By Joseph Curatolo
Hurricane Sandy’s devastation along the coast of New York and New Jersey identified a major problem in the world’s largest financial system.
The storm that overwhelmed lower Manhattan brought the center of the world’s financial markets to a standstill for several days. The problem wasn’t getting traders back on the floor. With no power, computer systems couldn’t work. Without computers, trading came to a halt and billions of dollars were lost. The real issue was not being able to get the IT people back into the exchanges to run the systems.
However, as with every tragedy, an opportunity arises. In this case, it might be something that can benefit Western New York, bringing much-needed, well-paying jobs here: redundancy. In this day and age, it’s hard to believe that the New York Stock Exchange and other markets have no off-site redundant systems to keep the markets working when a tragedy hits New York City.
We have an opportunity to establish Western New York as a redundant headquarters for these financial markets. The systems are basically huge data centers staffed by IT professionals, who can seamlessly take over the operations of computerized trading.
The best part of this plan is that we already have everything this type of project needs. First and foremost, we have the low-cost power that the project would require. Instead of sending much of the surplus power out of the area, the New York State Power Authority can allocate it to a project that will benefit upstate New York.
Second, we have a steady stream of educated computer professionals, thanks to the region’s colleges and universities. This type of project would allow many of them the option to remain in the area with a well-paying job.
Third, Gov. Andrew M. Cuomo would have an interest. He identified our area as a priority in economic development, setting aside $1 billion to help projects like this get off the ground. With these financial incentives, he might “nudge” the NYSE to see the importance of placing redundancy in its financial systems in another part of New York State. This would be an all-around win for him, helping both upstate and New York City.
Fourth, we also have a model for this type of data center with Yahoo! in Lockport. Company officials cited “our naturally cool climate to dramatically decrease its electricity use throughout the year” as a reason for locating here. They say they saved enough electricity to power about 9,000 households and approximately 1.1 million laptops annually. That’s a tremendous benefit for both business and environment.
Housing the redundant system for the financial markets won’t be a “silver bullet” for Western New York’s economy, but it could be an important step in growing another industry here.
Joseph Curatolo is president of Georgetown Capital Group in Williamsville.