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MANY TECHNOLOGY FIRMS MULL LEAVING NEW YORK

Nearly one out of three technology companies that responded to a survey of upstate New York firms is thinking about moving to another state, according to the accounting firm Price Waterhouse L.L.P.

The firm drew the results from a survey of 216 computer equipment, software and services firms and communications and life sciences companies.

The survey aimed to determine how the region can improve the business climate for technology companies, an engine of growth in booming parts of the country. Fifty-six percent of the respondents expect their employee roster to grow within the next year, and only 2 percent expect their employment to shrink.

"The message to policy makers is clear -- keep the pedal to the metal on improving the tax and business climate," said Mark Rajkowski, managing partner of Price Waterhouse's upstate technology industry group.

The survey found that 45 percent of respondents have seriously considered moving out of state at some point, and 30 percent are actually mulling the idea.

The reasons that technology companies gave for their dissatisfaction have been aired by other industries. Their top five gripes were: state taxes, local taxes, utility costs, cost of living and lack of government incentives.

"The lack of government incentives somewhat surprises me," said Robert Martin, president of the Western New York Technology Development Organization. Matching grants from the Empire State Development Corp. and loan programs from county industrial development agencies are among an array of public programs available for high-technology employers, he said.

"There's a lot of money out here," Martin said. "Maybe that (the response) shows there's a communication problem."

It's not surprising that so many tech companies are mulling an out-of-state move, Martin said. In an era when regions vigorously compete for corporations, it's a rare company that isn't at least entertaining offers.

"Companies in the incubator are constantly getting letters -- even checks -- saying 'if you come here, there's $100,000 for your company,' " Martin said. The technology development organization operates an industrial incubator in Amherst.

Martin also questioned whether the relatively small sample of firms reflected the feelings of the technology industry as a whole. The 219 respondents were among more than 2,900 companies that received survey questions from Price Waterhouse.

"They (the respondents) may have been more vocal," Martin said. "If there's a burr under your saddle, you're more likely to say something."

Western New York firms, about 50 of which participated in the survey, cited "transportation/airports" among their top five concerns.

On the bright side, 62 percent in Western New York said they were satisfied with the business climate. Among the region's advantages they frequently cited were proximity to family, lifestyle, adequate housing, available office space and moderate cost of living.

One disadvantage that firms didn't cite was a lack of skilled workers, a problem in other parts of the country, Rajkowski said. However, most respondents were small, five-person companies, which may not have done enough hiring to encounter a labor shortage, he said.

In addition to labor, tech firms will need capital to keep growing, the survey indicates. Twenty-eight percent of Western New York respondents expect to raise capital within the next year.

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