According to a short of history of the founding of Associated Industries of New York State, the Buffalo Chamber of Commerce called for a meeting of manufacturers on the 27th and the 28th of March 1914 in response to the labor laws of 1913 and 1914. Twenty-seven men, representing various businesses, met for these two days and appointed a committee to draft a constitution for an association which would combat legislation unfavorable to business. They voted unanimously in favor of that constitution, which gave the name of the organization as Federated Industries and its purpose as "to promote the mutual welfare of its members . . . and assist in establishing equitable and beneficial laws and rules pertaining to industries in the state of New York." The members decided their association should register as a corporation, and afterwards the executive committee met and voted to change the name of the association to Federated Industries, Inc., which was the first of many name changes.

By the executive committee meeting held on April 23, 1914, the association's name appeared in the general form it retained: Associated Industries (sometimes abbreviated to AI or AINY). An unincorporated body, the association determined in this first formal meeting "to go about its work not in a high-handed, but in a high-minded way, seeking to obtain only that to which it is entitled, but expecting to have all that willingly conceded and granted."

In the executive committee meeting of December 11, 1914, E. J. Barcalo, the first president of the association, brought up "the question of a proposed amalgamation between the New York State Manufacturers' Association and Associated Industries," but the members of Associated Industries worried that "the reported policy and the reputation of the New York State Manufacturers' Association as unfriendly to labor would be a detriment rather than an asset to Associated Industries."

At first, most of its members came from western New York, but by December 1914 the association had already begun to try to attract manufacturers in Glens Falls and were contemplating meeting with people in the Albany area. By 1915, the association had 748 members and a "considerable portion of the increase in membership was due to the amalgamation of Associated Industries and the New York State Manufacturers' Association, which occurred in June." The amalgamated association was named Associated Manufacturers and Merchants (of New York State). This merger helped extend the association's membership across the state. A few years later, the organization started to expand its membership into New York City.

During the board meeting of November 13, 1919, the board of directors recommended "the incorporation of the Association, under the Membership Corporations Law," and on January 29, 1920, Associated Industries of New York State, Inc., filed a certificate of incorporation.

The head office for Associated Industries opened in Buffalo in 1914. A second office opened in New York city in 1943 and another in Albany near the beginning of 1952. In late 1954, the New York office closed, and by 1962 the Buffalo office had closed, leaving the office in the state capital as the only office for the association.

The major officers of the association, the president and the secretary, were paid employees who did not have to be directors of the association. They and their assistants ran the daily business of Associated Industries. The executive committee made recommendations to the board of directors about all affairs of Associated Industries and required the approval of the board before acting on anything, but the executive committee also had the power to make decisions on its own in the interim between meetings.

On August 11, 1976, Active Industry for Development of the Economy (AIDE) was incorporated as a political action committee, funded by Associated Industries, that would donate money to political candidates "who will seek to improve the business climate of New York State." AIDE and a new policy of accepting whole associations as members to AI marked the beginning of a serious push to join others to achieve their goals.

The board of directors accepted Raymond T. Schuler as president on June 9, 1977. He was to be their last president. During Schuler's tenure, he built up staff positions, membership increased, and a few large companies like Gulf + Western and the Grumman Corporation joined AI. Schuler also travelled across the state making scores of speeches to business, fraternal and cultural groups.

According to a memorandum from the Empire State Chamber of Commerce and dated April 21, 1980, Associated Industries and Empire State Chamber of Commerce consolidated in 1980 to form The Business Council of New York State, Inc., with the goals of the new association being "to improve and promote the economy and business climate of New York State and promote the welfare of its members, their employees, consumers and the general public."