Report: 195 tech startups on Long Island in 2014
The offices of the Work Market, a startup located in a loft space on Wall Street in Huntington Village, on Apr. 18, 2013. Credit: Heather Walsh
Long Island has slowly begun to build a much-talked-about technology economy that is capable of producing good-paying jobs to replace those lost in the defense industry, according to a report due out Tuesday.
However, the employment numbers are still tiny.
There were 195 tech startups in Nassau and Suffolk counties last year, according to the study, commissioned by Accelerate Long Island.
Together, those businesses employ about 500 people, estimated Mark Lesko, executive director of Accelerate, which seeks to increase the number of tech firms here. Since the 1980s the Island has lost more than 50,000 jobs in the defense and aerospace industry.
The local startups are in biotechnology, clean energy and information technology -- the sectors that some experts believe should be the region's economic future.
The study, which counted startups up to four years old, found that inventions from Cold Spring Harbor Laboratory, Stony Brook University, Brookhaven National Laboratory and other local institutions are begetting new businesses.
"This report shows that there's really something to this -- the innovation economy that's been talked about on Long Island for years," said Lesko, former Brookhaven Town supervisor.
However, he and the report's author, John Kominicki, former publisher of Long Island Business News, said the startups are "fragile" and in need of cash and mentoring.
Lesko said the startups "are like little hatchlings . . . you have to nurture them and they will eventually become big."
He said he hopes the report will be done every year. The first installment cost $50,000, raised from 11 sponsors.
The report found that money is in short supply for some startups, particularly biotech firms that must be sustained for years while their drugs and medical devices win government approval.
But they aren't looking for large sums.
Twenty-four percent of the 97 startups polled for the report said they needed less than $250,000 to expand, 29 percent said between $250,000 and $1 million, and 20.5 percent said more than $2 million.
Kominicki said the "quickest avenue" for economic growth could be biotechnology and pharmaceuticals, because many of the Island's research institutions are focused on health care while local generic drugmakers are booming.
An innovation economy "will create good-paying jobs that keep young people here," he said. "This has to work; there's no other choice for us."
Both men said they are concerned about keeping tech startups once they've matured.
Startups often are purchased by larger companies that then move them, as was the case of OSI Pharmaceuticals, which was born at Cold Spring Harbor Laboratory but eventually purchased and relocated to Illinois.
The poll found 74 percent of the managers of local startups want to stay here.
"The more successful you become, the more ripe for acquisition," Lesko said. "We have to create a value proposition for the acquirer, where they decide to keep the startup on Long Island."
The full report is available at accelerateli.org.
It was paid for by Bethpage Federal Credit Union; Carter, DeLuca, Farrell & Schmidt LLP; Ernst & Young; Hofstra University; Long Island Business Development Council; Islip Town Industrial Development Agency; Rauch Foundation; Rechler Equity Partners; Ruskin Moscou Faltischek P.C.; Suffolk County Industrial Development Agency, and Bi-County Development Corp.
