Why the New York City Tech Industry is on Fire
By: Ben Weiss
There’s no denying that right now, tech is king. As our world becomes increasingly digitally based, professionals in every sector are using technology to enhance their reach and impact. As such, the more tech savvy professionals in any industry are, the easier it will be for target audiences to discover and interact with their core product or service. In other words, today tech skills are invaluable in preparing an idea for actionable deployment.
And while Silicon Valley is still the primary technology hub in the United States, as the country has adopted a tech-centric outlook, new portals for technological innovation are coming up and carrying the torch into new communities. Interestingly, while New York is known as the international leader in fashion, finance and media, the city that never sleeps has recently become the clear number two of top performing tech areas in America as well.
For those unfamiliar with the trajectory of the tech boom, this has not always been the case. In fact, according to New Tech City, a May 2012 report undertaken by The Center for an Urban Future – an organization dedicated to serving the long-term needs of New York City - New York sat at a distant third behind Silicon Valley and Boston regarding tech growth and culture until recently.
“In 2006, I wouldn’t have put New York anywhere on the map [of leading tech hubs],” technology entrepreneur and academic Vivek Wadhwa told the New Tech City researchers. “Now it is literally number two. If there is any second to Silicon Valley, it’s now New York, not Boston.”
But, why? One key differentiator that sets New York apart is enormous growth. For example, when New Tech City was released, the authors had determined from The MoneyTree Report, generated by PricewaterhouseCoopers and the National Venture Capital Association, that venture capital (VC) deal growth increased 32 percent between 2007 and 2011 in New York City, with at least 486 digital tech startups developing in the region with support from angel, seed and venture capital funding. For contrast, Silicon Valley, New England, Texas, San Diego and the United States overall all saw decreases of 10 percent or more in VC deals.
Moreover, many startups originating in New York such as Kickstarter, GuiltGroup and Tumblr have become extremely popular, leading the major players in the tech game like Google, Facebook, Twitter and LinkedIn to recognize what a hot bed the New York tech scene has become and set up branch offices in the region as well.
Furthermore, New Tech City cites experts like venture capitalist Jalak Jobanputra who mentions that the economic recession has led high numbers of top college grads to opt for a career in technology instead of heading to Wall Street, which combined with the investments being made by VC firms in the area, are creating a thriving IT ecosystem that even 10 years ago did not exist.
"I've increasingly seen entrepreneurs from the valley who want to be based in New York," said Jobanputra. "It's the first time they’ve seen New York as a viable option because now there's a community."
What’s more though is that this kind of growth appears to be sustainable rather than a fleeting trend. Examine the nature of the industry today. In prior years, legions of skilled engineers were busy building an infrastructure that required a lot of hardware and a lot of space, which New York City lacks. By contrast, with that foundation in place, today’s technology entrepreneurs need fewer people and less space (think cloud) and are instead adapting technology to all the industries that NYC already dominates like advertising, finance, legal, fashion and healthcare. In other words, New York can now thrive in technology since the platform exists and can be tailored to virtually any industry with the creativity for which the city is best known.
“New York is well suited to where tech is going,” says Jobanputra. “Maybe Silicon Valley will continue to build the next chip sets, hardware, and certain types of apps, but the expertise we have in New York is well-suited to the next generation of tech companies.”
It all sounds so good. So where’s the fine print? Well, of course in such a rapidly expanding market, technology companies of all sizes will need top talent to sustain growth and innovation.
According to a Huffington Post article on the issue, author Gerry Smith states that “while New York's tech sector is booming, its continued growth is being threatened by a shortage of engineers. The city's small and large tech companies are looking to expand, creating high demand for a pipeline of new talent that has become harder to find.”
So how can New York City sustain the glorious foundation that’s been established? Cornell University has received $15 million to develop a high-tech graduate school in Roosevelt Island in order to fill local tech companies with fresh talent, but the school won’t be pumping out graduates for years to come.
As such, staffing and recruitment firms should be considered an excellent option for securing the best talent fast, and the numbers suggest that many hiring agencies are deploying this strategy.
According to a recent study published by Staffing Industry Analysts, seven of the 10 companies compiled on the list of fastest growing staffing firms in America were focused in the IT industry. A press release promoting the list suggests that market growth in IT staffing is hot as well, as the industry is expected to see 14 percent growth in 2012 – four percent more than the general staffing industry.
These stats indicate that many tech companies have turned to staffing professionals to find new recruits with efficiency. However, at times, firms focusing in umbrella IT staffing can be too general and fail to match a client with a candidate possessing the ideal skillset for a position.
As such, any company in any industry seeking the best technical talent in New York City would be best advised to partner with a local specialized staffing firm. With a deep understanding of the core competencies required in specific roles, these professionals take much of the stress and guesswork out of the hiring process.
Taking this simple measure will help hiring agencies secure sustained growth and prosperity in a rapidly evolving and hyper competitive market landscape, ultimately ensuring that New York City remains a prosperous technology hub long into the future.
Infusive Solutions Inc. is a niche technical recruiting firm within the Microsoft Partner Network dedicated to serving the workforce needs of our clients as well as taking our candidate’s careers to the next level. Join is on Twitter and Facebook.
Image by Midwinter