New York looks to India, China to drive financial sector growth

New York City will conduct an international campaign focused on attracting commercial banks and insurance companies based in China, India and other developing economies, to encourage entrepreneurs to choose the city as their regional base.

The programme, unveiled by New York Mayor Michael Bloomberg on Wednesday, is designed to support the growth of new businesses in the city while keeping current ones afloat, thereby saving thousands of jobs.

Under the programme to revive the financial sector and the Wall street, entrepreneurs from China, India and other developing countries will be encouraged to set up their regional offices in the city by providing them incentives. 

The programme also envisages creation of incubator spaces for startup businesses, setting up an investment fund to help startup companies, offering business development programmes and retraining laid-off financial sector workers.

New York City proposes to support financial innovation through an annual business plan competition with top business and engineering schools throughout the US, Europe, Asia and Latin America.

Bloomberg has asked interested universities to submit financial service business plan proposals to New York City Economic Development Corporation (NYCEDC), which will evaluate the plans.

Winners will receive a cash prize, a trip to New York City, free space within one of the city's new incubators for two years and access to additional investments through the Angel Fund if a company is established locally.

''The financial services meltdown is a global problem, not one that any city or even nation can solve on its own," said Mayor Bloomberg. "And although we can't predict exactly what its revival will look like, we're confident the sector will come back. When it does, cities around the world will compete to capture the jobs it brings. In New York City, we're not waiting for that day to come. Instead, we are taking aggressive steps to put the City in the best position to capture growth, and we're doing it by promoting one thing more than any other: innovation. New York City's greatest strength has always been and will continue to be the innovation, drive and work ethic of New Yorkers. Time and time again, history has shown that our City rewards those who have the courage to pursue their dreams and launch new ideas."

The City has identified three basic challenges brought on by the financial services crisis. First, the shrinking of sector jobs and loss of institutions like Lehman Brothers and Bear Stearns has reduced the critical mass of financial services entities in New York City.

Of the five broad sub-sectors of financial services capital markets, investment management, insurance, retail banking, and wholesale banking the greatest job loss is expected to come in capital markets, the city's biggest sub-sector.

The report said capital markets will account for 57 per cent of the total financial services job losses in New York City.

In 2007, capital markets made up nine per cent of the nation's 6 million financial services jobs but 39 per cent of New York City's 339,000 financial services jobs, according to the Bloomberg report.