New Tech City: Has NYC Passed Boston in Mobile and Web Innovation?
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Bowles says that the flood of HBS grads to New York was just one of many signs that New York has shot past Boston in the rankings of tech hubs, even though Boston still leads in cleantech and biotech. “Twenty years ago people only came from Harvard to work on Wall Street,” he says. That’s no longer the case, he says, citing “a strong consensus in so many conversations we had that New York is passing Boston.”
The New York-vs.-Boston rivalry in tech has a long and spicy history. It was the topic of a rousing New York Tech Meetup last summer. And some entrepreneurship experts started warning years ago that Boston might lose its status as a tech hub.
No doubt, technology has been an important economic driver in New York City over the past five years. According to the NYC Economic Development Corporation, there are 90,273 high-tech jobs in the city—30 percent more than there were in 2007. The New York Tech Meetup recently created a list of tech companies that say they are hiring and found that 140 out of 298 listed with the Meetup are looking for new talent.
But some tech industry watchers wonder if the New York tech boom is already showing some signs of weakness. Michael Greeley, a general partner at Flybridge Capital Partners in Boston, recently observed on his blog that figures released in late April by the NVCA showed NYC taking a significant plunge in the first quarter of this year. The New York metro region saw $378 million invested in 75 deals in Q1. Compare that to Q1 of 2011 ($586 million in 82 deals) and more recently to Q4 of 2011 ($576 million, 84 deals) and New York isn’t looking so hot. In fact, companies in the New York metro area raised less than those in all of Texas during the first quarter, Greeley observed. “That is very surprising to me,” wrote Greeley, who is one of our Xconomists.
Bowles isn’t concerned. “It’s hard to look too much into one quarter,” he says. He notes that New York tends to see more early-stage deals than other markets, and that may account for the value of the overall deals dropping from one quarter to the next. “It may just be that certain quarters see fewer ZocDoc-type deals,” he says.
That said, Bowles is quick to acknowledge that New York has some work to do if it’s to keep up the momentum. “We’re not saying everything is perfect,” Bowles says. New York still suffers from a shortage of talent in key areas, such as software development. And Bowles fears some startups may struggle to find affordable office space. “Real estate will become an issue when the economy starts humming again,” he predicts.
The Center for the Urban Future got some notable attention for its report, which was sponsored by AT&T and the Association for a Better New York. The New York Times declared that the report clearly shows the city’s tech industry is growing faster than that of any other metro area. And the Wall Street Journal’s headline shouted “New York City’s Tech Boom no Fluke.”