What makes New York attractive to tech industry

Apple and Amazon are reportedly eyeing major expansions in New York. Photo / 123RF

Two of tech's biggest companies are reportedly eyeing major expansions in New York - moves that experts say highlight the area's ascendance as a major technology hub and the depth of the city's massive talent pool.

Amazon.com may be closing in on a deal to bring part of its second headquarters to Long Island City, in Queens, according to The New York Times, and Google is planning to amplify its presence in Manhattan, according to the Wall Street Journal.

Entrepreneurs and policy experts say tech companies are drawn to the city's rich diversity and skilled workforce, transforming it over the last decade into a vibrant tech stronghold and expanding the industry's footprint beyond its West Coast origins.

"Education, expertise, access to capital, access to customers, a place where people want to live. What you see is a thriving ecosystem," said Julie Samuels, executive director of Tech: NYC, a group that represents New York-based tech firms.

Tech companies and their employees are attracted to the city's essential characteristics: arts and cultural institutions, neighborhoods connected by public transit, restaurants, coffee shops and bars, Samuels said.

The city's tech industry already employs 320,000 people, according to Karen Bhatia, the vice president of initiatives at the New York City Economic Development Corporation (NYEDC).

And officials have invested in preparing young people to join those ranks. The city's more than 120 colleges and universities produce 4,500 computer science majors every year, Bhatia said. "We have the talent infrastructure here in New York."

Both Amazon and Google would be expanding their existing workforce in the area. Amazon has more than 2,000 employees in New York out of a global head count that exceeds 613,000. The online retail giant could eventually bring 25,000 highly paid workers to the area if it decides to build a piece of its second headquarters there.

Google counts roughly 7,000 people in New York out of a total of more than 94,000 employees. According to the Journal report, Google is planning to add space there for more than 12,000 new employees.

Google and Amazon declined to comment. (Amazon founder Jeff Bezos owns The Washington Post.)

Internet entrepreneur and investor Kevin Ryan, who joined his first tech company in New York in 1996, said that people often underestimate the city's success as a tech center because it hasn't spawned a mega company on the scale of one like Facebook.

Plus, the city's tech sector is obscured by several other world-class industries native to the area, such as finance and advertising.

But investments in the New York tech scene have grown at a dramatic pace. Last year, start-ups raised US$12 billion ($17.7b) in venture capital, up 40 per cent from 2016, according to the NYEDC.

"New York dominates the East Coast and will continue to dominate and continue to grow because we have the human talent," Ryan said.

"Tech companies are just people, and, unlike other industries, the people are so important that it's not about cost."

While New York is known for its high cost of living and its strained subway system, its tech scene has not drawn the scorn of critics who point to the Bay Area's housing crisis and Silicon Valley's insular nature and singular fixation on technology.

"What really makes New York stand apart is that tech is the sixth or seventh most important thing in New York - behind music and publishing and fashion and finance," Dennis Crowley, the co-founder and executive chairman of Foursquare, said.

"You can do great things in tech and still no one will know you at the cocktail party. And that is the beauty of it - that is the antithesis of Silicon Valley."