Even well-meaning people with good educations, savings, and open minds may find their best intentions thwarted during this period. One can’t become a social worker if social programs are whittled down to nil. One can’t be an aide to the elderly if senior centers are closing. If the finance sector gears back up and proves the most remunerative option on the horizon—which, if history is any guide, it will—one can’t expect an entire generation to forsake its lures. When I e-mail Mike Wallace to ask whether downturns produce responses of lasting virtuousness, he replies with gimlet-eyed mercilessness: “At the values/ethics level there’s often a furious rejection of speculative gambling, and fervent vows to reform,” his note says, “but (a) there are certain dynamics built into a capitalist society that tend to reassert themselves, and (b) ours is not a culture that cultivates long memories.”
It’s a rainy Monday in May, and the construction liaison to the Alexandria Center, New York’s first bona fide biotech park, is walking me through the shell of the campus’s East Tower building, scheduled to open in January 2010. It’s still a construction site, a gray moonscape of concrete and dust, but already, there’s evidence that this isn’t an ordinary New York office building. “See the ceilings?” he asks. “They’re fourteen feet high.” Laboratories require the extra height for their extensive ventilation systems. He points to a thick pipe of cobalt blue. “For acid waste.” Then he points to the ceiling and notes that there’s a backup generator on the roof the size of a tractor-trailer. Maria Gotsch, the president and CEO of the New York City Investment Fund, chimes in to explain that one: “So that the minus-80-degree freezers don’t thaw,” she says, “and eight years of research plus $100 million don’t go down the drain.”
For twenty years, this city has been trying to start its own biotech park. That one is finally opening in the middle of a recession could be viewed as rotten luck. But Gotsch, who very frankly admits she has a stake in the outcome—the NYC Investment Fund has committed to invest up to $15 million in the project—says there’s another way to look at it. New York has always been long on Ph.D. talent. New Jersey, home to 60 percent of the country’s pharmaceutical companies, has always been long on clinical-trial talent, and pharmaceutical companies are merging now, leaving many of those people without jobs. “And with Wall Street downsizing,” she says, “people who were formerly biotech analysts for investment banks might be willing to go work for an early-stage biotech company. The opportunity-cost for everyone to explore other options just went down.”
This recession will be brutally painful for some household economies. But for the city as a whole, it presents rare possibilities. Economic diversity is good for cities—one need only look at decaying Detroit to see the perils of a one-industry town—and the super-dominance of Wall Street made diversifying ours much more difficult. “New York has never been hungry enough to build an economy that goes beyond Wall Street,” says Bowles. “I thought it might happen after 9/11, but even then, there was a widespread feeling that the finance sector would rescue the city.” He mentions that the Bloomberg administration just announced it’s starting two new incubators. “I’ve been writing about the need to spur entrepreneurship for ten years at the Center for an Urban Future,” he says. “And it just hasn’t been a sexy enough topic for City Hall under this or the previous administration until now.”
No one is saying that this recession will result in a seismic transformation akin to the shift from manufacturing to finance. Even if Wall Street is in a deep state of hibernation, it remains the core of New York’s economic infrastructure and will almost inevitably remain so for the foreseeable future. But while it’s dormant, it’s a good time for other businesses to come to life. Bowles points out that Silicon Alley got its start in the mid-nineties in part because of cheap real estate that lingered from the early-nineties recession, as well as a surplus of unemployed New Yorkers who’d previously worked in advertising and finance. (In 1995, the city unemployment rate was still 8.2 percent.) Silicon Alley didn’t last long. Indeed, it’s possible that Silicon Alley’s failure to thrive is a symptom of just how calcified we are in our old-economy ways. “But we need to lay the foundation for the next round of growth industries,” says Bowles, “whatever they are.” Video games, digital media, interactive advertising, financial software and other niche services—these are some of the things people think they might be. Gotsch says there’s no reason why we shouldn’t have a strong biotech sector: According to a 2001 report from her organization, New York receives more NIH funding than any other city besides Boston, and at least thirty biotech start-ups per year are based on the research from our institutions. Jerry Hultin, the president of Polytechnic University in Brooklyn, recently arranged to merge with NYU, hoping to create a topflight engineering school in New York, so that the creator of the next Google will come from a local university, rather than from MIT or Stanford. John Sexton, the president of NYU, is fond of pointing out that the finance, insurance, and real-estate sectors in New York City—collectively known by the acronym FIRE—were shedding jobs before the new millennium, just as they are now, while the city’s intellectual capital only continues to grow: New York has more college students per capita than any other American city; it has the highest concentration of postdocs in both arts and science. So the transformation he hopes for—and this is his nifty coinage—is an economy where FIRE counts for a bit less, and ICE (intellectual, cultural, and educational capital) counts for a bit more.