NYC: America’s tech powerhouse
New York’s long-established status as a centre of global capital, education and diversity has turned it into a thriving hub for technology and innovation
For years, Index Ventures, a European venture-capital firm, has been investing in New York’s start-up scene, using its offices in London and San Francisco to follow and invest in well-known companies such as Etsy, Squarespace and Datadog.
But in May 2022, it opened a physical office – the first time it had done so anywhere in over a decade. “There has been a huge influx of tech-related talent here,” says Shardul Shah of Index Ventures. “We’ve uprooted our families to follow it – and that’s not tourism, that’s a commitment.”
Explosive growth over the last decade has propelled New York City to become the world’s second-largest technology hub, spurred by the diversity of tech-enabled industries that also call the city home. These legacy industries, including finance, healthcare and retail, are all hiring tech talent to help them keep up in an increasingly digitised world, making New York City’s tech economy more resilient to economic uncertainties.
Between 2010 and 2021, the city’s tech sector added 114,000 jobs, an increase of 142 per cent – seven times greater than the city’s overall jobs growth during the same period, according to a report from the Center for an Urban Future. Moreover, the number of tech-enabled start-ups in New York rose to over 25,000 in 2021, 145 per cent more than a decade before with over 90 home-grown tech companies that have reached unicorn status – valued at over $1bn.
Talented people want to be here, and that is why companies are coming here, too.
“That growth really speaks to the ecosystem we have built over time,” says Andrew Kimball, President and CEO of New York City Economic Development Corporation (NYCEDC). “Talented people want to be here, and that is why companies are coming here, too.”
New York City tech giants also see the advantages of creating a large New York footprint. Amazon and Google will soon open new offices, and in 2021 Google opened offices at Pier 57 with a publicly accessible rooftop park. As of 2022, Google employed 12,000 people in the city compared with just 2,000 ten years before.
Attracting and retaining talent
Julie Samuels, founder and Executive Director of Tech:NYC, a non-profit member organisation that brings together companies representing all facets of the city’s tech sector, argues that one result of local tech growth in recent years is that the ecosystem has become both a magnet for and producer of tech talent.
Anyone who wants to work in tech can come to New York and build an incredibly robust career.
“Not long ago, software engineers would want to come to the city for a job but would also be unsure if a second or third job would be available,” she says. “That has fundamentally shifted: anyone who wants to work in tech can come to New York and build an incredibly robust career.”
The result, she argues, is something akin to a market correction in the tech jobs market. “For so many years, tech workers felt the pull of the Valley because they believed they didn’t have other options. That has changed, and New York has been one of the biggest beneficiaries.”
New York’s diversity edge
New York already has one of the most diverse landscapes for tech employees, with 21 per cent either Black or Latinx. And through programmes such as NYCEDC’s Founder Fellowship, the city is providing access to mentorship, fundraising and business development for founders from underrepresented backgrounds – a strategy that seeks to address a long-term deficit of diversity and inclusion in the tech sector.
“It’s not enough just to bring the city back after the pandemic,” says Kimball. “We’re working with the VC community to make sure that they’re committed and that they have the tools they need to diversify both their portfolios and their workforce.”
The City is also working to create more physical spaces. In a city where real-estate prices can be a significant barrier to entry, New York now has more than 200 co-working spaces as well as more than 100 incubators, accelerators and even technology manufacturing sites covering everything from robots and drones to driverless cars.
Spanning key time zones
The city has world-leading academic institutions, with the likes of Columbia, Cornell Tech, Barnard College, NYU and the City University of New York (CUNY), among others, playing an important role in helping to grow the ecosystem and build the tech talent of the future.
In New York, you’re in a time zone that captures 70 per cent of the 30 most vibrant start-up ecosystems in the world.
Shah of Index Ventures says that one of New York’s advantages over other tech ecosystems is its strategic location between California and Europe. “In New York, you’re in a time zone that captures 70 per cent of the 30 most vibrant start-up ecosystems in the world,” he says.
That has also made New York the best place to be for start-ups from Europe and beyond eyeing the US market. In 2022, Wiz – an Israeli start-up that has grown from just $1mn in recurring revenue to $100mn in just over 18 months – chose New York over California’s Silicon Valley so that it could communicate easily with its office back home.
For venture capitalists such as Shah, the cocktail of talent, diversity and location has made New York irresistible. “There’s talent, there’s a hunger to be great, there is significant business growth,” he says. “And there are an increasing number of investors that are calling New York home.”