Democrat & Chronicle: New York wants to be an innovation hub. We have to do better for our businesses

July 24th, 2024

A guest opinion piece by Justin Wilcox.

As New York embarks on an ambitious plan to revitalize the regions upstate and reclaim the state’s role as a hub of innovation, it is essential that these efforts are supported by smart lawmaking and rolling back restrictive red tape.

Bipartisan support for the CHIPS and Science Act highlights a national commitment to revitalizing America’s semiconductor research and production capabilities, aiming to resolve the risks associated with relying on overseas chip manufacturing. It promises to return critical manufacturing capabilities to American soil, with New York poised to benefit significantly through targeted investments like the recent $40 million grant from the U.S. Department of Commerce. This funding will bolster New York’s semiconductor sector, creating a fertile ground for high-tech industries and job creation from Buffalo to Syracuse to Albany.

As Senate Majority Leader Chuck Schumer said when announcing a partnership between Capital Region-based GlobalFoundaries and Central New York’s Lockheed Martin, “Now more than ever, we need to secure our supply chains, and make sure the chips that our military relies on are built in places like the Capital Region, not overseas.”

These critical technologies should be stamped Made in New York, not Made in China. The Empire State is going all in on investments, too. Gov. Kathy Hochul’s latest announcements regarding the $500 million Green CHIPS Community Investment Fund and her Empire AI initiative signal a strong commitment to bringing emerging industries to New York.

These grants, as well as Micron’s $100 billion investment, promise to create tens of thousands of jobs and reinforce our domestic supply chains. Combined, these ingredients have the potential to reinvigorate upstate economies, transforming the region into the “innovation belt” it once was. But the potential our elected leaders are banking on can only be fully realized if they avoid enacting anti-innovation policies that could undermine these investments and if they address the costly regulatory and liability environment that often drives employers to more business-friendly jurisdictions.

To put it bluntly: Albany and Washington need to ensure that the businesses they attract aren’t later chased away by excessive regulations and anti-growth, anti-tech populist politicians.

New York must be friendlier to business, innovation
Indeed, attracting businesses with federal and state funds is only part of the equation. To truly succeed, New York must also ensure that these businesses are not smothered by bureaucratic red tape and restrictive regulations once the initial investment period ends. Current state policies often pose significant hurdles, driving potential economic growth to states with more attractive legal climates. It is crucial that alongside these financial incentives, we implement regulatory reforms that simplify legal processes, reduce unnecessary burdens, and foster an environment conducive to long-term business success and innovation.

While European regulations offer strict oversight of business operations and market conditions, they scare off investors and lead to less innovation. The United States is home to the most innovative and valuable companies on earth, the same cannot be said of our friends in the European Union. New York should learn from this example and strive to create a legal framework that acts as a catalyst for innovation and entrepreneurship, rather than a barrier.

Specific areas for reform include streamlining processes for environmental review and launching a new business, reducing civil liability that disproportionately impacts building new facilities, and avoiding overly restrictive mergers and acquisitions regulations that could prevent startups and tech firms from scaling effectively. Such reforms would not only support the growth of the semiconductor industry but also enhance New York’s broader tech ecosystem, which is vital for nurturing technologies like AI, 5G, and IoT.

The consequences of failing to reform our regulatory environment extend beyond missed economic opportunities. They include the continued exodus of residents and businesses from New York. These trends can only be reversed if we create a more inviting business climate through thoughtful lawmaking and fixing the laws that make New York one of the most expensive places in the world to build and run a business.

While targeted investments in advanced manufacturing and innovation are a promising step forward, their success depends heavily on the government’s willingness to avoid adopting new onerous laws and to roll back existing regulatory obstacles. By doing so, we can ensure that these investments yield sustainable benefits and help secure New York’s position as global technology leader. Let’s ensure upstate’s transformation into an innovation hub is both successful and enduring.

Justin Wilcox is executive director of Upstate United, a nonpartisan business and taxpayer advocacy coalition focused on growing the upstate economy.