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Study Examines Policy Implications of Growing New York City Tech Ecosystem

BY Miranda Neubauer | Tuesday, April 1 2014

The NYC Urban Future Lab in the Brooklyn Tech Triangle (NYCEDC)

New York City's technology ecosystem has a broad impact on the city's economy, a new study concludes, with significant policy implications for New York City government priorities.

HR&A Advisors conducted the study on behalf of the Association for a Better New York, Citi, Google and the NY Tech Meetup, focusing not just on the influence of jobs in the technology industry and start-up sector, but seeking to define a broader technology economy across sectors and job titles. In that spirit, the report also accounts for non-tech jobs in technology industries and tech occupations in non-tech tech industries.

According to the study, there are 291,000 jobs that that are "enabled by, produce, or facilitate technology," amounting to seven percent of the New York City workforce, compared with the eight percent that is the retail sector or the 16 percent that is the healthcare sector. Nearly 30 percent of those jobs are non-tech jobs in the tech industry, such as a sales representative at Etsy, while just over 50 percent are tech jobs in non-tech industries, such as a web developer at Citibank.

The study finds that the ecosystem generates around 250,000 additional jobs through multiplier effects, amounting altogether to 12.6 percent of city-wide employment, around $125 billion in spending and annual tax revenues of $5.6 billion or, 12.3 percent of New York City's total tax revenue. According to the study, the fastest-growing tech industries and the fastest-growing tech occupations in New York City are largely focused on the digital economy

Looking at education and wage, the study found that 44 percent of jobs in tech ecosystem do not require a bachelor's degree and that workers in the tech ecosystem with and without bachelor's degrees earn higher hourly wages than the average.

The study found that the tech ecosystem grew 18 percent over the past 10 years, faster than New York City's and the country's growth over the same period, and suggests that the New York City technology job ecosystem is larger than San Francisco's while under Silicon Valley's, with 347,000 total jobs. "Silicon Valley jobs are heavily concentrated in tech industries, whereas the opposite is true for New York City," the report notes. "New York City’s tech ecosystem is more diffuse and distributed throughout the entire economy – this results in tech appearing less prominent compared to Silicon Valley, where tech industries represent a larger share of the overall regional economy."

Across the New York City tech ecosystem, the study found that men still hold a majority of the jobs, compared to the even distribution among all city jobs. While the study notes that the geographic distribution of tech ecosystem jobs echoes the general distribution of all New York City jobs, with 77 percent in Manhattan around 10 percent in Brooklyn and Queens, it also points to developing tech company clusters outside of Midtown South including the Brooklyn Tech Triangle, the largest tech hub outside of Manhattan, Industry City and Greenpoint in Brooklyn, Long Island City in Queens and the Hub in the Bronx.

To further support the tech industry, the study recommends a focus on education and workforce development, real estate and infrastructure improvements as well as attraction and retention efforts.

The report recommends that the city provide financial support to build on and expand existing educational programs like the General Assembly, the Flatiron School, the Coalition for Queens' Access Code program, and Girls Who Code, as well as continue to support higher education programs like Cornell Tech, CUNY's two-year STEM program and NYU's Center for Urban Science and Progress. To support efforts to incorporate more computer literacy in the primary education curriculum, the report's authors recommend a more systemic approach beyond the models of the P-TECH program and the NYC Generation Tech, along with investments in teacher training and hardware for classrooms.

To support growing tech hubs such as Brooklyn Tech Triangle and Long Island City and promote the development of new ones, the report recommends specific investments. "A lack of reliable broadband access is the primary example of outdated infrastructure that impedes the progress and productivity of all New Yorkers," the report notes. But the study also points to the importance of broader infrastructure design approaches. "Pedestrian walkways, bike lanes, and robust transit networks will allow for easier access between firms and goods," the report notes. "Placemaking strategies like ground-floor retail and outdoor seating are needed to attract and retain tech firms and transform areas into tech destinations." To increase the availability of real estate spaces with short-team leases and changing space requirements that start-ups prefer, the report recommends the expansion of affordable, alternative rental spaces offered by companies like WeWork and the Varick Street Tech Incubator.

The report also recommends that the city better coordinate how it promotes its technology ecosystem, by for example emphasizing the benefits and advantages of the connections with advertising, media, finance, fashion and retail that don't exist in the same away in other tech centers across the country. To help retain tech and non-tech firms, the study recommends better organizing and more effectively disseminating the support from programs such as the Small Business Digital Toolkit, the Made in NY campaign, and complementing them with programs such as the NYC BigApps contest and economic development initiatives in Lower Manhattan.

But the final recommendations, drawing on a conclusion from recent Talking Transition survey, is one that goes beyond the tech ecosystem and speaks directly to one of Mayor Bill de Blasio's top priorities. "The recently published Talking Transition report reveals that the majority of New Yorkers, no matter which borough they live in, feel that access to affordable housing is getting worse," the report notes. "Addressing affordability is a crucial role in attracting and retaining workers needed by growing firms in the tech ecosystem. The City must construct affordable and market-rate, low- and middle-income housing in all boroughs so that residents have options they can afford."