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Q & A with Rob Simpson

CenterState CEO president says region must focus on eradicating poverty, closing the skills gap

By Lou Sorendo

Q.: You noted last year the “robust growth that drove investments in 2018 were expected to continue into 2019.” Did that pan out the way you expected? Is there a single headline to characterize your economic forecast for 2020?

A.: During our annual economic forecast breakfast, we highlighted the new optimism that is being felt in our community. In fact, members of the business community who contributed to this year’s economic forecast report described our regional economy using words like “vibrant, evolving, growing, progress, strong, robust” and “diverse.” It’s a sentiment echoed time and again in meetings with our members and partners. It’s optimism borne from seeing transformative projects take shape in our community, and our elected leaders aligned in their objectives. It is a direct reflection of our work and collective efforts to focus and execute on economic strategies rooted in data and best practices.

Q.: Are the region’s gross domestic product and unemployment numbers where you want them to be at this point? If not, what can be done in order to improve these key indicators?

A.: The region’s growth over the past three years is anticipated to continue, with real GDP growth strong at about 1%. Job growth has also accelerated over the past year, closing the gap as compared to the national average, which supports a near-record low unemployment rate.

These statistics and other indicators, underscored by our own research, tell a new story of economic advancement for the region.

Taking a closer look at job growth, we are seeing some of the best statistics in decades, highlighting the private sector’s role in driving the region’s economic resurgence.

According to the New York State Department of Labor, in every month of 2019 the Syracuse Metropolitan Statistical Area grew jobs over the previous year at a rate of more than 2%. The Syracuse MSA consists of Onondaga, Oswego and Madison counties.

That is a higher rate than the state as a whole, and nearly 3.5 times the rate of job growth in the combined regions of Albany, Buffalo and Rochester.

Wages were also up 4% in Syracuse from November 2018 to November 2019.

This progress is also driving another metric of success, population growth. In fact, the city of Syracuse is unique as it saw a 0.32% increase in its population between 2017 and 2018, making it the only metro area in New York state to see gains.

According to American Community Survey data, from 2010 to 2018, there was 12.8% growth in millennials in Onondaga County with the largest actual gain in the city of Syracuse with an increase of 9.3%.

In fact, Syracuse’s gain in millennials accounted for 28% of the gain in millennials in Onondaga County.

For the past decade or more, we have heard over and over about “brain drain” and how our young people were not staying and how we failed to hold onto our student population.

Yet today’s reality is starkly different. We are seeing an increase in the number of young people staying in Syracuse following college and more folks choose to come here to live and work in this vibrant urban center. This growth in Syracuse serves as an important reminder that a vibrant city is critical to our region’s strength.

Q.: Syracuse continues to struggle with one of the nation’s highest poverty rates, with almost a third of city residents living below the poverty line, according to new data released recently by the U.S. Census Bureau. The data shows that 30.5% of Syracuse’s population lived below the poverty line in 2018. As a key economic driver in the region, what is CenterState CEO doing to address the poverty issue?

A.: A vibrant city requires opportunity for all — not just for a few. Which is why, as we examine our community’s unacceptable rates of poverty and economic segregation, there is reason to be hopeful that this critical problem is, at a minimum, no longer getting worse and may in fact be improving, though at a rate that demands continued if not increased vigilance.

In 2013, poverty in Syracuse was 34.6%, and the 2018 poverty rate was 30.5%. That’s a change of 4.1% over five years.

Since 2012, Black and African American poverty has gone down more than 3%. That is on par with Buffalo, and an improvement over cities like Rochester that saw an increase in its poverty rate, and Detroit, which was unchanged.

And for Hispanics and Latinos, poverty went down more than 11%, outpacing Rochester, Buffalo and even Detroit.

While the overall rate of poverty remains far too high, we are beginning to see the numbers move in the right direction. We must not make the mistake of masking the true human toll of racial and socio-economic equality in marginal statistical improvement. We must also not fail to acknowledge even slight progress so as to reinforce the collaborations and partnerships that have rightly formed to focus our community’s attention and resources on this pressing need.

Q.: From all indications, a skills gap remains one of the most significant challenges confronting Central New York employers. How will the new $75 million STEAM high school and training center make a difference when it comes to properly preparing people to take on available jobs in the region?

A.: Talent remains one of the most significant pressure points faced by businesses in the region. We continue to develop strategies and programs to attract talent, like the launch of Good Life CNY, a new quality-of-life and job portal site for our region, and address workforce needs through programs like WorkTrain.

But we also need to prepare our region’s students so they are ready for tomorrow’s high-tech jobs. That is why we celebrate the news that Gov. Andrew Cuomo will establish the state’s first regional science, technology, engineering, arts and mathematics, or STEAM, high school in Syracuse, as well as a worker training center that will offer high school equivalency degrees, advanced technical certification and college degrees.

This $71.4 million investment to renovate Central Tech High School into a multipurpose complex builds on Mayor Bill Walsh and County Executive Ryan McMahon’s vision to educate and train the workforce of the future.

Q.: Up Start is a collaborative business development program that connects existing businesses and aspiring entrepreneurs to the tools and networks that help them thrive. Can you update us on CenterState CEO’s economic inclusion team and its Up Start program and how this is making a difference in terms of spurring business growth in the city of Syracuse and surrounding areas?

A.: Salt City Market is a great example of this work and one of Up Start’s major accomplishments. Eighteen prospective Salt City Market merchants received sector-specific training through the Up Start program in 2019. Many of them received additional one-on-one technical assistance to address specific needs related to their emerging businesses.

Although less than half of these businesses will eventually be selected for market stalls, all of the training participants now have the knowledge and skills necessary to grow a catering business. Several will be making the leap into business ownership regardless of whether or not they are selected for the market.

Up Start has also seen success in leveraging additional resources to sustain and strengthen our efforts around a larger-scale build-out of the Neighborhood Development Center model and seed an equity fund for patient capital investment into small minority-owned businesses in distressed neighborhoods.

Up Start will also be venturing into a second sector-specific training program in 2020, with the development of a StartIt! training course specifically designed for businesses in the trades and construction sector in order to help implement the Syracuse Build initiative.

Q.: How significant of a role has the Talent Task Force played in terms of developing new and creative strategies to help draw talent to the region?

A.: The Talent Task Force recommended strategies to help employers source mid- to high-skill talent in a number of ways. One is attracting new talent to the region, which the Good Life CNY hopes to address. In October, we launched the Good Life CNY in partnership with Advanced Media New York. Targeted marketing efforts to drive traffic to this new quality-of-life and job portal site for our region is already yielding results, with the highest number of visits coming from Washington DC, New York City, Philadelphia, Columbus and Canton, Ohio, and Boston.

In fact, more than 6,000 users have visited and more than 1,600 have specifically clicked on the talent connect job board.

There, visitors can review the 3,146 jobs available across key industries. Additionally, nearly 40 job seekers have joined the talent network with a variety of skill ranges from entry level to 15-plus years of experience. At the same time, we also look at ways to keep strong talent graduating from our universities here and uncovering hidden talent from non-traditional sources.

Q.: How is the Work Train initiative progressing and is there tangible evidence that it is making an impact?

A.: Work Train is focused on developing collaborative solutions to workforce challenges — supporting employers and building capacity of our partners.

We do this by building industry partnerships, which are growing. Currently, 54 companies work with us to address workforce need in manufacturing, health and construction industries. Through these industry partnerships, nearly 900 people have been placed into jobs after completing training through our partners.

We are excited to be part of Syracuse Build and Syracuse Surge and see unprecedented alignment from government, business and community partners around technology and construction workforce needs. We continue to expand partnerships and are working on a number of new opportunities with organizations like CNY Works, the Syracuse Community Center Collaborative and Syracuse Financial Empowerment Center.

Q.: Two distribution centers — a proposed $350 million distribution center in Clay and another in DeWitt — are believed to be an Amazon fulfillment centers. Is this a positive indication that Onondaga County still has the drawing power to land such significant projects?

A.: Aligning strategies and investments to key industries have long been central to our business development efforts. Just five years ago, we were one of the most vocal advocates for investments to support the growth of the warehousing and logistics sector because the data told us, unequivocally, of the opportunity for our region.

This is why we have pursued opportunities to attract projects like those announced for Clay and DeWitt. Today, we are proud to work alongside County Executive McMahon and others to bring these important projects online, bringing with them hundreds of good paying jobs with benefits and career ladders accessible to those in our community who need them most. Additionally, we are tracking a number of additional potential warehouse and distribution projects.

For the past decade or more, we have heard over and over about “brain drain” and how our young people were not staying and how we failed to hold onto our student population. Yet today’s reality is starkly different. We are seeing an increase in the number of young people staying in Syracuse following college and more folks choose to come here to live and work in this vibrant urban center.

Q.: How would you characterize the confidence level of regional industry and business leaders as 2020 unfolds? You mentioned last year that nearly three-quarters of respondents predicted a strong year. Can we expect to see the same level of confidence going forward?

A.: Overall, I would characterize the confidence level of our regional leaders as optimistic. There are a number of positive indicators that show we are on the right path. Seventy-four percent of our forecasters say the past year was either strong or very strong. This year, that optimism increases with 76 percent who anticipate a very strong to strong year ahead. Forty-nine percent expect to make capital investments.  Seventy percent expect sales and revenue to expand in 2020. Sixty-five percent say they’ll be hiring in 2020.

Q.: Central New York will receive $86.2 million in funding to support 93 economic and community development projects in 2020 as a result of the latest round of Regional Economic Development Council funding. Among the projects for which CNY received funding are Cayuga Milk Ingredients LLC, Tessy Plastics’ expansion project, and ACCESS Dental Laboratories. Of the projects being funded in CNY, which bode well in terms of making the greatest economic impact on the region?

A.: All of the projects funded in this round will have a positive economic impact on the region and the communities in which they are located. Of special interest are investments in growing tech companies, such as Digital Hive and Spark Orange; manufacturing expansions such as the Cayuga Milk, Lydall and Tessy Plastics; initiatives such as Oswego’s Start-Up NY program and Commonspace in Syracuse, and investments in traditionally underserved neighborhoods, such as Salina 1st and Access Dental Labs.

Q.: GENIUS NY continues to be the largest business accelerator competition for the unmanned aerial systems industry in the world. In general terms, what kind of economic development impact does competitions like this produce?

A.: GENIUS NY is the world’s largest accelerator program for UAS, and is open to unmanned systems, IoT and big data startups. Each year, this program invests $3 million in five early stage companies, while also providing incubator space, business programming, mentors, advisers and resources. The grand prize is $1 million and there are four $500,000 awards. As of April, we will have invested $12 million in 22 startups.

In January, five teams moved into The Tech Garden to start the program’s fourth round. There are 15 of 17 companies (participants from rounds 1-3) still located in the community. These companies have come from all over the U.S. as well as from Israel, Italy, the United Kingdom and Australia.

Over the past three years, more than 30 local jobs have been created and more than 40 interns hired. Recently, we announced that five startups in the GENIUS NY accelerator — AutoModality, Civdrone, Fotokite, OmniMesh and TruWeather Solutions — have raised over $10 million in additional private investment. This follow-on-funding validates the investments into the GENIUS NY program and proves the program’s ongoing impact in Central New York.

Additionally, the 50-mile beyond visual line of site corridor, the test site, the recently proposed small UAS testing facility at Griffiss International Airport in Rome and all of the companies that test here are key elements to the innovation ecosystem we have created to support startup companies in the UAS industry.