NEW YORK CITY TRANSFORMING A CITY I N TO A T E C H I N N O VAT I O N L E A D E R Victor Mul s nd Mik l G st lu-Iturri < 1 > The authors of this report are Victor Mulas and Mikel Gastelu-Iturri. Cristian Quijada, Kathy Qian, Hallie Applebaum, and Stanley Scott Henry contributed to this report through research and interviews. Ghia Zaatari supported the review of the report and contributed in the drafting of the Executive Summary. The source of Box 1.1 and 1.2 is research conducted by Michael Minges under the direction of Victor Mulas. Colin Blackman edited this report and Jimena Vázquez produced the design. The report received comments from Elena Gasol, Megha Mukim and Justin Hill. < 2 > NEW YORK CITY TRANSFO RM ING A CITY INTO A TECH INNOVATIO N LEADER NOVEMBER , 2016 < 3 > CONTENTS EXECUTIVE SUMMARY .......................................................................................................................................... 6 ABBREVIATIONS ...................................................................................................................................................... 8 1. THE GROWTH OF THE TECH STARTUP ECOSYSTEM IN NEW YORK ..................................................... 9 2. NEW YORK CITY POLICIES SUPPORTING THE TECH STARTUP ECOSYSTEM ..................................... 18 3. LESSONS FROM NEW YORK CITY’S CASE ................................................................................................... 26 APPENDIX A. LIST OF INTERVIEWS AND PLACES VISITED ..................................................................... 29 APPENDIX B. LIST OF DETAILED SOURCES FOR TABLES & FIGURES .................................................. 31 REFERENCES: .......................................................................................................................................................... 36 NOTES ..................................................................................................................................................................... 38 FIGURES FIGURE 1.1. CUMULATIVE NUMBER OF STARTUPS IN NEW YORK ............................................................. 9 FIGURE 1.2. COMPARISON OF EMPLOYMENT GROWTH RATE IN NEW YORK TECH ECOSYSTEM WITH CITY AND NATIONAL AVERAGES ............................................................................................................. 10 FIGURE 1.3. NEW YORK TECH MEETUP MEMBERS PER YEAR .................................................................... 10 FIGURE 1.4. CUMULATIVE CONNECTIONS AMONG TECH ENTREPRENEURS IN NEW YORK BY TYPE ........................................................................................................................................................................... 11 FIGURE B.1.1.1. BROOKLYN: ELECTRONIC SHOPPING ................................................................................... 14 FIGURE 1.5. TECH EMPLOYMENT GENERATED IN NEW YORK CITY, 2003-2014 .................................... 15 FIGURE 1.6. TECH EMPLOYMENT WHERE NO BACHELOR DEGREE WAS REQUIRED IN NEW YORK BY CATEGORY .......................................................................................................................................................... 15 FIGURE 1.7. MAP OF STARTUPS IN NEW YORK BY LOCATION ..................................................................... 16 FIGURE 1.8. NEW YORK LEASING ACTIVITY BY SQUARE FEET ................................................................... 16 FIGURE B.1.2.1. MAP OF DUMBO ......................................................................................................................... 17 FIGURE 2.1. NETWORK OF NYCEDC-SPONSORED INCUBATORS ............................................................... 20 < 4 > TABLES TABLE 1.1. TECH STARTUP IPOS SINCE 2008 ................................................................................................. 10 TABLE 1.2. WEWORKS’ MEMBERS BY COWORKING SPACE LOCATION (2014) ...................................... 10 TABLE 1.3. BOOTCAMP PROVIDERS IN NEW YORK CITY ............................................................................. 11 TABLE 1.4. LARGE TECH FIRMS’ NEW YORK OFFICES WITH CORE MARKETING OR ENGINEERING FUNCTIONS .............................................................................................................................................................. 12 TABLE 1.5. NEW YORK STARTUPS PER SECTOR 2007-2012 ...................................................................... 12 TABLE 1.6. THEMATIC ACCELERATOR PROGRAMS IN NEW YORK ............................................................. 13 TABLE 1.7. EXAMPLES OF NEW YORK TECH STARTUPS GENERATING NEW MARKET CATEGORIES .. 13 TABLE 1.8. TECH SECTOR IMPACT IN BROOKLYN ......................................................................................... 16 TABLE 2.1. CHALLENGES FOR NEW YORK CITY’S TECH STARTUP ECOSYSTEM ................................... 19 TABLE 2.2. POLICY ACTIONS APPLIED BY NYCEDC TO ADDRESS IDENTIFIED CHALLENGES ............. 20 TABLE 2.3. CITY-SPONSORED INCUBATOR MODEL ...................................................................................... 21 BOXES BOX 1.1. ETSY’S ECONOMIC AND EMPLOYMENT IMPACT IN NEW YORK CITY ....................................... 14 BOX 1.2. EVOLUTION OF TECH STARTUP ECOSYSTEM IN DUMBO ............................................................ 17 BOX 2.1. A DIGITAL STRATEGY FOR NEW YORK CITY ................................................................................... 19 BOX 2.2. HOW THE NYCEDC INCUBATOR PARTNERSHIP WORKED IN PRACTICE ................................ 22 BOX 2.3. CORNELL-TECHNION INNOVATION INSTITUTE ON ROOSEVELT ISLAND ............................... 23 BOX 2.4. NYU AND COLUMBIA RESEARCH CENTER PARTNERSHIPS ....................................................... 23 BOX 2.5. NYC SEED ................................................................................................................................................. 24 < 5 > E X EC U T I V E SUM M A RY Over the last 8 years, New York City has become > The startup ecosystem became a new source one of the largest and most vibrant tech startup of employment, generating jobs directly (i.e., those ecosystems in the world. Today, the city is widely from startups) and, more importantly, indirectly, seen as a leading startup hub worldwide. However, through non-tech companies (e.g., the local industry this was not something one could have anticipated base) employing tech talent (partly due to the dis- just ten years ago. At that time, the tech startup ruptive and competitive process described above). community in the city was anecdotal and disor- This push for tech from the traditional industry base ganized. New York was seen as the place to be for resulted in the highest numbers of new sources of corporate jobs in finance, media or advertising, and employment generated by the ecosystem. Interest- tech was just supportive to corporate functions. ingly enough, these new sources of employment pro- Startups were not synonymous with New York. This vide job opportunities for both low- and high-skilled all changed in 2008. The financial crisis shocked the tech workers. city and, in doing so, provided the circumstances for the transformation of the New York startup scene. > The growth of the startup ecosystem further at- By 2015, New York accounted for nearly a $6 billion tracted tech R&D, innovation and product develop- venture capital investment in startups and had over ment functions from leading tech companies from 14,500 startups (Wall Street Journal, 2016 and Dig- outside the city (e.g., Google, Facebook, IBM), sup- ital NYC, 2016.) porting the economic diversification of New York City and creating new market categories for existing New York provides insights on how startups are im- and new industries. pacting city economies, generating new sources of jobs and helping transforming the urban landscape. > The startup ecosystem has had significant impli- New York represents a new model of startup ecosys- cations on urban transformation, helping to regen- tems that is emerging in cities worldwide. Different erate neighborhoods in Manhattan and most notice- to Silicon Valley’s suburban ecosystem, New York’s ably, in Brooklyn. is urban in nature and well integrated into the local economy and industry base. New York is the prime There were many factors that enabled New York’s example of the new urban startup ecosystem model, ecosystem to grow; in what for the most part start- providing key insights: ed as an organic process, yet the city, through the New York City Economic Development Corporation > New York’s tech startup ecosystem evolved (NYCEDC) and the Mayor’s office played a critical around the traditional local industries of the city role supporting the ecosystem with a targeted pol- (e.g., finance, advertising, media, fashion and health.) icy program. This process not only allowed it to retain the very specialized talent from the city at a moment of cri- New York remains distinguished in many ways as a sis, but it also increased the competitiveness and in- city, as was the processes that lead to the growth of novation of New York’s traditional industry base. As its tech ecosystem. Nonetheless many of the chal- more and more startups emerged, competitive pres- lenges it faced when developing the tech ecosystem sures forced incumbents to also innovate directly, are similar to those confronted by many other cities. introduce open innovation processes with startups These include: a) lack of technical talents, b) lack of and absorb startup technology (through acquisition available seed finance, c) limited affordable space or recruitment). for entrepreneurs, and d) a small and decentralized community. < 6 > These challenges were addressed through a two-fold > The skills pipeline was addressed early on and, al- approach, combining an overall strategy from the though remain a challenge, this allowed for the expo- Mayor’s office and an operational program of pol- nential growth of the ecosystem. icies developed and implemented by NYCEDC. The program tackled these identified challenges, imple- This report provides a detailed study of the case of menting new solutions through rapid testing, de- New York tech startup ecosystem, its growth and veloping the support infrastructure required by the characteristics as an urban startup ecosystem, the ecosystem, and growing the startup community and policies applied by the city of New York to support attracting key outside resources (e.g., capital, talent the growth and sustainability of the ecosystem, and and expertise). This included, inter alia: a) creating a the lessons learnt for other policymakers interested network of coworking spaces and incubators, b) de- in supporting their startup ecosystems. This case veloping a university tech education campus in the study was conducted throughout 2015, including city, c) catalyzing the seed investment funds, and field visits and interviews with key identified stake- d) promoting the community and attracting outside holders from New York’s ecosystem (Appendix A). tech talent and companies. The policies that were applied to each of these chal- lenges as well as other supportive actions present examples to learn and inspire other policymakers. This does not mean that these policies could be di- rectly applicable to other environments. However, there are key lessons that we can extract in each of these instances that can help develop policy action elsewhere: > The policy program was tailored to New York’s identified challenges and it was codeveloped and supported by a coalition of partners that went be- yond the Government of New York City itself, involv- ing the whole ecosystem. > There was a clear support from the Major’s office, who took a key role in empowering the community and promoting the local ecosystem to attract need- ed outside talent and resources. > Policies were focused in areas where there was a market failure and where they could catalyze mar- ket solutions that would be sustainable over time. > The program addressed the ecosystem as a community and not as a “innovation district.” This allowed the ecosystem to expand beyond physical boundaries and grew organically, benefiting multiple neighborhoods of the city. < 7 > ABBREVIATIONS API Application program interface CDO Chief Digital officer CUSP NYU Center for Urban Science and Progress DUMBO Down Under the Manhattan Bridge Overpass Edtech Educational technologies Fintech Financial technologies IPO Initial public offering NYC New York City NYCEDC New York City Economic Development Corporation NYCEF New York City Entrepreneurial Fund PPP Public-private partnership 1. THE GROWTH OF THE TECH STARTUP ECOSYSTEM IN NEW YORK The city of New York has become host to the sec- This growth has occurred during the past ten ond-largest tech startup ecosystem in the Unit- years, with an exponential growth pattern that ed States (after Silicon Valley) with almost $6 billion accelerated after the financial crisis in 2008 venture capital investment in startups in 2015 and (Figure 1.1). Seed investment of venture capital in over 14,500 startups listed in New York (Wall Street technology startups increased fivefold since 2003, Journal 2016, and Digital NYC 2016). The ecosystem with over 85 percent of the sector’s companies and directly employs more than 50,000 people (around 86 percent of its employment created during this one percent of the city’s workforce) and generated time (Endeavor Insight 2014). $5.6 billion in annual tax revenues for the city by 2014 (about 12 percent of the city’s tax income) (En- deavor Insights 2014; and HR & A 2014). FIGURE 1.1. Cumul tiv Numb r of St rtups in N w York 2500 2000 1500 1000 500 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Not : Actu l numb r of st rtups in th cit is much hi h r. Sourc : As r port d to Crunchb s 1 nd An lList2 d t b s s ( s prox of t ch st rtups rowth) The ecosystem has produced $18.1 billion in suc- cessful exits since 2003, with over seven initial public offerings (IPO) of companies valued over $400 million since 2012 (see Table 1.1), and more than 15 acquisitions totaling over $4.4 billion since 2008 (Endeavor Insight 2014; and CB Insights 2015). < 9 > TABLE 1.1. T ch St rtup IPOs sinc 2008 TABLE 1.2. W Works´M mb rs b Coworkin Sp c Loc tion (2014) Comp n Y r V lu tion (MM $US) W Work Loc tions 2014 Ets 2015 3,500 OnD ck 2014 1,320 Comp n M mb rs Ev r d H lth 2014 416 Bord rfr 2014 488 NoM d 1,442 V ronis S st ms 2014 524 Fulton C nt r 1,408 Tr mor Vid o 2013 494 SoHo W st 1,307 Shutt rstock 2012 558 Ch r in Bull 1,095 P rk South 780 TOTAL 7,300 W st Bro dw 721 Br nt P rk 577 Sourc : N ws r ports (S App ndix B for d t il d sourc s) M dison 525 Empir St t 509 Since 2008, employment in the tech startup eco- SoHo 488 system has grown at an annual rate of 18 per- M tp ckin 389 cent (see Figure 1.2), compared to an overall growth TOTAL 9,241 in the city of 12 percent (HR & A 2014). Sourc : Konr d, 2014. FIGURE 1.2. Comp rision of Emplo m nt Growth R t in N w York T ch Ecos st m with Cit nd N tion l There are numerous tech-related events, hack- PERCENT GROWTH IN EMPLOYMENT 2003-2013 athons and competitions in the city, reaching a broader audience. New York Tech Meetup3, which U.S. TOTAL EMPLOYMENT is the largest tech event and community in the city, has grown to more than 45,000 members from NYC TOTAL EMPLOYMENT about 7,000 members in 2009 (see Figure 1.3) (Cen- ter for an Urban Future 2012). Angel investors have also grown locally, providing a local base of smart NYC TOTAL EMPLOYMENT investment and mentorship for early stage start- 0 5 10 15 20 ups. New York Angels4, the local angel investor as- sociation, has invested over $95 million in entrepre- Sourc : HR &A, 2015. neurship ventures, growing from 30 members at its foundation in 2004 to over 120 in 2015 (New York Angels 2015). The New York tech ecosystem has developed a comprehensive infrastructure to support tech entrepreneurs, providing tailored services and fostering a community. Since 2008-09, the city FIGURE 1.3. N w York T ch M tup M mb rs p r Y r has created mentorship programs, accelerators, in- 50000 cubators, coworking spaces, events, skills training 45,200 programs, and other supporting services. Today there are over 30 accelerator or incubator programs 40000 36,000 in the city. With a typical class of 10-12 startups per 29,000 cohort in these programs, the city graduates over 30000 300 startups per year from these programs alone. 19,500 Entrepreneurs in New York have access to cheap of- 20000 15,000 fice space in more than 238 shared office locations. 11,500 In addition, there are over 40 managed coworking 10000 7,500 space locations, which create communities of entre- preneurs and provide support services to startups 0 in multiple areas of the city. In 2014, WeWorks, the 2009* 2010* 2011 2012 2013 2014 2015 largest coworking space provider, had over 9,000 Not : 2009 d t from D c mb r 2008; 2010 d t from J nu r 2011. members, that is, recurrent users of coworking Sourc : NY T ch M tup nd onlin n ws (S App ndix B for d t il d sourc s) spaces (Table 1.2). < 10 > New York’s tech startup ecosystem is deeply con- nected. This entrepreneurship support infrastruc- FIGURE 1.4. Cumul tiv Conn ctions Amon ture has resulted in a tight community that sup- Entr pr n urs in N w York b T p ports entrepreneurship in the city organically. There are in-depth linkages among tech startup founders 2,000 2,070 1,813 in New York (Endeavor Insights 2014). Connections among founders have grown exponentially, with a Numb r of conn ctions 1,503 1,500 substantial increase in investment among tech en- trepreneurs, employment among startups, mentor- 1,070 ship, and serial entrepreneurs (see Figure 1.4). This 1,000 719 growth shows the maturity and sustainability of the ecosystem. Findings by Endeavor Insights (2014) 500 535 359 show that mentorship by other top performing en- 148 236 trepreneurs increases the success of startups5 in the 0 45 87 ecosystem. 03 04 05 06 07 08 09 10 11 12 13 20 20 20 20 20 20 20 20 20 20 20 Inspir tion M ntorship Inv stm nt Form r mplo S ri l ntr pr n urship Not : conn ctions limit d to s mpl of st rtup found rs. Sourc : End vor Insi ht 2014. The growth of the tech startup ecosystem has percent and above6). In addition, New York has gone generated strong demand for technology skills. from having no strong engineering and technical re- Since 2011, the city has generated over 15 provid- search academic programs to hosting two technol- ers of rapid technology skills in the forms coding of ogy engineering and research programs. New York bootcamps, providing the technology skills demand- University created the NYU Polytechnic School in ed by the sector. These bootcamp providers grad- 2014, after merging with the Polytechnic School7, uate over 2,500 students per year (see Table 1.3). and Cornell Tech started courses in the city while it These programs are specialized and connected with waits for the building of its campus by 20178. With tech startups and companies to address demand Columbia University, these three schools now pro- quickly and generate rapid employability for locals duce almost 6,000 engineering and technical gradu- (with reporting employment rates on average of 90 ate students each year9. TABLE 1.3. Bootc mp Provid rs in N w York Cit Found d L n ht of pro r m Est. Y rl N m Y r (w ks) Stud nts H ck r School 2011 12 195 G n r l Ass mbl 2011 12 750 D v Bootc mp 2011 19 300 Insi ht D t Sci nc 2012 6 210 St rtup Institut 2012 8 60 Fl tiron School 2012 12 60 M k School 2012 9 50 Th N w York Cod nd D si n Ac 2012 12 51 St rtup Institut 2012 8 240 App Ac d m 2013 9 220 Fullst ck Ac d m 2013 13 150 Turn to T ch 2013 12 NA B t Ac d m 2014 12 240 M tis 2014 12 100 NYC D t Sci nc Ac d m 2015 12 60 TOTAL 2,686 Not : Estim t d numb r of r du t s (b s d on s ssions nd cl ss si ). Sourc : W bp inform tion nd surv to bootc mp provid rs. < 11 > The ecosystem has also attracted large tech has hosted Cornell University’s tech program (Cor- companies to establish offices in New York, ex- nell Tech) in its offices while its campus is complet- panding employment beyond sales functions to ed in 2017), and also exit opportunities for startups core marketing and engineering in search of talent (for example, Google, Facebook and Yahoo are top and new ideas. Since 201010, tech multinationals acquirers of New York startups11). In addition, em- have been establishing operational business offices ployees from these companies are a technically and in New York, hosting engineering, marketing, and entrepreneurial savvy source of talent for the tech product development functions. There are more startup ecosystem, founding their own startups and than nine major tech companies with operational further boosting the ecosystem12. New York has also offices in New York, employing over 15,000 people attracted at least two labs from the global research (see Table 1.4). These companies are also connect- programs of multinational companies: Microsoft Re- ed to the tech startup ecosystem, providing support search and Watson Research from IBM, which are and talent to the ecosystem (for example, Google part of the innovation ecosystem of the city. TABLE 1.4. L r T ch Firms´ N w York Offic s with Cor M rk tin or En in rin Functions Estim t d Sq ft tot l mplo s Comp n 2006 281,000 2,081 Goo l , F c book 2007 50,000 370 Y hoo 2010 506,000 3,748 Goo l , Link din 2011 61,000 452 Y hoo, Twitt r 2012 35,000 259 B 2013 222,000 1,644 Microsoft, Microsoft R s rchb 2014 862,500 6,389 F c book, Twitt r, Y lp, IBM (W tson R s rch) +, Y hoo, Link din 2015 95,000 704 P P l 2,112,500 15,648 Not : m ns cquisition of N w York st rtup; b m ns r s rch f cilit ; stim tion of mplo s b s d on squ r f t v r occup tion p r mplo in t ch s ctor Sourc : Multipl sourc s (S App ndix B for d t il d sourc s) The growth and maturity of the tech startup eco- system have impacted the city’s economy and TABLE 1.5. N w York St rtups competitiveness in three main ways: (a) strength- p r S ctor 2007 - 2012 ening competitiveness and innovation of local indus- tries, (b) creating new sources of employment and St rtups jobs, and (c) contributing to urban transformation. S ctor found d Ad T ch 63 Strengthening competitiveness and in- Di it l M di 121 novation of local industries E-com rc 103 Ed T ch 20 New York tech startups have developed around the Fin T ch 33 largest industries of the city (such as finance, adver- H lth T ch 19 tising, media, fashion, and health) producing innova- Soci l N tworkin 79 tion for these sectors by introducing new business and operational models and creating new market Sourc : C nt r for n Urb n Futur , 2012. categories. New York startups are different to pure technology startups. Instead of focusing on tech- nology, the New York startup ecosystem focuses on applying technology to the existing industries and challenges of the city (see Table 1.5) (Center for an Urban Future 2012). < 12 > Since 2011, the city has hosted accelerator pro- ups, resulting in direct access to new innovations. grams for many of these categories, where existing Other accelerators, such as the Fintech Innovation firms in the sector interact with startups (see Table Lab, pair industry professionals assigned by banks 1.6). Barclays Bank and Kaplan manage their own with startups. accelerator programs for fintech and edtech start- TABLE 1.6. Th m tic Acc l r tor Pro r ms in N w York Th m tic Acc l r tor Y r Found d St rtup p r cohort Fint ch B rckl s Acc l r tor 2015 10 Fin t ch Innov tion L b 2014 NA V lu Str t L b 2011 6 H lth N w York Di it l H lth Acc l r tor 2012 8 Blu print H lt 2011 10-11 St rtup H lth 2011 NA Educ tion EDGE EdT ch 2015 12 K pl n EdT ch 2013 10 R l Est t M t Prop NYC 2015 8 F shion N w York T ch F shion L b 2014 8-12 Sourc : Multipl Sourc s (S App ndix B for d t il d sourc s) New York startups have not only introduced tech- and then expanded domestically and internationally. nology in the city’s local industries but they have The chart below provides examples of new market also created new market categories and disrupted categories and business models created by the tech existing markets. This disruption is applied locally startup ecosystem (see Table 1.7). TABLE 1.7. Ex mpl s of N w York T ch St rtups G n r tin N w M rk t C t ori s N w m rk t c t or Y r St rtup S ctor busin ss mod l Found d Ets E-comm rc H ndm d nd vint m rk t 2005 Gilt Group F shion Low cost f shion 2007 Kickst rt r Fin nc Crowdfundin 2009 M k rBot M nuf cturin Di it l m nuf cturin 2009 ( fford bl 3D print r for consum rs) Quirk E-comm rc , Inv ntion pl tform conn ctin 2009 m rk tpl c inv ntors nd comp ni s Fourthsqu r Urb n Livin S rch nd conn ct r t il rs 2009 usi n mobil W Work Offic l sin /r l Coworkin sp c s with 2010 st t communit s rvic s G n r l Educ tion/voc tion l T ch r pid skills tr inin 2012 Ass mbl tr inin Sourc : Comp ni s´public inform tion (S App ndix B for mor d t il d sourc s) < 13 > These new market categories are generating new employment and growth opportunities (see Box 1.1). BOX 1.1. Etsy’s Economic and Employment Impact in New York City Etsy provides a good example of the impact of start- diture for website development and property and ups in the city. Etsy was founded in 2005 and has equipment. recently exited through an IPO. Its offices have been located in Brooklyn since its foundation and it devel- Etsy’s growth mirrors the rise of e-commerce start- oped a new market category by creating an e-com- ups in Brooklyn. From just 73 electronic shopping merce marketplace for the so-called “maker move- establishments in 2005, the number had grown to ment” — handmade goods and craft supplies13. 351 by 2012, an increase of almost 400 percent. Employees increased from just over 400 to 1,576 Etsy has had several economic impacts but it is dif- and payroll increased from $12 million to $60 mil- ficult to attribute these precisely to a specific city lion. With gross merchandise sales of $1.9 billion and because of the global nature of its business (31 per- revenue of $196 million in 2014, Etsy is clearly no cent of sales come from outside the United States). longer a startup. It is estimated that Etsy accounted In 2013, it had 496 employees of which 347 were in for about 20 percent of employees and a quarter of Brooklyn. In 2014, Etsy spent $52 million on com- payroll for the electronic shopping sector in Brooklyn pensation (general and administrative expenses), $5 in 2012. million on taxes and $10 million on capital expen- FIGURE B1.1.1 Brookl n: El ctronic Shoppin 1.576 1.500 $80 $60 $60 1.000 851 747 673 644 536 493 $40 431 $32 500 $28 $21 $23 $17 $14 351 $20 $12 197 237 148 166 73 76 91 $0 2005 2006 2007 2008 2009 2010 2011 2012 Est blishm nts P roll (US$ m) P id mplo s Sourc : Ad pt d from U.S. C nsus Bur u < 14 > New sources of employment and jobs innovation. However, there is a much broader cate- gory of tech jobs, which are more akin to blue-collar Over the past 10 years, tech startups have gener- tech skills (these include, for instance, jobs involving ated new direct employment accounting for one basic coding of webpages or requiring technical lan- percent of the workforce in New York City (58,000 guages). These are tech skills that do not require a jobs) (see Figure 1.5). However, the impact of the tech bachelor’s level degree and can be learnt through sector seems to have expanded to non-tech indus- rapid skills programs (for example, bootcamps, code tries within New York. During this timespan, the city academies, and so on) of 10-16 weeks of duration. generated 150,000 tech jobs within non-tech indus- A third of tech jobs within the tech ecosystem and tries. An example of these jobs is a web developer almost half of tech jobs in non-tech industries do in a retailer or a financial institution. Some of these not require bachelor degree level of skills (see Fig- jobs would have been generated in any case because ure 1.6). This has not only spurred the development of technology adoption by non-tech companies. of a new education industry related to tech skills However, the focus of startups in the city’s tradi- (see Table 1.3), but also it has expanded the new tional business industries strongly suggests that employment created by the tech ecosystem to the part of the growth in tech jobs in non-tech industries non-highly-educated population, increasing welfare occurred as a response to the disruption of tradi- and wealth creation evenly. tional sectors by new business models (see section on “Strengthening competitiveness and innovation of local industries” above). An example of this pro- FIGURE 1.6. T ch Emplo m nt Wh r No B ch lor cess is illustrated by the impact of Uber (a startup D r w s R quir d in N w York b C t or founded in San Francisco but which rapidly setup of- 100% No B ch lor´s D r R quir d R quir m nt fices in New York) in urban transportation. Uber is a NYC Av r - 74% platform that allows users to hail taxis and pay for the transaction by a mobile app. Today, in New York, 80% non-Uber taxi companies have developed a mobile P rc nt of Jobs No B ch lor´s D r app to compete with this new service. Such mobile 60% apps need to be created, maintained, and hosted, generating new tech jobs in non-tech sectors. These 60% job categories did not exist before the disruptive in- 40% 44% 44% novation and are net additions to the job force. 20% 22% FIGURE 1.5 T ch Emplo m nt G n r t d in N w York Cit , 2003 - 2014 0% T ch Jobs Non-T ch T ch Jobs N w York in T ch Jobs in T ch in Non-T ch Cit T ch Industri s Industri s Industri s Ecos st m 58.000 105.000 TECH INDUSTRY INDIRECT Sourc : HR & A, 2014. TECH JOBS JOBS 150.000 Urban transformation NON TECH INDUSTRY 83.000 TECH JOBS TECH INDUSTRY Tech startups have impacted neighborhoods in New NON-TECH JOBS 145.000 York resulting in urban regeneration. The ecosys- INDUCED tem, previously concentrated mainly in Manhattan, JOBS has expanded to include boroughs such as Brooklyn 58.000 TOTAL JOBS GENERATED (see Figure 1.7). This expansion is the result of the city providing offices at lower rents and in a lower category of office space (Alvarez & Marshal and JRT Sourc : HR & A, 2014. Realty Group 2013)14. Tech startups result in the cre- ation of communities in these neighborhoods, result- ing in spillover benefits: meetups and events in the The jobs created by the tech ecosystem in New York neighborhood, use of amenities (e.g., cafes and bars), reach beyond typically highly educated workers. attraction of related businesses, and so on15. Jobs requiring higher education qualifications are core to tech startups and pure tech sector jobs, as they typically require educated and qualified techni- cal talent and entrepreneurship to create disruptive < 15 > FIGURE 1.7. M p of St rtups in N w York b Loc tion 9 18 3 31 63 3 33 7 39 445 88 21 189 2 3 38 16 6 51 16 248 34 11 4 664 5 8 4 7 11 3 111 5 30 6 3 7 3 4 9 5 2 Not : Circl s shows numb r of st rtup r port d in th r . Sourc : Di it l NYC. As startups have become more successful and have Brooklyn is an example of the expansion and urban attracted more mature industries, rents have risen, regeneration produced by the startup tech ecosys- office space has grown, and economic development tem, with DUMBO (see Box 1.2) and the Navy Yards has increased in areas such as DUMBO and the being completely transformed into tech hubs in less Navy Yards in Brooklyn. Since 2012, the tech sector than 10 years, with over 600 technology and inno- has surpassed other categories to become the larg- vation related firms located there. (Brooklyn Tech est office leasing activity in the city, accounting for Triangle 2015). The tech industry is transforming the 25 percent of office rents (see Figure 1.8). neighborhood physically, stimulating new develop- ments to attract new firms and particular tenants, as well as economically (see Table 1.8). FIGURE 1.8. N w York L sin Activit b Squ r F t Tr dition l Offic Us rs TABLE 1.8. T ch S ctor Imp ct in Brookl n 16% 25% Fin nci l S rvic s 10% L l S rvic s 2012 2015 1% 12% 5% Accountin 3% T ch firms 523 639 10% Insur nc 6% 25% Sq F t of T ch work sp c 1.7 1.7 Bus S rvic s (million) 11% Inform tion/M di /T ch 6% Dir ct t ch mplo s 9,628 17,960 9% 7% Educ tion l S rvic s 3% 2% Tot l conomic imp ct of t ch 3,100 5,900 App r l (million US$) 23% 28% Oth r 2002 2012 Sourc : Brookl n T ch Tri n l , 2015. Sourc : Alv r & M rs l nd JRT R lt Group, 2013. < 16 > BOX 1.2. Evolution of Tech Startup Ecosystem in DUMBO Just across the East River from Manhattan, DUM- has carved out a niche as a center for digital adver- BO (Down Under the Manhattan Bridge Overpass) tising17. forms part of the Brooklyn Tech Triangle (see Figure B1.2.1), an area encompassing 523 innovation firms There are 13 universities in Brooklyn with over of which a fifth were launched between 2013 and 90,000 students and a good number of New York’s the beginning of 2014. In addition to DUMBO, the tech workers live in the borough. DUMBO’s 54,668 Tech Triangle includes Downtown Brooklyn and the residents (2013) are highly educated with 70 percent Brooklyn Navy Yard and is home to almost 10,000 aged 25 and over possessing a bachelor’s degree or tech workers. DUMBO’s distinguishing feature is higher18. that it comprises a comprehensive tech ecosystem within a few city blocks (about 1.4 square miles (3.6 The DUMBO Incubator, supported by NYCEDC and km2)). operated by NYU Polytechnic, is located right in the heart of DUMBO’s digital district and represents the first incubator space in the area. DUMBO is home to NYC’s most prominent media technology and dig- FIGURE B1.2.1. M p of DUMBO ital companies and, as a result, the DUMBO Incu- bator has helped spur startup activity in the area. The space is currently home to hardware and digital media companies. There are additional workspace facilities in DUMBO, including options for flexible of- fice space; real estate agency Green Desk has three buildings in the area. There is a regular and comprehensive program of events in DUMBO organized by startup facilities, special event organizations, and others. The DUM- BO Startup Lab Digital has monthly meetups on Sourc : Th N w York Tim s, 2016. business model tools and collaborative events with entrepreneurs. Digital DUMBO19 started in 2009 as a monthly gathering for tech, advertising, and start- In the early 19th century, the area making up to- up companies in the neighborhood. Since then it has day’s DUMBO was a manufacturing and transport organized over 100 live events and conferences that hub underpinned by steam ferries crisscrossing the “connect companies and brands with digital taste- East River16. High-density brick buildings were built makers, talent, and executives”, often held at The to store, refine, and ship products across the river Dumbo Loft, constructed in 1891 with over 3,200 to Manhattan. The decline of the city’s manufac- square feet. turing in the middle of the 20th century led many companies and workers to leave the area. DUMBO The economic impact of DUMBO and the Brooklyn began to experience a renaissance beginning in the Tech Triangle is forecast to be $6 billion in 2015 with 1970s. The riverfront warehouses and high lofts were almost 18,000 tech workers and 43,000 supporting a big attraction to artists priced out of the Manhat- jobs. Etsy, a startup launched in DUMBO in 2005, is tan market. In the late 1990s, tech firms followed, emblematic of tech growth in the district (see Box including startups like Big Spaceship and Huge that 1.1). today employ hundreds of people. Today DUMBO < 17 > 2. NEW YORK CITY POLICIES SUPPORTING THE TECH STARTUP ECOSYSTEM The financial crisis of 2008 was a catalyst for The City applied a twofold policy approach: (a) the city to intervene in supporting the growth practical and operational, led by NYCEDC, and of the tech startup ecosystem. The 2008 crisis (b) strategic, led by the Mayor’s office. NYCEDC affected the financial sector the most, which repre- was the main actor in designing and implementing sented 38 percent of the private payroll of the city key actions towards building the tech sector as the (New York City 2009), and created a recession that fastest growing one in NYC. NYCEDC conducted a impacted all sectors of the economy. During the six SWOT analysis of NYC’s tech startup ecosystem, months following the financial meltdown, New York which informed its set of operational policy actions, City lost nearly 90,000 jobs, two thirds of them out- most of them following a pilot-testing and scal- side the finance sector, and by 2009, the consumer ing-up approach, similar to the lean startup model20 spending of New Yorkers had dropped an alarming applied by entrepreneurs (see below). In parallel to 11 percent (Fiscal Policy Institute 2009). In response, NYCEDC’s scanning of NYC’s tech startup ecosys- the city presented a plan of action that would di- tem, Mayor Bloomberg’s administration embarked versify the city economy, promote entrepreneurship, on a comprehensive strategy to digitalize the city and target industries where New York was seen to that would help the tech startup ecosystem grow have a competitive advantage. The plan, which was in a more favorable environment (see Box 2.1). The the result of a process launched in 2008, resulted Digital Strategy was critical in providing the “official” in a comprehensive and long-term economic diver- backing of the city for the tech startup community sification strategy, targeting eight sectors, including (which was small but growing at the time) and pro- bioscience, fashion, tourism, and media and technol- viding a focal point, the Chief Digital officer, between ogy, with entrepreneurship (understood as a techno- the community and the city21. logical/digital and innovative entrepreneurship) as a cross-cutting asset (NYC Office of the Mayor 2009 and New York City 2009). Whereas the support for sectors to diversify the economy followed a tradition of previous economic plans, the inclusion of technol- ogy entrepreneurship was a new departure. This led to a series of specific policies from the city, started by New York City Economic Development Corpora- tion (NYCEDC), to support the tech startup sector. < 18 > BOX 2.1. A Digital Strategy for New York City In July 2010, the first stone of the digital strategy the development of public-private partnerships and was placed. Mayor Bloomberg and Katherine Oliver, developer community relations in the digital media the newly appointed Commissioner of The Major’s sector, such as in the BigApps initiative or the Made office, launched NYC Digital, a new entity for city- in NY Media Center. wide digital strategy that would work to engage, serve, and connect the public, making the city gov- The Roadmap for the Digital City. Mayor ernment more efficient and citizen-centric (NYC Of- Bloomberg and the CDO unveiled the Road Map for fice of the Mayor, 2011). Its first task would be the the Digital City in May 2011 (NYC Office of the Mayor development of a thorough report to assess the dig- 2011). The report showed the findings of its investi- ital state of the digital, solicit feedback from public gation, providing a comprehensive and strategic plan and private sectors, and define a Digital Road Map, for NYC’s digital future, presenting both current and a comprehensive strategy with the goal of making future initiatives of various city agencies and organi- NYC the nation’s leading digital city. To lead this ini- zations towards achieving those goals. The roadmap tiative and to further improve the way in which the was divided in five core areas: (1) Access; (2) Educa- city was engaging the public through digital technol- tion; (3) Open government; (4) Engagement; and (5) ogies, in January 2011 the first Chief Digital Officer Industry. Many of these policies were executed by or (CDO) of the City of New York was appointed. combined with the policies of NYCEDC following the operation policy actions to address the challenges NYC Digital works closely with other city agencies, identified. By 2013, the progress report showed that such as the Department of Information Technology all of the targets had been achieved (NYC 2013). and Telecommunications (DOITT) and the NYCEDC, to support their initiatives and give advise on digital strategy, policies, and real estate tools. In collabora- tion with DOITT and the NYCEDC, it also supports NYCEDC identified key areas to support the growth analysis was conducted through an intensive con- and sustainability of the tech startup ecosystem in sultation process with multiple stakeholders repre- New York City, to which it targeted its policy actions. senting the ecosystem, including focus groups and The SWOT analysis of the tech startup ecosystem open consultations sessions (interview with Dmytro identified four main challenges (see Table 2.1)22. This Pokhylko, VP NYEDC). TABLE 2.1. Ch ll n rs for N w York Cit ´s T ch St rtup Ecos st m Ch ll n s Expl n tion 1. L ck of ph sic l sp c for ntr pr n urs Offic sp c in N w York Cit is too xp nsiv for st rtups nd th r w s no sp cific off rin of offic r nt ls for st rtup n ds. 2. L ck of t chnolo -sp ci li d t l nt N w York Cit l ck d stron n in rin nd t chnic l schools nd most of th t l nt w s import d. 3. Insuffici nt s d c pit l v il bl for loc l Althou h N w York Cit w s hom to m n in th VC industr , st rtups th s firms did not consid r N w York Cit st rtups m tur nou h for fundin . 4. Limit d nd uncoordin t d communit of Th t ch communit w s rowin but sc tt r d nd t ch-l d innov tors nd ntr pr n urs uncoordin t d, th r w s no robust communit infr structur or institutions, nd b in n ntr pr n urs in N w Yrok w s soci ll not consid r d r sp ct bl occup tion. Sourc : NYCEDC SWOT n l sis. (Int rvi w with Dm tro Pokh lko, VP NYEDC). < 19 > Interestingly, these challenges were not unique to the policy was discarded or scaled-up depending on New York, which at the time did not have a robust its success, making a better use of public resources ecosystem, but they were (and still are) common to and obtaining faster results. In addition, NYCEDC many other cities that have not traditionally had a followed a partnership approach with academia and tech startup sector. NYCEDC built a program with the private sector, which allowed it to: (i) promote targeted policies to address each of these challeng- the tech startup industry without getting involved in es where there was a market failure (see Table 2.2). the day-to-day management of the initiatives, and These policies were not part of a large strategic plan (ii) catalyze further private involvement and the sus- and mostly followed a pilot-testing approach, where tainability of the sector in the long term. TABLE 2.2. Polic Actions Appli d b NYCEDC to Addr ss Id ntifi d Ch ll n s Ch ll n s Polici s 1. L ck of ph sic l sp c for ntr pr n urs 1.1. N twork of coworkin sp c s/incub tors 2. L ck of t chnolo -sp ci li d t l nt 2.1. Attr ction of sci nc nd t chnolo univ rsiti s (PPP mod ls - “Appli d Sci nc s NYC”) 3. Insuffici nt s d c pit l v il bl for loc l 3.1. S d fund support d b th Cit (”NYC Entr pr n uri l st rtups Fund” nd “NYC S d”) 4. Limit d nd uncoordin t d communit of 4.1. Comp titions (”Bi Apps”) t ch-l d innov tors nd ntr pr n urs 4.2. Politic l support for communit v nts nd m rk tin c mp in (in coll bor tion with M or´s offic nd CDO Sourc : NYCEDC SWOT n l sis. (Int rvi w with Dm tro Pokh lko, VP NYEDC). Where a pilot project proved successful, it was then scaled up. This is the case of city-sponsored incu- bators for startup businesses that became corner- stones for the development of the tech industry in NYC. Starting with the first incubator in 2009, NYC currently has 16 city-sponsored incubators scat- tered throughout the five boroughs, and with specific areas/sectors of focus (see Figure 2.1.) Network of coworking spaces/incubators NYCEDC addressed the lack of office space through a pilot project: a coworking space/incu- bator. This was one of the first policy actions of NY- CEDC, with the first city-sponsored incubator (160 Varick Street) opening in 2009. The concept proved successful in addressing the lack of office space and it evolved, expanding its goal to promote entre- preneurship in thematic industries (linked to those identified in previous strategic plans of the city as those where New York has competitive advantage). Today the network of incubators has grown to over 15 across the city and is managed by the Center for Economic Transformation (CET) at NYCEDC23. < 20 > FIGURE 2.1. N twork of NYCEDC-sponsor d Incub tors 13 Y r Incub tor Th m tic L unch d 1 V rick Str t Th m tic 2009 8 14 9 2 CFDA F shion Incub tor F shion 2010 7 3 Ch s n Artist Studio Art 2010 4 BMW V ntur s M di /T ch 2011 5 Dumbo Incub tor M di /T ch 2011 6 Entr pr n ur Sp c Industri l/Culin r 2011 7 HBK Incub tors Industri l/Culin r 2011 2 6 8 H rl m Biosp c BioSci nc 2013 9 H rl m G r G n r l Busin ss 2013 4 10 M d in NY M di C nt r M di /T ch 2013 1 11 St t n Isl nd M k rsp c Industri l 2013 5 12 Urb n Futur L b Cl nT ch 2013 10 13 Brox Busin ss Brid Busin ss 2014 14 BXL Busin ss Incub tor Busin ss 2015 12 15 T rmin lBioBAT Brookl n Arm BioT ch 2016 15 11 3 Sourc : NYCEDC W bsit NYCEDC incubators went beyond traditional munity spaces. By adding these services, NYCEDC incubator models and created communities of was able to address the challenge of growing the entrepreneurs. NYCEDC introduced elements of community of tech startups in parallel to the lack coworking spaces as well as community-building of office space. activities that went beyond the traditional concept of incubator. The space for startups is normally open NYCEDC developed its network of incubators in plan, making it easier for startups to meet and min- partnership with the private sector, attracting gle. The incubator provides traditional business ser- investment. NYCEDC followed a PPP model for vices but goes beyond that, also providing a network its incubators, where NYCEDC provides funding for of mentors and educational seminars for resident operational costs for a period of time and provides startups (which is more like an accelerator services). the space and its renovation at subsidized rates to In addition, the incubator had to connect with the kickstart the incubator (NYC Committee on Small community and develop events for that purpose, Businesses 2011). However, it is the private operator such as educational connection programs with local who ultimately bears the financial and operational schools, events linking resident entrepreneurs with responsibility for the project. The city-sponsored local business, events to generate networking (for incubator model is a multipartnership one as de- example, meetups, hackathons, and so on)24, all of scribed in Table 2.3 and Box 2.2. which are similar to services provided by tech com- TABLE 2.3. Cit -sponsor d Incub tor Mod l Op r tor Addition l p rtn rs NYCEDC ( . ., sp c provid r/donors) > B rs fin nci l nd op r tion l > B rs fin nci l nd op r tion l > S l cts nd contr cts th r sponsibilit for th proj ct r sponsibilit for th proj ct op r tor throu h public t nd r > Coll cts r nt nd p s > Provid in-kind s rvic s nd > F cilit t s r l tionship b tw n op r tin xp ns s support, such s furnitur , th op r tor nd l ndlord > Provid s duc tion nd pro bono or discount d > Provid s fin nci l ssist nc to fit tr inin for t n nts prof ssion l s rvic s, tc. out th incub tor sp c > Cr t s communit within > H lps r is public w r n ss th incub tor nd with oth r cit incub tors Sourc : NYCEDC. < 21 > BOX 2.2. How the NYCEDC Incubator Partnership Worked in Practice For the first city-sponsored incubator (Varick Street), > $50,000 for the launch and lease of the work opened in July 2009, NYCEDC helped negotiate a spaces; three-year master lease between the Polytechnic > $30,000 for the management and further devel- Institute of New York University (Operator) and Trin- opment of the business incubator; ity Real State (Space provider), who provided 16,500 > The remaining $70,000 for the required updates square feet of prime real estate. The polytechnic, and reports to NYCEDC on the operation of the busi- since renamed the NYU Tandon School of Engineer- ness incubator. ing, was responsible for the operation and manage- ment of the incubator, while NYCEDC provided the After the financial support from NYCEDC was to- initial financial assistance required for the fit out and tally disbursed, the operator was responsible for the operation of the incubator. In the DUMBO incubator continuation of the incubator operations on its own. case, for example, which opened in January 2011 and Apart from the donors and sponsors that supported which was also operated by NYU Tandon School of the Incubator, Bloomberg LP and Thomson Reuters Engineering, the amount disbursed by NYCEDC add- agreed to provide data feeds at no cost, and univer- ed up to $250,000 and was distributed the following sity partners provided mentoring services, business way: seminars, and networking opportunities for tenants. > $100,000 for the development of the project site to accommodate as many physical workstations as possible; NYCEDC’s network of incubators catalyzed the Attraction of Science and Technology development private sector-led of incubators, Universities accelerators, and coworking spaces in the city and fostered a community of entrepreneurs. The NYCEDC targeted the lack of homegrown tech city-sponsored incubators served to attract pri- talent through the attraction of applied science vate-sector led incubators and accelerators, which campuses in New York City. This was one of the starting appearing in the city widely from 2011 (Ta- most ambitious initiatives of the policy program and ble 1.6 Thematic Accelerator Programs in New York). attracted the full support of the mayor, which made Moreover, they were pioneering in creating a com- it a flagship initiative. The program (called Applied munity of startups in areas of the city that would Sciences NYC) was launched in 201025 and aimed to then become clusters (such as the Meatpacking attract at least one major university campus in the District, Downtown, Flatiron District, and Brooklyn). applied sciences to New York City. As with the oth- Prompted by the additional services introduced by er policies to support the tech ecosystem, Applied NYCEDC beyond traditional incubator models, some Sciences NYC proposed a PPP, incentivizing the at- of the city-sponsored incubators, such as Gener- traction of a top university to New York by provid- al Assembly, evolved into complete new business- ing funding and land for the campus (NYC Office of es and created the bootcamp education category, the Mayor 2010). In July 2011 a Call for Proposals serving the city’s tech rapid skills-training needs was launched and in October of the same year sev- (see Table 1.3). The 16 opened and upcoming incuba- en qualifying responses were received from 17 insti- tors have collectively raised more than $125 million tutions from around the globe (out of 27 interested in venture funding, comprising more than 160,000 institutions). The result was the establishment of square feet of office space and currently host more Cornell Tech Campus in the city, which is planned to than 600 startups employing about 1,000 people start by 2017 26 (see Box 2.3). (NYCEDC’s Blog 2013). < 22 > BOX 2.3. Cornell-Technion Innovation Institute on Roosevelt Island In December 2011 New York City announced the cre- the campus beginning in January 2014. The first full ation of the first Public-Private Partnership between classrooms are expected to open in 2017. Meanwhile, the City of New York and a consortium of institu- on January 21 2013, the first class of eight students, tions led by Cornell University and the Technion to also known as the beta class (The New York Times create a graduate engineering school from scratch 2013), began pursuing a one-year Cornell Master (Next City 2012) that would be located on Roosevelt of Engineering degree in computer science at of- Island and would receive $100 million in capital initial fice space donated by Google to Cornell-NYC Tech investment from the city to build a $2 billion and two during campus construction (NYCEDC’s Blog 2012). million square foot campus. On December 19, 2013, The campus will also have an incubator space, R&D the city, Cornell University, and Technion-Israel In- labs, and a $150 million fund for local startups. stitute of Technology signed a 99-year lease for the 12 acres of Roosevelt Island, with construction of The city complemented the attraction of a uni- Prompted by Cornell Tech Campus, both NYU and versity campus with partnerships to develop Columbia strengthened their engineering and sci- research centers and strengthening the science ence offering. NYU created the NYU Polytechnic departments of existing universities in the city: School in 2014 after merging with the Polytechnic New York University and Columbia University. This School (renamed as New York University Tandon reinforced the two existing universities, introducing School of Engineering in 2015), providing a second partnerships with the private sector (see Box 2.4). full campus for applied sciences in the city. BOX 2.4. NYU and Columbia Research Center Partnerships NYU Center for Urban Science and Progress. On Institute for Data Sciences and Engineering at April 23, 2012, the City announced a s NYU Center Columbia University. In July 2012, the city and for Urban Science and Progress. On April 23, 2012, Columbia University announced the creation of a the City announced a second partnership agree- new Institute for Data Sciences and Engineering ment within the Applied Science NYC initiative with a (NYCEDC 2012). As part of the agreement, the city consortium of top academic institutions and private provides $15 million in critical financial assistance to technology companies to create the NYU Center for Columbia – including discounted energy transmis- Urban Science and Progress (CUSP), to be located sion costs and partial debt forgiveness – as well as in Downtown Brooklyn. The CUSP consortium is a valuable lease flexibility leading to the development partnership led by NYU and the Tandon School of of the institute. The agreement includes the creation Engineering that focuses on research and develop- of 44,000 square feet of new applied science and ment in technology to address the critical challenges engineering space on Columbia’s campus by 2016 facing cities: infrastructure, technology integration, and the addition of 75 new staff over the next de- energy efficiency, transportation congestion, public cade and a half. The focus of the new institute will be safety, and public health. From initial studies, the on advances in the data sciences. city expected that the new research and technolo- gies developed at the center could generate about $5.5 billion in overall economic impact and 7,700 jobs over the next thirty years27. < 23 > Seed Fund supported by the City accelerator program for New York startups. This initiative is an evolution of the incubator model, ad- Access to seed funding for local startups was vancing the seed funding needs that are provided by addressed by supporting the creation of a seed a full accelerator program. NYC Seed provided men- funds with the mandate of investing in New York torship, initial seed funding, and an accelerated pro- City startups. NYCEDC supported two initiatives to gram to develop products from concepts28 (see Box catalyze seed funding to New York grown startups. 2.5). In 2010, the city launched the New York City In both cases, NYCEDC followed a PPP approach, Entrepreneurial Fund, a comatched fund for seed in- providing support for private partners to collaborate vesting in New York startups. This fund addressed and kick start support for local startups. In 2008, the lack access to VC funding by New York startups. NYDEC supported the creation of NYC Seed, an BOX 2.5. NYC Seed Announced in 2008, NYC Seed is a public-private generation of NYC tech companies. NYC Seed is a partnership initiative that supports seed-stage partnership between the Partnership Fund, ITAC, startups in the city of New York. Additionally, fund- NYCEDC, Empire State Development and Polytech- ing and mentoring from notable entrepreneurs and nic Institute of NYU29. The $2 million fund invests up venture capitalists are provided to help businesses to $200,000 per homegrown web startup (The New move from concept to product, fostering the next York Times 2009). NYCEDC contribution to New York City Entre- Community-Building Policies preneurial Fund (NYCEF) was a catalyst and NYCEDC did not intervene in investment deci- Community building was addressed through mul- sions. Through a contest, NYCEDC partnered with tiple interweaved policies involving both NYCEDC a professional investor manager, FirstMark Capital, and the mayor’s office, which included: (a) apps to create NYECEF30. NYCEDC contributed $3 mil- competitions, (b) active support from the mayor’s lion out of the $22 million fund, the remaining be- office, and, (c) a promotion campaign and attraction ing topped by FirstMark Capital, who also provid- of tech multinationals and startups. ed industry insight, proprietary relationships, and operational expertise. Under the terms of the fund, Competitions began as a tool of open government FirstMark Capital was responsible for sourcing and and resulted in an effective community-building evaluating potential investments, negotiating terms tool. Initially, when launched in 2009, the city apps and conditions, and closing each seed investment; competition (BigApps Competition32) was designed it also monitored the performance of the compa- to make use of the recent open data made available nies in which the NYCEF’s funds that were invest- by the city. The idea was to offer monetary prizes ed. NYCEDC did not set any rules for investment, following a hackathon format for the tech communi- except that startups should be located in New York ty to develop useful apps using the data provided by City, pertain to the tech sector, and not be involved the city. The competition was part of the Open Gov- in illegal or illicit activities. This provided complete ernment strategic line of the Digital Road Map and freedom to the fund operator to decide investments was part of a group of initiatives, including the city’s based on market criteria, similar to how an indepen- apps hub, its developers’ portal, and the release of dent VC would operate31. data33. By 2014, and as the Open Government goal was achieved, NYCEDC shifted the BigApps com- NYCEF resulted in attraction of private sector petition to focus on its community-building impact, funding for local startups. Following the creation fostering the connection aspects. The BigApps com- of NYCEF and its investments, local and outside-of- petition was transformed into a tech community the-city VCs were attracted to invest in New York event where participants collaborate and solutions startups. Today, New York is the second largest tech focus on the city’s problems for the benefit of the startup ecosystem in the United States in terms of community34. In its fifth edition in 2014, 20 finalists VC funding for local startups (see Section 1: The competed for more than $100,000 in cash prizes. Growth of the Tech Startup Ecosystem in New York). The competition also links with the incubator net- < 24 > work and the city fund of the city and many proj- over 50 parks had free public Wi-Fi, 300,000 low-in- ects are then hosted in the network of incubators come residents were able to access the internet, and (provided they qualify), connecting both networks of 36 NYC underground subway stations had Wi-Fi ac- entrepreneurs and mentors. For instance, the first cess. On government as a platform, the city opened investment of NYCEF was a winner of the BigApps its data, provided APIs, made a hub for developers, competition in 201035. and showcased apps based on city data. This was combined with a yearly competition (BigApps com- The mayor’s office provided active support to petition, see above) which connected with the other the tech community, participating in events and community building and funding initiatives of the meetups, and creating a point of contact for the city. community in the city: the Chief Digital officer (CDO). The mayor and the CDO have participat- ed personally in the tech community’s events since 2008. The Mayor could be seen with early entrepre- neurs in the First Internet Week Event in New York in 2008 or in New York Tech Meetups supporting the community and promoting New York as a city for entrepreneurs . The appointment of a CDO in the city to interact with and support the tech commu- nity provided additional backing combined with agile reaction to the community’s needs. The city launched an intense promotion cam- paign to highlight New York’s entrepreneurs to attract talent and raise the profile and signifi- cance of the tech community. The city launched “We are Made in NY” in 2002, an economic develop- ment initiative that focuses on the local tech sector, highlights job opportunities, attracts new companies to the city, and presents a host of education pro- grams that support learning at every literacy level. Expanding the Made in NY Mark of Distinction for digital companies that base at least 75 percent of their development in NYC, to capitalize on local tal- ent and achievements, was also another focal point to promote the city’s tech sector. The city also cre- ated a central point of information for the tech eco- system in New York, Digital.NYC , where interested parties could access information about startups, investment, spaces, or training courses in the city. All this was combined with advertising and promo- tion of success stories of entrepreneurs, raising the profile of New York as a tech startup hub. In parallel, the mayor’s office also involved itself in attracting prominent tech startup to open operational offices in New York, offering tax breaks. Additional Supportive Policies New York combined NYCEDC operational policy actions with strategic support actions. As part of the strategic policies stemming from the NYC Digital City Roadmap, the city supported the tech startup ecosystem through: (a) development of broadband access infrastructure, and (b) government as a plat- form as part of the open government agenda. On connectivity, by 2013, 99 percent of New Yorkers had residential access to high-speed broadband, < 25 > 3. LESSONS FROM NEW YORK CITY’S CASE The New York City case highlights interesting les- er interested parties. There was a clear policy from sons for policy action to support the growth and the outset to involve as many partners as possible sustainability of a tech startup ecosystem. These and attract them to the goal of growing the tech lessons can inform policies in other cities. community in New York City. NYCEDC developed its policies in close contact with the ecosystem’s stake- < 1 > Action plan was tailored to New York’s chal- holders, through focus groups and meetings, and lenges, which were identified together with the ensured that each policy had the buy-in and backing ecosystem stakeholders. NYCEDC’s starting point of the ecosystem’s stakeholders. These meetings re- was to analyze the city’s tech ecosystem and under- sulted in a coalition of partners. The mayor’s office stand its key challenges. Every city is different and attracted institutional stakeholders, including large the challenges it may face are not the same as in universities and multinational tech companies, as other cities. Ecosystems, although having similar- well as empowered the community. This was critical ities, are also unique and have different challenges in obtaining the buy-in of the ecosystem itself and and opportunities. By focusing on its local challeng- ensuring sustainability, while the city focused its re- es, the city could focus on targeted policies with di- sources on catalyzing the growth of the ecosystem rect results that build upon each other. More im- strategically. portantly, NYCEDC did not identify the challenges alone. Rather, it worked with the ecosystem, through < 4 > Combination of operational and strategic an intense consultative process and bottom-up ap- vision approaches. New York’s approach was prag- proach, which ensured that the challenges identified matic, addressing specific challenges through ac- were validated by the stakeholders, being the “real” tions that provided quick wins in combination with challenges of the ecosystem (see <3> below). a clear strategic vision (through Digital City Road- map). This combination provided guidance for the < 2 > There was clear leadership support from policy actions, but allowed flexibility for NYCEDC the mayor and continuing city endorsement. The to respond to changes in the environment, respond personal endorsement from the mayor changed rapidly to new challenges, and modify its initiatives perceptions of New York as a city for tech entrepre- when needed. It also allowed for quick results (while neurs. The backing of the mayor in tech events and the umbrella strategic plan was being developed) showcasing New York startups reinforced the com- that encouraged the community of entrepreneurs munity and provided a socially respectable image of and reinforced the idea that city support for the eco- tech entrepreneurs in the city. In building communi- system was not just a paper plan. ties, social perception matters which can set growth dynamics and develop champions outside the city to < 5 > Policies were only applied were there was a push for that growth (for example, the private sector, market failure. The city was careful to only devel- civil society, academia, and so on). This change in op policies where there was a market failure. The perception was critical in making the community be- SWOT analysis and thorough involvement of the lieve in itself and enabling it to attract tech entrepre- ecosystem identified the challenges that were not neurs to New York. The city combined this high-level being addressed. The city intervention was also lim- political backing with the creation of a single point ited in time with the goal of catalyzing the stake- of contact for the city with tech entrepreneurs (the holders themselves to address the challenges. These CDO) and a policy of open government to catalyze criteria ensured that the city’s intervention did not tech startup growth (see <12> below). result in market distortions that would alter the eco- system and that resource were use in the most tar- < 3 > The city built a coalition of partners involv- geted way. ing the whole ecosystem. New York City did not work alone. Instead, the mayor’s office, NYCEDC, < 6 > City intervention was limited to catalyze and the other city institutions developed a coali- market solutions, providing sustainability and tion of partners to support the growth of the tech making the most effective use of public resourc- startup ecosystem. This involved universities, the es. NYCEDC’s interventions aimed at catalyzing private sector, entrepreneurs, civil society, and oth- the private sector and other stakeholder involve- < 26 > ment. NYCEDC’s typical method of working was to mension was the key for the growth and sustainabil- launch public tenders to attract private operators ity of the ecosystem. to manage the initiative and to actively contribute resources, which reinforced the idea of partnership < 9 > Policies had no geographic boundaries in the and increased the commitment of the city’s part- city and they were not limited to a unique “tech ners. Examples of this include the incubator network district”. New York did not focus on a specific geo- and the seed fund initiatives. In the first one, the city graphic area. Instead it aimed at developing the eco- provided the initial funding for operation costs and system across the city. Even policies where it had to the refurnishing of the office space, and mediated choose geographic locations, such as the incubator with third parties to obtain below-the-market or do- network, evolved to spread throughout the city and nated real estate space. In the second case, the city support the growth of the tech startup communi- provided a small percentage (Dmytro Pokhylko, VP ty in new neighborhoods (for example, Brooklyn or NYCEDC) of the fund, the rest being leveraged from Queens). This approach ensured that the benefits of the private sector. The management of both initia- the tech startup ecosystem spread throughout the tives was reserved for the private sector partners, city and allowed the ecosystem to grow and flow or- with no involvement of NYCEDC in daily operations. ganically (in fact, the ecosystem moved and expand- This approach proved successful in providing sus- ed naturally throughout the city as neighborhoods, tainability to the initiatives that were taken over by supportive infrastructure, and rents changed (see the “partner.” At the same time, it liberated resources Section 1: The Growth of the Tech Startup Ecosys- for the city to apply to other initiatives. tem in New York). This approach is consistent with understanding the ecosystem as a community and < 7 > A pilot/scale up approach allowed for flex- it contrast with other policies that target “innovation ibility and rapid testing of policy actions. Using districts,” limiting the policy scope to a single neigh- pilots allowed NYCEDC to test policy approaches borhood. and assess their potential impact before fully com- mitting resources. There were no existing policies < 10 > The skills pipeline was addressed early designed or tested for the challenges New York City on with multiple combined approaches. The city was addressing and NYCEDC had to try new ap- addressed the need for a larger pipeline of talent proaches. Pilot testing allowed for experimentation through multiple approaches. For the long term, the and new approaches that could be tested rapidly city attracted new engineering and applied science and adapted or discarded for better results. The city campuses to the city. This was combined with a applied a similar approach to the lean startup model, myriad of short-term policies imbedded within city’s in which iteration allows for pivoting and adapting program. For instance, in the incubator network the the policies to achieve better results before scaling city required the partners to provide tech skills ed- up. The fact that the city could use an agile organi- ucational courses. This resulted in short-term skills zation like NYCEDC to do that allowed for such an for the tech community, and in new models of rapid approach. tech skills training (the “bootcamps”) with Gener- al Assembly (one of the incubators of the network) < 8 > Policies addressed the tech startup ecosys- evolving into one of the largest bootcamp providers tem as a “community,” strengthening its social in the world. There were many other actions, such as dimension. Intuitively or purposely, New York City providing tech skills in public libraries and supporting approached the ecosystem as a community that the introduction of coding in public schools. Some had to be nurtured and grown. Example of this in- of these approaches proved more successful than clude the emphasis on social events in the incubator others, but the mix of all of them served to highlight network or the policies to grow the community di- the importance of tech skills for education in the city rectly. By taking this approach, New York City cre- and attract new talent into building these skills for ated a social environment that grew stronger with the future. each new policy action. New York’s policies were dif- ferent to other city’s policies to promote innovation < 11 > Strong emphasis on behavioral and percep- or startup ecosystems, which typically considered tion change with use of promotion and marketing the ecosystem as a set of different players or layers, campaigns. In parallel to the operational policies, the each of one of which was the target of the policies. city developed a promotion and marketing campaign The policies that New York developed addressed the to change social perception of tech entrepreneurs social connection among the different stakeholders, and change the image of New York into a welcoming empowering its members to grow and take own- city for tech entrepreneurs. This was coupled with ership of the ecosystem. Research by World Bank targeted support by the mayor and the city through (Mulas, V., Minges, M. and Applebaum, H. 2015) and the CDO for the tech startup community, raising its Endeavor Insight (2014) shows that the social di- relevance. This was crucial in changing the social dy- < 27 > namics enabling growth of the ecosystem and the support of a community of stakeholders beyond the tech entrepreneurs themselves, bringing in large cor- porations, universities, and civil society from around the city. It also increased the image of the city to attract talent for the tech ecosystem, which previ- ously did not consider New York as a tech-friendly city. This was especially relevant for New York, giv- en that over 80 percent of the tech founders came from outside the city (Endeavor Insights 2014). < 12 > The city government served as an active platform for the development of tech solutions. The support of the city went beyond promotion and formal backing. The city consciously developed a policy of open data and open government, which fed the tech startup community. There was a strat- egy to provide open data, with tools specific to open data from the city, combined with an invitation to tech entrepreneurs to address challenges (for exam- ple, the BigApps Competition). These policies were connected with the network of incubators or the seed fund to grow the ecosystem and form a larg- er community. The provision of the city’s data and challenges served as a catalyst to form cohorts of potential startup founders through hackathons and competitions which connected socially to feed the tech community. < 28 > APPENDIX A. LIST OF INTERVIEWS AND PLACES VISITED The research for this report included the following interviews and places visited in New York City during the week of [May 18-22], 2015. Additional interviews were conducted in previously via phone. Institution Category Name Title General Assemblya Community Space / Mandy Le Head of Market bootcamp provider / Expansion Successful startup Endeavor Insighta Research / Entrepre- Rhett Morris, Matt Director of Endeavor neurship support Lerner Insight, Associate Urban Future Lab/NYC Incubator / Accelerator Joe Silver Project Manager Accelerator for a Clean Renewable Economy (ACRE)a LittleBitsa Successful startup Alisson Vannatta Account Manager New York University University Abram Goldfinger Executive Director (NYU) Office of Indus- trial Liaison (OIL)a Google (New York Of- Tech Company William Floyd Head of External Affairs fice) a NYCEDCa City Government / Eco- Dmytro Pokhylko VP NYCEDC system Catalyzer NYC Major’s Office, Of- City Government Dave Selinger Project Manager fice of Technology and Innovationa WeWorka Successful startup / Matt Shampine VP of Business coworking space Development provider The Center for an Think Tank / Research Jonathan Bowles Executive Director Urban Futurea Bloomberg Philanthro- Think Tank / Research Todd Asher, Shaina Media and Technology pies / Associatesa Horowitz Strategies Team Gust / Digital NYCa Angel investor / David Rose CEO, Gust Research Office of Intellectual University Orin Herskowitz VP / Executive Director Property and Tech Transfer Columbia University / Columbia Tech Venturesa < 29 > Institution Category Name Title DUMBO Incubatora Incubator / Accelerator Craig Wilson Manager Manhattan Borough City government / Will Colegrove Director Budget and President’s Office Borough Transparency State of New York State government Rachel Haot Chief Digital officer and Deputy Secretary for Technology Office Council Member City Government / Stacey Gardener Legislative Director James Vacca – Chair Councilmember Committee of Technology iZone / NYC Depart- City Government Kara Chesal Program Manager ment of Education Office Council Member City Government / Monica Abend Deputy Chief of Staff Laurie Cumbo – Chair Councilmember Committee of Women’s Issues Krash Coworking space Mykim Dang Director of Marketing Uncubed Community space / Tarek Pertew Co-Founder and COO Tech skills provider Shutterstock Startup Niamh Hughes Tech Communications Manager Coalition for Queens Coworking space / Jukay Jsu, Marina Tran Founder, Director of bootcamp provider Community and Partnerships Techstars NYC Accelerator KJ Singh Director NYC Tech Meetup Meetups / Community Jessica Lawrence Executive Director catalyzer Meetup.com Meetups / Community Kristin Hodgson Communications catalyzer Director Beta NYC Startup Noel Hidalgo Co-founder Enstitute Startup Kane Serhan Founder Audience.io Startup Courtney Boyd Meyers Founder Note: a Visited onsite. < 30 > APPENDIX B. LIST OF DETAILED SOURCES FOR TABLES & FIGURES (TABLE 1.1) Tech Startup IPOs since 2008 Company Reference Etsy Xconomy. 2015. Why Etsy’s IPO Could Silence Haters of the New York Tech Scene. April. http://www.xconomy.com/new-york/2015/04/20/why-etsys- ipo-could-silence-haters-of-the-new-york-tech-scene/ The Verge. Etsy completes its IPO, valuing the craft marketplace at over $3.5 billion. 2015. April. www.theverge.com/2015/4/16/8428627/etsy-ipo- goes-public OnDeck Xconomy. 2014. That OnDeck $200M IPO, and Keeping Things Real in the New York Scene. December. www.xconomy.com/new-york/2014/12/24/ that-ondeck-ipo-and-how-to-keep-things-real-in-the-new-york-scene/ NY Times. 2014. OnDeck, a Lender to Small Businesses, Raises $200 Million in I.P.O. http://dealbook.nytimes.com/2014/12/16/ondeck-a-lender-to- small-businesses-raises-200-million-in-i-p-o/?_r=0 Everyday Health Seeking Alpha. 2014. Everday Health IPO Less Vigorous than it sounds. March. http://seekingalpha.com/article/2114393-everyday-health-ipo-less- vigorous-than-it-sounds Recode. 2014. Every day health raises 100 million in IPO but Shares Dip in Early Trading. March. http://recode.net/2014/03/28/everyday-health-rais- es-100-million-in-ipo-but-shares-dip-in-early-trading/ Fortune. 2014. IPO watch: Everyday Health. March. http://fortune. com/2014/03/28/ipo-watch-everyday-health/ Borderfree Reuters. 2014. Boderfree prices IPO at top end of $14-$16 range: under- writer. March. http://www.reuters.com/article/2014/03/20/us-border- free-ipo-idUSBREA2J2D020140320 Varonis Systems Yahoo. 2014. Varonis Systems. February. http://finance.yahoo.com/news/ varonis-systems-friday-hot-ipo-161010681.html Reuters. 2014. Data Security firm Varonis Systmes raises IPO to $22/ share. February. http://www.reuters.com/article/2014/02/28/varonissys- tems-ipo-idUSL3N0LW4ZR20140228 Tremor Video Crunchbase. 2013. Tremor Video. June. https://www.crunchbase.com/ipo/ da03beda0798fced34b1c37de5399aff CBS insights. 2014. OnDeck Capital is New York’s Larges Backed Tech Exit Ever. December. https://www.cbinsights.com/blog/ondeck-capital-largest- new-york-vc-backed-tech-exit/ Shutterstock Bloomberg. 2012. Shutterstock surges after IPO Priced above range. Octo- ber. http://www.bloomberg.com/news/articles/2012-10-11/shutterstock- surges-after-ipo-priced-above-range-at-17 < 31 > (FIGURE 1.3) New York Tech Meet up Members per Year NYTech Meetup. https://nytm.org/members Attending. Lessons from the largest Meetup Group in the World. http://writing.attending.io/pieces/ lessons-from-the-largest-meetup-group-in-the-world TechCo. 2015. Jessica Lawrence Video Intervies. March. http://tech.co/jessica-lawrence-video-in- terview-sxsw-2015-03 Venture Beat. 2013. New York Tech Meetup steps up to help shape NYCS Tech Policy. January. http:// venturebeat.com/2013/01/24/new-york-tech-meetup-steps-up-to-help-shape-nycs-tech-policy/ New York Angels. http://www.newyorkangels.com/about.html (TABLA 1.4) New York Tech Meet up Members per Year Company Reference Google Village Voice, 2006. Google: The New Port Authority. September. http:// www.villagevoice.com/news/google-the-new-port-authority-6418743 City Room. 2008. Google Expands its New York Footprint. June. http://city- room.blogs.nytimes.com/2008/06/23/google-expands-its-new-york-foot- print/ Urban Land. 2014. Making Space for More Tech Firms in New York City. August. http://urbanland.uli.org/economy-markets-trends/making-space- tech-firms-new-york-city/?utm_source=feedly&utm_reader=feedly&utm_ medium=rss&utm_campaign=making-space-tech-firms-new-york-city Vault.2014. Google Wants 600,000 More Square Feet of NYC Office Space. April. http://www.vault.com/blog/job-search/google-wants-600000-more- square-feet-of-gotham-city-office-space/ Fortune. Its been 10 years Google is Officially a New Yorker. May. http://for- tune.com/2013/05/22/its-been-10-years-google-is-officially-a-new-yorker/ The Ladders. Google Doubles Down on New York IT Jobs. http://info.thelad- ders.com/blog/bid/150994/Google-Doubles-Down-on-New-York-IT-Jobs Data Center Knowledge. 2005. Huge leases for googlenet at 111 Eighth Ave. http://www.datacenterknowledge.com/archives/2005/09/23/huge-lease- for-googlenet-at-111-eighth-ave/ < 32 > Company Reference Facebook Bloomberg. 2011. Facebook to open New York Engineering Office as Web- site prepares for IPO. December. http://www.bloomberg.com/news/arti- cles/2011-12-02/facebook-to-open-new-york-engineering-office-as-web- site-prepares-for-ipo Quartz. 2014. How Facebook’s fancy New York office explains its manage- ment philosophy. July. http://qz.com/229542/facebook-office/ Zdnet. 2011. Facebook announced that it will open a major engineering offince in New York city in early 2012. December. http://www.zdnet.com/ar- ticle/facebook-announces-open-engineering-office-in-new-york-city/ IBTimes. 2011. Inside Facebook’s New York Office at 335 Madison. December. http://www.ibtimes.com/inside-facebooks-new-york-office-335-madison- photos-378072 Ebay Gigaom. 2012. Ebay puts down roots in NYC with data-focused tech center. May. https://gigaom.com/2012/05/03/ebay-puts-down-roots-in-nyc-with- data-focused-tech-center/ Crains New York. 2013. How eBay NY plans to conquer the world. May. http://www.crainsnewyork.com/article/20130512/TECHNOLO- GY/305129973/how-ebay-ny-plans-to-conquer-the-world Crain’s. 2015. PayPal gets its own office in the West Village. May. http:// www.crainsnewyork.com/article/20150513/BLOGS03/150519949/paypal- gets-its-own-office-in-the-west-village Microsoft Microsoft Research Blog. http://research.microsoft.com/en-us/news/fea- tures/msrnyc-050212.aspx Bloomberg. 2013. Microsoft Leases Manhattan Offices in 11 Times Square. January. http://www.bloomberg.com/news/articles/2013-01-07/micro- soft-leases-manhattan-offices-in-11-times-square Microsoft. 2013. New York City Lab Lands in Silicon Alley. April. http://blogs. technet.com/b/inside_microsoft_research/archive/2013/08/19/new-york- city-lab-lands-in-silicon-alley.aspx The Free Library. Microsoft leases 100,00 SF of space. http://www.thefreeli- brary.com/Microsoft+leases+100,000+SF+of+space.-a0100243448 PC. 2012. Microsoft Opens New York Research Lab with Former Yahoo Scien- tists. May. http://www.pcmag.com/article2/0,2817,2403915,00.asp < 33 > Company Reference Yahoo Tech Crunch. 2013. Yahoo Sets up Shop in Times Square for its 500 New York Employees. May. http://techcrunch.com/2013/05/20/yahoo-sets-up- shop-in-times-square-for-its-500-new-york-employees/ Bloomberg. 2013. Yahoo will expand in New York City with New Times Square Office. May. http://www.bloomberg.com/news/articles/2013-05-20/ yahoo-will-expand-in-new-york-city-with-new-times-square-office New York Times. 2013. Yahoo to consolidate New York Headquarters in Times Square. May. http://www.nytimes.com/2013/05/21/nyregion/yahoo- to-consolidate-new-york-headquarters-in-times-square.html PC. 2012. Microsoft Opens New York Research Lab with Former Yahoo Scien- tists. May. http://www.pcmag.com/article2/0,2817,2403915,00.asp Rew. 2011. Yahoo leases 50000 SF at 1540 Broadway. http://rew-online. com/2011/04/01/yahoo-leases-50000-sf-at-1540-broadway/ Linkedin Business Insider. 2013. Linked Finished Renovating Its Emire State Building Offices and Gave us a Tour. April. http://www.businessinsider.com/linke- din-office-tour-2013-4 The Real Deal. 2014. Linkedin Expands out at Empire State Building. March. http://therealdeal.com/blog/2014/03/04/linkedin-expands-out-at-empire- state-building/ Yelp Crains New York. Real Eastate Deal Watch. http://www.crainsnewyork.com/ data-lists/real-estate-deal-watch/details/12/2959697 Daily News. 2011. Yelp Unveils NYC office space in Union Square. October. http://www.nydailynews.com/new-york/yelp-unveils-nyc-office-space-arti- cle-1.968465 (TABLE 1.6) Thematic Accelerator Programs in New York Company Reference Barclays Bitcoin. 2015. Barclays Launches Fintech Innovation Hub Rise New York, Other Rise Hubs to Follow. July. https://bitcoinmagazine.com/21257/bar- clays-launches-fintech-innovation-hub-rise-new-york-rise-hubs-follow/ FinTech Innovation Lab Crunchbase. Fintech Innovation Lab London. https://www.crunchbase.com/ organization/fintech-innovation-lab-london Value Street Lab Crain’s. 2014. The New Wall Street. August. http://www.crainsnewyork.com/ article/20140902/TECHNOLOGY/308319990/the-new-wall-street New York Digital Health Parternship for New York City. 2014. The Partnership Fund’s ‘NY Digital Accelerator Health Accelerator Announces Programs 2014 Class of Entrepreneurs. July. http://pfnyc.org/news_press/new-york-digital-health-accelerator-announc- es-top-pick-companies-for-2014/ < 34 > Company Reference Blueprint Health https://www.blueprinthealth.org Startup Health Crunchbase. Startup Health. https://www.crunchbase.com/organization/ startup-health EDGE EdTech http://www.edgeedtech.com/ PR Newswire. 2015. Edge Edtech. Launches Accelerator in New York City for Education Technology starts ups offering 170000 in funding to ten selected companies. https://www.crunchbase.com/organization/startup-health Kaplan EdTech Crain’s/ 2014. Tech accelerator’s grab for equity. March. https://www. crunchbase.com/organization/startup-health http://kaplanedtechaccelerator.com/ Meta Prop NYC Crain’s/ 2014. Tech accelerator’s grab for equity. March. https://www. crunchbase.com/organization/startup-health http://kaplanedtechaccelerator.com/ Crunchbase. 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October 20. http://www.nytimes.com/imagepages/2006/10/20/ realestate/22livi_map_ready.html Wall Street Journal. 2016. Venture Funding Gushes in New York City. January 14. http://www.wsj.com/arti- cles/venture-funding-gushes-in-new-york-city-1452834060. < 37 > NOTES 1 Crunchbase, https://www.crunchbase.com. 2 Angelist, https://angel.co/ . 3 NY Tech Meetup, https://nytm.org/. 4 New York Angels, http://www.newyorkangels.com/. 5 Tech Crunch (2015), http://techcrunch.com/2015/03/22/mentors-are-the-secret-weapons-of-successful-startups/. 6 Bootcamps.in, http://www.bootcamps.in/. 7 NYU Polytechnic School of Engineering, http://engineering.nyu.edu/about/merger. 8 Cornell Tech, http://tech.cornell.edu/. 9 See: http://engineering.nyu.edu/admissions and http://engineering.columbia.edu/. 10 Tech multinationals starting establishing offices since 2006 through acquisitions or by setting small commercial offic- es. However, it was not until 2010, that tech multinationals started establishing operational corporate offices with core design and engineering functions (see Table 1.4) 11 CB Insights, https://www.cbinsights.com/blog/new-york-tech-investment-report/. 12 Observer, http://observer.com/2011/02/the-xoogler-infiltration/. 13Unless noted otherwise, the source of the information for this box is from Etsy’s 2015 Form S-1 Registration State- ment and 2013 Values and Impact Annual Report. 14 Savills-Studley, http://www.savills-studley.com/63069c1c-06dd-4fd8-8ad1-7f972007a04e/our-firm-press-room- detail.htm. 15 Business Insider, http://www.businessinsider.com/brooklyn-is-the-new-mecca-for-startups-2014-1. 16 NYC, http://www.nyc.gov/html/dcp/html/dumbo/dumbo2.shtml. 17 The Wall Street Journal, http://www.wsj.com/articles/SB10001424052748704247904575240583258102378. 18 Refers to Zip code 11201. Source: U.S. Census Bureau American Fact Finder. 19 See: http://www.digitaldumbo.com. 20 See: http://theleanstartup.com/principles. 21 Interview with Rachedl Hort, Chief Digitial Officer and Deputy Secretary for Technology, State Government 22 Interview with Dmytro Pokhylko, VP NYCEDC. 23 The CET’s goal is “to develop the City’s major business sectors by implementing policy and programmatic initiatives that address current issues faced by each industry, create good jobs, and promote entrepreneurship and economic diver- sification across the five boroughs.” See: https://www.nycedc.com/division/center-economic-transformation-0. 24 See, for instance: NYCEDC (2010) Dumbo Business Incubator Project, Consultant Contract for Consulting Services. 25 NYCEDC: https://www.nycedc.com/project/applied-sciences-nyc. 26 Cornell: http://tech.cornell.edu/future-campus. 27 CUSP: http://cusp.nyu.edu/about-how/. 28 NYC Seed: http://www.nycseed.com/advisoryBoard.html. 29 Partnership for New York City: http://pfnyc.org/our-investments/. 30 New York City entrepreneurial Fund: https://www.nycedc.com/program/nyc-entrepreneurial-fund. 31 Interview with Dmytro Pokhylko, VP NYCEDC. 32 NYC BigApps: http://nycbigapps.com/. 33 See: http://www.nyc.gov/html/media/media/PDF/90dayreport.pdf. 34 https://medium.com/@internetweek/q-a-why-bigapps-pushed-past-the-hackathon-a3d4f442f3f6. 35 MyCityWay, http://www.mycityway.com/. 36 See, for instance: http://www1.nyc.gov/office-of-the-mayor/news/204-08/mayor-bloomberg-launches-first-ever-in- ternet-week-new-york. 37 Digital.NYC, http://www.digital.nyc/. < 38 > This work is available under the Creative Commons Attribution Non-Commercial 3.0 IGO license (CC BY NC 3.0 IGO). 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