So many U.S. cities now pin their economic hopes and dreams on building a burgeoning technology sector and becoming a mini-Silicon Valley, with an abundance of jobs and well-educated residents. Even New York City, whose residents and leaders rarely admit to any feelings of inferiority, is no different. It wants those hot tech start-ups for itself.
And in the last decade, New York has succeeded in cultivating, attracting, and boosting its local tech talent. Just ask the founders of Tumblr, Etsy, BuzzFeed, or Warby Parker—all companies headquartered in New York. Tech and information companies, including media properties, now make up the second largest sector in the city's economy, surpassed only by finance, according to a new study produced for the Bloomberg Administration. Since 2007, those types of jobs grew by 11 percent, or approximately 26,000 positions.
National Journal recently sat down with Robert Steel, New York's deputy mayor for economic development, to talk about New York's tech push and why the city is different--maybe even better--than its California rival. Edited excerpts follow.
You worked for Goldman Sachs for years as a banker. Did you ever think you would see a day when the tech sector would become New York City's second-largest driver of jobs, trailing only finance?
Finance is still an important part of the New York City economy and industry. It's an important jobs contributor and even more important in terms of tax revenue, so it's still important to focus on. What you see is that technology isn't just an industry. It's a skill that's spreading through all industries. New York City needs to have start-up companies that are begun here like Tumblr or Etsy, but we also want the very large established companies to come here, whether that is Yahoo or Google. All industries, whether it's advertising, communications, publishing, or retail, are being changed by technology. They're not tech companies, but every industry needs the skills of knowing how to use data and manage it accordingly.
How can New York compete with Silicon Valley, which outranks New York with the amount of venture capital funding it has and with its built-in advantages, such as its close ties to universities like Stanford?
I think the real question is how Silicon Valley is going to compete with us. What you're seeing with technology is that as it moves from being hardware-driven, it's all about how you use the technology. I would argue quite strongly that NYC has much better skills because the industries in which it's going to be used--advertising, communications, publishing, retail, fashion—these are here. So, I don't know how Silicon Valley will be able to keep up, as the focus of how technology is applied moves to New York. If you look at the companies that are being successful here, they are basically application-based. I don't think the software that enabled entertainment is going to be birthed in Silicon Valley. I like New York's odds in those competitions.