22 alan mitchell, mitef-nyc

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Testimony before NYC Council’s Joint Meeting of Committee on Technology in Government and Committee on Economic Development on behalf of MIT Enterprise Forum of NYC, Dec 16, 2009 Alan Mitchell, [email protected], 646-267-8296 New York, NY – On Wednesday, December 16, 2009 at 10 AM in the Council Chambers of City Hall, the New York City Council Committees on Technology in Government and Small Business will hold a joint public hearing to examine how small technology start-ups are surviving in this tough economy. This hearing will help the Council understand the dynamics behind successful firms as well as what options are available to the City in aiding these important businesses in their struggle to remain competitive and viable in a global environment. City lawmakers are seeking ways to foster small business growth and boost New York City’s image as technology and digital media leader. Small businesses and information technology groups offer a myriad of job opportunities and ideas to the broader economy. Current incubators, venture capitalist funds, and industry consortiums help improve the economy and provide support for future entrepreneurs. By understanding the dynamics of how these firms operate, the City can help facilitate broader innovation and attract additional companies within knowledge-based industries. 1. Acknowledgement and Introductions. Thank you Committee Chairs Brewer and White and all Joint Committee Members. I am Alan Mitchell. I run a strategy and operations consulting practice in New York City, ARMAK and Associates, that serves clients on the supply-side and the demand-side of Internet information and communications technology. I am also a Board member of the MIT Enterprise Forum of New York City, and it is in that capacity that I testify today. I want to address two agenda items: (i) options that are available to the City in aiding small technology start-ups, and (ii) ways for City lawmakers to foster their growth and boost New York City’s image as a technology and digital media leader. 2. Overview of MITEF-NYC. First, allow me to briefly introduce the MIT Enterprise Forum of New York City. We are a volunteer, not-for-profit organization whose mission is to provide educational programs and services that promote networking and innovation at the intersection of business and technology. We are one of 24 chapters worldwide of the MIT Enterprise Forum, which was formed by MIT alumni in 1971. Membership and program participation in our events is open to all. Our chapter has approximately 5,400 subscribers to our email services and over 200 active members, representing the entire ecosystem surrounding and supporting start-ups in digital media, biotech, clean teach, software as a service or cloud computing, aerospace, and so forth. 3. Available Options. For the first agenda item I promised to address, options that are available to the City in aiding small technology start-ups, I offer the MIT Enterprise Forum of New York City and its Board for expert consultative support of the Committees’ planning and deliberative activities and future public events we might jointly sponsor. Allow me to distribute my business cards for my contact information and the Chapter’s web site, where you can play streaming media of our recent events, find an introduction to Board members, and sign up for our email notices∗.


http://www.mitef-nyc.org

Testimony before NYC Council’s Joint Meeting of Committee on Technology in Government and Committee on Economic Development on behalf of MIT Enterprise Forum of NYC, Dec 16, 2009 Alan Mitchell, [email protected], 646-267-8296 4. Ways to Foster Growth. Let me briefly address the second agenda item, ways for City lawmakers to foster small business growth and boost New York City’s image as a technology and digital media leader. a. Finance. To foster small business growth, lawmakers need to ensure that new sources of financial assistance for start-ups are available as they evolve past the seed/incubator phase into the revenue phase. There is no significant payoff for New York City from fostering start-ups at the seed phase unless we ensure that they can enter the revenue phase and profitably grow long-term in New York City. However, small businesses are being starved for credit globally. We hear the President jaw-boning CEOs of our large bailed-out banks in this regard. PBS News Hour this past Monday had a heart wrenching piece called “Small businesses struggle amid credit crunch”, which you can find on pbs.org. On Dec 10, the Economist wrote a piece called “Small business, big problem”, which you can find on economist.com. The Economist reminds us that firms with fewer than 500 workers accounted for 64% of new jobs created in America between 1993 and the third quarter of 2008, that 90% of small enterprises rely on banks for all of their financing needs, and that most of the banks on which small businesses have relied have either failed or stopped lending to small businesses. Therefore, there is a need for City lawmakers to immediately pass regulations and laws that would offer guaranteed low cost loans, rent tax breaks, and other financial measures that would help ensure that start-ups stay in New York City as they grow. These financial measures could be affordable for the City, offer a significant long-term return, and create an important competitive differentiator that motivates start-ups to choose and remain in New York City. b. Marketing. To boost New York City’s image, lawmakers need to centralize a coordinated critical mass of marketing, including market research, publicity, and multimedia ads. In this regard, being able to tout outstanding financial assistance programs, supported by small business testimonials, would go a long way toward boosting New York City’s image to a differentiated level that attracts and retains technology and digital media entrepreneurs. 5. Closing. In closing, let me summarize by saying that the MIT Enterprise Forum of New York City is ready to support the Committees and City Council in significant ways toward our common objectives of ensuring that the City is a preeminent location for technology and digital media businesses, from seed phase through the life-cycle of long-term growth.

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