Silicon Valley has long been known as the startup capital of the world. However a shift is occurring, resulting in large entrepreneurial growth being brought to New York City. Startups in Silicon Valley have a history of creating digital infrastructure and tech hardware, but ‘Silicon Alley’ is tailored to startups that want to build digital businesses. As the intersection between ecommerce, education, fashion, media, advertising, finance, and healthcare industries, New York City is the natural choice for startups that wish to be immersed in these fields.
NYC has seen an influx of entrepreneurial activity with several startups rising above the rest into startup prominence. Foursquare, Kickstarter, Tumblr, Codeacademy, Gilt Groupe are just some of the NYC based startups that have found immense success in recent years. One commonality they all share however is that they are all digital businesses rather than hardware centric.
Though why has NYC experienced such growth in the startup sector?
Part of the reason has been vast access to capital from both VCs and the arrival of venture-backed acceleration programs. NYC BigApps competition offered $50,000 prizes for developers to create apps based off of data gathered by the city that improve quality of life for users living in NYC. Overall venture backing increased 17% in Q2 totaling $7 billion, putting 2012 on pace to beat 2010 in investments. Nonetheless certain analysis indicates that Boston ranks close with NYC in terms of startup activity, but much of that is life science while NYC is ahead in terms of tech and information.
A New Tech City report indicated that New York was the only technology region between 2007 and 2011 to increase total venture capital deals posting a 32% increase, compared to declines of 10% in Silicon Valley and 14% in New England. While private sector employment in the city grew by only 4%, the total number of information technology jobs in the city rose 29% over the past five years to 52,900. Overall tech sector growth has been favorable as the New York City Economic Development Corp. counts 90,273 new jobs, a 30% hike since 2005.