Tech-Information Now the Second Largest Engine of NYC Economy, Supporting 262,000 Jobs
By MikeBloomberg.com - SEP. 30, 2013
The tech/information sector is now the second-largest engine of the New York City economy, supporting 262,000 jobs in the city, according to a new report released today by the Bloomberg Technology Summit. Growth in the tech/information sector enabled New York to increase private sector employment by 4 percent between 2007 and 2012 at a time when national private sector payrolls fell by 3 percent. Because of the growth of the tech/information sector, New York City’s share of the nation’s private sector employment now stands at its highest level since 1992.
The report, “Building a Digital City: The Growth and Impact of New York’s Tech / Information Sector,” features both an in-depth, quantitative analysis of New York’s technology sector and a qualitative study of the attributes that have enabled New York and San Francisco to become the nation’s two leading “digital cities.”
“New York has long been recognized as the capital of finance, fashion, media, and the arts - and we now have the numbers to demonstrate what has become increasingly clear: New York is the country's hottest and most dynamic tech capital. We've worked to foster the tech industry's growth here, and that's one reason why New York City has been a national leader in job creation,” said Mayor Michael Bloomberg.
“The technology industry is one of the fastest growing economic sectors in our cities. There are important lessons that we can learn from the success of San Francisco and New York that can help other cities build their own tech sectors, and I am excited to join Mayor Bloomberg and leading tech innovators from both our cities at this year’s Tech Summit to share lessons learned,” said Mayor Edwin Lee of San Francisco.
The economic analysis performed by Dr. Michael Mandel of South Mountain Economics, LLC found that the New York City tech/information sector -- which includes traditional tech companies as well as media and information companies -- has grown by 11 percent since 2007, adding 26,000 jobs and $5.8 billion in wages to the local economy. Using a conservative estimate, these jobs alone were responsible for approximately one-third of private sector job creation in New York during this time. Moreover, the city itself significantly out-performed the rest of the New York metro – with a percentage increase that was four times that of the New York suburbs over the 2007 to 2012 time period. Brooklyn, too, saw impressive tech/information job growth as its rate of expansion outpaced every other large county in the country except San Francisco; this includes tech centers such as Austin, TX; Cambridge, MA; Seattle, WA, and North Carolina’s Research Triangle.
This growth was not an accident, according to a companion study prepared by Boston Consulting Group (BCG) which conducted interviews with more than 50 leading tech executives from the country’s premiere digital cities – New York and San Francisco. BCG found that both New York and San Francisco were able to foster the growth of their tech sectors through developing five key conditions: growing a strong talent pipeline, supporting a vibrant tech community, leveraging local early stage capital, expanding tech infrastructure and office space, and engaging with existing industries.
In New York, for example, the Made in NY campaign elevated the profile of the local tech sector, and the expansion of broadband service within the city has enabled companies like Songza – which streams music online – to grow their operations. At the same time, in San Francisco, Mayor Lee holds weekly press events at local tech companies, and the elimination of payroll taxes for companies in the Tenderloin district has provided office space for both young startups and established tech companies.
The second annual Bloomberg Technology Summit is being jointly hosted by Mayor Michael Bloomberg of New York and Mayor Edwin Lee of San Francisco, and is co-sponsored by Bloomberg Philanthropies and the San Francisco Citizens Initiative for Technology & Innovation (sf.citi). The first session of the summit will take place in New York on Monday, September 30, and the second session will be held in San Francisco in March, 2014. The goal of the summit is to explore the factors that enabled New York and San Francisco to become leading digital cities and to develop a roadmap that other cities can follow.
The New York City session of the Bloomberg Technology Summit will bring together more than 30 leaders in technology and business, including Fred Wilson from Union Square Ventures, Jennifer Hyman from Rent the Runway, Chad Dickerson from Etsy, Tim Armstrong from AOL, Terry Lundgren from Macy’s, Dave Gilboa from Warby Parker, Perry Chen from Kickstarter, Charles Phillips from Infor, and Michelle Peluso from Gilt.
“It has been remarkable to watch New York's tech sector grow and thrive in the last several years. I strongly believe New York City leads with incredible strengths that make it an exciting place to start and grow a business," said Chad Dickerson, CEO of Etsy.
The Bloomberg Technology Summit was established in 2012 to bring together a small, select group of senior business, tech, government, and community leaders for intensive off-the-record conversations and collaborations about the future of technology, and its role in our economy. The inaugural summit took place in New York City on October 1, 2012.
Founder of Bloomberg LP
IN MIKE'S WORDS
Whether you’re looking to build a small business or you’re a mayor looking to strengthen city services – a strong media and tech sector is good for everyone.
The media and tech sectors are engines of job creation, and attract new business and new investment to cities.