Technology Infrastructure Tab Hits $12 BillionTechnology Infrastructure Tab Hits $12 Billion

The Sept. 11 terrorist attacks on the World Trade Center blew a $12 billion hole in New York's technology infrastructure. That's the finding of the New York City Partnership, a consortium of business and community groups that analyzed the effects of Sept. 11 on the local economy. The study, released last week, assesses all key industries and sectors of the city's economy in the short and long term, using pre-Sept. 11 economic forecasts as a baseline.

Booz Allen Hamilton performed the analysis of the IT and telecom sectors, finding that the attack directly damaged or destroyed much of lower Manhattan's IT infrastructure. IT and telecom companies suffered a $2 billion loss. World Trade Center occupants alone must replace about $8 billion worth of technology. A six-to 12-month delay in the technology sector's return to growth is expected, says Reginald Van Lee, a Booz Allen VP. Rebuilding the infrastructure is a short-term salve and long-term bridge to growth, the report says. But only a small percentage of technology revenue will flow to New York companies, because most telecoms and IT vendors are in other parts of the country, Van Lee says. "A fair number of businesses that suffered losses were financial-services companies, users of fairly new technologies."