Just five years ago, when I was looking to build a tech company with venture capital in New
York, finding early stage or seed capital was a daunting prospect. NY just wasn't an easy place to start a tech company. But last night, hundreds of developers, entrepreneurs, and funders stood side by side as Mayor Michael Bloomberg handed out awards to this years BigApps3.0 winners. Wow, have times changes.
Today the New York tech scene is exploding. It's alive with talent, innovation, passion, and capital.
How did that happen? And what can Washington learn from New York's tech renaissance that could help fuel and expand the fledgling economic recovery that now seems to be blooming?
There are some factors in the emerging state of the web that makes New York a hotbed of innovation. The growth of the web underpinnings required brilliant engineers and heavy iron infrastructure. Today, much of the plug and play infrastructure of the web exists. Entrepreneurs can spin up servers with Amazon S3, and have much of the technology needed available without even swiping a credit card.
What we're seeing is emergence of Hyphen-Tech -- technology plus media, technology plus advertising, technology plus finance, technology plus fashion. In worlds where tech is driving innovation around industries, being near those industries accelerates innovation and growth. New York is ideally suited to grow technology companies in these verticals and, in particular, in social media software where New York's diversity, population density, and frenetic pace helps people-powered software innovate in rapid cycles.
But cities don't magically embrace new industries. Here government either stands in the way, or lends a hand. And the Bloomberg Administration has taken a decidedly pro-technology approach to New York's newest growth industry.
Using what can only be described as a bully pulpit, Mayor Michael Bloomberg created an American Idol-style competition between many of the country's most prestigious universities to build a Technology Campus in New York. The winners -- a consortium of Cornell University and the Technion Institute of Israel -- are now building an 11-acre, 2-million square foot campus on Roosevelt Island. The campus will have 2,500 students and 280 faculty when it is completed. The first phase is set to open in 2017.
The city is putting up $100 million in capital costs to fund transit upgrades. A relatively small commitment from taxpayers, given that the Cornell consortium is putting up two billion dollars to build the campus. The land and the abandoned hospital on the site were city assets that stood ready to be put to a good use.
And what does NY get? Well, for one -- a steady stream of new engineers to help the tech sector continue to grow. By EDC estimates the new campus will increase New York's Masters and Ph.D. students by 70 percent. The campus will generate $23 billion in economic activity over the next thirty years, 20,000 construction jobs, and an estimated 600 new start-up companies.
And just to make sure that start-ups get off the ground, Cornell/Technion has committed an additional $150 million in capital that will be devoted to funding NYC entrepreneurs and start-ups.
Something is changing in NY, and in the economy more broadly -- as we shift from a nation of manufacturing of things to digital creation of bits and bytes.
New York has been savvy in turning assets that are either controlled by or created by government into fuel for the new economy.
The NYCTech Campus isn't the only example of Bloomberg's understanding of this critical shift. New York had the insight to turn a valuable unused asset: government data, into another opportunity for competitive development. Now in its third year, NYC BigApps invites programmers and entrepreneurs to turn digital assets into new economic activity. To date, companies have built mobile apps around city data and taken home $50,000 in cash prizes.
This years winners are an extraordinary mash-up of NYC data and New York developer creativity. The Best Overall Application Grand Prize went to NYC Facets to create an open-data mash-up portal on steroids that can collaborate structured and unstructured information and make NYC data more easily useful to other developers. The Investors Choice Application was The Funday Genie. The Funday Genie is an application for planning a free day, creating personalized day-itinerary of things to do in NYC, including events, attractions, restaurants, shopping, and more, based on the individual preferences. But my favorite this year was Scene Near Me, an app that allows you to figure out where NYC movie scenes were filmed. Check out all the winners, and you'll get plugged in to the energy of NY tech. And where is all of this innovation taking place? The city has funded, or co-funded now eleven business incubators, giving cash-strapped start-ups the space they need and the community environment they hunger for to thrive.
Meanwhile, Washington seems to be slowing waking to the reality that small business, entrepreneurs, and innovation are the likely drivers of long term and sustainable economic growth. The Senate passage of the JOBS Act promises to open a whole new era in crowd funding small business. But letting mom's and pop's into angel investing doesn't replace real federal vision, programs, and the president's enthusiastic endorsement of American innovation. Overall, U.S. Government seems more focused on repairing the old economy rather than embracing the emerging digital economy.
There are exceptions in Washington of course. FCC Chairman Julius Genachowski is pushing a plan to expand Broadband. Former AOL CEO Steve Case is working with the administration to embrace entrepreneurism. But the president is missing out on the digital opportunities that could -- and should -- be part of any future jobs program. President Obama would be well to use the power of the bully pulpit to embrace and celebrate America's entrepreneurial spirit and technical leadership.
What New York understands is that our best export is digital innovation, software, digital content, and social media. These are things that the U.S. can innovate, own, and export.
New York attracts a steady stream of young, hungry, passionate innovators from around the country, ready to bring their passion, spirit, and the economic engine of job creation to New York's growing tech community. But even as developers and entrepreneurs from around the world try to bring innovation on to our shores, U.S. immigration policy continues to bar the door. Bloomberg has called U.S. immigration policy "national suicide," as it blocks new technical talent from around the globe that wants to build their businesses in the U.S. To win in the competitive global tech economy, we need to embrace change, not resist it.
And unlike just a few years ago where call centers and developers were shifting to lower cost competitors, we're seeing many of these jobs come back onshore.
Understanding that his job is, in part, Cheerleader-In-Chief, Bloomberg has set a goal to "reclaim the title as the world capital of technological innovation." That spirit, along with the overall growth in New York's tech community and a spirit of entrepreneurial exuberance, has fostered companies like FourSquare, Guilt Groupe, Tumblr, and Etsy as homegrown success stories.
Taking a page from New York's playbook, Washington would do well to embrace a spirit of digital entrepreneurism. Software is truly the new frontier for innovation... and American's spirit of adventure and innovation is ideally suited to win in this new creative and competitive world.
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