talent Officer
• Establish Outcome-Based Criteria
  for Education Funding

Greater Connectivity & Accessibility
• Pursue Universal & Redundant                    • Redesign the Transportation Network
  Connectivity                                    • Tap Private Sector Resources
• Advocate for Improved Airports

Safe & Affordable Living Environment
• Optimize Existing Housing Resources             • Improve Services in High
• Reduce Costs of Housing Construction               Crime Communities
• Prioritize Long-Term Planning
    & Sustainability

Efficient, Disciplined & Well-Run CITY Government
•   Eliminate the Structural Budget Deficit       • Redesign Community Service Delivery
•   Recruit Strong, Tech-Savvy Managers              for “Collective Impact“
•   Reform Property Taxes                         • Mobilize Business-Labor-Citizen Lobbying
•   Evaluate City-Owned Property for                 Efforts to Support the City’s Agenda in
    Revenue Potential & Economic                     Washington, DC & Albany
    Development

                                              Partnership for New York City NYC Jobs Blueprint   9
Section 1

     NYC 2002–2012: Steady Growth
     in an Era of Turbulence

10    NYC Jobs Blueprint Partnership for New York City
During the past decade, the New York City economy has experienced steady
growth, despite turbulence in the global and national economies. Innovation
in core industries, effective marketing of the city and a burst of entrepreneurial
startup activity have been the driving forces.

The city’s Gross Domestic Product (GDP or             companies, including digital media, e-commerce,
economic output) grew at an average annual rate       social networking and ad tech, which account
of 1.7% over the past ten years and at over 3%        for 85% of the city’s high-tech startups.13 Tech
annually for the past three years, outpacing the      entrepreneurs are attracted to New York because
country’s 2.1% average rate of post-recession         it is the center of the global advertising industry,
GDP growth.5                                          it has a deep creative talent pool, and New
                                                      York’s legacy industries—finance, media, retail,
Today, at $583 billion, New York boasts the
                                                      and professional services—represent the biggest
largest city economy in the world.6 Of three
                                                      market of first adapters of new technology.
domestic peers (Chicago, Los Angeles, Silicon
Valley) only California’s Silicon Valley, with its    New York City now commands 13% of national
concentration of technology companies, grew           market share for economic output in the creative
faster than New York during this period. The city’s   sector.14 Growth in creative industries (4.1% per
private sector added 357,000 jobs since 2003          year) was led by a surge in the film and broad-
and, in 2012, the total number of private sector      casting sector, which grew 6.2% over the decade,
jobs reached 3.332 million, surpassing the 1969       thanks largely to a New York State 30% produc-
employment peak of 3.251 million.7                    tion tax credit and an aggressive marketing and
                                                      services program run by the Mayor’s Office of
The financial services industry dominates the
                                                      Media & Entertainment.15 Since 2002, television
city economy. Over the decade, it experienced
                                                      production activity has increased by 82%, ampli-
2.3% annual growth in terms of its contribution
                                                      fied by average industry salaries of $111,000.16
to the city’s GDP, although job numbers have
been flat.8 Recent growth has come from the           Tourism has grown steadily at an average rate
asset management and insurance sectors, rather        of 4.1% per year, with New York passing a new
than the traditional mainstays of banking and         milestone of 52 million visitors in 2012.17 Visitors
securities. The asset management industry             to the city generated an estimated $55.3 billion
grew annually by 6.2% over the last decade and        in total economic impact, with direct spending
employment increased by 4.5%.9 In contrast, the       reaching $36.9 billion.18 A record 33% share of all
securities sector has experienced minimal growth      U.S. visitors from abroad came to New York City.19
(0.5%) and has seen a decline in jobs (-2%).10        The volume of international visits from emerging
New York’s share of global IPO listings has nearly    markets has risen substantially since 2006 with
halved over the last decade (currently 22% of the     a 447% increase from Brazil, 442% from China,
total) as Asia has grown in importance.11             and 258% from Argentina.20 The Metropolitan
                                                      Museum of Art, for example, saw record breaking
The fastest growing sectors in terms of economic
                                                      attendance for the second year in a row with
output are high-tech, creative industries (media,
                                                      6.28 million visitors in 2012.21
arts, fashion) and tourism. High-tech has led the
way, with annual growth averaging 5.3% over           High productivity, high salaries and multiplier
the past decade.12 The city still accounts for        effects are what make the tech, creative and
only 3% of national high-tech industry output,        tourism sectors such important contributors to
leaving considerable room for further growth.         economic growth.
The centerpiece of local tech activity are internet

                                                 Partnership for New York City NYC Jobs Blueprint            11
In terms of jobs, these sectors together only                          On the negative side, the last decade saw a
                            represented 12.2%, or 462,000, of the city’s                           4.5 pecentage point decline in contribution to
                            jobs at the end of 2011.22 All these sectors offer                     GDP from several “traditional” sectors: construc-
                            salaries that exceed average local earnings,                           tion/real estate, government, and education. The
                            with tourism having the lowest average wage at                         healthcare sector, one of the city’s largest em-
                            $52,000, which is still roughly $7,000 more a year                     ployers, has seen its share of GDP rising at 2.3%
                            than the average city salary.23 Creative industries                    annually over the last decade.25 Growth has con-
                            actually lost jobs over the decade at the rate of                      tinued despite hospital closures, with jobs shifting
                            0.5% a year largely due to flat employment in                          to outpatient care, but is heavily dependent on
                            the media and publishing sector and continued                          federal and state funding that is clearly at risk.
                            decline of traditional apparel manufacturing,                          Professional and business services, a significant
                            which has fallen nearly 10% per year since 2002,24                     creator of new jobs in the past decade, should
                            (mass manufacture of apparel has relocated to                          also continue to grow, assuming their primary
                            lower cost regions and is not coming back to the                       customers in financial services and other legacy
                            city, as distinguished from fashion design and                         industries remain strong. While traditional manu-
                            very limited, high end or sample production that                       facturing has continued to decline, technology-
                            is thriving in New York.)                                              enabled “new” manufacturing shows promise,
                                                                                                   with a number of entrepreneurial startups calling
                                                                                                   New York City home.

                                   EXHIBIT 1.1: NYC  GDP Growth Has Outpaced Domestic Peers
                                        and the Nation, but Lagged International Competitors
                                    GDP 2002–20111

                             150

                                                                                                                                +3.4     +4.3

                             120                                                                                                +1.7     +3.1
                                                                                                                                +1.6     +2.1
                                                                                                                                +1.4     +2.2

                              90
                                   2002     03       04        05        06        07        08        09        10        11

                               Post 9/11                   Economic                        Great               Post-recession
                               Recovery                    Expansion                     Recession               Recovery

                                                 International peers2                    U.S.                                    % CAGR, 2002–20114
                                                 NYC                                     Domestic peers3                         % CAGR, 2009–2011

                                   NOTES:
                                   1) Real GDP, Indexed to 2002
                                   2) International peers: Shanghai, Singapore, Hong Kong, London, Toronto, Sydney, Paris, and Berlin
                                   3) Domestic peers: Chicago, Los Angeles, and Silicon Valley
                                   4) The Compound Annual Growth Rate (CAGR) is the average annual growth rate (positive or negative), or the
                                      year-over-year growth rate, calculated by taking the nth root of the total percentage growth rate, where n is the
                                      number of years in the time period being considered.
                                   SOURCE:
                                   McKinsey analysis of data from the Canback Global Income Distribution Database (C-GIDD) & Moody’s Analytics

12   NYC Jobs Blueprint Partnership for New York City
EXHIBIT 1.2A: NYC’s              Economy Has Grown but Jobs in Major Industries
                                                           Have Been Lost Over the Last Decade

                          GDP1, 2011                               % CAGR2                       Employment, 2011                   % CAGR2
                          $ Billions                              2002–2011                      Thousands                         2002–2011

Finance & Insurance                                  131                      2.3                               323                    -0.3

         Healthcare               40                                         2.3                                          590                   1.7

         Information                  52                                            5.1                  169                           -0.1

   Business Services                            91                       1.1                                              597                  0.9

Leisure & Hospitality           24                                             3.4                              338                              2.7

               Retail        21                                                3.2                              313                             1.8

        Government                    47                                 0.6                                             548           -0.4

       Construction         12                               -2.2                                    112                               -0.4

          Education         10                                           0.3                             176                                    2.3

         Real Estate                            93                       0                           118                                       0.4

      Manufacturing         9                                    -2.0                               75                      -6.6

      Other Services        12                                    -0.4                                   164                                   0.8

               Other                 41                                      2.1                               258                             1.4

            TOTAL                                          583               1.7                                        3,783                  0.6

                         NOTES:
                         1) Nominal GDP
                         2) Real GDP
                         SOURCE:
                         McKinsey analysis of data from the U.S. Bureau of Labor Statistics (BLS) & Moody’s Analytics

                        EXHIBIT 1.2B: New
                                        Economy and High-growth Sectors Saw a Greater Rate of
                           GDP and Jobs Growth Over the Decade than all Industries Combined

                         GDP1, 2011                                  % CAGR2                     Employment, 2011                        % CAGR2
                         $ Billions                                 2002–2011                    Thousands                              2002–2011

            Creative                                  58                           4.1                                     224          -0.5

          High-tech                        27                                        5.3                  98                                     1.4

            Tourism              12                                                4.1                         120                               1.4

        TOTAL NYC                                          583                 1.7                                      3,783                   0.6

                        NOTES:
                        The creative, high-tech and tourism sectors were created through McKinsey’s analysis of traditional industry
                        sectors to show the share of jobs and impact on GDP by aggregating 4 digit NCAIS codes.
                        Creative includes relevant codes from the fashion, media and arts industries. Tourism includes codes from the arts,
                        entertainment & recreation industries as well as from accommodations, travel and sightseeing. High-tech includes
                        codes from the information, technical services, computer manufacturing and telecommunications.
                        1) Nominal GDP
                        2) Real GDP
                        SOURCE:
                        McKinsey analysis of data from BLS & Moody’s Analytics

                                                                                           Partnership for New York City NYC Jobs Blueprint            13
Resilience in the Face of                                   the competitive stakes, despite far greater finan-
                                                                                            cial and policy support from their national govern-
                                Crisis and Competition                                      ment than New York gets from Washington, DC.
                                New York has demonstrated remarkable resilience             The 2012 Cities of Opportunity benchmarking
                                during a decade marked by terrorism, recession,             study, issued by the Partnership for New York City
                                financial crisis and a technological revolution that        and PwC, ranks New York and London in a virtual
                                is transforming the city’s anchor industries. The           tie for economic advantage, with the real threat
                                destruction of the World Trade Center inflicted             to both cities coming from the emerging financial
                                massive economic damage and accelerated a                   centers of Asia and, in New York’s case, smaller
                                financial downturn that, in 2001, was already               domestic cities like Austin and Seattle.27
                                underway. Yet New York’s economy bounced
                                                                                            The 2008 financial crisis and the Great Reces-
                                back, and GDP grew 3.8% annually from 2003
                                                                                            sion interrupted real estate development and
                                to 2007.26 An ambitious and comprehensive
                                                                                            construction activity across the city, delaying the
                                rebuilding program, financed by a combination
                                                                                            financing, marketing and build out of important
                                of government and private investment, was
                                                                                            projects like the new World Trade Center site,
                                responsible for this rapid recovery.
                                                                                            Atlantic Yards, Hudson Yards, Alexandria Cen-
                                After 9/11, there were indications that London              ter (the city’s first science park) and hundreds
                                was surpassing New York as the global financial             of smaller residential and commercial projects,
                                capital. Fear of London’s competitive edge was              most of which are finally moving forward. Some
                                reinforced when that city won the 2012 Summer               100,000 New Yorkers lost their jobs during the
                                Olympics bid. But London failed to pull away in             national 2008–2009 recession, the city lost several

                            EXHIBIT 1.3:        Financial Services Employment Was Nearly Flat Over the
                                                   Decade, but Remains an Essential Asset

                                             2002 Employment                  2011 Employment                    % Change, 2002–2011

                                 Thousands

                                                                                        330.9
          Finance & Insurance                                                                      -2.57
                                                                                       322.4

                                                     114.2
              Real Estate and                                  +3.5
             Rental & Leasing                        118.2

                                                                                                               445.1
        TOTAL EMPLOYMENT                                                                                               -1.01
                                                                                                            440.6

                                                                                                   FINANCE AND INSURANCE SUBSECTORS1
                                                                                                   Thousands

                                                                         Credit Intermediation                         92.6
                                                                                                                                -4.86
                                                                         and Related Activities                        88.1

                                                                  Securities, Commodities and                                           169.5
                                                                                                                                                +0.35
                                                                              Related Activities                                        170.1

                                                                Insurance Carriers, Brokerages,                 58.3
                                                                         and Related Activities                         -5.49
                                                                                                                55.1

                 NOTE:                                                      Funds, Trusts, and       8.2
                 1) Numbers may not sum due to rounding.                                                   -23.17
                                                                       Other Financial Vehicles      6.3
                 SOURCE: NYS Department of Labor

14   NYC Jobs Blueprint Partnership for New York City
The city is in a position of strength compared to global and
                                                   domestic competitors, but this could change quickly.

                                            major financial institutions, and the brand of Wall             ployed or underemployed—an increase of nearly
                                            Street was tarnished.28 Although Wall Street was                7% from 2007.31 Residents who are ill-prepared
                                            the epicenter of the financial system meltdown,                 for the high-tech work environment, or lack other
                                            New York rebounded faster than the rest of the                  skills required by employers, increasingly are in
                                            country. The city gained 250,000 jobs between                   temporary and part-time jobs or freelance assign-
                                            2009 and 2011, 150,000 more than were lost, and                 ments, often earning less than is required to live
                                            at twice the national rate of yearly job growth.29              in a high cost urban environment.

                                            Today, unemployment remains high, nearly                        In response to the seeming contradiction between
                                            five percentage points more than its lowest levels              robust job creation and high unemployment, the
                                            during the last business cycle and 1.5 percentage               Independent Budget Office (IBO) identified the
                                            points higher than the national average.30 Some                 impact of a growing labor force participation rate,
                                            15.8% of New Yorkers are estimated to be unem-                  driven by an increase of nearly 60,000 new city
                                                                                                            residents and re-entry of job seekers who had
                                                                                                            previously dropped out of the market.32 In short,
                                                                                                            employment grew, but not fast enough to absorb
           EXHIBIT 1.4:      NYC’s Unemployment Rate Remains High                                           all the new job seekers.

12                                                                                                          Today New York is navigating a new round of
                                                                                                            challenges, both natural (Superstorm Sandy)
                                                                                                            and man-made (fiscal pressures at all levels of
                                                                                                            government). The city’s economic performance is
10                                                                                                          good, but not unaffected by national and global
                                                                                                      9.5   forces that have increased economic inequality
                                                                                                      9.5   and poverty across the United States and most
                                                                                                            of the developed world. In 2011, roughly 20.9%
                                                                                                      9.1
 8                                                                                                          of New Yorkers—or 1.73 million people—were
                                                                                                      7.9   officially classified as poor, an increase of 2.2%
                                                                                                      7.6   from two years earlier, compared to a national
                                                                                                            poverty rate of 15.0% that grew 0.7% in the same
 6                                                                                                          period.33 New York has a lower poverty rate
                                                                                                            than the nation’s five other largest cities, but its
                                                                                                            poverty statistics are nonetheless troubling.34
 4                                                                                                          In sum, the city is in a position of strength
 2002     2003    2004     2005    2006     2007    2008     2009    2010        2011   2012   2013
                                                                                                            compared to global and domestic competitors.
                                                                                                            But this could change quickly, and the next city
                 NYC                                Chicago                                                 administration must have a plan and a network of
                 Silicon Valley                     U.S.                                                    partnerships in place in order to respond quickly
                 LA                                                                                         and effectively to the inevitable challenges ahead,
                                                    Unemployment Rate (%) as of Jan 2013
                                                                                                            which are discussed in Section 3.

     NOTE: NYC defined as 5 boroughs; Silicon Valley defined as San Jose MSA &
     San Francisco MSA; Chicago and LA defined as their respective MSAs.

     SOURCE: McKinsey analysis of BLS & Moody’s Analytics

                                                                                                        Partnership for New York City NYC Jobs Blueprint           15
Section 2

     The Bloomberg Principles:
     Long-Term Vision and
     Data-Driven Management

16    NYC Jobs Blueprint Partnership for New York City
The Bloomberg Administration governed with a long-term vision for the city
in a global context and an immediate focus on public safety and “livability”
as the baseline conditions for economic growth. It advanced this agenda by
leveraging the city’s many assets, including an extraordinary concentration
and diversity of talent, multiple global industry headquarters, and a cluster of
great universities, medical research and cultural institutions.

The Administration drew heavily upon ideas and             mitments.35 At the same time, to encourage
resources from the private and nonprofit sectors,          private investment and job creation, it in-
resulting in economic development activity far             vested heavily in infrastructure and community
beyond what city government could have accom-              improvements associated with sports facilities
plished on its own. In the process, the City gained        and other redevelopment projects, which critics
“stickiness” with industry leaders and emerging            suggest provide relatively modest economic
entrepreneurs that helped the local economy                benefits for the city.
weather the turbulence of the past decade.              • The Administration aggressively rezoned the
Realizing the vision of New York City as a center         city’s land area and supported eminent domain
of global innovation and economic growth was              actions to assemble sites for private develop-
a shared mission of the whole Bloomberg team,             ment while carrying out down-zoning actions,
not just the Economic Development Corporation             imposing design criteria and expanding historic
(EDC). This was reinforced by having the Deputy           preservation designations that have reduced
Mayor for Economic Development also oversee               development potential in communities across
the Departments of City Planning, Finance, Small          the city.
Business Services (SBS), Transportation, and            • In 2002, the Administration pushed through
Housing.                                                  an 18.49% property tax increase to deal with
                                                          the revenue shortfall and security needs con-
As the Bloomberg mayoralty ends, there is
                                                          fronting the city after 9/11.36 As the economy
concern in the business community that the
                                                          improved, it established budget reserves to
next Mayor will tip in the direction of one policy
                                                          avoid income tax increases and issued property
extreme, toward a more intrusive, higher cost
                                                          tax rebates to homeowners, but simultaneously
government without an offsetting commitment
                                                          allowed commercial property tax assessments
to quality of life and pro-growth policies. Rather
                                                          and fines on small business to skyrocket.
than governing from the political right or the left,
Bloomberg seemed to follow his instincts. For           In short, the Administration has often strayed
example:                                                from laissez-faire, pro-business orthodoxy. But it
                                                        has maintained the confidence of job creators by
• The Administration toughened up on discre-
                                                        championing the city’s key industries and great
  tionary subsidies to business and inserted
                                                        institutions and by focusing on the safety and
  serious enforcement and clawback conditions
                                                        quality of life issues that are essential to a healthy
  into pre-existing tax incentive programs that
                                                        business climate.
  yielded $85 million in returns to the city from
  companies that failed to meet their com-

                                                    Partnership for New York City NYC Jobs Blueprint             17
Focus on Geographic                                            public amenities. Targeted public investments
                                                                                           sought to maintain manufacturing and shipping
                            and Sector Diversity                                           uses in select locations, such as the Brooklyn
                            The 9/11 terrorist attack illustrated the need                 Navy Yard, the new Brooklyn Cruise Ship
                            to make the city less vulnerable to the “boom                  Terminal, the Brooklyn Army Terminal and New
                            and bust” cycles of Wall Street and to create                  York Container Terminal. In the process, ferry
                            new centers of economic activity outside the                   services were expanded to provide connectivity
                            highly concentrated Manhattan central business                 to areas that were poorly served by public transit.
                            districts where an attack, a power failure, or the             Moving inland, there were also an unprecedented
                            paralysis of growing traffic congestion could                  number of City-sponsored planning and rezoning
                            inflict disproportionate damage on the entire five-            initiatives to stimulate redevelopment in places
                            borough economy.                                               like Downtown Brooklyn, Jamaica Center, Central
                                                                                           Harlem and, most recently, Midtown East.
                            Geographic diversity initiatives were incorpo-
                            rated in the vision for the city’s 2012 Olympics               The results of far-reaching planning, zoning and
                            bid, based on a plan for turning derelict sites                capital investment activity have been substantial.
                            across the five boroughs into Olympic venues                   Between 1992 and 2001, Brooklyn, Queens,
                            and permanent new hubs of economic activity.37                 the Bronx and Staten Island accounted for only
                            The waterways that historically separated the                  18% of New York City’s real GDP growth.38
                            city’s boroughs were reconceived as connectors                 By 2012, the “outer” borough contribution
                            and the waterfront as an asset to be reclaimed.                had increased to 29% of GDP growth, driven
                            The Olympic bid failed, but the ambitious plans                by growth in Brooklyn and Queens.39 From
                            for building out the Far West Side, as well as the             2002–2011, job growth was greater outside
                            Brooklyn and Queens waterfronts, proceeded.                    Manhattan than within it, with the Bronx seeing
                                                                                           more than double (11.7%), and Brooklyn nearly
                            City-initiated rezoning actions reversed decades               triple (16.4%) the rate of growth in Manhattan
                            of inactivity on the formerly industrial waterfront.           (5.7%) from 2002 to 2011.40 The number of local
                            Long derelict sites such as Hudson Yards,                      Business Improvement Districts (BIDs) grew by
                            Greenpoint-Williamsburg, Brooklyn, and Hunters                 50% since 2002 to 67, mostly outside Manhattan,
                            Point, Queens, attracted major private investment              investing over $100 million annually in services to
                            in commercial and residential redevelopment and                neighborhood commercial strips.41

                                                          Brooklyn & Queens Have Increased
                                                        EXHIBIT 2.1:
                                      Their Contribution to NYC’s GDP Growth Over the Last Decade

                                             % Contribution to GDP Growth,
                                             1992–2011

                                                                  13   +6                                           1992–2001
                                  Queens
                                                         7                                                          2002–2011
                                                                 12
                                 Brooklyn                              +5                                           % of Change in GDP1
                                                        7

                                                    3
                                    Bronx                    0
                                                    3

                                                1
                             Staten Island              -1
                                                 2

                                                                                                                       71
                               Manhattan                                                                                                  -11
                                                                                                                                 82

                                             NOTE:
                                             1) Real GDP

                                             SOURCE: McKinsey analysis of data from Moody’s Analytics

18   NYC Jobs Blueprint Partnership for New York City
Creating a Life Sciences Cluster

                                                      New York is home to the nation’s largest concentration
                                                      of world-class medical research institutions and top scien-
                                                      tists, but this has never translated into development of a
                                                      local life sciences industry. A 2001 study by the Partner-
                                                      ship Fund for New York City (Partnership Fund) identified
                                                      only about 2,000 local jobs in commercial life sciences, as
                                                      compared to 71,000 in Silicon Valley and 25,000 in Greater
                                                      Boston.45 Discoveries by New York scientists were being
                                                      commercialized elsewhere, largely because there had been
                                                      no commitment by government or the medical research
                                                      institutions to create a local industry cluster. The Partner-
                                                      ship Fund study identified two obstacles to development
                                                      of a life sciences cluster: the anti-commercial culture of the
                                                      city’s academic medical centers; and the lack of commer-
                                                      cial lab space to accommodate life science companies.46

                                                      The Bloomberg Administration, working with the
                                                      Partnership Fund and leaders of medical research
                                                      institutions, set out to address both issues. The City
                                                      and State provided incentives for development of the
                                                      first commercial science park, the Alexandria Center, on
                                                      the City-owned Bellevue Hospital campus. In addition
In addition to diversification of economic activ-     to a long-term lease and property tax abatements, the
ity across the five boroughs, there have been         City provided infrastructure funding to move sewers, an
deliberate efforts to support the growth of new       ambulance entrance and make other site improvements.
industries. To spur startup activity, the City
                                                      The State provided $33 million in grants and other tax
provided modest support for a dozen high-tech
                                                      incentives.47 The private developer committed $700 million
business incubators that have housed nearly 500
startups.42 It has launched “jump start” and “boot    to build and finance what will ultimately be a million
camp” programs for entrepreneurs, promotional         square foot facility.48 At the same time, the Partnership
competitions, and networking activities that have     Fund was working with the major research institutions to
added a new dimension to New York’s tradition-        encourage industry partnerships, entrepreneurship and
ally corporate business culture. These programs
                                                      local commercialization.
have been synergistic with land use and public
infrastructure investments on Manhattan’s West        Alexandria’s first tower was completed in 2011 and the
Side, in Brooklyn, and Long Island City, helping      second tower is under construction, housing research
to generate “buzz” and creating clusters of new
                                                      labs of Pfizer, Eli Lilly, and Roche Pharmaceuticals and
economy businesses in long stagnant areas.
                                                      including both conference and incubator facilities. The
EDC has seen its staff and responsibilities           Alexandria Center represents the core of an emerging life
expanded significantly beyond the agency’s
                                                      sciences cluster in the city that is reinforced by public and
historic configuration. They have established
                                                      philanthropic investments in nonprofit initiatives such as
industry desks and working relationships with
business leaders, hired consulting firms to           the Structural Biology Center, the Stem Cell Foundation,
develop ideas for enhancing key sectors, and          and the Genome Center. Employment in the sector
created hundreds of initiatives to demonstrate        reached more than 11,500 by 2010.49 While still small, jobs
support for core industries and to promote the        in life sciences have a huge economic multiplier effect and
emerging entrepreneurial ecosystem.43 EDC has
                                                      cluster activity further strengthens New York’s educational
initiated outreach to foreign international markets
                                                      and healthcare institutions that employ 260,000 New
that were likely sources of foreign investment
and turned a favorable spotlight on companies         Yorkers and attract more than $2.3 billion in federal
from around the country and the world that were       research grants annually.50
expanding in New York.44

                                                                    Partnership for New York City NYC Jobs Blueprint   19
It is conventional wisdom that government is not               The presence of 45 U.S. Fortune 500 financial and
                            good at picking winners in the economic devel-                 corporate headquarters operations is the basis of
                            opment arena and the record of direct govern-                  New York’s global economic clout.51 They are the
                            ment investment in business is unimpressive. But               magnetic force that attracts other job creators,
                            the experience of the past decade demonstrates                 such as professional and business services,
                            how government can invest intelligently in the                 software application developers, and foreign
                            infrastructure and supportive environment that                 companies. Aside from federal “Liberty Bonds”
                            encourages business formation and growth if its                that were used to reinforce the corporate and
                            decisions are informed by private sector expertise             financial sector after the security risks generated
                            and rigorous market analysis, as opposed to wish-              by 9/11, the Administration has relied largely on
                            ful thinking or politics.                                      cultivation and advocacy as the preferred tools
                                                                                           for corporate retention. While many politicians
                                                                                           bash big banks, Mayor Bloomberg has employed
                            Leveraging the City’s                                          his bully pulpit to argue that nothing can replace
                                                                                           the solid middle-income jobs and contributions to
                            Assets                                                         the city tax rolls of the financial services industry.
                            The most successful economic development                       Mayoral attention and support has also been lav-
                            initiatives are those that effectively reinforce and           ished on other key industries: media, information
                            leverage the city’s economic assets. In New York,              services, health, education, fashion and retail, arts
                            these assets include the concentration of global               and culture, hospitality and tourism. The busi-
                            headquarters companies in multiple industries,                 ness community appreciates this support and the
                            world class educational, medical and cultural insti-           result is a much stronger commitment to stay and
                            tutions, the growing entrepreneurial community,                grow in New York.
                            and the city’s prominent global brand.

                                          EXHIBIT 2.2: NYC is Home to the Highest Concentration
                                                 of US Fortune 500 Companies in the Country
                                                    Number of US Fortune 500 Headquarters by City

                                                                    Minneapolis    9                             New York
                                                                                         Chicago
                             Silicon Valley
                                                                                             8                     45
                                  30
                                                                                                   6
                                                                             St. Louis 8
                                                                                              Cincinnati

                                  Los 5                                                                      7 Charlotte
                                Angeles                                                                 10
                                                                    Dallas 10                                           Top Cities by HQ Revenue
                                                                                                       Atlanta
                                                                                                                             $ Billions, 2011
                                                                                  22                                    New York         1,234
                                                                                                                        Silicon Valley    920
                                                                               Houston
                                                                                                                        Houston           500

                                         SOURCE: McKinsey analysis of data from Fortune magazine

20   NYC Jobs Blueprint Partnership for New York City
The Administration has also effectively exploited                  making credible claims that New York City is
     and enhanced New York City’s iconic brand.                         the greenest, healthiest and safest big city in
     NYC & Company was restructured and received                        America, if not the world.
     serious resources to launch an international
                                                                        Big ideas started early with introduction of the
     tourism marketing campaign. They helped carry
                                                                        311 system, where a live person responds to
     out high profile events, such as The Gates exhibit
                                                                        questions and complaints about city services
     in Central Park and Fashion’s Night Out, and
                                                                        (and just about anything else). Nearly 22 million
     to develop new international destinations such
                                                                        annual calls are logged by 311, allowing City
     as the High Line and Times Square. A retention
                                                                        agencies to anticipate and respond to issues far
     partnership featured a marketing alliance with
                                                                        more effectively.53 Along with other tools, such
     JetBlue, “New York’s Hometown Airline.”
                                                                        as Citywide Performance Reporting Online, 311
     Spurred by these creative efforts, the tourism
                                                                        resulted in a better managed city, where resource
     industry has grown from 320,000 jobs in 2011 to
                                                                        allocation and performance evaluation can be
     an estimated 356,000 jobs today.52
                                                                        largely data-driven.

                                                                        PlaNYC 2030 was another ambitious undertaking,
     The pursuit of big ideas                                           engaging representatives of industry, labor,
     The Bloomberg Administration has pursued—                          environmental groups and communities to
     and largely achieved—a series of big, audacious                    help develop and implement a long-term plan
     goals: topping 50 million tourists, establishing                   for the city’s future as a sustainable urban
     New York as a high-tech innovation capital, and                    environment.54 The plan proposed to reduce

                                     EXHIBIT 2.3:      High-tech and Other New Sectors on the Rise While
                                                        Anchor Industries Remain Vital Assets

     Change in GDP Growth
     % CAGR, 2002–2011                                                                                         Size of the Bubble = 2011 Contribution to NYC GDP

7
         High Growth                                                                                                                        Assets
6
                                       High-tech Tourism
5

                                                        Healthcare                                                                                  Creative
4                                        Food
                                      Retail                                           Finance &
3
                                                                                       Insurance
          Administrative services
2
                   Wholesale

1
                                                                    Professional &                                         U.S. GDP Growth Rate
                                        Government
                                                                  Engineering services
0
                                                                                            Education
                                               Construction &
-1                          Other               Real Estate

-2

-3
         Low Growth                                                                                                                          Legacy
-4
     0        0.2     0.4      0.6      0.8      1.0      1.2     1.4      1.6      1.8     2.0      2.2       2.4   2.6     2.8    3.0     3.2    3.4    3.6

                                                                        2011 Degree of Specialization

         NOTE: Degree of specialization is calculated by dividing the % of NYC sector employment by the % of
         U.S. sector employment; value > 1 indicates higher NYC job concentration than the U.S.

         SOURCE: McKinsey analysis of data from BLS & Moody’s Analytics

                                                                                                   Partnership for New York City NYC Jobs Blueprint                21
the city’s 2005 carbon footprint by 30% by 2030, through a           the $2 billion extension of the #7 subway line—the transit
     variety of long-term initiatives that range from building code       investment with the largest projected economic return of any
     reform to upgrading wastewater treatment plants. More                that is underway in the city.65
     than 15% reduction in emissions has already been achieved,
                                                                          In the business community, no current set of projects are
     representing the lowest per capita greenhouse gas emissions
                                                                          considered more important than those launched under
     among major U.S. cities.55 Ultimately, this will translate into
                                                                          the Applied Sciences initiative, through which the City has
     reduced energy costs and a more globally competitive city. An
                                                                          established partnerships with great universities that will more
     important aspect of this effort was the creation, by local law, of
                                                                          than double the number of engineering graduate students and
     the Mayor’s Office of Long Term Planning and Sustainability,
                                                                          faculty in the city, insuring its future status as a global center of
     which is charged with the pursuit of objectives that transcend
                                                                          innovation.
     short-term thinking.56
                                                                          The Administration has also taken substantial ownership of
     Quality of life initiatives have done much to transform the
                                                                          workforce development and training, moving beyond the
     stereotype of New York from a dense, cold urban center to a
                                                                          city’s traditional role as a passive conduit for state and federal
     highly livable city. The City has created more than 300 miles
                                                                          funding. Through SBS, it established eighteen Workforce1
     of bike lanes57, as well as pedestrian-friendly streetscapes
                                                                          Career Centers that, working with nonprofit and private
     and new public spaces. Since 2002, the City has added more
                                                                          contractors, have placed more than 160,000 New Yorkers in
     than 730 acres of new parkland and over 75% of New Yorkers
                                                                          jobs––more than half in the last three years.66 With private
     now live within a ten-minute of walk of a park.58 New Yorkers
                                                                          philanthropic funding, the Mayor created the Center for
     have a record high life expectancy rate, 2.2 years longer than
                                                                          Economic Opportunity, to explore innovative solutions to the
     the national average.59 Improvements in the public education
                                                                          education, health and employment issues confronting the city’s
     system and expanded school choice have made the city more
                                                                          poorest residents. When it comes to public and undergraduate
     family-friendly. Major crimes have been cut in half.60 For many
                                                                          education, there has been a greater focus on preparing
     employers, overall livability and the desire of talent to be here
                                                                          students for employment in growth sectors where there is an
     have supplanted business needs as the primary reason for
                                                                          unmet demand for skilled labor. The City has partnered with
     keeping jobs in the city.
                                                                          the City University of New York (CUNY) and the private sector
     There has been a record $88 billion of improvements to roads,        to launch several 9–14 schools and is also rolling out a software
     sewers and public space and buildings.61 Through the New             engineering pilot program in 20 schools modeled after the
     Housing Marketplace Plan, the city is building or preserving         Academy for Software Engineering that opened in 2012.67
     165,000 affordable housing units (15,000 to 18,000 annually).62
                                                                          In sum, the Bloomberg Administration will leave a solid
     Private, market-rate housing production is slowly rebounding
                                                                          foundation of industry relationships, greater geographic and
     from the recession, with the Buildings Department issuing
                                                                          sector diversity, and “innovation economy” initiatives for the
     about 10,600 residential construction permits in 2012, or 31%
                                                                          next Mayor to build on. It has invested heavily in infrastructure
     of the 2008 peak of 33,910.63
                                                                          and amenities, parks and streetscape improvements, and has
     Lower Manhattan has been transformed into a world class live-        launched sustainability initiatives that will define the param-
     work community and the city’s fastest growing neighborhood,          eters of the city’s physical and economic growth for decades to
     with population doubling in the decade after 9/11.64 Through         come. But changing demographics, increasing fiscal challenges
     a novel tax increment financing scheme, the City captured            and global competition will require a new blueprint for jobs,
     benefits from the value created by the Hudson Yards rezoning         the outline of which is suggested in the final section.
     on the Far West Side, and is using proceeds to help finance

22     NYC Jobs Blueprint Partnership for New York City
Applied Sciences NYC

Applied Sciences NYC is a “game-changing”             • NYU-Center for Urban Science & Progress
investment to insure that the city has sufficient       (CUSP)70: New York University leads an
engineering talent to be a global center of             international consortium that will convert an old
innovation in the 21st Century. Silicon Valley has      Metropolitan Transportation Authority (MTA)
nearly four times the concentration of engineering      building in Downtown Brooklyn into 150,000
jobs as a percentage of its workforce than New York     square feet of classrooms, offices and lab space,
City does.68                                            with another 40,000 square feet dedicated as
                                                        an incubator for businesses spun off by CUSP-
In December 2010, the city issued a challenge to
                                                        related research. CUSP is projected to create
top institutions from around the world to build a
                                                        2,200 construction jobs, 900 permanent jobs
new or expanded applied sciences and engineering
                                                        and generate 200 spin-off companies––creating
campus in New York City. The competition winner
                                                        another 4,600 permanent jobs.
would be awarded a package of city-owned land,
up to $100 million of City capital, and the full      • Columbia Institute for Data Sciences &
support of the City to make the project a reality.      Engineering: Columbia University will expand
The City received seven qualifying responses from       its engineering space by 44,000 square feet and
17 world-class institutions and selected three          create 75 new faculty positions, and create five
winners:                                                new areas of study and research which will be
                                                        crucial to New York City’s innovation economy in
• Cornell Tech: A partnership of Cornell University
                                                        the 21st century, including a New Media Center,
  and the Technion University of Israel will invest
                                                        a Smart Cities Center, a Health Analytics Center,
  $2 billion in a two million square foot campus
                                                        a Cyber Security Center, and a Financial Analytics
  on Roosevelt Island that will house hundreds of
                                                        Center.
  faculty and staff and 2,000 full-time graduate
  students. Over the next three decades, Cornell      Over the next three decades, these projects will
  Tech is projected to create 20,000 construction     collectively generate more than $33 billion in
  jobs, 8,000 permanent jobs, and generate nearly     overall economic impact, 48,000 Jobs, and nearly
  600 spin-off companies resulting in tens of         1,000 spin-off companies. Additionally, the new
  thousands of additional jobs. The campus will       facilities will more than double the existing number
  also create a $150 million venture fund for New     of full-time graduate engineering students in New
  York startups.69 Classes are already underway in    York City to over 5,600 and more than double
  temporary quarters at the Google offices.           engineering faculty in New York City to over 700.71

                                                            Partnership for New York City NYC Jobs Blueprint   23
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