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CenterState CEO President Robert Simpson’s 2013 Annual Meeting Remarks
Date:  4/9/2013
ArticleType:  Press Release

Good Afternoon.

I’d like to thank our keynote speaker, Kevin Warren. His comments resonate so clearly because you can see it in our own history…

We live in a region with an amazing legacy of invention. It has defined us for generations. We have proudly developed products which have – quite literally – changed the world. Agricultural inventions which brought heavy machinery to the farm and dramatically increased food production; the typewriter, which changed the way we work; the air conditioner, which opened up climates to live that had previously been inhospitable.

What’s not as well known is that the people behind many of these products passed through the same building – a modest 20,000-square-foot structure on South Geddes Street. In 1880, a 29-year-old inventor bought the building and opened a machine shop. Charles Lipe created products from cigar rolling machines to motion picture equipment. Alongside his own business, he rented space to dozens of young entrepreneurs. He worked with them, shared his equipment and his ideas. Over time, this building became known as “The Lipe Shop” and was seen as a “haven for inventors and an incubator of industries.” In 1939, The Syracuse Journal looked back and described it this way…”These men sowed the germs that sprouted into major business enterprises in Syracuse and elsewhere.” In all, more than 150 patents are connected to The Lipe Shop.

Today, perhaps fittingly, that building is a hardware store. But the companies it spawned are a proud part of our history, and the spirit of invention that gave that building meaning remains as potently important to our region today as it did more than 70 years ago.

We’ve seen our share of trying times since the days of the “The Lipe Shop.” That’s no secret. And, understandably, people who know and care about our region have often lamented its losses.

Take downtown Syracuse, for example.

As if channeling Jane Austen or Charles Dickens, Dick Case grabbed our attention with the first words of a 2006 column in The Post-Standard. He said: “The truth is, most days, downtown Syracuse is pathetic.” Dick went on to describe Syracuse’s central business district as “dirty” and “aging gracelessly.”

I remember that column vividly. And I remember resenting it. The words. The tone. Because the seeds of renewal had been planted. A committed group of anchor institutions. A first grant for the Landmark Theatre. Plans to build a new transit center. Four vacant buildings in the Pike Block under our community’s control, though still far from finished. I resented it, but he was right. And his civic-minded cynicism pushed us forward.

That was 6 short years ago. What strikes me today is how far removed we are from that reality. Change has already come. Cranes have dotted the skyline. Many of those projects are completed and new ones are underway. The reinvention of our center city is no longer bubbling beneath the surface but is rising from the ground.

Last year, in one of his last columns, Dick recognized downtown’s revival, but closed on this note: “We’ll never have the downtown we used to have.” Again, he’s right. That’s the very nature of reinvention.

The same holds true for our regional economy, which will never again be dominated by a few industrial powerhouses the way it was when Carrier’s campus was a booming manufacturing center, and GE was a virtual printing press for patent applications.

Reinvention is hard, sometimes painful…and in the end, things will look different.

But different need not mean lesser. Or incomplete. Or unsustainable.

Six weeks ago, there was an article published in Forbes Magazine by Carl Schramm, the former President and CEO of the Kauffman Foundation, now a University Professor at Syracuse. In 1,500 words, Carl recounted the economic odyssey of Syracuse and our region – from salt to canal to typewriters to radar and now to present day and what he called a litany of embarrassing civic distinctions.

His premise, of course, was that our community had turned its back on its most valuable natural resource – the creativity and innovative spirit of our region’s residents. And in so doing, we had forfeited our economic future.

I, for one, don’t think either is true. We didn’t forget how to innovate when Carrier moved its manufacturing to Asia. In fact, the opposite is true. In an ironically bitter twist, Carrier actually invested in our ability to innovate at the same time that they moved production overseas. And still today, the DeWitt campus is the global Design and Engineering Center for Carrier’s entire HVAC business – tasked with developing the products that others now build.

Likewise, it wasn’t a lack of innovation that closed New Venture Gear – but rather an acquisition of a local company by a larger and more ruthless Canadian competitor. Magna bought that company for its capabilities. And for its innovation. And they stripped it bare and left us holding the bag.

Every day, businesses in this region still do amazing, innovative things. Jadak, in Cicero, itself a spin-out of Welch Allyn – is revolutionizing the use of bar code scanning applications to serve the medical industry and is about to break ground on a $5.5M expansion. In 2000, Jadak had 3 employees. Today, it has 100 and is about to hire 65 more.

DLI, in Cazenovia, is reaching even further, developing and manufacturing radio and microwave components that support a host of new applications, even putting its communications filters on Mars. DLI is adding new production capabilities and at least 60 new jobs.

Pick up our annual report at your table. The stories of reinvention quite literally jump off the page – like that of the mobile marketing start-up Glypher on page 14, which is taking two-dimensional print-ads and turning them in to 3D products.

It isn’t that we forgot how to innovate. But we have clearly made mistakes. We ignored the very reality that Carrier was reacting to – that Asian markets were growing exponentially and domestic markets were shrinking in comparison. We were too slow to react. We were too timid. We certainly weren’t unified as a community. Perhaps we were too sentimental about what was, to focus clearly on what was about to be. Maybe more than anything, we weren’t yet prepared to win.

I’ll admit that when I read Carl’s article, I initially resented it. Perhaps more so because some of his criticisms rang true. Just like Dick Case’s 6 years ago. But those of you in this room know something Carl has not yet had the chance to learn. That, working together more collaboratively than ever, the seeds of renewal have been planted.

Glypher is just one of 31 companies that populate our modern-day “Lipe Shop,” – The Tech Garden – with 150 employees creating new intellectual collisions every day.

Just press rewind for a few minutes, and think about Startup Labs. Over seven years, more than 650 companies entered our emerging business competitions and we have invested more than

$1.1 million dollars in the best of the best. In 2006, there was no mechanism to identify these companies. No tools to support them.

Now, a group of investors is taking that support a step further, working to launch a $25 million venture fund targeting this region’s best innovations, entrepreneurs and businesses.

Eight years after Carrier pointed the way, we finally have a strategy to help companies in this region sell to growing global markets and the 6.7 billion customers that live outside of the United States.

And because the old way wasn’t working, this very organization has adapted and embraced the role of literally transforming what was once called economic development by combining bricks and mortar, community development, workforce alignment, education, innovation and quality of place in to a whole new discipline that we call economic opportunity. We staked our very name on it.

I guarantee you that if you ask Kevin Warren’s staff, they’ll tell you he’s never satisfied. And neither can we. China is catching up. India and Brazil are rising. 60 years ago we had to outrun 150 million Americans. Today we have to outrun a world of 7 billion.

Charles Darwin said, “It’s not the strongest of the species that survive, nor the most intelligent, but the most responsive to change.”

In that vein, let’s consider some of the current environmental factors:

  • Only 9% of regional GDP is generated from exports, compared to 13% nationally and more than 50% in Germany.
  • Household income in our region lags the nation by 20-percent.
  • More than a quarter of families in Syracuse live in poverty.
  • We have only regained 22-percent of jobs lost during the recession, not nearly enough.

And we are burdened with highest-cost local government structure in the nation, with 4.15 units of local government for every 10,000 residents in our region -- nearly ten times the national average.

How long do you think it is safe to rest? What kind of margin for error do we have?

In a hyper-competitive world, the reward for our progress, to date, is that we simply get to live another day. To move on to these bigger, more-daunting challenges…with luck, equipped with a bigger group of partners and a bolder set of solutions.

Each one of us has a different motivation for this work. Some will re-invent out of necessity. Some for fun. For the pure challenge of creating and re-creating. Some will be motivated by money. Others, by sheer love for this region.

Mine is the simplest of all.

Corinne and Ben. One little family that is my world. Ben will turn one next week. All the cliches about how fast it goes ring true. I must have 3000 pictures to tell the story of his first year. But I don't have much time to reminisce on. Because every day is a new adventure for him and as he changes, and grows, what he demands of me and my wife requires us to reinvent ourselves as parents and individuals in ways both large and small.

Ben has six signs. More. Food. Milk. Thank you. Doggies. Please. Although truth be told when he says please it’s usually in the heat of the moment and looks a bit more like this...

My point is, I am starting to have conversations with my son. Yes, you can bring me a book. No, you can't eat the doggy's tail. It is the most spectacular thing. But it won't be long before those conversations turn to matters more serious. I can hear the familiar refrain now. “Why? Why? Why?”

But there are certain conversations I am not prepared to have.

I know I know, a quarter of our community was living in poverty but to be honest the other 75 percent of us were fine so we just ignored it.

Yes, Ben, in retrospect we should have recognized that a governmental structure designed for the days of horse and buggies was not especially competitive in a world of 1s and 0s, but what you need to understand is, at the time, the politics of it seemed impossible to overcome.

Go back to Kevin Warren’s speech. He talks about re-invention as a process. First, seeing the challenges. Then, building solutions. Executing on them, And finally, committing yourself to success and continuous improvement.

The challenges in front of us could not be more clear. Even the progress we are making is obvious. Yes, it is incremental. Yes it is hard.

What remains, though, is the most difficult. Today’s marketplace demands not just people and communities and businesses that can identify trouble and changing trends, but ones that can plan and execute on sound strategies. And with 4,600 cities and regions in the world, even that’s not enough.

We have to commit to winning…and to improving what we do and how we operate not just once, or once a year, but every day. We have the leaders, nearly 1,100 in this room right now. To build on our progress we need commitment and an unwillingness to lose.

That’s a story that was once familiar to our region. And we need to write it again. So help me out.

Make a commitment of your own – today.

  • If your business doesn’t export. It’s time to start. We can help. If you do export. It’s time to grow into a new market.
  • Develop a new product or service that your business doesn’t offer today.
  • Help a new business get off the ground…. How you might ask?
  • Invest in this region’s new venture fund.
  • Mentor an emerging business. Your expertise can help our next generation of leaders grow. And they can help you grow.
  • Commit to working with us to train and hire someone through GreenTrain or HealthTrain and help lift someone in this community out of poverty.
  • Help attract and retain our next generation of talent. Sign onto Project ION and hire an intern.
  • Build our region’s wealth effect by circulating more of your dollars here. Commit to a 10% shift – spending at least 10% of your dollars with independent local businesses.
  • Commit to making a new business connection before you leave here today.
  • Or join the more than 100 business, labor and community leaders, 8 common councilors and 17 county legislators who have pushed for the creation of a commission on local government modernization to give us the government we need for the 21st century instead of the one designed more than 200 years ago.

Knowing how to reinvent our region is not our challenge. But succeeding sometimes is. Commit to win.

Thank you.