| Live City Cams |
 |
Rochester isn't riding national boom, but it's still a contender
AIMEE K. WILES
Newcomer Mercedes Fages-Agudo, 31, who moved to Rochester in August, says the city lacks a vibrant nightlife, making it difficult to convince young people that the area is a good place to live and work. She sees signs of hope, though, including development of High Falls. New Internet company calls Rochester the perfect home
Jeffrey Burke has no doubt that the Rochester area provides fertile ground for growing an Internet services company.
Burke, the 42-year-old chief executive officer of NetSetGo Inc., offers plenty of reasons:
-- An abundance of talent from local colleges and universities, especially Rochester Institute of Technology, and companies such as Eastman Kodak Co. and Xerox Corp.
-- A local economy on the upswing, especially in Internet business and telecommunications.
-- A community that is good for families.
''The major obstacle to attracting high-tech talent is the weather,'' Burke said. ''When you're young and you've just graduated from college and you want to make a change, you want a place with sunshine and nice weather.''
NetSetGo, run by three former Xerox employees, was formed last year by combining two companies -- E-Web America Corp. and IBS International. Burke has set a goal of $100 million in sales by the end of this year.
''It's fair to say people with Web-development skills come at a premium, but we are getting good prospects,'' Burke said.
To make sure he has the people to grow, Burke has made a deal with RIT.
At least 20 RIT students will work at NetSetGo as part of the school's co-op program. The company will give the students as much as $3,000 toward annual tuition, in addition to their salary.
Even as they work at the company on co-op, the students can begin accumulating stock options. The options are vested only at graduation and stock can be purchased after the students are hired full time.
''It keeps students in school until graduation,'' Burke said. ''And you can build a solid relationship that makes them want to work here.''
Sean Harrington, an RIT telecommunications engineering, called the NetSetGo program an incentive that makes him feel wanted.
''I am getting in on the ground floor at a growing company,'' said Harrington, a Long Island native who had been considering areas with a warmer climate for jobs.
Israel Washington, a 31-year-old systems engineer who is a Buffalo native, left a job in Binghamton to work at NetSetGo. Most of his friends have left New York for jobs.
''I see a good future here for companies like ours,'' Washington said. ''But those that aren't changing will be hurting.''
-- MICHAEL WENTZEL
|
and Christine Van Dusen
Democrat and Chronicle
|
While the country has reached new levels of economic success, statistics suggest that the Rochester area did not board this national gravy train.
In almost every measure of job and income growth, the area lags the nation and many comparable regions.
To be sure, the economy here has not collapsed. It has remained steady, even in the face of tens of thousands of layoffs at the large corporations.
For people with secure jobs and companies with solid revenues, a stable economy seems fine. But if the national economy edges toward recession, or if Xerox Corp. or another major local employer announces significant layoffs, can our economy remain resilient?
''It is phenomenal Rochester could absorb the layoffs it has and not decline,'' said Richard Dietz, an economist with the Buffalo branch of the Federal Reserve Bank of New York.
''That speaks well about the area,'' he said. ''It is going through a period of adjustment. Rochester, with a technologically trained work force coming from area colleges and high-tech manufacturing already in the area, could be poised for significant growth.''
Or could the Rochester area tip into decline?
''The area is losing its labor force, and without a growing labor force, there is no way for businesses to expand the way others have,'' said Celia Chen, an economist with RFA, a research and analysis firm based in Pennsylvania.
''Any way you cut it,'' Chen said, ''it is very unlikely that the Rochester area will show much growth in terms of jobs in the next 10 years. It's just not going to happen.''
Trailing the nation
There are some tantalizing signs about the region's economic future. Small businesses are expanding. Internet and telecommunications companies are being born. But a significant number of people in their early 20s and 30s -- the core of a future work force -- are leaving the area, a factor that could dampen or halt expansion. And some surveys have shown increases in poverty and homelessness.
Experts disagree as to where those signs point. But statistics show a lagging local economy.
In 1992, as the national economic boom began, the Rochester area ranked 71st among the 100 largest metropolitan areas in annual average private sector job growth. By 1999, Rochester fell to 93rd, according to preliminary figures.
Startling revised job growth statistics, released last week by the state, could alter the area's ranking. But even that report shows Rochester running behind. While the number of jobs in the region increased 1.9 percent last year, according to the state report, jobs grew 3.2 percent in the Syracuse area, 4.5 percent in Utica and 2.9 percent statewide.
A broader look offers a similar picture.
- From 1990 to 1999, the United States lost 3.4 percent of its jobs in manufacturing, while the Rochester area lost 13.4 percent, according to a Federal Reserve Bank of New York analysis.
- During the last decade, the number of service jobs increased by 40 percent in the United States and by just 28 percent in Rochester.
- During the middle of the boom, 1994 through 1997, wage and salary disbursements -- an indicator of growth in the number of people working and their pay -- increased 20.1 percent nationally. In Rochester, that was only 12.6 percent, as opposed to somewhat similar communities such as the Nashville metropolitan area at 25.3 percent and the Milwaukee area at 19.4 percent.
- In a similar comparison, the gross metro product -- the value of products and services -- grew by an average of 0.5 percent a year from 1995 through 1999 in the Rochester area, compared with 3.9 percent in the Milwaukee area, 3.7 in Nashville and 4.1 percent in Cincinnati.
Jeff Lester does not need to see the numbers to know about trouble in the Rochester-area economy.
Six years ago, Lester, who is now 30, thought he had grabbed on to the boom and was on his way.
The Genesee County native earned a degree at the Rochester Institute of Technology. He had a job that paid a good wage -- more than $40,000 annually after a couple of years.
But then, his employer, Bausch & Lomb Inc., got out of the sunglasses business. Lester, a ''model maker'' who built prototypes of sunglasses, was laid off in July 1999. He had seen the end coming and has been looking for work in his field for two years.
''My skills still seem to be useful, but because they are tied to manufacturing, it's been very difficult to find a job,'' Lester said. ''After we were separated from Bausch & Lomb, the more I heard about economic gains, the more I heard about people being let go.''
Lester, who lives in Spencerport, has given up trying to find a job as a model maker. His wife has a nursing job here that she enjoys, and they want to remain here.
''She essentially is supporting me, and I have become the homemaker,'' he said.
He hopes his design skills can be transferred from the handmade reality of manufacturing to the creative world of cyberspace. He has returned to RIT to study Web site design, animation and graphics, although he cannot afford to go full time.
''I have to realign my skills to the technology market. This is the only way out of this,'' Lester said.
He describes the loss of his job as a ''huge personal blow'' that he wants to convert to a career opportunity. But his vision for the future in the Rochester area is limited.
Even if he gets his job in technology, he said he expects to earn less than he did in manufacturing at Bausch & Lomb.
''I am preparing myself to deal with that,'' Lester said.
Small businesses rise
Lester's story illustrates one cause of the Rochester area's economic problems: the loss of manufacturing jobs because of downsizing at Eastman Kodak Co., Xerox and Bausch & Lomb.
Since 1990, the number of manufacturing jobs in the Rochester area has declined by 24,500. That count does not measure the effect of replacing high-paying jobs with lower-paying manufacturing jobs.
Still, the unemployment rate here has remained somewhat flat for the last five years, hovering around 4 percent. That's partly because the area's smaller businesses have helped absorb job losses. In fact, small businesses are credited with creating almost all of the net new jobs in New York state this decade.
In 1980, 57 percent of the jobs in Rochester were at businesses with fewer than 1,000 employees. By 1996, small companies employed 82 percent of the work force here, said Kent Gardner, an economist with the Center for Governmental Research.
Those companies are growing, but for many it has been a difficult process made more challenging by Rochester's economic climate -- the state's high taxes, a shrinking labor pool and a negative image of upstate New York.
Panther Graphics Inc. on Cumberland Street started in Rochester in 1993 just as the nation's economic boom was starting to roll.
''When you're coming out of the blocks, when you're starting, you don't feel the effects of the economy. Your life is on the line and you're only aware of survival,'' said Darryl Anthony Jackson, Panther's 41-year-old president.
Panther's printing business grew to more than $1 million in sales annually.
''For the last two or three years, there's been a leveling off,'' Jackson said. ''I stopped growing my business 100 percent annually and now I see 10 or 15 percent growth.''
Jackson, a Buffalo native who grew up in Rochester and learned printing here, finds the area a rewarding place to do business. But to become a $2 million or a $5 million company, he said, he has to find customers outside upstate New York.
''The local economy has been good to me. It's a very supportive environment,'' Jackson said. ''But there is still a long way to go if I want to reach my goals and objectives.''
State's high costs
Another local printing company found a way to expand. Jim Hammer didn't want to move Hammer Lithograph Corp. out of Brighton after its 85 years there. But the high cost of doing business in upstate New York nearly forced him to relocate his printing company and its more than 200 employees to North Carolina.
Many business executives complain that the state's tax and regulatory policies make it difficult to stay or grow in New York. Some studies have shown that state and local taxes raise New York energy costs as much as 50 percent above the national average.
The cost of the workers' compensation system and high air fares also are targets of business.
About $1 million in state and county aid and incentives helped keep Hammer here. But the company also opened a facility in Charlotte, N.C., to house a printer subsidiary.
Hammer, president and chief executive officer, has seen the booming economy in North Carolina -- the influx of people, the rapid home-building. But that has not diminished his faith in Rochester's economy.
''I get the sense, when I go to other parts of country, that they are realizing more growth than we are, but there is an increase here, too,'' he said.
Some areas of the country hit rock bottom in the early 1990s, so their growth -- by percentage -- appears dramatic. Rochester started out at a better place and didn't have as far to climb, said Sandra A. Parker, president of the Industrial Management Council.
''We certainly haven't seen the significant growth that other areas have,'' she said. ''We're not in the tank yet.''
But about 7,000 more people left the area than moved here in 1998, according to a study by the economics research firm Dismal Sciences Inc.
The biggest exodus is among young people. The same Dismal Science report estimates that the number of people between the ages of 20 and 44 has dropped about
3 percent in the last decade.
''We have to stop our people, especially our young people, from moving away,'' said Brian Hickey, regional president of M&T Bank, who emphasized he sees great potential here. ''You can't grow private sector jobs for too long if you're losing people. We could rationalize and say we're doing OK compared with Buffalo or Syracuse. But that's complacency. These trends are not at all healthy in the long term.''
Parker and the IMC have been talking with local college students to figure out why they tend to leave after graduation to seek employment opportunities in other cities.
Night life helps
When Mercedes Fages-Agudo walks through downtown Rochester, she gets homesick. She misses Barcelona and Boston, two cities she has called home in recent years.
She misses the vibrant city life, something she says Rochester lacks -- a perception some blame for the exodus of young people.
''Rochester doesn't have the feeling of a city like the other cities do,'' said Fages-Agudo, 31, who takes classes at the Community Darkroom on Monroe Avenue. She moved to Rochester in August when her husband took a teaching position at the University of Rochester.
''At some point the industry in this area didn't do so well, and you can see that -- that moment of depression and people leaving the city and moving outside,'' she said. ''But I have the feeling that something is going to happen.''
She sees development efforts in the city's High Falls area as a good start. But even if Rochester makes a concerted push to revitalize its city and its economy, the place might still suffer from a perception problem.
When Fages-Agudo told friends she was moving to Rochester, she got mixed reactions. A few pals in Ithaca sang Rochester's praises, noting its cultural activities. But friends in Boston told Fages-Agudo she would be buried in snow.
''It's a question of convincing people this is a good place, that there are options,'' she said. ''It's a challenge.''
For some, the convincing comes from a look at the Rochester area's strengths, including a productive system of colleges and universities. Rochester Institute of Technology is a leader in computer technology. And the University of Rochester has launched a bold effort in biomedical research.
The Rochester area had the second-highest number of patents per capita among the 100 largest metropolitan areas in the country -- bested only by San Jose, Calif., and the hot Silicon Valley.
And with aggressive companies such as Choice One, PaeTec Communications Inc., Mpower Communications Inc., NetSetGo Inc. and Global Crossing Ltd., the Rochester area could become a significant cluster of telecommunications and Internet services.
From where Paul Vander Horst sits, in his home office in Webster, Rochester's economy looks healthy enough. He runs Strategic Integrated Marketing, which offers consulting for small-and medium-sized businesses.
He saw his tiny company grow by 192 percent from 1998 to 1999, and he is on pace to see a similar jump in revenues this year.
That could not have happened if Rochester's economy was not solid, he said.
''When the economy starts to slow down or shut down, small-and medium-sized companies are the types that are quicker to hold back spending,'' Vander Horst said. ''They're concerned about their employees and want to avoid layoffs. With larger companies, it's more of a numbers game.''
He doesn't subscribe to the ''grow-or-die'' philosophy, at least when it comes to Rochester's economy. He likes the conservative culture here.
Like Vander Horst, Rochester's companies tend to take fewer risks. That may mean less dramatic returns. But it also means less severe losses.
Vander Horst added: ''I'm more comfortable in an environment where the expansion of the economy is such that if we're a few ticks less than the national average during a boom, we'll be a few ticks above if it hits bottom.''
Use of this site signifies your agreement to the Terms of Service (updated 08/08/2001).