New Tech City — NYC on the Charge
Long before Gordon Gekko meddled his way to the top in Wall Street, pun intended, the streets of Lower Manhattan were metonymic with the American financial services industry. New York City was where the young guns fantasized about corporate raiding, leveraged buyouts and becoming trader folklore, following in the footsteps of rags to riches exemplars like Soros and Icahn.
Fast forward a few decades and the majority of office buildings in the Big Apple may not show significant signs of exterior advancements, but you can be sure there has been a spatial and tech-focused revolution within those four walls. Just ask WeWork, the co-working giant started in 2010 which as of last year became the city’s largest commercial tenant with more than 5.2 million square feet leased throughout Manhattan, Brooklyn, The Bronx and Queens; Softbank’s additional $2 billion investment in early 2019 only fuelling their rapid global expansion.
Unbeknownst to many, while financial titans such as Blackstone and KKR were being formed in the 70s and 80s in NYC, across state lines, a new synecdoche for the American technology sector was forming; the ‘Silicon Valley’. A valley, so to speak, that is now home to an endless number of tech start-ups, research parks, technology centres, and the global headquarters of Apple, Facebook and Google; arguably the three companies whose products we interact with most on a daily basis.
15 years ago, the words ‘NYC’ and ‘tech’ would rarely have been heard under the same breath.
15 years ago, the words ‘NYC’ and ‘tech’ would rarely have been heard under the same breath. Michael Bloomberg, incumbent Mayor at the time, campaigned for and vehemently pushed mandates and programs that would make New York less reliant on its financial industry and more so on tech, ramping up those efforts post the financial crisis. Today, NYC is home to over 7,500 start-ups valued at over $70 billion and second only to Silicon Valley as the nation’s, and for that matter the world’s, tech epicentre. According to government statistics, from 2010 to 2017, NYC’s tech sector grew by over 50,000, roughly 65 percent, to an estimated 135,000 and in 2017, Knight Frank reported that the TAMI (Technology, Advertising, Media and Information) sector comprised of over 30% of the total square footage leased in the Manhattan office market; double than in 2009.
The culmination of these efforts were rewarded in 2018 when Google, amongst others, announced landmark expansion plans, arousing the city’s excitement level in the tech and real estate world. Google plans to create a $1 billion campus spanning 1.7 million square feet in Hudson Square and earlier in the year bought Chelsea Market for $2.4 billion; allowing it to double its workforce in the city to more than 14,000 over the next decade. Hot on the heels of Google are other tech behemoths like Amazon, Spotify and Uber who are all increasing their workforce and continue to lease up more and more space in the city. Big Tech is proving to be the stalwart of the tech ecosystem in NYC, attracting top talent from around the world and serving as a prospective pool for other tech companies to pluck candidates from.
Bloomberg’s long standing ambition to, “make New York City the first choice for tech companies”, is primarily hinged on the city being a worldwide hub for multiple industries, not just tech as the case is for Silicon Valley. Advertising, media and finance all call the Big Apple their respective industry mecca. A leading executive from a non-profit tech network was quoted as saying, “the next generation of technology tools that are going to be built [will be] in partnership with existing industries and that’s going to require being where those industries are, obviously New York”. NYC is not only diverse in its industry base but also in its human capital; leveraging its idiosyncratic cultural, financial, and contextual supremacy to aid in fulfilling Bloomberg’s grandiose ambition for his beloved city.
In the Valley, tech is the only conversation.
Sure, Silicon Valley will remain as the centre of the tech world for the foreseeable future however it doesn’t draw from the fact that in the Valley, tech is the only conversation. Sounding too optimistic for you? Just take a look at the 2019 Savills Tech Cities Index, which ranks NYC as the premier hub for technology, overtaking San Francisco, on the back of its significant volume of venture capital cash and the ever-growing pool of talent that continue to flock to the Big Apple.
As prominent venture investor Fred Wilson candidly told CNN in an interview, “I don’t see it overtaking [Silicon Valley], but NYC mattering more and more is what I see happening”.
Advantage, Gotham City.
Author Bio: Rohan Amin is an Analyst at Leaseum Partners
