Startup NY: a model for university innovation to follow?

One of the bigger challenges a university that aspires to grow its entrepreneurial offering can encounter is building the community around it. The benefits of doing so are obvious: existing resources and companies for startups to work with, an alluring proposition for both the entrepreneurial student and professor, and a community that will have the right ingredients to attract potential investors. But without an established research base and university brand, how does a university get the ball rolling on such a project?

One initiative which has made strides in making these first steps can be found around the campuses in the state of New York.

A little over a year ago, the state, led by governor Andrew Cuomo, launched the Startup NY programme with the aim of building innovation communities around the state’s numerous colleges and universities. Among the institutions included in the programme are big names such as New York, Cornell and Buffalo Universities, as well as a number of other university and college campuses such as Stony Brook State University, SUNY Albany, and many others. In total, the project covers around 100 institutions.

To date, the project has attracted 128 companies, which Startup NY has forecast to bring 3,609 jobs and invest over $180m into the state over the next five years. The range of companies are broad – some are startups, others are university spinouts, some are New York-based companies expanding into university campuses, others are relocating from around the US and even from Canada.

It’s also worth noting that the project has also attracted a $100m venture fund, backed by New York. Originally pegged to be $50m, Cuomo succeeded in getting the size of the fund doubled in April of this year.

So what’s the allure all of a sudden?

At the core of the Startup NY offer is 10 years of tax free of operation for any company setting up shop in the university zones. That covers incomes tax, real estate tax, sales tax, organisation tax, and commuter tax. In return, an eligible company must either be a new business within the state or relocating there, partner with a university or college in the state, and aim to create new jobs in the area.

With only a little over a year under its belt, it may be too early to judge Startup NY as a success, but the volume of startups and businesses it is bringing into university innovation communities already cannot be denied. And while most governments may wince at the idea of allowing firms to get ten years of tax-free operation, that could be seen as a short-term outlook. What Startup NY allows its firms to do is to get a solid footing and threads them into the ecosystems of its universities. Such a foundation is exactly what an entrepreneurial university will need to build its ecosystem to rival more established peers.

It will undoubtedly be interesting to follow Cuomo’s pet project over the coming years as the seeds Startup NY is planting come to fruition, and whether or not other states and countries look to the model for inspiration in kickstarting their own innovation communities.