When asked to name a place that’s home to cutting-edge technology, hyper-innovative startups, and burgeoning entrepreneurial ventures, many would say Silicon Valley.
And that’s justified. The San Francisco Bay Area has over the past few decades been a launchpad for countless new businesses that have gone from being obscure brands to household names — and in the process, have transformed the way we live.
But over the next few years, Silicon Valley may well be eclipsed in its status as the capital of innovation and venture capital-fueled growth. New York City, no longer home to just established, legacy companies, is increasingly asserting itself as a hub for innovation and transformation — a place that “screams energy,” according to Nataliya Wright, assistant professor in the Management Division at Columbia Business School. Wright moderated a conversation about the city’s transformation at the second annual Think Bigger Innovation Summit, supported by The Hub, a CBS think tank.
As panelists noted, several factors have contributed to this remarkable shift.
Anastasia Istratova is a principal and climate tech investor at Fifth Wall, a company that invests in early- and growth-stage companies focused on digitizing and decarbonizing the built environment. Specifically, she works in the firm’s climate tech practice, which includes investing in technologies and decarbonizing the lifecycle of buildings. In that capacity, she considers New York City to truly be a “climate tech hub.”
Importantly, Istratova noted, New York has implemented a slew of forward-thinking policies that support the types of innovation that are relevant to her field of work. Initiatives such as Local Law 97, she explained, have mandated building decarbonization, for example. Efforts by New York’s Economic Development Corporation, including establishing hubs for climate tech startups, have also underscored the metropolitan area's commitment to fostering sustainable innovation. It has created what Istratova dubs “carrots,” or incentives for entrepreneurs and investors who might previously have had eyes for only the West Coast.
Owen Davis, a partner at Contour Venture Partners, agreed with Istratova, noting that the rate at which New York has grown as a center for VC investment and entrepreneurship is perhaps the most compelling marker of its success to date. It is also a decent predictor of its trajectory in the future, he said: “You're really looking at an incredible growth story and success story in New York.”
Some of the impressive expansion, Davis said, has been fueled by the sheer livability of the city. It offers a vibrant and interesting urban lifestyle that lures top talent from around the world. And it’s conveniently located within a train ride of Boston and Washington, D.C.
And unlike Silicon Valley's concentration on tech companies alone, he added, New York’s industry sectors are diverse, ranging from finance and media to fashion and, yes, technology.
Overtaking Silicon Valley?
So, considering all the merits of New York City as an innovation hub and center for VC activity, is it realistic to expect it will one day overtake Silicon Valley entirely?
In short, the panelists agreed that it could but added that it’s important to understand what yardsticks are used to measure such growth.
In terms of the percentage of people working in tech and the number of companies started, for example, the growth rate in New York City is absolutely convincing, Istratova said. New York, she predicted, could certainly, at some point, catch up to and surpass Silicon Valley. But in terms of other metrics, it might not be that clear, she said. Silicon Valley, of course, has a rich history of breaking-edge technology, creativity, and innovation — and that’s not about to change.
Davis predicted that it is entirely plausible for New York to replace Silicon Valley as the world’s innovation hub, perhaps even in the next five to seven years. But he said what’s perhaps more important to consider is what sectors the city might be able to own — be able to control and dominate — in the future.
“What are the specific strengths that play to New York City, to the people here, and to the experiences that are unique to New York?” Davis noted.
If we can land on an answer to those questions — if we can play to the city’s strengths and leverage all its enticing, unique qualities, so many of which have become more apparent in recent years — then the growth we’ve seen so far may be only a taste of the thrilling developments to come.
