Ambitiously entitled “New Tech City,” the report was conducted by New York City advocacy group, Center for an Urban Future, and sponsored in part by AT&T. It involved a review of data on jobs, funding applications and business moves related to the five boroughs that make up New York City.
From 2007 to 2011, New York City witnessed a 32-percent increase in venture capital deals for the tech industry. Under that same time frame, the report indicated decreases in VC deals in more established tech regions like Silicon Valley, San Diego, Boston, and an 11-percent drop overall in the U.S. Of those startups that have received angel or venture capital funding, digital media has led the way with 121 new companies since 2007. The last five years has also shown growth in tech startups for e-commerce (103), social networking (79) and advertising tech (63). Startups that have brought in big venture capital dollars include fashion sales provider Gilt Groupe ($221 million, and the largest employer in the study), social sharing site Tumblr ($125 million) and real-time ad provider AppNexus ($65.5 million), though the vast majority of startups have taken in $5 million or less, according to the report. Since 2008, the first 12 tech startup accelerator programs have been established in New York City, with particular support for new providers in fields such as entertainment, health care and human capital management. The report also noted that there may well be more than 1,000 operating in the city outside of these funding routes.
This boom has brought with it a vast increase in jobs. A review in 2010 noted more than 90,000 people working at 7,147 high tech companies in New York City, with a 60-percent increase in IT jobs in the city from 2003 to February 2012, according to New York State Department of Labor statistics cited in the report.
But more than that, report authors Jonathan Bowles and David Giles said that the tech rise is pumping “new life” into the city’s economic engine. Along with the startups, there has been renewed interest in New York City as a center for operations by large established providers like Dell and Google, a move toward the cloud by city government, and IT community support in the form of new open source and hacker conferences.
And the range of startups show more promise for New York City because it’s not based on hardware and tech school incubators like those that cropped up during the Dot-Com bubble more than a decade ago.
“Today’s growth is being fueled by the Internet and smart phones, and the creation of new ways of taking advantage of these now widely used platforms to deliver content, sell products, deliver services, play games and simplify life for individuals and businesses,” Bowles and Giles wrote, adding, “The technology revolution is much less about creating the infrastructure and plumbing for the Internet, but about applying technology to traditional industries like advertising, media, finance, fashion and health.”
To download a PDF of the report, click here.