Can science save Long Island's economy?

The Island has a long way to go

The Island has a long way to go before spinning its world-class research into gold. Photo Credit: iStock

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After years of rhetoric and false starts, Long Island has begun a daunting effort to harness the brainpower of its research institutions and build a high-tech economy, hoping to follow the trail of Silicon Valley, Boston and elsewhere.

Brookhaven National Laboratory, Cold Spring Harbor Laboratory and other local research facilities have storied histories of Nobel laureates, drawing scientists from around the globe. But business and academic leaders have long hoped that research would spill into the commercial sector, giving rise to a network of software and biotech companies to transform job growth.

Now business leaders say an ecosystem of high-tech entrepreneurs is slowly emerging in Nassau and Suffolk as a coalition of laboratories, universities and investors have joined in a broad experiment to determine if science can rebuild the Island's economy.

"Long Island has plenty of talent," said David Silverman, who follows startup companies for PwC, a New York financial services firm. "It just needs to build that ecosystem."

The Island, however, has a long way to go before spinning its world-class research into gold. A Newsday analysis shows that not only does it stand light-years behind the likes of Silicon Valley, it also trails other regions of New York State based on several key indicators measuring innovation and entrepreneurship.

Venture capital: Since 2010, Long Island companies have received $79.7 million in venture startup funding, company reports and the National Venture Capital Association show. That total works out to be $28 per person living here. That's below the state average of $241 per capita and less than Albany ($51) and Rochester ($43). New York City, meanwhile, received $469 per capita in venture funding. San Francisco topped the United States with $16,062 per capita.

STEM jobs: Long Island's 48,460 science, technology, engineering and mathematics jobs encompass 4 percent of the region's overall workforce, according to the National Science Foundation, below the state average of 5 percent and trailing Syracuse (5.6 percent) and Poughkeepsie (5.5 percent). In Silicon Valley, STEM jobs account for 19 percent of workers.

Patents: Between 2000 and 2011, Long Island's businesses and laboratories filed about 7,800 patents -- fewer than researchers in the Hudson Valley (19,000) and the Finger Lakes (14,600), the U.S. Patent and Trademark Office said. During the same period Silicon Valley researchers filed 89,000 patents.

To be clear, economists say those numbers have nothing to do with the quality of research on Long Island. Most scientists here focus on fundamental questions about life, matter and the universe -- not business. Rather, those figures illustrate the Island's struggle to use its rich intellectual capital as a foundation for a high-tech economy.

Science is already big business on Long Island. The five largest research institutions -- Brookhaven, Cold Spring Harbor, the Feinstein Institute for Medical Research, Stony Brook University and Hofstra University -- bring in more than $1.2 billion in annual funding. And they employ 8,200 researchers.

Yet, business and academic leaders say research could have an even bigger impact. With coordination and strategy, they say, those institutions could put Long Island on the tech map.

As the U.S. economy limps through its recovery, towns across America are jealously eyeing soaring property values and job growth in Silicon Valley and trying to figure out how to jump-start their own fortunes with software and bioscience companies. Few have succeeded.

That's in part, economists say, because startup hubs tend to spring from chance meetings and fortuitously timed ideas rather then careful planning.

Silicon Valley, for instance, developed slowly over a half century, beginning in the 1930s when Bill Hewlett met Dave Packard on a camping trip after graduating from Stanford University. Forty years later, Steve Wozniak and Steve Jobs wound up at the same high school, 10 miles from the garage where Hewlett and Packard started their company.

"This stuff is really random, and the thought that you could plan for it and incubate it strikes me as a real stretch," said Robert Inman, a professor of economics and public policy at the Wharton School.

Others say local institutions can play a role in nurturing startups by building a network of business professors, lawyers and investors to provide entrepreneurs with advice, support and capital.

On Long Island, officials say the effort is crucial to stop the bleeding of high-paying engineering and science jobs as the local aerospace industry wanes and companies including OSI Pharmaceuticals and Northrop Grumman move workers out of state.

"This is a matter of survival," said Kevin Law, president of the Long Island Association, the region's largest business group. "Companies are not just going to move here. We need to create them."

Officials have been talking about cultivating bioscience and software companies on Long Island for at least 25 years. The thinking has been that with top-flight research labs, terrific schools, nearby airports and access to Wall Street -- the region should be poised to soar. So far it hasn't.

Now, however, business and academic leaders say the moment is nigh.

For one, the Long Island Association has managed to unite the region's long-balkanized research community, bringing the five largest labs together to back Accelerate Long Island, a nonprofit organization that promotes fledgling tech companies. Meanwhile, Manhattan's startup community is exploding, which leaders hope will spread east. And a small but growing group of entrepreneurs is beginning to coalesce in Nassau and Suffolk, officials said.

Mark Lesko, executive director of Accelerate Long Island, said he has identified 93 young tech companies here. (The New York City Department of Information Technology & Telecommunications says there are 1,800 startups in the five boroughs.)

A key challenge, business leaders said, is creating a culture of entrepreneurship on Long Island. That includes encouraging people to invest their money in local startups. "Long Island is a place of significant wealth. But very few Long Islanders are investing here," said David Calone, chief executive of Setauket venture capital firm Jove Equity Partners.

He likened it to the local-food movement. But instead of choosing produce that supports nearby farmers, people would invest in Long Island entrepreneurs to boost the local economy. It is already happening to some degree. Several local funds, including Jove Equity, Canrock Ventures, the Long Island Angel Network, the Long Island Emerging Technologies Fund and Accelerate Long Island's seed fund, are now backing Long Island startups.

"People are waking up," Lesko said. "It's a long-term play, but everything can change with one success."

Long Island has scored with a cutting-edge blockbuster startup before. A few years before Hewlett and Packard got their start, six men opened an aircraft repair shop in a Baldwin garage. One was named Roy Grumman.

Now officials hope Long Island can do it again.

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