The Boston Consulting Group is conducting a review of our region’s approach to economic development. It has done an impressive job of engaging representatives from many sectors of our community, including myself, as it conducts research.
Shortly, BCG will deliver a report that will include an assessment and recommendations. As Greater Rochester Chamber of Commerce CEO Bob Duffy articulated in his recent Rochester Business Journal column, we perform at an uncompetitive level that prevents us from achieving our region’s full potential. Bob’s tone in the article reminds me of his courage advocating for mayoral control of the school district. He doesn’t mince words about institutional dysfunction and the absence of clear goals and accountability standards. Kudos to Bob for taking this potentially controversial position.
The business leaders identified with funding this expensive engagement include CEOs of three of our largest companies: Wegmans, Constellation Brands and Paychex. I also applaud them for their engagement and commitment to improving the regional economy. For them, this is not charity. The health and vibrancy of our community contributes directly to their ability to attract and retain a talented workforce.
I have had privileged contact with leadership in cities that are often cited as recent success stories, such as Nashville and Columbus. In those communities, the business leaders are visible and driving economic development. When Rochester’s “Big Three” were healthy, there seemed to be clearer leadership from the business community. We now have greater business diversity and our new and small firms have become central to the economy. This community has not yet attained its deserved influence upon economic development policy. From my perspective, the politicians and economic development organizations in successful cities appear to have greater accountability to the business community.
Many Rochesterians seem to have acquired a misperception of government’s role in the innovation economy. Politicians do not drive a healthy economy. Nor do economic development officials. Go to Boulder, Austin or Portland, and you don’t see their state governments funding business plan contests or accelerators the way New York does. We have benefitted marginally from our state’s (or taxpayer) largesse, but I see this as filling a void left by the private sector.
The BCG process might appear closed to the general community. The Chamber and the project funders are members of a traditional segment. Albeit an important element of the community, this is 2019 and we need to engage new blood—the new generation of entrepreneurs and businesspeople. We are fortunate to have them in relative abundance.
I advocate for new thinking focused on engaging more, diverse elements from the business community. Some of these individuals might even include the many non-residents who manage companies with significant operations here. It is not uncommon for businesses in Rochester to grow after acquisition due to our talented workforce and reasonable costs.
Equally as important, I advocate for incorporating issues that touch upon our greatest social challenges, such as education, workforce development, segregation and poverty. The younger generations don’t see clear distinctions between innovation in commerce and social equity. As a venture capitalist, I recognized little difference between the mentality of a successful social entrepreneur and a founder of a high-tech startup. They both are attempting to solve problems in novel ways.
If we don’t openly identify our social problems, they will continue to fester and remain a drag on our economy. They divide our community and contribute to higher taxes. It is not unreasonable to see a confluence of innovation in the for-profit and not-for-profit spheres. This is often found in healthy entrepreneurial ecosystems.
I would like to suggest ideas for BCG and the stewards of this process to consider; ideas that aim to break through the status quo and release the energy and innovation present among the future leaders in our community.
The Chamber and GRE board members should retain a software czar, someone with direct industry experience, charged with developing a plan to support local companies and recruit others from major markets such as New York City, Silicon Valley and Boston. We have a distinct cost advantage and talent pool that is attractive to high-growth companies in those regions.
They should appoint a respected business leader to work with the University of Rochester and Rochester Institute of Technology to foster collaboration that promotes the region’s economy. Identify a minimum of three impactful ways the schools can forge new cooperative ventures. This might be a joint effort to market to major tech companies located in other metropolitan areas using both universities’ vast alumni networks. Joint initiatives might combine programs in artificial intelligence, big data and cybersecurity to create a 1+1=3 formula.
Before concluding, BCG should interview the new entrepreneurs represented by the RocGrowth community. They include founders of such companies as CloudCheckr, iCardiac and CaterTrax. Over four years, we have highlighted many of those individuals through our RocGrowth Candids series. The stories emphasizing their connection to Rochester have been recorded and posted on our website for all to see. The BCG planning process would benefit from the energy and vision the emerging tech company founders bring to their business. This is an opportunity for the organization to embrace the new economy and grow with it.
The Chamber and its leaders should also work to promote greater coordination among the state, county and city economic development programs. A leadership group appointed by the Chamber might meet monthly and report back in a few months with a specific plan. This feedback loop will help government officials understand more about the needs of high-potential businesses and make them more relevant.
Someone should take responsibility for initiating greater coordination among business leaders in Syracuse and Buffalo. Several local employers, such as M&T Bank, have significant operations in each city and have a regional perspective already. Our response to the HQ2 proposal incorporated a partnership with Buffalo, revealing an awareness that our combined resources make us more competitive. Between our three metros, we have 2.7 million people, placing us among the top metros in the nation, and are home to some of the leading institutions of higher learning. We compete in a global economy. Let’s exorcise ourselves of the petty, retrograde mentality that leads us to compete with our neighbors along the Thruway.
Finally, new committees or teams should include representation from a younger demographic with a bias towards diversity of gender and race. We have a diverse community, yet it often doesn’t feel that way. This is another asset we don’t always seem to exploit. It has been proven that diversity is a desirable characteristic for thriving economies.
Bob Duffy stresses improving our region’s ability to “work as a team.” I wholeheartedly agree. Now, let’s make sure we bring the right team to the game, and that it represents the emerging business leaders and other less-enfranchised members of our community.
Richard A. Glaser is co-founder of RocGrowth and People for Parcel 5.
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Very well said Richard. Our Western NY region has all the necessary elements to become a powerful economic engine except for the fact that we don’t think, work or act like a community with a commonality of interests.
We have maintained our Silo’s out of community pride, without reference to the simple fact we compete for resources of all kinds versus cities that would engulf our borders of Rochester, Buffalo and Syracuse.
We build small uncompetitive airports with limited direct flight opportunities or competing rates when a major airport between Rochester and Buffalo would only add 30 minutes to the drive.
We all need to begin to work together on regional approaches to business development.
Thanks for your thoughtful reply. I appreciated your article in today’s Beacon. Job well done!
Please attempt to attend our events. Beyond the useful information on the website, the events provide an unusual and positive experience
Richard, thank you for the thought provoking article. I travel a bit for work and see some interesting places but with the exception of big metros like NYC or the Bay Area I don’t feel that any peer group city has been fundamentally dealt a better hand than Rochester – they have in some cases just done a better job capitalizing on their strengths and minimizing the negative impact of their weaknesses. We have some great assets that with some care and feeding could put us on par with Austin or Nashville. I’d love to see more collaboration among our small business community to help achieve this and would gladly raise my hand to help.
Thank you for your thoughtful reply. Are you familiar with RocGrowth?
I was not familiar with RocGrowth. Looks interesting – I just subscribed to their list and have been poking around. Thank you for the suggestion.
What doesn’t get talked about enough is what all sectors that Richard mentioned could have in common. Striving to be a more Conscious Company. This may have been radical thinking and still may be to the old guard, but the change has been building for a long time. And now the hum has become a roar, spurred on by the thousands – maybe millions – of people who have seen the true price of “profits at all costs” and said, “Enough! We want something more in life, in business, in companies, in work, in the world. We want meaning. Purpose. Joy. Of course money matters. But money isn’t everything. We know there can be more.”
I and many others locally are confident this isn’t just a fringe movement or an idealistic trend. This shift is real, permanent, and growing. It’s driven partly by the demands, needs, and values of the not only the Millennial generation but also by Baby Boomers starting to wonder seriously about their legacy and by Generation X, which found that the singular pursuit of profit didn’t lead to a promised land. Thank goodness. Because this shift is our planet’s best hope.
Read the 2019 YPO Global Leadership Survey just published. 93% of business leaders agree that the purpose of business is to have an impact on society, beyond the pursuit of profit. 74% responded that their perspectives toward the role in business have largely changed in the last 5 years. Move over Beetthoven!
I am also confident that the BCR report will have no mention of this and there lies the economic development opportunity…declare that a crucial element of our community’s uniqueness is we are striving to be a Center for Conscious Companies, profit and non-for-profit.
Thanks Richard for your articulate, cogent suggestions. You speak not only “truth to power” but truth for all of us who are committed and grateful citizens of this community to think about and use to spur action.I think of Mayor Warren’s description of our community as “program rich and results poor”. We need to use the reality you expose to drive us to action so that the mayor’s words will no longer be an accurate description of our great community.
Richard, I think you already know that I wholeheartedly agree with your points. Coming from the SF Bay Area 15 years ago, I am still amazed at the great software/high-tech companies that form, like CloudCheckr and iCardiac, and growth of companies like Mindex and Innovative Solutions, given the limited efforts to drive additional high-tech business in the area and foster a workforce that supports that. A “software czar” or whatever it is called is a great idea, and as Martin said, long overdue.
I also believe the ability to make growth work by also focusing on pulling-up the underserved in our community is critical. Let the innovation that is available in abundance in our community drive additional innovation in this area. Efforts like the Systems Integration Project lead by the United Way are a great start to this.
Thanks for your thoughtful feedback…and for all that you have done for the region.
What I don’t hear from the “business community” is any acknowledgement of the small business, particularly retail trade (e. g., corner store owners or franchisees of various food or 7-11 type stores; independent store owners (there is more retail business on Clinton Ave. or Hudson Ave. than in all of the “downtown” area).
As someone who per-Diem taught in the City School District for 35 years (retired now) Mayoral control is really not the answer. A significant increase in K-12 academic achievement can be achieved if the parent, parents, or guardians of students were taught valid methods of how to encourage their children to succeed in school. This might mean making certain the parent, parents, or guardians know how to read.
The RCSD Board and Administrators make many rules but rarely are consistent in applying those rules.
Obviously suburban children are succeeding. The trick is to transfer the reason why suburban children succeed to RCSD students, the answer is neither charter schools nor Mayoral control.
You’re definitely correct that the rcsd failure has to be addressed. What are your ideas for an action plan? Who is accountable?
Mr. Glaser’s comments are heartening to hear from a local business leader. One way we can work as a team is to re-design COMIDA so that it stops inter-community competition. Moving development from one community to another is not a recipe for success. Also, new development sites should be situated within a 45 minute commute from disadvantaged neighborhoods, either by locating along existing high-frequency routes, or by supplementing existing public transit to achieve the same.
Maybe we should just put COMIDA out of business. BTW, it has been rechristened Imagine Rochester. Has it demostrated any meaningful success? Who are they accountable to? They often get ensnared in controversy due to a lack of transparency and conflicts of interest.
I think the idea of a ‘software czar’ (though I’m not crazy about that term) is long overdue. The tradition business and economic development people in this town seem to have little understanding of how vibrant our homegrown software company eco-system has become, in spite of their being little community awareness (beyond the excellent efforts of RocGrowth). Over the past ten years I have worked with many of these companies as a senior marketing member of the management team. There has been very little material support for successful local startups in software while companies that relocate here are cheered on (as they should be!). Consider that CaterTrax, CloudCheckr, Jorsek, and iCardiac have created hundreds of professional level jobs, just as our transplants have. I have worked for three of these companies and with the founder of CloudCheckr at another of his successful startups. Two of the four have had successful acquisitions that did not result in their leaving our area. The other two have either raised money or are revenue positive on their own.
Are you ready to rejoin the revolution? This goes back to Digital Rochester. I’m making this go viral in the right corridors.
let me know if you want to grab a drink or cocktail sometime soon. I always benefit from your insights.
Bravo Richard. You are definitely getting at some of the major structural economic and political problems that exist here – especially in light of giving new, young talent a place at the table, soliciting their ideas, and including them in the implementation. They are the future leaders of this community. If we are not inclusive of all our diversity, solutions will remain “stuck” in our illustrious past. These old solutions, based on different social and economic realities, simply will not work in the future.
We also must be ready (and willing) to accept and encourage new paradigms. One of these might be the creation of a more municipal government structure in Monroe County – including both the City and the suburbs into a stronger Great Rochester – able to fully educate all its citizens and provide new opportunities for the sharing of wealth and opportunity. Carry on!
We need to reconnect, catching up and plot.
How can we do that?