New York City's startup ecosystem has come a long way in recent years, but some of the city's industries continue to be starved for investment.
During a panel conversation in New York Tuesday, a group of entrepreneurship experts including serial entrepreneur and educator Steve Blank pointed out that New York is trailing far behind both Boston and Silicon Valley in terms of investment into life sciences.
"That's been in my opinion criminally missing in New York City," Blank said. "You have some of the best medical research and development--whether it's therapeutics, diagnostics, devices, or digital health--and no life science risk capital that matches it on a scale of Boston, San Diego, or San Francisco."
Panelist Maria Gotsch, president and CEO of a $100 million entrepreneurial investment fund called the Partnership Fund for New York City, pointed to biomedical research at New York-based universities as "the single most under-leveraged asset for high-growth tech industries in the city."
One of the issues plaguing New York's startup ecosystem in the past has been collaboration with local universities. "The growth of [New York's] ecosystem in the first 10 years was basically done absent participation from technology from universities," Gotsch said.
In 2011, Cornell University beat out Columbia and NYU to win former New York City mayor Michael Bloomberg's 2011 innovation and technology competition. The prize for the contest was a new academic campus on New York's Roosevelt Island, which opens in 2017, and $100 million from Bloomberg's personal foundation.
"I don't want to be the guy pointing out the dead moose on the table, but Mayor Bloomberg essentially said to Columbia and NYU, 'You guys aren't good enough,'" Blank said.
While the result of the competition was seen as an insult to New York's startup community, it also helped jumpstart entrepreneurship within the city's startup ecosystem. And for the city in the long term, that's a very good thing.
"Innovation happens best in a crisis," Blank said. Supporting this claim, Blank cited the fact that the only reason the U.S. government began giving money to science departments at universities was to fund weapons systems development it sorely needed during World War II. "That started the culture of federally funded science in the U.S., which never stopped."
The development of New York's entrepreneurial ecosystem has included everything from accelerators and co-working spaces setting up shop in all five boroughs to mayor Bill DeBlasio appointing the city's first ever chief technology officer. Today, the city is home to roughly 300,000 technology jobs, according to panelist Maria Torres-Springer, president and CEO of the New York City Economic Development Corporation.
While startups in Massachusetts attracted a record $7.4 billion in venture capital funding in 2015--on par with the $7.65 billion for New York, according to research firm PitchBook--Gotsch explained that when you exclude VC money invested into life science startups in Boston, New York is "way ahead" in terms of VC investment.
One thing the city does have going for it is its dense concentration of businesses in a variety of sectors, according to Gotsch.
"New York has in the long term the potential to be the dominant player in B2B technology, because we have the markets here," she said, adding that the city also has the potential to solve the lack of diversity problem in the tech sector.
"If anybody is going to figure out how to solve it, it's one of the most diverse cities in the world."