Silicon Valley, the stretch of California between San Francisco and San Jose, has long stood as technology’s global capital. The area beats out other high-tech urban hubs in its huge influx of venture capital dollars, number of tech company headquarters and world-renowned academic center, Stanford University. While Silicon Valley is revered for unprecedented innovation, Northern California’s risk taking community also shares DNA with an East Coast counterpart—New York City.
New York’s “Silicon Alley” largely collapsed in the late 1990s, following the crash of the dot-com bubble. However, the last decade brought a period of exponential growth for New York City tech, as it quickly turned into the fastest-growing technology startup ecosystem in the country.
With more venture capitalists funding local companies, an increase in acquisitions and fierce support from the city’s government, New York now trails the Valley as the second largest technology hub in the world. In light of vastly different cultures and metropolitan layouts, New York City will never be Silicon Valley and vice versa. However, New York City’s current tech landscape paints a promising picture, one that might give Silicon Valley a run for its money.
Between 2003 and 2013, New York City’s tech sector grew twice as fast as Silicon Valley in terms of capital invested, with venture funding increasing by 240 percent over the course of 10 years. From 2009 to 2013, the amount of dollars invested in New York’s tech companies each year jumped from $799 million to $3.1 billion. Over the same period, tech jobs in New York also increased by 33 percent, which was four times the job growth in the city’s other industries. More than 85 percent of the city’s tech companies and tech jobs were created over the past decade.
There are multiple factors driving this type of momentum in New York’s tech sector. While Silicon Valley has been successful in industry niches such as cloud computing, New York’s explosion of startups are disrupting industries where the city is already a world leader. For example, fashion, media and finance startups are thriving in New York, where the city already has an established pool to draw top talent from. Established NYC-based tech companies across these sectors include Etsy, Gilt Groupe, Birchbox, Warby Parker, Bonobos, Vice, BuzzFeed, Vox Media, Thrillist, Venmo and Learnvest to name a few.
And while New York City doesn’t currently churn out engineering talent on Silicon Valley’s level (from institutions like Stanford University, University of California, Berkeley and The California Institute of Technology), Cornell University is expected to change that with the opening of its next-gen technology campus in 2017.
New York's success in spawning a wide variety of technology businesses also translates to its (relatively) diverse employment demographic. While the tech industry undoubtedly suffers from a lack of diverse members, New York's tech community is composed of 40 percent women and 21 percent underrepresented minorities. Comparatively, women make up about 30 percent of the workforce in Silicon Valley and minorities make up about 6 percent of employees. While New York tech's diversity numbers are better than Silicon Valley's, they don't defy the industry-wide lack of diversity in tech.
New York City’s tech hub also has a strong political backing, with Mayor Bill de Blasio working as a leading advocate for tech’s expansion in the city. In May, de Blasio launched Digital.NYC, a public-private partnership to support technological development not just in Manhattan, but across New York’s boroughs.
The de Blasio administration has already committed $70 million to extend accessible high-speed internet across the city by 2025 and has said that the CUNY system would receive $80 million over the next two years to expand its STEM programming. These initiatives follow de Blasio’s February announcement to implement Tech Talent Pipeline, a collaboration with LinkedIn to recruit and train New Yorkers to become top talent in the city’s burgeoning tech workforce. The mayor’s plans are motivated by his goals to expand professional development and make technology more accessible within New York City.
It seems that New York's dot-com era promise as a technology center at the forefront of innovation is finally coming to fruition. While startups have increasingly found their homes across every corner of New York over the past decade, this doesn't mean that New York City will ever become the next Silicon Valley. The city's tech scene is still maturing as a major player, developing its own unique ecosystem of companies that build technology into larger industries like finance, health, advertising, commerce and media. For those types of companies, New York is the place to be.