By: Steven Abernathy
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The last decade brought unprecedented change across the tech industry globally. New York, a key city for several industries including finance, fashion, and art participated in—but by no means dominated—the tech world. However, for investors with the foresight to get involved now, staying connected to the burgeoning tech market across New York City will be an asset.
The combination of tech talent, capital both onshore and offshore as well as being in the world’s financial capital, is creating a rival to Silicon Valley—and the world does not seem privy to this—yet. New York’s “best of the best” hyper-competitive attitude and environment creates unmatched stimulation found, as Cindy Adams writes, “only in New York.” The tech explosion, a well-known New York insider fact for over 10 years, is now making it onto the radar of nearly every tech and healthcare banker in the U.S.
Highly trained technologists are abundant—and their numbers are expected to grow. New York is home to Google, Microsoft and huge software companies poised for growth. According to the Atlantic, 43% of Stanford graduates stay in the San Jose metro area. Over 74% stay in the tri state New York metropolitan area. This has major implications for the future of the tech sector as well as those industries which will be influenced by developments and innovations within it (possible examples could be a new finance app or POS platform disrupting current technology). While the exact number of graduates in technology and engineering across New York City isn’t known, it’s about to receive thousands of new computer science and engineering graduates.
Cornell University is building out what will become one of the most celebrated and significant engineering schools in the world. Cornell Tech features graduate programs across disciplines related to technology. The school is slated to move to its new campus on Roosevelt Island in the fall of 2017. In addition to contributing to New York’s highly trained technical workforce, the school’s very design is based on encouraging interdisciplinary synergy. When he spoke to Wired, architect Michael Manfredi said, “The idea is to get people into a kind of close proximity, so you can get these catalytic connections between different disciplines. It’s about making connections between someone who might be working at Microsoft and some doctoral student who is working on ways of assembling information, and that rarely happens on an academic campus.” An academic incubator designed for such interdisciplinary connection at this level is unprecedented.
Erik K. Grimmelmann, President of the New York Tech Alliance, says the future will be largely influenced by the development and support of New York’s tech ecosystem. “Technological innovation doesn’t happen just by some people working together in a company; it takes a robust ecosystem. Things are going well for technology in New York now because the ecosystem is maturing and has the necessary components—including highly trained people, including attorneys and accountants who know the space—a sophisticated angel network and incubators. It all matters.”
Cornell Tech’s inception would not have happened without the support and influence of former New York Mayor Michael Bloomberg. After taking office in 2002, the billionaire set his sights on growth across a variety of industries, including technology. Bloomberg’s economic policies helped New York City experience record-levels of private-sector job growth and support for entrepreneurship. Tech is poised to be the main route for the next generation of middle class jobs—Bloomberg saw this clearly. In 2015 he made a $100 million dollar donation to Cornell Tech. It’s expected that the cross sector, entrepreneurial collaborations Bloomberg encouraged and practiced in public life and private industry will continue.
“What makes New York and the collaboration between Bloomberg and Cornell tech unique is that it’s explicitly about the exchange between academics and industry with a focus on startups,” says Grimmelmann. “Historically New York City hasn’t had a university that turned out startups the way that MIT, Carnegie Mellon and Stanford have. The former Mayor saw this.”
Cornell University won the competition to establish a technology campus in New York City that’s focusing on entrepreneurship. Other universities in the area, including NYU and Columbia University, are moving toward similar models and doing a lot with entrepreneurship to foster similar collaborations. Historically a university’s focus is on research resulting in academic forums. The hands-on collaborations happening now between students and established companies change the game considerably.
The tech sector is the fastest growing portion of the New York economy. “What’s held companies back the most is not being able to hire the talent they’d like. Not having enough tech talent to go around is a global issue. People lack the specific training to fill the positions,” states Grimmelmann. “Now, Engineers will have been trained and have connections within the venture and industrial communities. There are people in New York from venture funds and large companies—so this isn’t a pure academic experience. And the school will create a highly immersive experience. The financial community has an industry evolving and growing up right between their toes.”
When there is the mix of a highly competitive learning environment paired with collaboration across sectors and disciplines in what is arguably the most dynamic city in the world, innovation and growth are a given. New York has a strong spirit of reinvention—everything is right here. Unlike Silicon Valley, New York isn’t a “company town” and people work across a variety of industries rather than just a few. As the tech ecosystem grows, investors who take notice are likely poised to grow their investments right along with it.
Steven Abernathy counsels affluent families on multi-generational wealth management strategies and corporate retirement plans. He contributes articles and commentary to a variety of publications. For more information, contact him at sabernathy@abbygroup.com or 212-293-3469.
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