Click here to subscribe today or Login.
SEVERAL YEARS ago, Wall Street West (WSW) was launched with $15 million and a dream that events such as the Sept. 11 terrorist attacks and Hurricane Katrina would cause financial sector businesses on Wall Street to move some of their manpower, disaster-critical operations and facilities to Northeastern Pennsylvania and bring with them high-tech, high-paying jobs and prosperity for the region.
The idea seemed like a good bet at the time: This region was situated a perfect distance from New York City from a technological standpoint; the region could develop the necessary technology infrastructure (fiber optics); and in a matter of a few short years we could guarantee a technically savvy work force to feed the needs of the financial services sector.
Most of us involved in the WSW vision knew it was a high-stakes game. And, as with all high-stakes games, sometimes the stated objectives materialize and sometimes they do not. For WSW, it appears the initiative will not work out exactly as planned.
The most tenuous aspect of WSW is attracting New York City-based companies to the region in order to establish backup and back-office operations in the 10-county area. Several things that happened out of our control lessen the possibility of these businesses establishing a presence, and more importantly, providing employment opportunities in Berks, Carbon, Lackawanna, Lehigh, Luzerne, Monroe, Northampton, Pike, Schuylkill and Wayne counties.
The most obvious event was the meltdown among institutions in the financial services sector. Investment banks are gone and banks are either gone, merged or in deep financial trouble. The financial services sector overall is much smaller than it used to be. Disaster recovery in financial services has taken on completely different meanings.
But even before the current financial crises, other things were going on that were pointing to the disappointing likelihood that there would be no migration of financial services jobs to Northeastern Pennsylvania.
For one, the expected federal requirement to establish real disaster and continuity plans never materialized. They remain to this day just suggestions and recommendations. While the financial services sector on Wall Street and other places continues to write plans for business continuity and disaster recovery, there are no legal requirements that they be implemented.
In addition, the prediction that Wall Street financial services firms would move here as part of their emergency contingency plans was probably overly optimistic. Wall Street firms are finding other solutions that do not require a move anywhere. They have opportunities both closer to New York City, as well as within their own far-flung geographic corporate units.
Nonetheless, WSW did lead the effort to create “advancements in economic and work force development” and made more than 50 grants to organizations and education and training institutions to build the human resource infrastructure necessary to attract and support financial services jobs of all kinds. For example, Misericordia University has been working closely with regional high schools, and Lackawanna, Luzerne and Northampton county colleges to provide financial services education for traditional and adult students all the way up through and including the master’s degree in business administration (MBA).
Despite the change in direction of the financial services sector, the WSW education investments appear to be genius, as the region now appears to be well positioned to satisfy the human resource needs of what most people agree will be a completely different financial services sector.
We have reason to be optimistic also because the financial services sector is changing in ways that play to our new strengths. According to several studies, including some by the Federal Reserve Bank in Philadelphia, the financial services sector will be outsourcing more services, and more efficient solutions will need to be found that link financial services with retail businesses and households. The studies point out that these newly emerging changes in financial services will be fertile territory for financial services entrepreneurs.
The research also points us to a new regional marketing and employment strategy, one built on the creation and growth of new entrepreneurial financial services firms. We could recruit individuals to the region – not businesses. Where are these individuals? They can be found among the thousands who were displaced by the events in New York City and other financial centers. Unemployment is known to spur individual entrepreneurship.
Northeastern Pennsylvania, because of its regional advantages, has the potential to become the “front office” choice of entrepreneurs. But to win this game we need to effectively communicate our new regional advantages to attract those wishing to build new businesses and establish new jobs in the area. Job creation was the original intent of WSW when it began years ago. With this new model, it appears that we can still achieve what we set out to when WSW was first introduced.