More stuff about the drive for NE PA to become "Wall ST. West"...or in effect another cog in the process becoming NYC, PA......heh....oh, dear God, no....
Posted on Sun, Sep. 10, 2006
Bridging NYC’s gap
Wall Street West initiative aims to create a secure backup system for New York’s financial district here, and prepare this region’s workforce for jobs.
By RON BARTIZEK
Five years after clouds of debris billowed up from the toppled towers of the World Trade Center, a silver lining may be forming in Northeastern Pennsylvania. Government regulators are pressuring financial services firms to seek a safe and reliable backup location for data and employees, and this region’s Wall Street West initiative would seem to fit the bill perfectly.
“A lot of firms around Sept. 11 were forced to knee-jerk react,” said Christopher Haran, chief executive officer of the Great Valley Technology Alliance. When they abandoned their lower Manhattan offices and trading desks, most of them relocated not far from Wall Street, still within the theoretical “target zone” for a terrorist attack.
Because so much information and so many people were lost Sept. 11, nearly a full week passed before the stock exchanges reopened. The attacks took place on a Tuesday morning and trading did not resume until the following Monday. It took several more weeks for all the lost data to be retrieved.
The federal government doesn’t want the stock and bond markets closed for seven hours, much less seven days if there is another attack or a major natural disaster. Instead, the Securities and Exchange Commission, which regulates the markets, wants trading to resume in no more than two hours. That can’t happen unless an adequate backup – almost a parallel system – is available in a location that has not been affected.
That’s where Wall Street West comes in.
Northeastern Pennsylvania does not share the New York City region’s electrical power grid, employment base or watershed. It’s beyond range of even the most serious disruption – Haran says the blast zone for a nuclear bomb is estimated at 50 miles radius – but it’s still within relatively easy reach.
“We are far enough away, but not too far,” he said, in a pinch even within commuting distance. But there are two things missing; a fast computer connection and a trained workforce to operate the remote sites.
A diverse group of individuals and organizations is about to tackle both needs. Negotiations are underway with two telecommunications companies, one of which will get a contract to extend a fiber optic connection to the region from the New York financial district. The existing route goes through Philadelphia and the extra distance adds a tiny but unacceptable fraction to the speed of data transfers.
And if all goes as planned, during the 12-18 months it will take to lay the cable local academic leaders will formulate strategies to meet the staffing needs of new and expanding employers in the financial services industry. At the same time, Jim Ryan, newly hired as director of outreach and network development for the Wall Street West initiative, will be making a pitch to firms that could benefit from a secure backup.
He doesn’t think it will be a hard sell.
“There’s a great story to tell from a cost of living and lifestyle standpoint,” he said. “You don’t have to be real smart to see the economics of it” in low taxes and a cost of living that allows employees to afford a home much more easily than is the case in Manhattan’s suburbs.
Ryan has lived through a similar experience. The cost of living soared during the 16 years he worked at Applied Materials, a Silicon Valley semiconductor company. When it became difficult to hire workers dismayed by housing prices, the company moved 80 percent of its manufacturing to Austin. “The business case was there,” for a move, much as it is here.
Chad Paul, chief executive officer of Ben Franklin Technology Partners Northeast, one of the groups promoting Wall Street West, said the economic boost for the region could be substantial.
“When you think about what potential there is to bring three or four or six of these companies to Northeastern Pennsylvania, each has the potential to employ 500 or more people,” he said.
And what starts as a backup could grow from there. “The whole idea is to attract them to the region, build the facilities and then start to move a vertical slice of their workforce.”
To get them here, Ryan will have to overcome an attitude Jim Cummings, president of Penn’s Northeast, another participating organization, has been fighting for years. “The perception that unless you were born in Manhattan, what do you know about financial services? You’re a rube.”
Carl J. Witkowski would disagree strongly. The Executive Vice President and Chief Administrative Officer of Wilkes-Barre-based Guard Insurance Group sits on a national committee of insurance executives where the conversation often turns to workforce quality. From what he hears, “I would put ours up against any. People here take pride in what they do, they work hard.”
Still, the region’s lingering negative image affects Guard in a different way. He has found that local college graduates believe there’s little opportunity here and tend to look elsewhere for work after graduation. So even though new employers might raise the ante when it comes to hiring, Witkowski and Guard are solidly behind Wall Street West.
“It would be more jobs, a larger talent pool. It’s one of those things where success breeds success.”
A slow response
Despite the disruptions of Sept. 11 and a major power outage two years later, a paper issued in 2005 by federal agencies that oversee the financial services industry found inadequate response to the call for remote backup and recovery facilities. Even more fundamental questions have been raised about the wisdom of having the nation’s financial services concentrated in a small area; 74 percent of the civilians killed at the World Trade Center worked in the industry.
Yet most firms that moved some offices out of the city went only across the Hudson or to nearby Long Island. “They did exactly what the feds didn’t want them to do,” Cummings said.
“It doesn’t seem like they’ve adopted the mindset,” that they need to be farther from New York. “That I think is our biggest challenge.”
Or it may be that the firms have been thinking too far out of the box. Witkowski said there was a belief in the industry that backup offices needed to be farther away, perhaps in the Midwest. That would be fine for disaster recovery, which using modern technology can be conducted almost anywhere.
“But it’s one thing to restore systems, it’s another to deploy and harness your people resources,” he said. “That’s why Northeastern Pennsylvania is so appealing to many people.”
Witkowski sees one other possible obstacle in the path of Wall Street West, and it’s closer to home.
“The biggest challenge is to accept this and to capitalize on the opportunity. One of the things that will allow this to succeed is collaboration at a regional level.” But that hasn’t always been the case, with different regions and educational institutions competing rather than cooperating.
That may be a thing of the past; the Wall Street West initiative covers nine counties, more than a dozen colleges, business interests and a wide range of economic development organizations. The result of the effort could be dramatic.
“It becomes a magnet. If you build that fiber backbone and infrastructure it really fuels the local area. And it will grow,” Witkowski said.
Congressman Paul Kanjorski sees Wall Street West as only the dawn of a new era for the region.
“In reality, when you look at Northeastern Pennsylvania, it’s probably the most ideal expansion of greater New York,” he said. That westward movement already is happening in Monroe County and will continue, he believes. “They really don’t have much option” to expand in other directions.
But improved education and training are needed to keep the trend moving, Kanjorski said.
“They really have to have an upscaled workforce to meet their needs. We’re not competing for back office, we’re competing for very highly skilled positions.”
“It really can’t be looked at as year or two- or three-year program. It’s decades.”
© 2006 Times Leader and wire service sources. All Rights Reserved.