This past week, I read two interesting articles about ways in which tech talent is being drawn to New York. Given that we are going on a trip to Silicon Valley and we have read about the erosion of Silicon Valley’s monopoly on tech talent for a variety of reasons, I found it worth investigating in greater detail how a big city 3000 miles from the Bay Area could be shifting the tech landscape. The articles I read to research this topic provided a few key trends that everyone should know. I put them in bold throughout this post.
As you can see in my tweet, the MTA will be implementing an eight-week program that will give six tech companies a shot at solving two of the city’s most long-standing problems: overcrowded subway platforms and ineffective bus lanes. When it comes to bus lanes, the startups are using cameras to monitor bus lanes for traffic violations. The startups trying to assist the subway system use cell phone data, sensors, and cameras to monitor platform crowding and warn MTA operations of potential danger. The director of this program dubbed the “transit tech lab”, Rachel Hoat, stated that while these companies all offered different solutions, they all had one thing in common: the use of data.
To me, this is reflective of a larger trend in which the public transportation of cities is being strained by population increases. This is a result of a key demographic trend, in which more people are moving to urban areas. Jobs and prosperity are clustering in a select number of cities, and as a result, public resources are being spread too thin. In Los Angeles, the infamous highway traffic leading into the city has led many, including Elon Musk with his underground tunnel, to develop potential solutions. This is so important to businesses and governments alike as they see economic productivity intrinsically linked to the amount of time that people spend commuting. People can’t be out shopping or coming up with the next big tech startup if they’re stuck in bumper-to-bumper traffic or waiting for a delayed subway train.
This trend of wealth accumulating in areas that are already prospering is seen with Amazon’s HQ2 choices of New York City and the Washington D.C. area, while cities that desperately need an influx of highly skilled workers were shunned by Amazon. NYC and DC even went as far as giving Amazon billions in tax subsidies, something that cities like Tuscon, Arizona and Raleigh, North Carolina cannot offer.
This “transit tech lab” links to another idea that was discussed in the article below: entrepreneurial innovations occurring in well-established industries. This is one reason that Steve Lohr at the New York Times believes that New York has become a rising tech hub. Finance, media, and advertising companies have become more innovative for the sake of maintaining a competitive advantage. During many presentations throughout the semester, the names “JP Morgan” and “Goldman Sachs” were mentioned quite a few times, two names I never expected to hear about in a tech class. The rise of fintech as an industry is the perfect example of an old-school industry (finance/banking) innovating to stay ahead. Another reason Lohr gave for New York’s ascension as a high-tech market was because tech workers see a vibrant urban lifestyle in New York City that is distinct and superior to that of Silicon Valley. The lifestyle of the Bay Area may be something worth inquiring about on our trip.
Something I found particularly interesting in this article was Lohr’s analysis of Google, and how Google has been a foundational company for the New York tech scene. Given that Google is a relatively old company, at least compared to many of the companies we will be visiting, it chose New York for its headquarters long before the post-recession tech resurgence that was detailed in this article. Its reasoning is tied to the core of Google’s business model itself, in which advertising is a significant portion of its revenue, and was essentially the only source of revenue for Google at the time it decided to be based in New York. Since New York was where the ad money was, that’s where Google set up shop. Simple as that.
Another key trend mentioned by Lohr was the fact that as time has passed since the 2008 financial crisis, investment banking is increasingly becoming the primary job choice of the nation’s most talented students. Tech and computer programming was the “cool” field in the wake of the financial crisis that repelled many from the field of financial services. Since innovative young minds are increasingly drawn to finance, innovations in technology have not simply been spawned out of thin air but have been designed to improve the way that financial services are operated. Tech companies, such as Google and Facebook, undergoing ethical dilemmas in the past few years could lead to the reverse effect of 2008. The following excerpt from R. Martin Chavez, a senior partner at Goldman Sachs, gives insight into the difference between his firm and the likes of Facebook and Google:
“If you want to work on advertising, that’s where you should go. If you want to use math and software to solve hard problems for governments, corporations and other institutions, you should come to Goldman Sachs.”
In conclusion, if Tech Trek East is more popular than Tech Trek West in ten years, don’t say I didn’t warn you.