Once viewed as Silicon Valley‘s little brother, New York City‘s technology industry has captured the nation‘s attention by growing faster than any other North American hub. Now second only to the Bay Area in venture capital funding volume, number of tech employees and concentration of future tech giants, New York appears well on its way to unseating Silicon Valley as the country‘s preeminent innovation center.
What is fueling this rapid ascent and does the momentum show any sign of slowing? Industry analysts and experts paint an overwhelmingly positive picture of New York‘s future thanks to four key trends driving tech‘s explosive growth.
I. The Tech Titan Invasion – Giants Flood NYC with Jobs and Investment
Like pioneers laying down infrastructure for a gold rush, New York City in the early 2000‘s made sizable investments in fiber optic connectivity while proactively courting tech titans. Their efforts paid off in a major way over the last decade as Google, Apple, Facebook and Amazon flooded Manhattan with tens of thousands of high-paying jobs.
Google alone now employs over 9,000 people in New York after opening their Hudson Square campus in 2018 – the company‘s largest office complex in the world. Apple occupies over 650,000 square feet of office space as New York City‘s single largest corporate employer, providing jobs to over 15,000 workers.
In perhaps the biggest endorsement of New York‘s emergence, Amazon in 2019 selected the city to construct half of its much-sought-after HQ2 headquarters. Scheduled to open in 2023, the campus will add 25,000 Amazon employees earning an average salary exceeding $100,000.
Facebook meanwhile doubled its New York presence by signing a massive 1.5 million square foot lease at Hudson Yards in 2021. And according to Thinknum data, job listings from these four tech titans increased 37% year-over-year as of January 2023.
Rapid expansion by the industry‘s most influential companies cements New York as a central tech hub while fueling an influx of ancillary startups, vendors and support services. As Gené Teare, head of analytics at Crunchbase observes, "Seeing Google double down on offices and workforce in New York has been positive reinforcement for other startups to move there."
II. Venture Dollars Flood NYC Startups at Unprecedented Levels
Mirroring the tech titan surge, NYC-based startups over the last 5 years secured more venture funding than any previous period. After startups attracted just $5.13 billion total combined between 2010 to 2015, investment exploded to $60.43 billion over the next 5 years. And the funding spigot shows no signs of slowing with NYC startups nabbing $30.72 billion in VC money across 2022 alone.
Driving this deluge of investment is an almost insatiable appetite among VCs and Wall Street to find the next standout unicorn anchored in New York. "Every venture firm is hungry for the next lifesaving biotech breakthrough or fintech innovator that could mint New York‘s next 100 billion dollar startup," explains Maya Jensen, Partner at Softbank Investment Advisors.
Jensen and other investors like Lux Capital, IVP and Venrock now maintain major NYC presences to capitalize on blockbuster funding rounds. New companies landing nine figure capital infusions over the last year include robotic supply chain orchestrator Locus Robotics ($117M), hybrid events platform Hopin ($175M) and commercial real estate fintech Bowery Valuation ($170M).
With this accelerant of easy access to growth capital, NYC now stands behind only Silicon Valley in terms of total startup venture funding – sustaining an ecosystem where great ideas translate quickly into profitable and impactful tech enterprises like Dataminr, Yotpo and Better Mortgage.
III. A Deep Bench of Elite Tech Talent Keeps Growing
Manhattan decades ago cemented itself as the epicenter of finance, advertising, media and fashion – industries attracting some of the country‘s most creative, analytical and determined minds. Over the last 10 years, New York witnessed tens of thousands of those knowledge workers shift into high-paying tech careers. Lured by lucrative pay at companies like Google, exciting startup opportunities and thriving tech sub-cultures, this "talent multiplier effect" fueled unprecedented tech employment growth.
In numerical terms, New York tech from 2010 to 2020 averaged 6.34% annual job growth – well above the overall US tech work employment expansion rate of 4.77%. And according to Cyberstates 2022 data from CompTIA, roughly 9.3% of all New York workers now have tech positions – a ratio on par with acknowledged tech hubs like Washington and Texas.
Powering this job growth is an increasing supply of qualified graduates from New York‘s universities tailored to meet tech industry demands. NYC‘s major technology colleges and credential programs now mint over 17,500 tech-skilled graduates per year – up 42% over the last decade. Top schools including Columbia University, Cornell Tech and NYU Tandon School of Engineering adapted curriculums spanning AI, cybersecurity, fintech and other high-demand focus areas. This expansion of the talent pipeline fortifies employer confidence about sustaining tech workforce growth.
"Stanford and MIT may still have the worldwide cachet," acknowledges Professor Neil Gandal, Chair of NYU‘s Information, Operations and Management Sciences Department. "But NYC reaches talent others can‘t access. Our city allows New York‘s tech ecosystem to keep growing and meet the diversity and specialization needs that stagnant tech hubs can‘t."
IV. Financial & Government Support Catapults Growth
While San Francisco tech expanded predominantly from grassroots industry momentum, New York City tech benefited greatly from proactive policy and investment support by multiple key institutions.
On the private financing side, non-profit investment vehicles backed by Wall Street heavyweights stepped in providing pivotal early funding for startups before VC attention arrived. The most influential example – Partnership Fund for New York City – launched in the wake of the 911 attacks to support local economic development. Backed by the CEOs of every major bank along with other corporate titans, the fund provides seed capital for early stage companies developing innovations with practical impact potential. Thus far they invested over $150 million into 63 NYC startups across high-growth verticals like cybersecurity, edtech and healthcare.
Equally vital, forward-thinking public initiatives eliminated key infrastructure and regulatory obstacles startups commonly encounter trying to scale locally. Dan Doctoroff – a successful tech founder himself before becoming NYC Economic Development Corporation President – speerheaded high-impact improvements like the $500 million New York Works broadband investment in 2008.
"What most people don‘t understand is that New York ten years ago had third-rate internet capabilities and connectivity hampering growth," explains Doctoroff. "By working with tech industry partners to comprehensively address weaknesses in physical infrastructure, human capital development and regulatory reform, NYC evolved into a place ripe for exponential progress when coinciding with rising venture investment and maturing management talent."
The Outlook – Best Days Still Ahead
Given the confluence of sine-wave synergistic growth curves across funding, titans descending, workforce expansion and infrastructure upgrades, analysts and experts overwhelmingly agree New York City technology still remains early in its exponential growth journey. Though already generating a powerful gravity well attracting the world‘s top technical minds and money, most foresee the coming decade resulting in NYC unquestionably rivaling Silicon Valley as America‘s opportunity nexus.
"The numbers simply do not lie – by any metric whether jobs, graduates or investment, New York tech is growing multiple times faster over the last 5 years than Silicon Valley from any comparable period during its expansion curve," projects Adam Sterling, Director of Emerging Tech NYC and prominent industry analyst. "I fully expect that 10 years from now, New York will definitively stand as the equal of San Francisco as America‘s undisputed technology capital."
A lofty prediction indeed, but certainly supported by the data. One thing does seems certain though – with accelerant funding levels, renowned titans planting their flags and a phenomenal labor pipeline, New York City tech appears destined for a breakout decade further cementing its status as the predominant Eastern tech hub. For startups across verticals like enterprise software, biotech, sustainability tech and consumer mobile, no ecosystem outside Silicon Valley itself seems better positioned to transform brilliant ideas into legendary enterprises.
