The transition to a renewable economy may be a painful one, particularly in this era of aversion to active government. When New York City endured the difficult transition from a commercial and small manufacturing city to today’s post-industrial megacity, we nearly went broke. One of the reasons for our financial distress was the need to pay for a highly stressed social welfare system which, while far from perfect, provided more help for poor people than the system we see in many states today. This past weekend, Clifford Krauss wrote an excellent report on the hurt and dislocation being caused by the declining coal industry. According to Krauss:
“There is pain across the nation’s coal fields, but here in West Virginia, the disruption is particularly acute. Mines are closing almost every month. Sawmills that provide wooden support beams for the tunnels are lying off workers, and diners are putting up signs asking their customers to pray for the miners. The coal industry, long the heart that pumped the economy here, is in deep trouble, buffeted by power plants switching to cheap natural gas, crippling debt, mounting foreign competition and increasingly strict regulations to limit greenhouse gases and toxic emissions like mercury.”
Krauss notes that U.S. coal production is down and its share of the energy market is being reduced by natural gas and renewables. From the climate perspective this is good news; for workers in West Virginia coal towns, this is bad news. The problem for West Virginia and Kentucky is not the “war on coal” that the right wing blames on President Obama, but a declining resource-extraction industry that is being displaced by new technology.
In a modern economy, rapidly changing technologies can have a negative impact on workers. The guys that used to unload ships on the west side of Manhattan were thrown out of work when containerized port facilities opened in Newark. The people who worked in Blockbuster Video and Tower Records lost their jobs to online music and videos. The list of lost jobs is nearly endless. The issue is: what is society’s responsibility to help those who suffer the impact of these changes?
The impact of new technologies on jobs is unavoidable, and not all of the news is bad. Many old jobs are destroyed but many new jobs are created. The problem is that with weak unions, global competition and inadequate wage regulation, some of the new jobs are lower paid than the old jobs. The new jobs that pay well often require specialized training and education that is not easy for miners to access.
Installing solar panels, operating energy efficiency equipment and building micro-grids all create new opportunities. While these may help the coal miners willing to move to the places that have those opportunities, or are able to obtain additional education, they will not help the communities that once relied on the coal industry for jobs and money. Community redevelopment requires that new industries be attracted to replace the old ones that are in decline. Creating the conditions to attract new businesses is more art and craft than science. It requires a sophisticated public-private partnership that is often blocked by our intense but outmoded political ideologies.
Here in New York City, efforts to use our universities to attract new businesses are underway in upstate New York and on Roosevelt Island in New York City. The effort in New York City is slowly taking shape as Cornell University and the Technion — Israel Institute of Technology partner to create Cornell Tech, a school devoted to applying cutting edge technologies to business applications in health care, media and the built environment. In addition to Cornell, Columbia, NYU and CUNY are all building “STEM” (science, technology, engineering, math) programs.
In upstate New York, under Governor Andrew Cuomo’s persistent prodding, the State University of New York is much further along in its effort to transform upstate New York’s moribund economy by building high-technology capacity. In September 2014, the state merged SUNY’s nanotechnology college with its Institute of Technology to create the SUNY Polytechnic Institute. According to the press release at the time of the merger:
“SUNY Polytechnic Institute (SUNY Poly) is New York’s globally recognized, high-tech educational ecosystem, formed from the merger of the SUNY College of Nanoscale Science and Engineering and SUNY Institute of Technology. SUNY Poly offers undergraduate and graduate degrees in the emerging disciplines of nanoscience and nanoengineering, as well as cutting-edge nanobioscience and nanoeconomics programs at its Albany campus, and degrees in technology, professional studies, and the arts and sciences at its Utica/Rome campus. As the world’s most advanced, university-driven research enterprise, SUNY Poly boasts more than $20 billion in high-tech investments, over 300 corporate partners, and maintains a statewide footprint. The 1.3 million-square-foot Albany NanoTech megaplex is home to more than 3,100 scientists, researchers, engineers, students, faculty, and staff. The Utica/Rome campus offers a unique high-tech learning environment… SUNY Poly operates the Smart Cities Technology Innovation Center (SCiTI) at Kiernan Plaza in Albany, the Solar Energy Development Center in Halfmoon, the Photovoltaic Manufacturing and Technology Development Facility in Rochester, and the Smart System Technology and Commercialization Center (STC) in Canandaigua. SUNY Poly founded and manages the Computer Chip Commercialization Center (Quad-C) on its Utica campus, and is lead developer of the Marcy Nanocenter site, as well as the Buffalo High-Tech Manufacturing Complex, Buffalo Information Technologies Innovation and Commercialization Hub, and Medical Innovation and Commercialization Hub.”
It is far too early to know if these new educational institutions can stimulate economic growth, create employment, and sustain it long-term. But at least New York City and New York State are attempting to take the institutions they have and provide incentives for them to connect with industry and develop facilities, trained staff and an exciting environment to encourage investment.
While New York City’s economy is doing much better than the upstate economy, we are still only four decades from near bankruptcy. When Mike Bloomberg was mayor, he was particularly concerned about the need to diversify the city’s economy and attract high-tech businesses here. New York City has an exciting environment that attracts talent. Upstate New York and West Virginia may not have the city’s nightlife and excitement, but they also don’t have our high cost of doing business. They can offer lower land and building costs and, if an effort is made to leverage university resources, the possibility of a trained workforce. In New York we see an effort to leverage resources and create a sophisticated public-private partnership.
What about West Virginia? Decades ago, I spent my first year as an assistant professor at West Virginia University in Morgantown, West Virginia. Even then, it was a large, comprehensive university. Today, it is clearly an asset that can play a role in transitioning the state’s economy. The university’s website indicates that this is understood on campus and declares that:
“It would be hard to find a university as committed to making a difference to its state as West Virginia University is to West Virginia. As our state, nation, and the world transition to a knowledge-based economy, the role of higher education, which is “the original knowledge industry,” will become even more critical. WVU’s responsibility has never been more important, and our ability to spark innovation and the jobs and opportunities it produces has never been needed as much as it now.”
However, while Mike Bloomberg and Andrew Cuomo invested scarce public resources in building high-tech university hubs, West Virginia Governor Earl Ray Tomblin leads a poorer state with far less ability to invest in the infrastructure of the brain-based economy. West Virginia is struggling to keep its roads paved, an even more fundamental requirement for economic development.
For the workers in the mines and workers all over America faced with a transitioning economy, we need a better response to tough times than a wish and a prayer. The transition to a global economy is well underway and the transition to a sustainable economy has begun. The human cost of this transition should not be ignored and requires determined and creative solutions. In my view, that does not mean we need big, bureaucratized government programs, but it does mean we need an assertive state and local government working in partnership with the private sector. Just as the federal government declares a state eligible for special emergency assistance during a natural emergency, we need a national program to help geographic areas that are hit with financial emergencies measured by specific unemployment thresholds. Funding to help states attract businesses and for universities to partner with business should be made available to help states like West Virginia transition from declining to growing businesses.
