How Big Is The NYC Tech Sector?
A few weeks back, I wrote about a study commissioned by the Bloomberg Administration that said the tech sector was the second biggest industry in NYC and was responsible for 262,000 jobs. The comment thread to that post was full of debunking those numbers, particularly for counting media industry jobs in that 262,000 number. So after seeing all of those comments, I reached out to my friends at the Partnership For NYC, which is the chamber of commerce for NYC, and asked them what the right numbers were.
They did some work and published new numbers on their blog yesterday. The Partnership thinks the number of people in NYC working in positions that require "avanced tech sklls" is 150,000. That feels about right to me too.
In any case, what all of these studies point to is that the tech sector is growing nicely in NYC, at rates well in excess of other industries right now, and will become more and more important to the NYC economy in the coming years.
isn’t this newer sector cannibalizing several older sectors? is there a net gain in jobs in this NYC labor market group?
Newer will cannibalize older and your odds for growing jobs increase. Protecting older leads to flat line.
Typically, cost reduction drives innovation. Cost reduction is typically done via automation. Automation typically eliminates more jobs that it creates. Automation is done via ‘the tech sector’.So, net net, the tech sector eliminates jobs while creating wealth for participants in the tech sector.Uber / Hailo is awesome – unless you are a dispatcher.Standardized trans-oceanic shipping containers were an awesome idea – unless you were a longshoreman.I ate in a air terminal restaurant last weekend that had iPads as your ordering system. It was cool automation – but I am not a waiter.Get with the program(ming) or get eaten.
Back when, programmers in AI were talking of replacing taxi drivers in NYC. I picked up an air of arrogance and said, “What you say is true, but what is the time difference between that and the machine programming itself and the machine replaces programmers?”The evolution of tech replacing human labor has been around since before we controlled fire. I agree with your last line.My comment was based on accomplished tech folk moving to the better place, this makes room at their former and they will eventually move up to something better.All communities should be striving to gain forward looking start ups.
don’t see why people who are being replaced aren’t part of process of building new in many ways. Didn’t Home Depot hire lots of small shop guy they ran out of business to be on the floors still helping customers with their expertise?
Yes, as well as Lowes. Move back to Sears or even the beginning of franchise itself across the spectrum.
To your point re people with experience building newer, better, remember you have to add drive and luck to the equation.That is why those who can only memorize formulas….
oh blah dee oh bla da as the song goes.Over 50% of those working today are in jobs that didn’t exist when they were born.Stuff changes.
“Over 50%”Sounds very “8 glasses of water a day” to me.Source of that?
You crack me up.My suggestion is don’t believe it and I’ll track it down when time presents itself.I bet it is way higher a percent actually.
Yous saying I’m a funny guy? (Pesci/Liotta in Goodfellas):http://www.youtube.com/watc…(Note 15 second pre-roll ad for a 1.5 minute clip. Who buys these annoying ads?)
You have mastered drollness as a comic art form without a doubt!
Yup. Was just referring to turnover.
Newer sectors cannibalize older sectors leading to flatline in jobs, increase in WEALTH. Been going on for 1000’s of years.
WEALTH is one half of the equation. DISTRIBUTION is the other. That game has been going on for thousands of years too. i like bitcoin technologies – could be a game changer.
Why do you like Bitcoin? Why is it a game changer? (A lot of people I know think its the greatest pyramid scheme of the 21st century)
And what does “could be a game changer” mean anyway?What’s the point of any thought not backed up with money on the line (or as you are asking reasons why)? As in “how confident do you feel that it is a game changer”?Reminds me of people who get on TV and make these hedged predictions that are hard to prove or disprove or give some variable time line.Bitcoin, in it’s present form (note the hedge in that statement btw!) doesn’t solve any problem that a majority of people have. It solves a problem that some people have of course. So an investment in it ranks high on the gamble scale.
i like the peer-to-peer technologies that underpin bitcoin. bitcoin is the poster boy for these technologies, but these technologies go beyond mere bitcoins. bitcoin may or may not be a pyramid scheme (i don’t believe it is), although there are late to the party ‘me too’ coins out there that are pump and dump scams (and a receding tide can strand boats of all sizes if action isn’t taken – taking out Silk Road may be a good thing in the long run for bitcoin and its reputation).game changer because it eliminates the political interference in the value of what we value. QE is the great fraud of our time.
Distributes itself quite well to those who participate in its creation
Yup, a big difference is that in the current tech boom, the proceeds are well distributed, as entrepreneurs, capitalists and labour all get wealth out of it – the earlier tech implementations (e.g., railroads) benefitted capital but didn’t pay out stuff to labourers the way tech currently pays programmers and designers.
I’ll let others slice and dice, commend or detract on the #s.But–the #s will grow for the very reason that NYC is the perfect sandbox for letting the web serve the needs of a huge on foot, mobile population.Smart companies build and live where the market is…and NY is a perfect a petri dish for today’s and tomorrow’s mobile, just in time delivery market as there is right now.
new york as big sandbox. love that!now everybody play nice and share.
NYC has always been the stage to amplify messages to the world.It’s now a great place to iterate your market and your brand as well.
I don’t think this study is defining “tech sector” the way startup folks usually do. And I think that’s a good thing.This is a study of how many people are in technical **roles** across all industries, not a measure of any one supposed “tech sector.”Facebook is social networking. Dropbox is storage. Twitter is media. Airbnb is hospitality. Uber is transportation. Etsy is commerce. The only things that make a “tech sector” are the media and investors who are united around the thing the made up.Though, lately, I’ve become more comfortable with the made up “tech sector” and what it provides: forced adoption of innovation. Airbnb likely wouldn’t have gotten investment from the Hyatt Group, and I doubt city governments would have been willing to integrate Uber into cab systems when they were just fledgling (or even now, for that matter). The “tech sector” took in those orphans and made them forces to reckon with, thus it has it merits.But I think the key for those businesses is to remember that while their funding and media attention may come from one place, their customers and future probably lie in another that’s more aligned with the product they actually produce (hospitality for Airbnb, transport for Uber, etc.), not technology — as its every industry’s responsibility to innovate and keep up with advancements in tech.
+1 on Airbnb-Hyatt link.I am not able to comprehend the last paragraph…What product they all produce?IMHO they all produce the same product ..is it not?”ease of use with key touch of the same old industry products instead of person-to-person”.
My point is that Airbnb’s product is hospitality, not tech. It will find its customers in the hospitality market, not a tech market. Same for Uber and transportation, Etsy and commerce, and so on.I also edited the last paragraph to clarify. 🙂
It’s the “people buy 1/4″ holes, not 1/4″ drill bits” analogy 🙂
I don’t know that analogy! What is it?
“…legendary Harvard Business School marketing professor Theodore Levitt put it, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”…”http://hbswk.hbs.edu/item/5…So, study the hole, not the drill 🙂 People are buying a place to stay, not a bed-renting app. People are buying a ride somewhere, not a mobile taxi app. Etc.
I think it’s cute and true somewhat what the HBS prof is saying. But if that were the case there would be no differentiation of products at Lowes in terms of the tools that a typical workman buys. Or why I buy one laptop replacement battery vs. another (which I just did).Of course in the end people are looking to solve a problem. But there are many intangibles that come into play in a buying decision. Not just “something that will make a hole”.Or take wine. By using the above aphorism it’s obvious that it’s not just about the buzz or about what it tastes like (which I think there is general agreement that some or plenty of it is all in one’s head in many cases) but about intangibles and what is in someone’s mind by some image that has been created by the liquor marketing. (Same with cigarettes, right?).So is there truth? Sure there is. But it’s way to simplistic.By the way ironically with “education” you wouldn’t say “people don’t want the college (the buildings) they want the education”. Which with Harvard is certainly not the case. Harvard is not about the education. It’s about the buildings (really), the location, the reputation, the student body, the cache and I’m probably leaving out a bunch of other things.People are buying a place to stay, not a bed-renting app.Well they are using a bed renting app that will allow them to find a place to stay that has the looks, price and location that fits their mindset. So if it ends up being in Patterson NJ instead of the Village then the app has failed. So the look and feel and functionality of the app is quite important. If it weren’t then they would simply troll craigslist to find their short term housing.
My kid wanted to be a big black dot for halloween, like the acme hole in Road Runner. or a huge period, or a polka dot.Philosopher’s costumes.
That’s just plain awesome, ha!
Lol. Never heard that before. Love it.
Nope… government data would consider AirBnB a software/information company… not a hospitality company.
actually, i think at this stage, them getting investment from the hyatt group would be interesting.
You make a really good point, Brandon.
There are two industries that always lead in tech: Finance and porn. NYC has a huge finance sector. I think that the other reason NYC has been able to build a startup community so fast is three fold:1. Culture. Because it was a dropping off point for immigrants, NYC isn’t as clicky as other towns. It has a constant flow of new people coming in that it accepts, and integrates. SF and Seattle are like that too.2. Diversity of industry and thought. Ideas get smashed together in NYC. Then they get applied. Because the population is huge, there is a lot of opportunity for large networks to form quickly without the internet. With tech-they go faster.3. Money. Huge amount of capital in NYC because of Wall Street. Because most of it is other people’s money (OPM) it finds its way into riskier enterprises like startups.
4. Proselytized by people like Fred. With respect to women in startups, same with Gotham Gal. Not to mention investments by both of them in people (through AFSE and CSYNYC, WEF (off the top)) that will be future participants.
Agree. Exits help a community too. NYC might not have happened without USV.
The problem with this is that the Tech sector doesn’t create more jobs than what it destroys.It’s simple: High tech eliminates traditional jobs (which is good, we’re optimizing our lives), the problem is that, under our current system, people need jobs to survive (not all are or can be entrepreneurs). People need and want to be cashiers, but 30% of them were already replaced in Wal-Mart by self-checkout (thanks to tech), and 70% in Home Depot…So we have a problem, not with the Tech Sector, and not with the Jobs it eliminates, but with the system that keeps trying to give non-existing or soon-to-disappear jobs to low level workers.
The current evidence seems to point that there won’t be a job-creation that would fit and fix the current system. This time, the system (where all people need ‘jobs’ to survive) will have to change, or those same people will [have to] find a way to break the system.
Do I work in the tech sector? Or in online media? Or in advertising? All, I guess. Without calling them “sectors”, I also work in sales, software, and the NYC “startup community”.#LabelsDontMeanShit
Jim – are you seeing the new mobile emebed on AVC on your phone today? I am
Yes, it’s deployed on AVC.com for all visitors on mobile. Hope to hear some feedback from the community.
I saw it last night, it looks great.
Takes a while to load, but I do see the comments load up on iOS safari.Any plans for a mobile app for Disqus, @JimHirshfield:disqus ?
There’s one for the Windows Phone – a side project of one of our engineers. Otherwise, we’re moving forward with what you see here on AVC on mobile. It’s early days and we’re deploying improvements often.
I see, thx Jim.
While pretty snarky, pretty accurate.
Yes, I work in snark as well.
That post says “I don’t just read your comments…I also ACT on it”…two-thumbs-up.
It all depends on what is defined as “avanced tech sklls” in their survey … if it is only keyboard-puter-tech then it is sad….This keyboard-technology has made a very big hole in other disciplines especially in India in a big way …other disciplines like metallurgy, material science, high-power-electronics, pure-science, math, are now considered as low end.The irony is great disciplines like electronics, electrical, chemistry are considered third-world-disciplines in the this third-world-country.
I’d like to see the tech sector add more women in it’s growth. I’m proud to be one of them.
Right on, lady founder 🙂
I was at a Women In Mobile event last night featuring Gotham Gal, Red Stamp’s Erin Newkirk, Red Stamp’s buyer Stephanie Schmid, hosted by Kelly Hoey. Great story which showed how women are driving ideas, investing, and product market fit, and a successful exit.All that estrogen on stage!! Loved it!
Love their events.Have you seen the video circulating about the Cheek’d founder? I’m thinking of starting a support group for solo, female, non-tech founders who’ve been rejected by TechStars and are out of money but are still kickin’ ass 😉
count me in. Though I am not solo.
Same.Though I hope to not be rejected by TechStars.
badge of honor reject
Panterosa – I’d love to learn more about the Women in Mobile event etc. I’m doing a thesis on tech/dev and would like to include more about the digital gender divide…
I have backed, and/or mentored many a woman founder. Dabble.co, CheekyChicago.com, Smarteys.com, MoxieJean.com, Brilliant.org, to name a few. One thing that I have noticed is not every woman builds a scalable startup business. Many choose to build lifestyle businesses instead. I don’t think it’s bad or good-we just want to support entrepreneurship in any group that wants it. Doing an event in Chicago on Apr 24 to support minority founders.Entrepreneurship is a meritocracy. Anyone can jump in the pool. The water is warm.
I’d like to see the tech sector add more women in it’s growth.I asked this before but I’m not sure who I asked.Are you saying they should have some kind of affirmative action?
That was a spiky discussion last time it came up.
I’ve also seen continuous growth in the 13 years I’ve been here; One of my biggest challenges right now is hiring.We were pretty lucky to move here straight out of college in ’00, so I never really experienced NYC when tech wasn’t a good industry to be in, but I can imagine that if you wanted to be a programmer in the early 90s, you had to work at a bank. Couldn’t be happier that that has changed, because NYC has been my favorite place in the world since I was a seven year old kid visiting from NC.
Another data point I can give you from analyzing the Mattermark database is that soft tech VC investments in NY startups totalled $190 mm in September alone, and that’s only 2nd to the Bay Area. (excluding cleantech, biotech, medical)Re: these 150K jobs, do we know what it was, say 5 years ago or 10 years ago?
Using tech and creating tech are not the same. I am not sure I consider a company that uses tech but it’s primary reason for being a tech company.Is Etsy a tech company? Is Goldman Sachs? I’ll bet you GS creates much more tech every year than Etsy does.Does any of it really matter?
You get more attention by applying a sexy label. Tech, otoh, has been pretty good for many years now.But what changed with the internet is the fact that tech has been associated with big wins and large dollars and young people and all of that is good for media attention.Large wins in anything give the media a chance to focus. Especially when the people winning make good visual candy as some of the tech entrepreneurs do. Back when I had graduated college the label “entrepreneur” was not in vogue. As evidenced by the look on my girlfriend’s mother’s face when I told her what I was going to do upon graduation.
“Software is eating the world” – Andreessen. Eventually everyone will need a proficiency in software.
Disagree.(If you mean learning to code) Coding is becoming a commodity. Its about learning to chose and leverage the right applications. And it helps having access to some tradesmen who can build some connectors when you need them..
“avanced tech sklls”what is this, a quote from a source lacking community editing?
Interesting spelling: “avanced tech sklls”
i think you accidentally typo-ed “avanced”
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Here you have a really good video comparison of New York vs. Silicon Valley: http://www.trendguardian.co…
I’m sorry, but how is the McKinsey definition of “high-tech” any less arbitrary than Mandel’s? There is a very wide range of “tech jobs” out there. I view it as a combo of workers in technical roles regardless of industry, and those in the high-tech industries regardless of occupation. Put those groups together, and that is a rough estimate of the tech workforce. I understand why Mandel was trying to add to that with information jobs, and I’m pretty sure that by calling them “Tech/Information” jobs he wasn’t trying to hide that. Besides, your gut has been proven to be wrong in the last week alone: http://www.cbinsights.com/b…
“blowhards”By process of elimination it would seem that you mean management?
the spectrum – from blowhard to visionary….