We all know where we were on September 11, 2001. For many businesses, where they are is different today, five years later. While Wall Street and the New York area have the most profound changes, many business location decisions have been different since 9/11 because of the concerns about terrorist attacks. While we could clearly see the cleanup and rebuilding, what were less visible were the lasting geo-economic ramifications.

Almost immediately after the attacks, all of the financial services firms with offices in Manhattan went into significant location-based studies regarding their ongoing operations. Some had to scramble for temporary office space, others had to rebuild or repair significant infrastructure. This experience and the rethinking that followed led to many a new or revised disaster recovery/business continuity plan. However, the implications went well beyond DR/BC, and also beyond New York City – as discussed in detail in Where is Wall Street? Financial Geography after 09/11, Nicole Pohl, Economics Department, Franklin & Marshall College, Lancaster, PA in The Industrial Geographer, Volume 2, Issue 1, pp.72-93.

“Although wars, earthquakes and terrorist attacks have caused major damage to cities in the past, the tragedy of 09/11 was unprecedented given the narrow geographical target and the boldness of the attack, the extent of the damage and the focus of the attack on one particular industry. It seems fair to say that the events have triggered a rethinking of the geographical organization of the financial services industry worldwide and they have raised academic attention expressed in efforts to re-evaluate the importance and future of the financial district.”

It is interesting that people are beginning to question the whole idea of financial districts -

“…it is no longer appropriate to think in terms of a narrowly defined financial district “Wall Street.” Some of the movement was inevitable due to the complete destruction of office space in Lower Manhattan. Moreover, the data support the view that large companies enjoy the freedom to make themselves independent from externally supported infrastructures, while small companies show a stronger degree of inertia in terms of their propensity to stay within the established financial core Wall Street.”

The demographic data back up the changes seen on Wall Street with one study done in 2003 showing inability of the city to retain young, educated people who moved there from other parts of the U.S. as well as foreign-born immigrants. ENGINE FAILURE. With Economic Woes That Go Well Beyond 9/11, New York Needs a Bold New VisionTo Renew the City’s Economy, The Center for an Urban Future, Sept. 2003.

“Globalization and technology have changed economic realities of cities like New York,” says Kathryn S. Wylde, president and CEO of the Partnership for New York City, the city’s leading advocacy organization for businesses. “Only a handful of industries are now locked into location. There’s real estate, there’s utilities, but the driver industries are no longer locked into location. 9/11, I think, significantly exacerbated and accelerated this process.”

The net result is that many companies are much more spread out than they were five years ago, especially their critical operations. In financial services, backup centers might be hundreds of miles away, as encouraged by the SEC. Because of these and other “sound practices”, according to a joint report from the Federal Reserve, OCC, SEC, “the financial sector is considerably more resilient to a wide-scale disruption than they had been prior to September 11 [2001].” On another sad anniversary of the tragic day, there is evidence of positive response for business, using location dispersion to reduce risk.