By Andrés Uribe, Expedition PR
Since the mid to late 90’s NYC’s Flatiron, Tribeca, and SoHo areas have been known to some as Silicon Alley. Now that it is 2013, this term has come to define NYC as a whole. The tech scene in NYC is booming, to say the least.
At last week’s Internet Week New York 2013 I was able to attend a panel dedicated to the impact of New York City growing tech sector on the local economy. The panel was led by William Floyd of Google and featured three distinguished speakers – Jessica Lawrence, Managing Director of the NY Tech Meetup; Tucker Reed, President of Downtown Brooklyn Partnership; and Jonathan Bowles, Executive Director of the Center for an Urban Future. The panel shone a light on what this boom in tech means not only to the tech community, but also to other industry sectors in New York, including real estate. They also compared New York’s tech scene to the rest of the country. Here is what they had to say on each of these topics.
The New York Tech community
The community of people supporting and working in the tech industry in NYC has seen a snowball like growth over the past few years. Jessica Lawrence was able to illustrate this best by noting that it took NY Tech Meetup 7 years to reach 15,000 members, but over the past two years alone they brought in 16,000 new members for a total of 31,000 members. Lawrence offered, and the panel agreed, that this community alone is a big incentive for others to consider NYC as a place where they can start their tech business, or look for work in the tech industry. Although many of the jobs can be done from anywhere with an internet connection, by working in NYC, tech industry employees are able to work in a place where the city and the friends they make cater to their lifestyle. Not every city offers a deli to grab a bite to eat at 2am, or a friend willing to join you at that hour..NYC offers both.
The Tech Workplace
NYC was once the home to waterfront factories and shipyards that were part of the manufacturing industry. The Robert Gair building, for example, is located in DUMBO and was the birthplace of the cardboard box in the early 1900s. Having been abandoned for years now, these factories are beginning to make a comeback in the form of converted workspaces. Today the Robert Gair building is home to internet startup Etsy, a poster child for the New York tech scene.
Reed noted that ‘startups aren’t looking for prime midtown Manhattan workplaces. They want workplaces that are cost effective and can provide them with a surrounding area that can cater to their needs.’ As mentioned before, DUMBO is a prime example of this movement. What was once classified by Huge CEO Aaron Shapiro as a “sketchy area” where they had to “escort female employees to the subway” is now home to 500 tech firms in a 10 radius block, the highest concentration of tech firms in all of NYC. This trend will continue to unfold throughout other parts of Brooklyn as tech firms seek spaces that will give them the best bang for their buck.
NYC Tech vs. The Rest
Now you might be asking if the rest of the country’s tech hubs have been experiencing this boom? The short answer is no. According to Bowles, ‘over the past 5 years NYC has seen a 24% increase in VC deals. Over this same time span, Boston has seen a 21% decline in VC deals, and Silicon Valley a 31% decline. This has lead to NYC recently taking over Boston as the #2 tech cluster in the United States, behind Silicon Valley who still holds the #1 spot.’
According to Bowles, it’s different now. 10-20 years ago the tech boom was about infrastructure. The groundwork for the internet was being laid. Tech companies were manufacturing this infrastructure, and NYC, pressed for space, was not the ideal place for manufacturing. Now though, we are seeing a different type of tech boom, one based off of web 2.0. This tech boom is based off of services that can be offered over the internet, and NYC has always had a strong service based economy. It’s for this reason that NYC has now become a big player in tech.