Despite serious concerns about monopoly power, surveillance, and control, government officials and economic development practitioners all over the world promote the tech industry as the key to economic innovation and job growth. An “innovation complex” is emerging in many cities, with offices for big tech companies and small startup firms, makerspaces for developing computer hardware, and a complementary array of tech incubators, accelerators, and coworking spaces with food halls, bicycle racks, and coffee bars. The race to fill them reflects ongoing interurban competition to attract firms developing new digital technology that is expected to create the highly paid “jobs of the future” as well as booming markets for companies in fields with new names like “healthtech” (health care), “fintech” (financial services), and “proptech” (real estate and construction). Industries ranging from media and video production to “software as a service” have created an especially dynamic innovation economy in New York, mainly on the foundation of historically embedded “legacy” industries (Eisenberger et al. 2019). Job creation and startup culture have softened memories of the Great Recession of 2008 and earlier “dot-com” failures (Indergaard 2004; Zukin forthcoming).
By some accounts, New York’s tech economy is now second only to Silicon Valley’s in its ability to channel investments into companies that develop, make, and sell digital products and services (Startup Genome 2019). Between 150,000 and 350,000 people work in tech-related jobs, mostly in non-tech businesses and organizations (Office of the New York State Comptroller 2017; Office of the New York City Comptroller 2019). In a remarkable evolution, Brooklyn’s tech economy has grown almost as fast as San Francisco’s (Bowles et al. 2019).
Unlike in San Francisco and Silicon Valley, most of this development is invisible. Although the use of digital devices like cell phones is omnipresent in public spaces, the production of new technology takes place in unmarked office buildings and behind old factory walls. There aren’t obvious signs of tech privilege like the Google buses that angered San Franciscans. Tech companies’ lobbying is more subtle than Amazon’s threats if the Seattle city council didn’t cancel a tax on big businesses they had adopted to help pay for affordable housing and Twitter’s prominent opposition to a similar “homeless tax” in San Francisco. New York neighborhoods suffered from rampant gentrification long before the tech industry bloomed, and even tech titans here have not contributed more to the housing crisis than private equity managers, media moguls, and foreign investors have.
But tech development comes with a dark side. In 2018, Amazon’s offer to create “half” of a second national headquarters (HQ2) in New York—after a year-long competition between 238 North American cities and towns that submitted bids to the company—provoked conflict over who would benefit and unleashed pent-up anger against Big Tech. Elected officials and community-based organizations protested huge city and state government subsidies to a very rich corporation at a time of great need for public investment in affordable housing, transportation, and infrastructure. They were also outraged by the lack of either consultation or negotiation with all the concerned public officials, community groups, and labor unions. Their protests made the situation so uncomfortable for Amazon—and so politically risky for the governor and mayor—that the company withdrew its plan on Valentine’s Day in 2019.
Yet New York’s tech ecosystem has continued to grow. Amazon and Facebook have leased vast amounts of office space on the far west side of midtown Manhattan. Google is expanding its already big footprint in Chelsea—and potentially doubling its 7,000‑member workforce—by leasing more office space near SoHo. New York University is bringing more tech programs to its engineering school and Big Data center in downtown Brooklyn, participating in that area’s real-estate revival.
On the waterfront, the Brooklyn Navy Yard not only has new tech and creative offices, lab space for hardware and software startups, and STEAM [1] programs for high-school students, it is planning to build modern “vertical factories.” Both venture capital (VC) deals and the space that tech firms occupy in New York are getting bigger all the time; although the We Company’s recent IPO (initial public offering of stock) failed to launch, WeWork is still the biggest commercial tenant in the city. Meanwhile, the NYC Economic Development Corporation is sponsoring new workspaces for the cybersecurity industry and classrooms for nonprofit tech training for low-income city residents.
The articles in this dossier explore the dark side of New York’s tech growth. My article looks at competition for land and shows stark zoning conflicts between a “new” economy based on software and web services and an “old” economy based on more traditional industry. Joanna Dressel dives into the geography of New York-based venture capitalists’ investments and suggests that, as VC firms become bigger and more successful, they show less commitment to their home city. Finally, Max Papadantonakis’s interviews with software engineers in New York expose their deep sense of precarity despite high wages and strong job growth.
These articles do not provide a comprehensive view of urban tech development. But by showing some of the critical issues that have emerged in New York, they open the door to research and debate in other cities and societies.
- “New York Tech Dossier: ‘Innovation Districts’ in New York: Contentious Geographies of Growth”, Sharon Zukin
- “New York Tech Dossier: The Declining Significance of Proximity in Venture Capital Investments”, Joanna Dressel
- “New York Tech Dossier: Insecure Frontier Jobs? Staying Relevant in New York’s Tech Ecosystem”, Max Papadantonakis
Bibliography
- Bowles, J., E. Dvorkin, N. Sharp, and C. Shaviro. 2019. Brooklyn’s Growing Innovation Economy, June, New York: Center for an Urban Future.
- Eisenburger, M., Doussard, M., Schrock, G. and Wolf-Powers, L. 2019. “Industrial Inheritances: Makers, Relatedness and Materiality in New York and Chicago”, Regional Studies, vol. 53, no. 11, pp. 1625–1635. DOI: https://doi.org/10.1080/00343404.2019.1588460.
- Indergaard, M. 2004. Silicon Alley: The Rise and Fall of a New Media District, New York: Routledge.
- Office of the New York City Comptroller. 2019. Venture Capital in New York City’s Economy.
- Office of the New York State Comptroller. 2017. The Technology Sector in New York City, Report 4‑2018, September.
- Startup Genome. 2019. Global Startup Ecosystem Report 2019.
- Zukin. S. (forthcoming). The Innovation Complex: Cities, Tech, and the New Economy, New York: Oxford University Press.
