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Ithaca strives to reach critical mass of tech companies

Ithaca wants to grow a tyrannosaurus of tech, but what comes first?
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Ithaca wants to grow a tyrannosaurus of tech, but what comes first?


Throughout our Ithaca series it’s become clear that if Ithaca wants to compete with the big guns - like Stanford and MIT - it needs to reach a point of critical mass, in terms of industry, ideas, and entrepreneurs.  Cornell is chasing those front-runners, but it’s a big job for a small place like Ithaca.

Take Charles Hamilton: He’s become a recognizable figure in Ithaca’s entrepreneurial circuit since getting his MBA from Cornell.

As he explains it, “I’ve had some success in the area ... I’ve run companies that have hired a lot of people and raised quite a lot of outside funding.”

As a result, Hamilton gets asked to speak a lot about starting businesses at forums around Ithaca (case in point - here he lays down some wisdom).

“Which is fantastic,” Hamilton says. “I’m happy to talk about it. But it would be great if, instead of calling Charles, they could call someone who could be a mentor to me who has built companies and sold companies.”

“There are a few people like that in the area. There aren’t very many,” he says.Growing talent

Charles Hamilton says Ithaca and Cornell should go out and recruit entrepreneurial talent to jumpstart spinoffs.

Ithaca’s not a place that entrepreneurs naturally gravitate, like Stanford and MIT are, but the region has some things going for it: The cost of living is low and people are attracted to the city’s quirky atmosphere.

However, even if Ithaca did put together a dream team of top-notch talent to help nurture companies, it still faces a key problem: it’s a much smaller place than the Bay Area or Boston or Research Triangle.

“We probably just don’t have the variety and scale,” says David Kay, who grew up in San Jose, and now studies planning at Cornell.

In part because this is a challenge shared by a lot of communities going after growth, Kay says, that “within the economic development literature the trend for the past decade or two has been around clusters.”

‘Clustering’ is the idea behind New York’s strategy of encouraging different sectors in different regions. Albany has become the model of this, with its laser focus on making nano-chips and owning that sector. 

The restaurant row model

If you can’t be good at everything, you specialize.

Steve Turner, an entrepreneur who left Ithaca for the startup hub of Northern California, says many people are coming to that conclusion, as they realize there is no magic formula for creating Silicon Valley-like growth.

“If you’re going to try and get something above critical mass, you wouldn’t want to try and get it above critical mass in semi-conductors in biotechnology and in automobile manufacturing all at the same time because there’s not a lot of overlap between them,” Turner says.

As he points out, it takes fewer people to get a single industry off the ground. Also, once that industry gets going, it builds its own momentum by creating networks of people in the same industry, and opportunities for employees to bounce from job to job.

Buzz grows like it would for a hot neighborhood. Say a bunch of biotech companies spring up in one place - just like a restaurant row - and just like that street becomes a destination for dinner, people come to this biotech block for some high-end pharmaceuticals, and everyone benefits.

But there’s a flip-side to this. And it’s something Ithaca has already experienced, that specialization can make an economic downturn harder.

“I don’t think anyone wants to change the shape of their economies to be totally dependent on health and education services like we are,” says the man at Ithaca College who dissects the district’s numbers, Elia Kacapyr.

Kacapyr, an economist, says Ithaca is dominated by health and education because of its big institutions: Cornell and Ithaca College and the city’s hospitals.

However, Kacapyr says even that focus is a roll of the dice. What worked in the last recession won’t necessarily work in the next.

“In the most recent episode, it just turns out that across the nation, employment in education and health services has held up very well and that’s our bread and butter here in Tompkins County and the Ithaca metro area,” Kacapyr says.

Entrepreneur Charles Hamilton says this is all the more reason to go after the things needed for growth.

“There’s no shortage of new ideas here,” he says. “We’ve got those in spades. We absolutely have tons of those.”

The very next step, he says, is for someone to recognize those ideas and run with them.

Former WRVO/Central New York reporter for the Innovation Trail.
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