Move over, Silicon Valley. New York's tech scene is heating up.
Alphabet, Google's parent company, is planning to expand its New York City footprint and potentially double its current workforce there to more than 12,000 employees, The Wall Street Journal reports. The news comes on the heels of reports that Amazon is choosing Long Island City, a neighborhood in Queens, as one of its two new headquarters locations.
The moves highlight the rising strength of New York's tech industry, which includes a robust community of more than 7,000 startups. In 2017, NYC companies raised $12 billion in venture capital funding--almost double the $6.4 billion secured in 2014--and are on track to exceed last year's amount in 2018. The city is also the second-largest producer of billion-dollar "unicorn" startups in the U.S., as well as the second-highest performing startup ecosystem in the world, according to Startup Genome.
Industry giants like Salesforce and Spotify have been flocking to New York over the past three years, says Julie Samuels, executive director at Tech:NYC, a nonprofit organization that advocates for the tech startup community in the city. "It's crossed over from something small to something really big," she says.
Having two major tech powerhouses move next door may not immediately benefit New York entrepreneurs. "In the short term, there will be a tightening of the labor market," Samuels says. Still, she adds, small businesses will ultimately experience positive effects such as improved infrastructure and transportation systems as a result of Amazon and Google's investment in the area.
William Kerr, co-director of Harvard's Managing the Future of Work Initiative, argues in his new book The Gift of Global Talent that talented workers are often more productive when in proximity to other talented people, who together create what he calls "talent clusters." The interactions in these clusters foster a culture of innovation, particularly when they are fueled by diverse members--which happens to be the case in New York.
In the long run, these talent clusters could boost the state's startup scene in other ways, as well. "It's more than just a single company," Samuels says, adding that New York is experiencing growth in its entire business ecosystem. "You're starting to see real concentration of people who work at [Google and Amazon already]. And I hope that after a few years they will start their own companies."