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A Continued Evolution

Technology, millennials and changes in higher education are shaping Rochester’s future

This story appeared in the RBJ’s commemorative 30th Anniversary section. See more content related to the RBJ’s anniversary here.

In the two centuries since Rochesterville was incorporated, the region has changed dramatically and has been influenced by a number of factors, from abolition and women’s suffrage to the rise and fall of Rochester’s Big Three employers.

The forces that drive Rochester’s future are seated in both its past and present. Technology, talent, agriculture, urbanization and entrepreneurship are just a smattering of those forces, and Rochester’s leaders have varied opinions on them all.

Heidi Zimmer-Meyer

Heidi Zimmer-Meyer

“The first force is that business can be done virtually,” said Rochester Downtown Development Corp. President Heidi Zimmer-Meyer. “And that allows people to live where they want and not necessarily in very big, expensive cities.”

Which means medium-sized cities like Rochester can claim part of the technology and creative class, and other innovative kinds of businesses, Zimmer-Meyer said.

“I think a lot of it’s driven by technology and talent, which is one of the key selling points (of Rochester),” said Greater Rochester Enterprise Inc. interim President and CEO Matt Hurlbutt. “Often the comments you hear from companies that are coming here, as well as expanding here from existing operations, is access to talent, cost competitiveness and ability to engage with our colleges and universities and have that good business environment or quick connectivity.”

Rochester and the Finger Lakes region are home to more than a dozen colleges and universities, led by University of Rochester, the area’s largest employer, and Rochester Institute of Technology, Greater Rochester Chamber of Commerce President and CEO Robert Duffy said.

“(They) generate so much in terms of not only educational excellence, but research, medical research, and bring so much money and assets into our community,” Duffy said.

Technology, innovation and entrepreneurial spirit have the potential to shape Rochester’s future, said High Tech Rochester President James Senall.

“I have to say entrepreneurship (in technology) is a force that has huge potential to shape our community going forward, only because that’s what built our community to begin with,” Senall said.

Downtown Rochester’s new innovation hub will play a critical role in its future, he said.

“When you look around at a vibrant downtown and an innovation zone, it’s really what helps create energy and activity and buzz and connections and collisions, which all lead to growth,” Senall explained.

In the midst of building a business incubator at the Sibley Building downtown, HTR is hoping to add to that vibrancy and buzz by helping startups connect to the people and other resources they need to thrive.

“A lot of negativity had been in Rochester for a long time, going back to the closings of big companies and downsizings,” Senall noted. “The positive energy will help with perception and how we all describe the city we live in.”

Duffy said he is in awe of the brainpower and technology Rochester has to offer.

Robert Duffy

Robert Duffy

“I’m blown away by what we have here, not just the big companies that everybody recognizes, but so many of these high-tech entities we have here,” Duffy said. “I don’t think we even realize the strength that we have here in Rochester.”

But Rochester’s future will depend on more than just its burgeoning high-tech sector, said Kent Gardner, principal and chief economist for the Center for Governmental Research Inc. Most of the market is in boring stuff, he explained, so encouraging startups in all industries will be a key to the region’s economic success.

“I would be disappointed if someone came in with an idea for a product or service that’s not technically sophisticated, for us to turn them down because they’re not producing something that looks high tech,” Gardener cautioned. “What we need to be able to help people do is to use all the tools at their disposal, which often have a deep technical core, to produce some fairly mundane products. Most of the economy still runs on mundane products and services.”

Gardner also cautioned that while the region’s abundance of higher education offerings has served it well, the landscape is changing. Enrollment at four-year colleges is down, he noted, putting pressure on schools to change their thinking.

“I think the future of higher education is uncertain at this point,” Gardner said. “They’re seeing pressure in the traditional form­ — pressure because the pool has shrunk. But they’re also facing pressure from various kinds of new media. We’ve talked a long time about how online education could be a disruptive force in higher ed.”

Just because it has not happened yet, Gardner said, does not mean the forecast is wrong.

“When institutions with reputation and with prestige begin to get into online higher education in a big way, that spells the beginning of the transformation,” he explained, noting the partnership between Arizona State University and Starbucks that allows baristas to get a discounted online education. “We have to worry about the health of our higher education sector because it’s a very big part of what happens to this economy.”

The other dilemma that Rochester’s private, four-year schools have to consider is New York’s new free tuition plan, something Gardner called an immediate threat.

But in many ways, Rochester’s businesses are flipping these changes on their heads, Duffy said, noting that UR’s data science center is being used by a number of healthy and growing businesses, including Wegmans Food Markets Inc.

“It gives us one of the greatest assets and growth opportunities,” Duffy said. “It creates jobs that create great economic activity, and it helps other companies get even better and grow and be better prepared for the changes we’re seeing in our economy.”

Another force that will affect Rochester’s future has to do with a generation that now makes up one-third of the American population, Zimmer-Meyer said. Millennials are a group to be watched.

“It is the most racially and economically diverse group in the history of this country and that will change everything,” she said. “People need to understand what kind of a world we’re moving into and what will make things grow, what gives opportunities to cities who are listening to what needs to be available in the environments of those places to attract and keep people from this generation.”

Millennials will shape real estate and what happens in Rochester’s retail sector, Zimmer-Meyer added. And they are calling the shots when it comes to having a life outside of work.

Engaging people more effectively in the community will be key to creating a Rochester that works, she said.

“And lest anybody get confused, some of the key forces that are driving center city development around the country, and definitely here, are that people want to be in dynamic, diverse places with people who are not necessarily like them,” Zimmer-Meyer said. “This is a very different set of forces than what we saw in the ‘50s, ‘60s, ‘70s, post-World War II, where we began to create huge divides—socially, economically, racially—and those divides are being bridged in cities.”

Rochester’s business and community leaders agree that the downtown area likely will play a large role in the success of the region’s future.

“I think it’s going to be more urban. I think it’s going to be younger as the millennial generation grows in its size and its impact,” Zimmer-Meyer said. “We will see the economy grow for the first time in a generation-and-a-half, and I do think the makeup of our economy, the composition of it, is going to shift.”

Senall noted that momentum downtown is building.

“I think we’re going to see the biggest difference in the downtown area, just based on the fact that people are moving in. The residential is leasing out as fast as they can build it,” Senall explained. “We’re going to see a lot more people. It’s definitely a much different feeling than a couple years ago.”

Hurlbutt said the Rochester of the future will see more technology downtown, as well as growth in optics, photonics and imaging sectors tied to the region’s universities and private industry. And he expects Rochester’s food and beverage industries to expand as we see more farm-to-table initiatives.

Duffy said Rochester has an opportunity to build for its future. It is our job to leave the place better than the way we found it, he said, and the only thing holding us back is ourselves.

“We might not succeed at everything, but our job is to leave this place better than when we came in. That is the goal of every leader, every organization, public, private, everybody,” Duffy said. “Put the competing priorities aside, put the squabbles aside, put the political infighting and party issues aside. What is best for this region?”

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