Tech Put New York City’s Job Market On Its Shoulders During the Pandemic
A number of challenges, though, could cork the supply, a new report says
It’s no secret that the tech sector has propelled New York City’s economy forward, growing faster than almost any other industry in the last 10 years, but remote work, a high cost of living and competition from the rival metropolis of Miami could threaten that trend, according to a new report from the Center for an Urban Future and Tech:NYC.
The tech sector barrelled ahead during the pandemic. The number of New York City tech industry jobs grew by 8.7 percent while the rest of the city’s employment shrunk by 5.3 percent from February 2020 through December 2021, according to the report. A potential recession is also raising questions about the industry’s future, as firms such as Meta Platforms, Twitter and Snap Inc. announce hiring freezes, instability rocks the cryptocurrency world, and companies from Coinbase Global to Netflix cut staff.
“New York is not immune to tech troubles in the markets right now or in the economy, but we’re seeing signs that New York City is much better positioned to grow in tech than it ever has been before,” Jonathan Bowles, executive director for the center, said. “Tech has always had companies going gangbusters and companies that are stepping back. The great advantage of New York is that it is not reliant on any single tech sub-industry.”
One of those sub-industries that has expanded is real estate-focused tech start-ups, which have grown in number by 28 percent from 2016 to 1,572 start-ups in 2021. Real estate tech companies represent more than 6 percent of all tech start-ups citywide, according to the report.
But internet-related tech jobs have been the true stars of the sector. New York City accounts for 15.6 percent of all of the United States’ internet-related tech jobs — on par with the city’s presence in the film and television, advertising and securities industries nationwide. New York is also beating out every rival city but San Francisco in the amount of venture capital funding tech start-ups receive, at $53.1 billion last year.
A significant player in tech’s success in the city is Google, which went from just 2,000 employees in New York in 2010 to more than 12,000 today. The tech giant has had a notable impact on real estate, too, buying buildings at 111 Eighth Avenue, 75 Ninth Avenue and the St. John’s Terminal at 550 Washington Street to add to its massive Meatpacking District campus. Other big tech names — like enterprise software company Datadog, online shopping platform Etsy and robotic automation software maker UiPath — got their starts in New York as well.
“Companies like Google want to grow where that talent is,” Bowles said. “I think that Google has just been an enormous part of the city’s tech growth. And it’s also benefited from the expansion of the tech ecosystem [and] expansion of talent in the tech sector.”
But that talent’s ability to work remotely is one of the central challenges facing the city’s tech economy, according to the report. Start-up founders can build their companies in cities not mired in the slew of issues New York faces: skyrocketing rents, public safety concerns and inequality to name a few.
Meanwhile, cities like Miami have attempted to lure tech workers south. Miami saw a 15.4 percent increase in workers migrating to the city from March 2020 and February 2021, while New York saw an 18.2 percent decrease in that same period. While the Big Apple has other benefits (a state government committed to legal abortion being one of them) Miami’s lack of COVID-19 protocols and pro-business political leadership has drawn white-collar jobs down south.
“New York shouldn’t take the tech sector for granted,” Bowles said. “The last thing that we’re trying to say is that things are going bad for New York. Far, far from it — the opposite is what we’re saying. But I think that there are advantages to other places. Some of it might be quality of life, like the ability to roll out of bed and work on the beach.”
Celia Young can be reached at firstname.lastname@example.org.