SIPA’s Entrepreneurship & Policy Initiative Working Paper Series

Silicon Alley: A Framework for New York City’s Entrepreneurship Ecosystem and its Public Policy Considerations By Hollie Russon GilmanI

Executive summary In the last decade, there has been no dearth of lit- As cities like New York emerge as hubs of innovation erature seeking to defne “innovation.” Literature resolved in using technology and engaging non-gov- spans the globe, outlining characteristics that include ernmental actors, this white paper pursues an analysis multi-sector stakeholder engagement, horizontal and of the actors in the urban innovation ecosystem to pin- lateral collaboration, and the use of diferent technol- point what makes these ecosystems distinct from their ogies. Yet, in defning and distinguishing innovation suburban counterparts. New York is unique in the way ecosystems, experts and actors are often in dialogue it describes innovation and entrepreneurs, pursuing an to the standard set by Silicon Valley, which is not a open and loose defnition, enabling it to engage stake- sufciently comprehensive lens through which to look holders and actors in a way that other places cannot. at the innovation ecosystems emerging within urban By bringing multiple perspectives and stakeholders into areas as these are rapidly evolving and changing. Fur- the fold, New York is able to pursue entrepreneurship thermore, it is pertinent to assess not only the use of hand in hand with civic duties, fostering an environ- diferent technologies but also its disruptive role in the ment that centers public and social good in many cases. economy, workforce, and skills, which have a large Actors then blur the boundaries between being entre- impact in shaping entrepreneurship ecosystems. preneurs, public servants, and civil society members. In each quarter of 2017, New York City surpassed San This paper explores the urban dynamics of innova- Francisco in venture capital funding. Moreover, where tion ecosystems, focusing on the role of New York in seed and Series A funding increased across the board, fostering and orchestrating them. Section I analyzes an uptick in Series C funding in New York shows the the disruptive role of emerging technologies in soci- pervasiveness and maturity of New York as a true hub ety, focusing on workforce and skills. Section II defnes of entrepreneurship. With more people moving to cit- urban innovation ecosystems, assesses the forces that ies than ever before, it is time to look at what makes are propelling this new spatial geography of innova- cities innovation districts distinct from Silicon Valley tion, and provides insights into redefning the new and how cities can foster entrepreneurship.1 dynamics and while arguing that the urban innovation

I. Hollie Russon Gilman is a Lecturer and Post-Doctoral Fellow in Technology and Policy at Columbia SIPA where she teaches a course on Technology and Governance. She has a forthcoming co-authored book, Civic Power, with Cambridge University Press Fall 2019.

______Silicon Alley: A Framework for New York City’s Entrepreneurship Ecosystem and its Public Policy Considerations"| 33 ecosystem remains distinct from traditional “innova- “machines that respond to stimulation consistent with tion ecosystems.” Section III provides a case study of traditional responses from humans, given the human New York’s innovation ecosystem and lists the multi- capacity for contemplation, judgement and inten- ple assets of the city as an innovation district. Finally, tion.”8 AI is being incorporated in a variety of dif- it puts forward policy considerations for a diverse set ferent areas, such as fnance, transportation, aviation, of stakeholders, including policy makers, technology and telecommunications. It is being used to replace companies, and civil society on how leveraging tech- humans in a wide range of areas, such as space explo- nology and entrepreneurship ecosystems can catalyze ration, advanced manufacturing, transportation, innovation; and illustrates policy actions applied to a energy development, and health care.9 Augmented reality number of challenges. is bringing 3-D technologies and graphic displays. For instance, Facebook’s Oculus, Google’s Magic Leap, I. Background: and Microsoft’s HoloLens represent consumer exam- ples of such development.10 These enable people to Emerging Technologies and supplement the usual senses with computer-generated Disruptive Innovation graphics, video, sounds, or geo-location information, Technology is moving fast and in diferent direc- and these images can be mapped to the physical world tions, which makes it challenging for public policy to and made interactive for the user.11 Machine-to-ma- track and adapt. Yet technology also drives economic chine communications and remote monitoring sensors remove growth and unleashes disruptive change.2 Disruptive humans from the equation and substitute automated technologies change the way people live and work, processes and are often used in the health care area.12 enable new business models, and provide new forms 3-D printing is a method for software to send design of innovation ecosystems opening the door to new plans to specialty printers and have those devices actors.3 These technologies will have a large impact make identical copies of those products. This tech- changing the way businesses organize themselves, nology is used in the manufacturing area for things how jobs are defned, and how technology is used to composed of a single material, which has transformed interact with the world. It is incumbent upon public product manufacturing and delivery, and changed policy to fully examine the implications of emerging global supply chains.13 Unmanned vehicles and autonomous technology and its impacts. drones are creating new markets for machines and per- forming functions that used to require human inter- From robots, augmented reality, algorithms, block- vention. One of the most recent examples is driverless chain, machine-to-machine communications, 3-D cars. Google has driven its cars almost 500,000 miles printing, blockchain to autonomous vehicles provide and found an extraordinary level of performance.14 In help and support to people with a scope of diferent India, unmanned drones are being used by authorities tasks. Robots are expanding rapidly in the developed for crowd control. Whenever there is extensive vio- world. The total rose to around 1.5 million in 2014 lence, police deploy drones armed with pepper spray and is projected to increase to about 1.9 million in and cameras and use to disperse crowds.15 2017.4 Tech experts predict that by 2030, thirteen core jobs will be automated including insurance-re- 1.1. The Future of Work lated roles, customer service and most warehouse and manufacturing jobs.5 There are computerized algorithms Technological advances are also enabling a growing that are able to take the place of human transactions.6 number of tasks traditionally carried out by humans An example is in the stock exchanges, where high-fre- to become automated. As reported by OECD (2017), quency trading by machines has replaced human while initially such automation occurred mainly in decision-making by spotting trading inefciencies routine tasks (e.g., basic paralegal work and reporting, 16 or market diferentials at a very small scale and exe- bookkeeping, etc.), with the rise of Big Data, AI, the cuting trades that make money for people.7 Further, Internet of Things (IoT) and the growing computing artifcial intelligence (AI) incorporates critical reasoning power, non-routine tasks are also increasingly likely to 17 and judgement into response decisions. It is defned as become automated.

34 |"SIPA’s Entrepreneurship & Policy Initiative Working Paper Series ______Automation enhances efciency by decreasing errors new employment and economic growth with the cre- and improving speed, and has historically increased ation of new employment and business categories.27 economic growth and prosperity. Based on the sce- For instance, the technology sector in New York has nario modeling in the report “A Future That Works: increased jobs faster than in other sectors, becoming Automation, Employment, and Productivity” from a source of direct and indirect employment,28 and McKinsey & Company, it could raise productivity accounts for 12 percent of city tax revenue (HR & growth globally by 0.8 percent to 1.4 percent annually. A Advisors 2014).29 From 2006 to 2013, the technol- The report recommends assessing the impact of auto- ogy innovation ecosystem in New York created over mation at an individual level rather than at the overall 500,000 new jobs.30 The positive correlation between occupation level.18 growth in the ICT industry of a city and job creation It has been estimated that by 2020, robotic automation has been noticed in other cities, such as Barcelona 31 and artifcial intelligence will be responsible for a net and Bangkok. loss of more than 5 million jobs across 15 developed The concentration of these disruptive technologies nations.19 The “Digital Revolution” is described by the in cities no doubt has an immense impact on entre- World Economic Forum as a fusion of technologies preneurial ecosystems, and urban entrepreneurial blurring the lines between the physical, digital, and impacts more specifcally. What is this impact and biological spheres.20 The rapid technological develop- how do they difer from the Silicon Valley context? ment is disrupting the global economy with artifcial Moreover, when looking at the policy considerations intelligence, widening skills gaps, and rising indepen- for New York City, it becomes clear that the increasing dent workers.21 A recent McKinsey report estimates prominence of these technologies across industries like that 50 percent of today’s jobs are susceptible to arti- fashion, fnance, advertising and journalism which to a fcial intelligence capabilities that are already in the large extent are globally headquartered in New York, market.22 The rapid advancements in robotics, artif- require centering in any analysis. cial intelligence, and machine learning are leading to a new age of automation, as machines match or outper- 2. Defining Urban Innovation: form human performance a range of work activities, including those requiring cognitive capabilities. Framework In recent decades, the spread of digital technology into 2.1. New Urban Dynamics of Innovation business and workplace has been reshaping the U.S. The emergence of suburban research parks like Silicon economy and workforce.23 Digitalization has expanded Valley in the San Francisco Bay area, Research Trian- the potential of individuals, companies, and society gle Park in Raleigh-Durham, or Boston’s technology while also contributing to a number of exasperating corridor on Route 128 in the second half of the last inequalities.24 The Brookings Institution’s “Digitaliza- century, called into question the historical predomi- tion and the American Workforce” report presents a nance of cities as major innovation and entrepreneur- detailed analysis of changes in the digital content of ship hubs. These clusters were built as spatially isolated 545 occupations covering 90 percent of the U.S. work- innovation ecosystems, mirroring residential and com- force in all industries since 2001.25 The report describes mercial suburb patterns. Similarly, refecting a tightly how between 2002 and 2016, the shares of U.S. jobs controlled research culture and secretive patenting pol- that require substantial digital knowledge increased icies, they were “generally closed innovation systems in rapidly due to the changes in the digital content to which frms and scientists carefully guarded their ideas, existing occupations, which varies widely among pro- and where interactions between them were limited.”32 fessions and across industries.26 AnnaLee Saxenian noted in her classic study of Silicon According to the World Bank report “Boosting Tech Valley that it has more independent and small frms Innovation Ecosystems in Cities” (2015), the rise of than Boston’s Route 128.33 In 1960, Benjamin Chinitz technology startups in cities—specifcally information argued that New York’s entrepreneurship, in compar- and communications technology (ICT)—is leading to ison to other East Coast cities such as Pittsburgh, was

______Silicon Alley: A Framework for New York City’s Entrepreneurship Ecosystem and its Public Policy Considerations"| 35 dependent on small, independent suppliers in contrast on an atypical combination of knowledge and tech- to more vertically integrated, large steel companies.34 nology.43 This phenomenon “stems from the fact that Several studies and reports have documented a recent density is crucial in facilitating learning across distant resurgence of innovation in cities that is giving shape felds, where ideas are more efciently transmitted 44 to new urban innovation ecosystems, fostered by an through informal channels.” Unconventional inno- economy increasingly oriented towards open innovation vations are more likely to be patented from university and cross-industry collaboration,35 amplifed value of density and labs, small companies, or independent researchers proximity in knowledge intensive sectors,36 as well as change in clustered in dense urban centers rather than from location preferences37 of people choosing to live in more large traditional companies in their suburban research walkable, amenity-rich, and mixed-use neighborhoods campuses. Also, due to its revolutionary nature, these near the city core. innovations are crucial for creating new products and have a more disruptive economic impact in the market. There is an interplay between disruptive technologies, These results are in line with observations that point urbanization, and entrepreneurship. The U.S. econ- to a new pattern in the location of high-tech industry, omy has become increasingly reliant on knowledge “in which smaller startups are incubated in cities while and innovation. Today, approximately 20 percent of established companies that require bigger foor plans all U.S. jobs are in science, technology, engineering, or and larger campuses remain in the suburbs where land math (STEM) related occupations—a share that has is cheaper.”45 doubled since the Industrial Revolution.38 An economy increasingly oriented toward open innovation is chang- 2.2. Redefining Urban ing both where frms locate and how buildings and Innovation Ecosystems larger districts—from research labs to collaborative spaces to mixed-use developments—are designed.39 As What precisely is an “innovation ecosystem?” As the knowledge and technology driven economy grows, defned by the OECD, an innovation ecosystem it is also becoming increasingly characterized by what is “the implementation of a new or signifcantly Henry Chresbrough and others call “open innova- improved product (good or service), or process, a new tion.”40 This process is described by Chresbrough as marketing method, or a new organizational method “a process whereby companies and frms more openly in business practices, workplace organization or exter- 46 generate new ideas and bring them to market by nim- nal relations.” The boundaries of what constitutes bly drawing on both internal and external sources.”41 an innovation ecosystem are reliant on the stakehold- Under this new paradigm, internal ideas can be ers within it, which includes both the economic actors commercialized by external start-up companies and as well as multi-sector institutions including industry, 47 entrepreneurs. Chresbrough observes, “the bound- governance institutions, and culture itself.” Existing ary between a frm and its surrounding environment literature compounds on this framework, built on top is more porous, enabling innovation to move easily of the biological ecosystem paradigm, referring to the 48 between the two.”42 community of “interacted organisms.” Yet where defnitions of innovation ecosystems fall short in defn- The spatial dynamics of innovation present in urban ing what we see in urban areas, specifcally in New centers and suburbs, measured by the location of new York, is not what innovation is but who is included or a patents and its characteristics, reveal the diferences participant in innovation.49 between both types of ecosystems. While suburban areas still represent a considerable share of the knowl- An ecosystem can also be conceived as two distinct and edge economy, accounting for more than 40 percent traditionally separated economies: the knowledge sec- of the overall patenting activity, dense cities dispropor- tor, driven by fundamental and applied research and tionately generate innovations with a higher degree of development; and the commercial sector, driven by the 50 “unconventionality,” born out of these interpersonal market. An innovation ecosystem is healthy when the social connections and intellectual exchanges that public and private resources invested in the knowledge Sassen explores, and more tangibly, the patents based economy generate proft increases in the commercial economy, induced by new innovations introduced to

36 |"SIPA’s Entrepreneurship & Policy Initiative Working Paper Series ______the market. At that point, the innovation ecosystem realm.55 Yet, within an urban innovation ecosystem, the reaches a “balanced equilibrium” resulting from the co-mingling of multi-sector stakeholders persists with interaction of its diferent actors and entities. This eco- a bigger role for public players and public problems. system approach to innovation has also been fostered Entrepreneurship has a broadened role in bridging the by the fact that companies, and increasingly universi- knowledge and commercial economies in innovation ties and other institutions, are starting to adopt open ecosystems, catalyzing the innovation process for both innovation strategies to challenge existing organiza- the public and private sectors. tional structures —“a distributed innovation process Entrepreneurship is part and parcel of the innovation based on purposively managed knowledge fows across ecosystem and is only getting further solidifed. Take, 51 organizational boundaries.” There is a two-way rela- for instance, the increasing number of educational pro- tionship involved in open innovation, from borrowing grams and courses dedicated to equipping New Yorkers ideas from the environment and other organizations with the skills they need to participate in the new inno- to sharing your own and making them commercial to vation economy. NYU Stern describes these skills as 52 other actors in the ecosystem. the “tools and concepts necessary for careers as entre- These strategies enable new ideas and strategies to preneurs or as investors in entrepreneurial ventures”56 move and be adopted within organizations and then while newcomers like Cornell Tech and Grand Cen- later between an organization and its surrounding tral Tech, seek to “provide critical resources for trans- environment, tapping on external knowledge sources formational startups to achieve scale.”57 Private sector to generate new innovations, or developing internal investment into startups coupled with academic and ideas through external paths for commercialization. educational institutions investing in future entrepre- Applying these open innovation practices broadly and neurial activities seeking to proliferate innovation only systematically in an innovation ecosystem would there- bolsters New York’s role as an innovation ecosystem fore increase the fow of ideas and resources between and furthers its projection as a key player in entrepre- diferent participants, and across the knowledge and neurship nationally and internationally. Organizations commercial economies, multiplying innovation and like NYCx a public agency dedicated to building and allowing the whole ecosystem to thrive. The increased shaping the city’s innovation future and the futurists reliance on open innovation strategies has been an hired to explore technology in the public sphere are important driver and outcome of the recent emer- working in tandem on projecting the city’s role in the gence of innovation ecosystems in cities.53 This paper next few years and decades. The multiplicity of actors looks at what this innovation ecosystem allows for and facilitates working side by side towards a shared vision take this within cities and amongst stakeholders, and describes this under broadened defnition and catalyze the innovation pro- the term of “entrepreneurship” in order to explore how cities, spe- cess, but also bake it into the city’s culture and solidify cifcally New York, are uniquely qualifed as an urban innovation the city’s innovation ecosystem. NYCx represents a ecosystem to foster and promote entrepreneurship both in the public new civic platform that aims to support tech startups and private sector. and New Yorkers towards creating digital solutions 58 In this context, entrepreneurship—understood as “the to common problems. Its challenge program invites pursuit of the generation of value, through the creation entrepreneurs, technologists and tech professionals to or expansion of economic activity, by identifying and participate in open competitions. Each challenge aims exploiting new products, processes or markets”54 —is to solve a specifc problem of urban life and move New a key component of an innovation ecosystem. While York towards realizing Mayor de Blasio’s One NYC 59 research and development focus on generating new plan: “growth, equity, sustainability, and resilience.” ideas, entrepreneurs identify business opportunities World Bank also recognizes that cities are emerging to bring these ideas to market, through the creation as the main centers for technological innovation and of new startups and business ventures. This is seen in has delivered a report on urban innovation ecosys- literature surrounding the innovation landscape in Sil- tems, identifying relationship-building or “network- icon Valley and spaces trying to recreate those models, ing” within dense urban environments as a critical wherein the ideas and players are strictly in the private asset.60 The World Bank defnes four categories of

______Silicon Alley: A Framework for New York City’s Entrepreneurship Ecosystem and its Public Policy Considerations"| 37 assets that result from the agglomeration efects within the developed or undeveloped siloes. It is important a city, which provide the basic components to develop to know that technology does not come up here as a and grow an urban innovation ecosystem: people or driver of innovation; rather, technology is simply one human capital, physical infrastructure, economic assets, and the tool in the box that innovation actors leverage.65 enabling environment provided by government and its policies.61 It can be argued that these assets are important for any 2) Interconnection innovation ecosystem, but the World Bank paper also “Interconnection” is another trope that emerges in highlights a ffth category that operates as a second the study of “innovation ecosystems.” Saskia Sassen, layer and is central to urban innovation ecosystems: in her paper Cities in Today’s Global Age, comes close networking assets.62 This category includes meetups; to exploring the distinct nature of cities that we can bootcamps and skill training programs; hackathons leverage to come closer to defning “urban innovation and innovation challenges; co-working and collabo- ecosystems” in relation to Silicon Valley or more tra- ration spaces; accelerators; incubators; and networks ditional or suburban “innovation ecosystems.” Sassen of mentors. Networking assets are the connectors that tracks the growth of cities and argues that their new support the social relationships of the ecosystem and economic preponderance is due to “the intensity in have the potential to boost the ecosystem’s growth by the organization of the economy,” which enables it to increasing the collisions and spillovers that result from deal more tangibly with and work with higher magni- social interactions between participants. According to tude of profts, incomes, and complex transactions.66 the report, on challenges, co-working and collabora- A recent case in St. Louis illustrates how interconnec- tion connections, networking assets would play a criti- tion among diferent stakeholders plays a crucial role cal role in the growth and success of urban technology in the evolution of the ecosystem by—among oth- innovation ecosystems.63 ers—connecting entrepreneurs in order to enhance Urban innovation ecosystems are then distinct from learning between entrepreneurs; communicating Silicon Valley because of a few key themes. Examining and collaborating with other entrepreneurial support the current literature and through stakeholder analy- organizations for readjustment of the local ecosystem; sis, this paper primarily identifes core aspects which and supporting organizations to recruit staf with defne urban innovation and are relevant for under- entrepreneurial experience.67 standing New York’s entrepreneurship ecosystem:64 1) Multi-Stakeholder Actors, 2) Interconnection, 3) Geographic 3) Geographic Advantage Advantage, 4) Access to fnance. Several scholars have identifed that costs for entrepre- neurs are critical. There is strong positive correlation 1) Multi-Stakeholder Actors between labor and intensity.68 Ed Glaeser and William The research paper “Components of Innovation Eco- Kerr found that an abundance of independent sup- systems: A Cross-Country Study” by Mercan and pliers was one of the best predictors of new estab- Göktas’ centers the involvement of multi-sector stake- lishment formation for manufacturing start-ups.69 ´ holders as paramount to an innovation ecosystem. Economic organization as a factor that enables cities The study argues that certain areas are specifcally to deal with more complex issues is coupled with the advantaged in acting as innovators because the geo- idea of geographic advantage that Mercan and Gök- tas’ also touch upon. For example, the proximity of graphic clustering of interconnected frms, suppliers, ´ and institutions in a particular industry drives collabo- like-minded institutions is crucial. In New York this ration and increased innovation output. Yet an indus- might include Civic Hall, Silicon Harlem, WeWork, try-centered view falls short too. Mercan and Göktas’ The Wing, and major research universities including ´ focus on a primary dichotomy between developed and Columbia, Cornell Tech, CUNY, NYU, and others, undeveloped but do not extend their analysis between that provide the intangible benefts that distinguish the rural and urban, a similarly geographically diverse urban innovation ecosystems from their suburban paradigm. This paradigm falls short in analyzing the counterparts. These intangible benefts include col- diferences and distinct characteristics within each of laboration, human capital, and the ideas that Sassen

38 |"SIPA’s Entrepreneurship & Policy Initiative Working Paper Series ______call the “social infrastructure” that undergirds urban after their abandonment and declining economic func- innovation and gives actors here an edge over subur- tion in the 1960s and the 1970s. Texas alone is home ban innovation arenas where remote working thrives to four of fve of the fastest growing cities in America.78 yet this co-mingling is made difcult because of 70 distance between actors and institutions. 3. New York’s Innovation Ecosystem 4) Access to Finance 3.1. Case Study The location of venture capital investments in the New York’s innovation ecosystem has experienced an last years shows that innovation and entrepreneurship extraordinary growth in the last decades, fueled by its is shifting back to urban centers: San Francisco has thriving tech sector. It is now recognized as the largest become the world’s leading center for venture capital truly urban center for technological innovation and investment and startup activity, even surpassing Silicon the second tech hub in the world after Silicon Valley.79 Valley. Likewise, New York City has shifted from being This case study primarily focuses on the abovemen- an exporter of venture capital, with almost no local tioned core aspects which defne urban innovation venture investment in the 1980s, to attracting more and are relevant for understanding New York’s entre- than $7 billion in 2016,71 with consistently increasing preneurship ecosystem:80 Multi-Stakeholder Actors, Inter- seed investment. According to the City’s Comptroller’s connection, Geographic Advantage, and Access to Finance. ofce, the city’s share of the global venture capital pie also grew from 4.58 in 2008 to 6.01 in 2017 and has Multi-Stakeholders Actors and Interconnection grown by 256 percent when looking at the number of New York City’s urban ecosystem benefts from a venture capital deals commensurate with global ven- diverse range of multi-stakeholders that create and 72 ture capital growth. This growth is in the face of a rel- promote innovation and entrepreneurship which ative decline in venture capital in the U.S., according includes a) government, b) private Sector c) investors to the Center for American Entrepreneurship, where and d) New York start-ups. Multi-stakeholders can pro- the U.S. share of venture capital activity has declined vide public-private opportunity which can help action 73 from 95 percent globally to over 50 percent now. where one sector alone would not be as efective. In both cities, and others like Boston and Los Ange- According to sociologist and Ford Foundation Vice les, high tech development, entrepreneurial activity, President Xavier de Souza Briggs, civic intermediaries and venture capital investment are increasingly con- can bring together multi-stakeholder actors and “com- centrating in downtown areas and mixed-use walkable pensate for a lack of civic capacity because of what suburbs. These empirical observations show that “a government, business, or civil society organizations are new, more urban geography of venture capital and not able, or not trusted to do, and also—along a more high-tech startups is clearly emerging,”74 suggesting the temporal dimension—for process breakdowns, such as “widespread movement of industry and people to the impasse, polarization, and avoidance, that thwart col- suburbs in the middle of the last century were histori- lective problem solving.”81 cal aberrations, not the permanent new paradigm that many took it to be.”75 a) Government Today, just the top fve metropolitan areas—San Fran- NYCx Labs cisco, San Jose, New York, Boston, and Los Angeles— The NYC Civic Innovation Lab & Fellows Program account for more than 70 percent of venture capital is empowering NYC’s Community Boards to develop investment across the United States.76 Forty metro digital and open data practices that are appropriate for regions, such as the Boston-Washington-New York the local constituencies they serve. The Civic Innova- corridor, account for roughly two-thirds of the world’s tion Lab (CIL) and Civic Innovation Fellowship (CIF) economic output and more than 85 percent of its inno- is the frst and only comprehensive program dedi- vation, while housing only 18 percent of its popula- cated to improving community boards’ use of data tion.77 This in part refects the repopulation of cities and technology while training the next generation of

______Silicon Alley: A Framework for New York City’s Entrepreneurship Ecosystem and its Public Policy Considerations"| 39 civic leaders from CUNY. Incubated out of the Man- Corporation. This included, inter alia: a) creating hattan Borough President’s Ofce, with support from a network of coworking spaces and incubators, b) the Mayor’s Ofce of Data Analytics & CUNY Service developing a university tech education campus in Corps, CIL employs three technological researchers the city, c) catalyzing the seed investment funds, and a small class of qualifed CUNY Service Corps and d) promoting the community and attracting students, a.k.a. CIF. While the early days of the tech outside tech talent and companies.83 sector were driven by the development of semiconduc- tors, computer hardware, mobile technologies and the New York City’s Economic Development Corporation basic infrastructure for the internet, today’s technology (NYEDC) revolution is about applying these founding technolo- As part of Mayor Bloomberg’s plan to promote busi- gies to traditional industries. The fact that New York is ness innovation through entrepreneurship, in 2009 a market leader for several of those industries, having the NYCEDC provided the funds to create the frst a rich pool of creative, marketing, and business talent city-sponsored incubator in Varick Street. Operated with expertise across diferent felds, has played to the by the Polytechnic Institute of New York University, city’s advantage in the current landscape of techno- this 16,000-square foot space ofered high-quality logical growth.82 This economic diversity has fueled ofce space with basic business services and adminis- its emergence as one of the top centers of activity trative support.84 Over the years the city has expanded in various tech subsectors, including adtech, fashion the program, creating a total of 17 incubators that tech, fntech, digital media, and edtech.II In addition, a focus on diferent industries related to technology.85 growing number of tech startups in the city are devoted More than 1,000 startups have graduated from these to improving everyday urban life in ways like making city-sponsored incubators, and these new businesses online reservations, ordering food, fnding an apart- have raised over $180 million in venture funding. This ment, commuting, hiring a handyman, or looking for initiative directly addressed the lack of afordable friends nearby. These new startups are clear examples physical space for entrepreneurs and also catalyzed of unconventional innovations, with cross-industry the development of additional incubators, accelera- spillovers between tech and other sectors as disruptors tors, and coworking spaces in the city such as WeWork of traditional markets. and General Assembly. The strategy followed by New York to build its tech In addition, the city targeted the development of tech innovation ecosystem is illustrative for other urban and entrepreneurial talent through the creation of sev- centers globally looking to take a similar path, as its eral boot camp programs. The frst two, FasTrac and initial challenges are shared by many cities. As Mulas JumpStart, were launched in 2009 and focused in train- and Gastelu-Iturri, describe: ing and educational programs to help emerging entre- These include: a) lack of technical talents, b) preneurs through partnerships with the Kaufman 86 lack of available seed finance, c) limited afford- Foundation and SUNY’s Levin Institute, respectively. able space for entrepreneurs, and d) a small and Similarly, the city-sponsored incubators incorporated decentralized community. These challenges were services more common to accelerators, such as men- addressed through a two-fold approach, combin- torship and skill training programs for resident start- ing an overall strategy from the Mayor’s office and ups, which also helped strengthen the tech community. an operational program of policies developed and Finally, there were longer-term initiatives from the city implemented by the NYC Economic Development to secure an increasing pool of tech talent, like the

II. Examples include; Fashion: Rent the Runway, Ideeli, Ecommerce: Etsy, Gilt Groupe; Fintech: Kickstarter; Health tech: Zocdoc; Edtech: Codecademy, Schoology, BrainPop; Social networking: Foursquare; Digital media: Tumblr, BuzzFeed, Gawker, Business Insider; Adtech: DoubleClick, Right Media, LinkShare, AdMeld, Interclick; Others: MakerBot, Quirky, WeWork, Seamless, Blue Apron, MondgoDB

40 |"SIPA’s Entrepreneurship & Policy Initiative Working Paper Series ______recent opening of Cornell Tech on Roosevelt Island87 NYCEDC-Sponsored Incubators after a request for proposals launched in 2011 by the Incubator Area Year Launched NYCEDC,88 and the commitment to introduce com- 89 Varick Street Data puter science in all NYC public schools by 2025. Tech 2009 Future Lab To address the funding gap in venture capital for local CFDA Fashion startups, in 2008 the city launched NYC Seed, a joint Fashion 2010 venture between the NYCEDC, NYU-Poly, the Part- Incubator nership for New York City Fund, the New York State Chasana Artist Art 2010 Foundation for Science, Technology and Innovation, Studio and the Industrial and Technology Assistance Corpora- Future mobility/ BMW i Ventures 2011 tion. Making its frst investments in 2009, the program Cleantech funded up to $200,000 per company, with the goal of 90 Dumbo Digital moving from idea to a successful product launch. In Digital Media/Tech 2011 addition, in 2010 the NYCEDC partnered with First- Future Lab Mark Capital to create the NYC Entrepreneurial Fund Entrepreneur Space Industrial/Culinary 2011 that provides promising NYC tech startups with ear- ly-stage capital. The NYCEDC contributed $3 million HBK Incubates Culinary 2011 to establish the fund and the New York City-based Harlem Biospace Biotech 2013 venture capital frm contributed an additional $19 mil- lion.91 Finally, the city launched a “NYC Digital City Harlem Garage General business 2013 Roadmap” in 2011,92 which channeled support to the Made in NY Digital Media/Tech 2013 tech startup ecosystem via development of broadband Media Center access infrastructure and incorporating “government 93 Staten Island as a platform” into its open-government agenda. Industrial 2013 Makerspace In addition to the initiatives pushed by the mayor’s ofce and the NYCEDC, relationships among entre- Urban Future Lab Smart cities 2013 preneurs catalyzed the growth of the city’s innovation Bronx Business General business 2014 ecosystem, showing the centrality of its networking Bridge assets. A dynamic has been unfolding in New York BXL Business where a few entrepreneurs give “rise to many gener- General business 2015 Incubator ations of spinouts. Through fve types of infuence— inspiration, mentorship, investment, serial entrepreneurship, MetaProp NYC Real estate tech 2015 and former employee spinouts—New York City’s tech sector is beneftting from a virtuous cycle in which BioBAT Biotech 2016

entrepreneurs grow their businesses, fnancial, and Brooklyn Culinary 2016 social capital in the next generation.” 94 DoubleClick, FoodWorks Buddy Media, and AppNexus, are three companies, Jamaica FEASTS for example, founded that directly infuenced 75 new Culinary 2017 Incubator startups in the city through one of the paths described Real Estate/ above. These startups have in turn gone to infuence 42 Floors 2015 other 177. Within just three degrees of relationships, General Business

the original three companies touch over 400 New York Union Square Civic Tech 2016 tech frms. Tech Hub

Figure 1: Adapted from Mulas & Gastelu-Iturri, 2016, p 21 and NYCEDC website

______Silicon Alley: A Framework for New York City’s Entrepreneurship Ecosystem and its Public Policy Considerations"| 41 b) Private Sector Syracuse, and the greater Albany area.103 New York Amazon HQ2 Bid has a history of ofering corporate incentive packages to companies including Goldman Sachs (with a sub- In September 2017, Amazon announced a request for sidy value of roughly $425 million); mall developer proposals for a second North American headquarters, Pyramid Companies ($600 million), and aluminum 95 called Amazon HQ2. The Seattle-based e-commerce manufacturer Alcoa Corporation (valued at roughly behemoth projected to bring $5billion investment and $5.6 billion). up to 50,000 high-paying jobs to the new host city.96 The unprecedented economic impact sparked intense While critics in New York City had been vocal about competition between cities, states. Districts and territo- the new HQ2, specifcally around issues of displace- ries, and a total of 238 bids for the HQ2 were submit- ment and gentrifcation, the 2018 election of local ted by the application deadline.97 Congressional representative Alexandria Ocasio-Cor- tez in November, the fipping of the State house in After a yearlong selection process, in November 2018, Albany, and the persistence of local labor unions in the Amazon announced it would split the HQ2 between region, enhanced political pressure which may have New York City and Arlington, Virginia, with more contributed to the Amazon HQ2 retreat from New 98 than 25,000 employees in each location. In New York York. The increased awareness of the subsidy package City, Amazon projected to generate $27.5 billion in and the process of acquiring the vote of the state Pub- state and city revenue over 25 years, a 9:1 ratio of rev- lic Authorities Control board may have also made it enue to subsidies. Governor Cuomo described it as the challenging for Amazon to continue with their plans “the highest rate of return for an economic incentive once Michael Gianaris, new Queens State Senator and 99 program the state has ever ofered.” vocal critic, was nominated onto the board in early When submitting their application for Amazon, NYC’s 2019. Although Gianaris was passed over for the board Economic Development Corporation named four seat in February 2019, the fear of the political process neighborhoods—Midtown West, Long Island City, the may have had a role in turning Amazon and Bezos Financial District, and the so-called “Brooklyn Tech away from New York, according to technology experts Triangle.” 100 In its bid, advantages cited included access in the city.104 With the absence of a critical community to a large and diverse population; industries; access to outreach strategy, Amazon pulled their headquarters multiple airports; mass transit; and real estate, a mix out of New York City on February 14, 2019.105 of “historic gems” and ofce towers.101 A challenge for New York is that housing and ofce costs are more Bloomberg Government Innovation expensive in comparison with other East Coast Ama- The Government Innovation team’s mission is to give zon HQ2 options including Pittsburg and Philadelphia. cities support to leverage data, technology, and innova- There have been public concerns that cities are ofering tion towards improving public sector capacity among tax exemptions, property tax abatements, corporate cities worldwide. The philanthropy supports cities’ work income tax credits, and other state and local fnan- to test and refne urban innovations and equip mayors cial incentives to Amazon, which ultimately deprive and local leaders with practical tools and approaches the city of vital resources. Several civil society groups, to tackle tough issues and enable civic innovation to including NY Communities for Change, Make the fourish.106 Bloomberg Philanthropies focuses on fve Road New York, and Showing up for Racial Justice, key areas for creating lasting change: public health, organized protests against tax breaks for Jef Bezos and environment, education, government innovation, and potential displacement of local business communities. arts and culture. These fve areas encompass the issues Unlike other cities, New York did not ofer any spe- Michael Bloomberg and his team are most passionate cifc tax subsidies to induce to Amazon, in contrast to about, and where they believe the greatest good can be cities such as Chicago and Newark.102 New York State achieved. While Bloomberg Philanthropies works on a ofered an incentive package if Amazon chooses any wide range of issues within each focus area, it applies a 107 New York proposals, which include Bufalo, Rochester, distinctive approach to all of its endeavors.

42 |"SIPA’s Entrepreneurship & Policy Initiative Working Paper Series ______Microsoft Cities gy-related company). Since its launch in December The Microsoft Cities team aims to leverage Micro- 2012, the Innovate NY Fund has made investments soft’s technology for social good, through products and in 81 New York State companies. The Fund’s capital branding (as opposed to funding). The team has worked was matched with over $240 million in private sector investment funding, yielding more than $277 million with the City of New York on projects such as:108 in investment capital for these start-up and seed-stage • Microsoft Translator, used to help New Yorkers companies. This led to the retention of 662 jobs and overcome language barriers. In New York City, the creation of 1,430 additional new employment according to the U.S. Census Bureau, 49 percent opportunities for the state. The Innovate NY Fund of households speak a language other than is not currently investing in any new companies. For English at home.109 example, Governor Cuomo’s announcement of the • TEALS (Technology Education and Literacy in $3 million that Empire State Development invested in Schools), supported by Microsoft Philanthropies, Glossier, a three-year old beauty brand based in New bringing professional computer programmers into York, would create more than 200 jobs. The expansion dozens of schools to teach computer science to of Glossier’s headquarters was a symbol of the sort students and teachers.110 of entrepreneurship that New York fosters. This was a boost for the cosmetics industry, as this company is • The Vision Zero Data Science project, led by young entrepreneurs, specifcally young women, developed by Microsoft and the pioneering non- and it symbolized the public’s investment in growing proft DataKind, helping the Department of the city and state’s entrepreneurship presence.113 Transportation virtually test changes to laws such In addition, the New York State Innovation Venture as speed limits and street architecture.111 Capital Fund (the “Fund”) is a $100 million venture • Tech Jobs Academy, an innovative rapid capital fund that invests in seed and early stage busi- re-skilling program delivered in collaboration nesses throughout New York State. The Fund provides with the NYC Tech Talent Pipeline and CUNY’s critical funding to promote the commercialization of New York City College of Technology to build new technologies, encourage job creation and drive expertise relevant to tech trends such as big data economic growth.114 and cloud computing and the skills individuals NYU’s seed-stage venture capital fund invests exclu- need in collaborative workplace environments.112 sively in start-ups founded by, and/or those com- mercializing technologies and intellectual property c) Investors developed by, current NYU students, faculty, and Innovate NY Fund researchers. This opportunity is open to start-ups founded by current students, faculty, and researchers New York City is unique in the number of venture at any NYU school, college, or institute. The fund capital dollars that come from city and state agen- seeks early-stage businesses with inventions, discover- cies. The Innovate NY Fund is a $45.9 million ven- ies, products or services that were developed in whole ture capital fund that invests in seed-stage businesses or in part at NYU, that have achieved proof of concept to support innovation, job creation, and high-growth (or a prototype) and are ready for commercial prod- entrepreneurship throughout the state. The program uct development. The fund does not invest in projects is supported by $35.6 million from NY State and requiring further basic research.115 $10.3 million from Goldman Sachs. The Innovate NY Fund operates through a “fund-of-funds” structure There are countless examples of New York start-ups, in which third-party investment managers, who were but the following frms exemplify the network efects competitively selected, manage the investment activity that New York City enables. Through public-minded, on a state-wide basis. Investments from the Innovate civic and social entrepreneurship, these frms create NY Fund into individual companies may not exceed environments for other start-ups to grow. $500,000 (or $750,000 in the case of a biotechnolo-

______Silicon Alley: A Framework for New York City’s Entrepreneurship Ecosystem and its Public Policy Considerations"| 43 New York Start-Ups Even though revenues have risen dramatically, costs have risen more,117 so the company is exploring oppor- NYC Start-Ups by Sector, 2007–2012 tunities to manage and own buildings in addition to Sector Startups Founded just renting them. In the meantime, WeWork has sold Ad Tech 63 $702 million in bonds in 2018 alone and is continuing to do so before going public to cover the gap.118,119 Digital Media 121

E-Commerce 103 The Wing The Wing invokes the history of women’s club move- Ed Tech 20 ments in the late 19th and early 20th centuries. More Fin Tech 33 than just a hub of “professional, civic, social and eco- nomic” activity, as proclaimed by its website, it provides Health Tech 19 members with the “soft benefts” that the company claims distinguish it from other co-working spaces: Social Networking 79 namely, encouragement and support. This includes Figure 2: Source: Bowles & Giles, 2012 lecture series and training sessions, in addition to ele- gant bathrooms and workspaces. WeWork During its $32 million series B funders included In 2008 Adam Neumann and Miguel McKelvey estab- WeWork and SoulCycle. After opening a fagship Flat- lished Green Desk, an eco-friendly co-working space in iron District location, it has quickly expanded across Brooklyn. Two years later, Adam and Miguel started New York, Brooklyn, and Washington, DC with plans WeWork in Soho. By 2014, WeWork was quickly to open in Seattle, San Francisco, Los Angeles, and expanding and has housed many New York based London. There has been some pushback against the start-ups including New York Tech Meetup, Turf, Red- single-sex model as potentially discriminating against dit, and others. Major corporations, including PepsiCo certain subsets of the population. New York’s Com- and IBM also rent ofce space in WeWork spaces. mission on Human Rights is investing the Wing for In 2014, WeWork raised investment from fnancial possible discrimination because of its women-only pol- 120 institutions including Goldman Sachs Group and J.P. icy. The Wing is currently based on a model where Morgan Chase. By 2016, WeWork had raised $430 women apply to be members and pay $2,350 annually million, with a valuation of $16 billion. In 2017, Soft- for access to a single location and $2,700 annually for 121 Bank contributed $4.4 billion from its vision fund and access to all locations. WeWork will expand into China. Roughly 20 percent of WeWork’s occupants are in the legal, fnancial, 14th@Irving and business services and 15 percent are in software. In February 2017, Mayor de Blasio unveiled a $250 WeWork has many high-occupancy companies, which million program to develop a Union Square tech hub results in higher occupancy rates. Part of WeWork’s of 58,000 square feet. The goal is to provide one allure has been streamlining the work of the ofce space for tech worker training, education, start-ups manager to enable more seamless interactions for and convening.122 The project, on city-owned land, is companies across the country. going to be anchored by Civic Hall, a collaborative Currently, WeWork has amassed more than 14 mil- work and event space focused on technology for the 123 lion square feet with ofces across the globe. WeWork public good. Several workforce development part- has 220,000 members worldwide, from just 7,000 in ners including the New York Foundation for Com- 2014.116 As of April 2018, WeWork is struggling to turn puter Science Education, General Assembly, Per a proft and owes $18 billion in rent. This is in part Scholas, FedCap, Code to Work, and Coalition for 124 because WeWork rents out the space it is renting out. Queens will be included. As New York’s chief dig- ital ofcer explained, “the Union Square tech hub is

44 |"SIPA’s Entrepreneurship & Policy Initiative Working Paper Series ______another clear signal to the tech community across the ofces, meeting rooms, projectors, and other amenities country and around the world that New York City and manages the ofce administration. It nurtures a is committed to the next generation of digital and culture of collaboration that fosters strong relation- technology innovation. Come build here, grow here, ships and opens opportunities. Further, as a platform thrive here.” 125 Through city investing, the goal is to for content delivery, CSI works with leaders to provide make a central hub at the intersection of digital tech- their members with knowledge they need to strengthen nology and entrepreneurship which will be attractive their skills, build, their capacity, and achieve their to start-ups, investors, and workers. goals.134 Finally, it makes strategic interventions in the most promising projects, providing mentors, investors, AlleyCorp and Gilt Groupe public sector and decision-makers.135 AlleyCorp has claimed the role as headquarters of Geographic Advantage the new Silicon Alley, dedicated to housing companies that are “dedicated to changing lives and transforming There is a growing initiative in creating accelerators, the world.” 126 Founded by veteran entrepreneur Kevin workspaces, business groups, events, and government Ryan in 2008, AlleyCorp is the parent company, or strategies in New York City. There has been an expan- “start-up factory,” of several internet-based compa- sion occurring, both in geographically and in indus- nies, most notably Gilt Groupe; Business Insider; and try focus. The tech industry, originally concentrated MongoDB, an open-source software company that is in Silicon Alley, has expanded north into Harlem and used by everyone from Disney to Foursquare.127 Situat- the Bronx, as well as out to Queens, and even to new ing itself as a start-up for start-ups, AlleyCorp sparked developments in Brooklyn. Silicon Alley is still flled the frst wave of Internet-based companies erupting with traditional tech companies (fn tech, adtech, etc.), in New York.128 but Brooklyn attracts more urban tech and creative tech companies, while foodtech and biotechnology is AlleyCorp’s biggest success has been Gilt Groupe, emerging in Queens and social good enterprises are an online luxury shopping destination. Launched in setting up in Harlem and the Bronx.136 2007, the company has expanded frst with menswear in April 2008; then a travel site, JetSetter, in 2009; and Further, New York is a highly diverse city. Almost then in 2010 Gilt City, a lifestyle site to help locate three million of its residents were born outside the exclusive experiences at spas, restaurants, and stores country.137 There are more than 800 languages spoken in cities including New York and San Francisco.129 In in Queens alone.138 This is a strength not only in the 2009, the Groupe received series C funding by growth myriad perspectives people in the city have to ofer equity frm General Atlantic, and by February 2014, it and which can enhance entrepreneurial thinking,139 was preparing for an IPO.130 But a prevalence of other but also in distinguishing it from Silicon Valley, which luxury sites and e-commerce businesses lowered the is historically a non-diverse place to work.140 Though valuation of the company, threatening the IPO, and hard to quantify, studies have shown that individuals in January 2016, the Gilt Groupe announced its acqui- from diferent backgrounds, ethnicities, and countries sition by Hudson’s Bay Company, owner of luxury contribute to the sort of social infrastructure that Sas- department store chains Hudson’s Bay, Lord & Taylor, sen holds up as an important driver for innovation.141 and Saks Fifth Avenue, for $250 million.131 Moreover, diversity can distinctly change the nature of work and entrepreneurship in innovation ecosys- Center for Social Innovation (CSI) tems. Where companies like Microsoft are still based in Silicon Valley, they are opening up social enterprise The CSI is a coworking space that provides its mem- divisions in New York, working with Mayor de Blasio bers with tools to accelerate their success and amplify to open tools like Microsoft Translator, The Vision their impact. It is building a movement of nonprofts, Zero Data Science project, and the Microsoft Reac- for-profts, entrepreneurs, artists, and activists working tor, that support the use of technology for the social across sectors to create a better world.132 Its model is good.142 Further, diversity and an increasing number “work, connect, create, transform.”133 It provides desks,

______Silicon Alley: A Framework for New York City’s Entrepreneurship Ecosystem and its Public Policy Considerations"| 45 of individuals moving to New York from all over the York, the increase in late stage and series C funding world address the tech talent gap that the city and can equip us with a better sense of the staying power others like it face. A Pew Research Center poll from of the industry and the city’s innovative credentials. earlier this year reports that while jobs that tradi- The $2.5 billion in funding that was garnered by the tionally fall into the categories of entrepreneurship NYC-based co-working space WeWork led New York and innovation have increased by 338 percent since to a uniquely successful year in terms of funding and 1990, there has not been a corresponding investment is predicted to lead to more frms, especially B2B and in education and training for Americans, and less so co-working companies, calling New York home.153 In for women and underrepresented communities.143 2017, WeWork received a $4.4 billion investment However, the number of women-owned businesses from Softbank and its “Vision Fund.”154 144 in NYC has increased dramatically in recent years. Private sector dollars still make up the bulk of entre- Over the last seven years, the number of female- preneurship funding in the city. $9 billion dollars owned businesses increased by 36 percent, while the across public and private sectors makes up New York number of male-owned businesses increased by just and are ready for commercial product development. 145 8 percent during the same period. Women-owned The fund does major VC companies: Orbimed, New businesses now make up more than 40 percent of pri- Enterprise Associates, Venrock, Deerfeld Manage- 146 vate companies in New York City. With a total of ment, and Canaan Partners.155 However, where pri- 413, 899 women-owned frms, New York has more vate sector contributions make up the bulk of seed than double the nearest competitor, Los Angeles, funding and capital in Silicon Valley and other entre- 147 which has 192,358. Infor’s former president, Dun- preneurship ecosystems, New York City benefts can Angove, remembers when the company was look- from, frst, twice the opportunities to receive funding; ing for a new headquarters. Angove cited New York’s and second, private sector contribution that bolsters culture, diversity, and interdisciplinary perspectives public-minded entrepreneurship initiatives. Take for to be the reason why it chose New York over Silicon example, Union Square Ventures, a “thesis-driven 148 Valley. The eight-hour fight, on average, from cit- venture capital frm” that has in the past supported ies like London, Paris, Berlin, and Rio de Janeiro also such initiatives as Shapeways. makes the city appealing for innovators. Further, in February 2018, the three city-desig- Access to Finance nated banks—Amalgamated, Bank of America, and TD Bank—committed $40 million towards two of Reports show that venture capital investments in New York’s three programs that help minority and New York were around $6 billion in 2015,149 with women-owned business enterprises (M/WBEs) and more than 14,500 startups located in the city.150 In small businesses access afordable loans to grow 2016, venture capital investment rose to $9.5 bil- and sustain themselves.156 The programs, known as lion and in 2017, a PricewaterhouseCoopers (PwC) the Contract Financing Loan Fund (CFLF) and the report stated that New York surpassed San Fran- Emerging Developer Loan Fund (EDLF), are two cisco in venture capital in the last two quarters of fnancial tools established by the de Blasio adminis- the calendar year.151 This amounted to a 25.5 percent tration to address historic barriers faced by many M/ growth in the tech sector for New York City, accord- WBEs and small businesses in accessing capital.157 ing to the comptroller’s ofce, surpassing all states This initial funding built on the city’s initial invest- but California and Washington.152 What is import- ment of $20 million to both funds. With this fund- ant to note, however, is that in terms of total dollar ing, M/WBEs and small businesses will have access investments, number of deals, number of employees to $60 million in total revolving loan funding, triple as reported by industry association, and number and the city’s initial investment.158 size of IPOs in New York City and nationally, the technology and entrepreneurship sector is increas- Past successes and the growth of late-stage and series ing everywhere given growth in perceived viability, C funding shows New York’s frm place as an inno- number of skilled talent, and other factors. In New vation ecosystem, demonstrating maturity and staying

46 |"SIPA’s Entrepreneurship & Policy Initiative Working Paper Series ______power in this sector. In addition, a look at the top 10 talent and resources. ventures that received the most Series C and late-stage As New York’s entrepreneurship ecosystem contin- investment include PlayBuzz, BlueCore, Common and ues to evolve, there are several policy considerations. Stash, mostly B2B, are symptomatic of a city rich in The rise of 14 @ Irving and other spaces like it pro- entrepreneurs and stakeholders, something that will vides an opportunity for more public-minded, civic, prove benefcial to the ecosystem at large creating and social entrepreneurship, which seeks to solve more investors and experienced executives to fund and public problems and train citizens for how to adapt found new ventures. to the 21st century work force through digital skills The main factors that helped New York emerge as a and entrepreneurship. Civic Hall has already served tech leader are rooted in its unique competitive advan- as an anchor and catalyst for this work. Many tech- tages and urban nature and were fostered by a set of nology companies, including Alphabet, are situat- strategies from city government to set the foundations ing their urban governance divisions in New York. for a thriving innovation ecosystem. Intersection and Sidewalk Labs are examples of those focused on leveraging technology to improve Policy Considerations for the urban experience. Is there an opportunity for a start-up ecosystem with civic, public-minded values? New York’s Innovation Ecosystem New York-based entrepreneur Tristan Louis said, Each of these examples exemplify New York City’s “this translates into an attitude that may focus New urban enterprises which leverage multi-stakeholder York tech companies more on the social impact,” cit- actors, interconnection, geographic advantage, and access to ing Kickstarter and Etsy as examples.160 The lack of fnance to spur, catalyze, and support entrepreneurship. diversity and culture is a systemic problem in Sili- The city has tapped into its leadership in a diversity con Valley, and there is increasing public critique of of areas including fashion, fnance, advertising, and this festering issue. Over the past year, tech giants journalism to develop entrepreneurship which lever- such as Google and its parent company, Alphabet, ages technology in these various subsectors. Finally, are grappling with culture clashes at shareholder through strategic investment and the New York City meetings161 and lawsuits over their hiring practices.162 Economic Development Corporation, it has created In addition, tech companies are facing a wave of a fertile ground for attracting talent, investors, and ‘techlash”—backlash resulting from concerns over innovation. Public policies have been a critical part user privacy, election security, and ethics lapses.163 in making New York a 21st century technology and Perhaps the tide is shifting for more policy interven- innovation hub. tions to help foster technology-based ecosystems to However, there can be limits and challenges in dictat- address social problems. ing innovation and entrepreneurship. Glaeser and Kerr warn against local governments playing venture capi- Public Policy Challenges talists. For example, Japan’s Ministry of International Urban innovation ecosystems face a myriad of chal- Trade and Investment, though stafed with top talent, lenges. The following table illustrates how New York was not successful in identifying companies.159 Scholars City addressed past challenges, which may be instruc- argue for a balance between government-led interven- tive for other urban systems seeking to use public policy tions and spontaneity and competition between local as a tool to enhance urban innovation ecosystems: banks and fnanciers. Ultimately, the direction of pub- lic policies around urban innovation is dependent on the outcome desired. If the outcome is for more entre- preneurial solutions to public challenges—whether the compacting, solar trash cans New York’s Innovation Lab has funded in Brownsville or subsidies for more coding classes in city schools—public policy will need to play more of a role to provide risk capital and lure

______Silicon Alley: A Framework for New York City’s Entrepreneurship Ecosystem and its Public Policy Considerations"| 47 Challenges New York City’s Innovation Ecosystem and Policy Actions

Challenge Explanation Policy Actions Applied

Lack of physical space for entrepreneurs Ofce space in New York is too expensive • City-sponsored network of coworking for start-ups and there was no specific spaces and incubators like the Union ofering of ofce rentals Square Tech Hub, which will be the new space for Civic Hall; it will include digital training hub for 21st century jobs and flexible workspace for growing start-ups

Lack of technology-specialized talent New York lacked strong engineering • Rapid tech skill training programs like and technical schools; most talent the NYC Tech Talent Pipeline (TTP), was imported which ofers no-cost training for jobs in the tech field.164 • Attraction of science and technology universities • Introduction of coding in public schools

Insufcient seed capital available for Although New York was home to many • Creation of seed funds supported by local start-ups firms in the VC industry, they did not the city like the NYC Seed, formed consider NYC startups mature enough to provide deserving seed-stage for funding entrepreneurs with capital and support to move from idea to product launch; partners include ITAC, NYCEDC, NYC Investment Fund, NYSTAR, and Polytechnic Institute of NYU

Limited and uncoordinated community of The tech community was growing but • BigApps competition, like launch tech-led innovators and entrepreneurs scattered and uncoordinated, there was of NYCx Challenge program, which no robust community infrastructure or includes local communities institutions, and entrepreneurship was not • Political support for community considered respectable events, like NYC Open Data Week, a collaboration between NYC Open Data, BetaNYC, and civic tech and data communities • Promotion and marketing campaigns, like NYC Computer Science Opportunity Fair (CS Fair), large annual college and career inspiration event for public high school students studying computer science • Attraction of prominent tech firms

Figure 3: Adapted from Mulas and Gastelu-Iturri, 2016, p. 20

Below are a few key recommendation areas which are goal is to create a “motivating” work environment increasingly relevant for the continued growth of entre- where businesses of diferent industries can learn preneurship in New York City and the opportunity for from each other, network, develop new skills, and public policy to play a role. As cities continue to be hubs inspire each other.166 Many of these hubs occupy of technology clusters and innovation, several of these iconic buildings, such as train stations, navy yards, considerations will have applicability for other places. hospitals, and de-commissioned warehouses.167 Around the globe, in places like Barcelona, Paris, These “creative hubs” are stimulating environments Buenos Aires, and New York, there is a new concept to work in for both large corporations and start-ups. propelling innovation: multi-sector innovation hubs For instance in New York City, there are the Indus- that comprise a range of business models, owner- try City Brooklyn, the Brooklyn Navy Yard, and the ship structures, and physical layouts.165 Their main Greenpoint & Williamsburg.

48 |"SIPA’s Entrepreneurship & Policy Initiative Working Paper Series ______Recommendations 3. Facilitate networking and interconnection between multi-stakeholders 1. Create and offer affordable technology & entrepreneurship training and education ∙ Incentivize actors across the technology and innovation community to engage and interact Establish partnerships between co-working ∙ in coworking spaces, accelerators, incubators, spaces, technology and design skills training and events in New York City. institutions, incubators/accelerators, and technology companies. For example, UXDI ∙ Engage with local stakeholders and General Assembly is leveraging start-ups and community residents to identify urban projects residents of WeWork as capstone challenges and collaboratively design solutions. projects for their students. Another example ∙ Connect relevant actors of community is the partnership between Microsoft Cities by creating and promoting city-sponsored and NYC Tech Talent Pipeline providing a events like the NYC Open Data Week, or the free intensive program on building expertise Computer Science Career Fair. relevant to tech trends. ∙ Create hubs to coordinate and connect ∙ Promote and fund university programs focused communities such as Civic Hall, WeWork, on innovation and entrepreneurship. New The Wing, and Meetup. York has leveraged resources and funding 4. Provide affordable housing from a number of initiatives at Columbia Address rising housing costs/more shared University, New York University, and CUNY, ∙ housing opportunities. For example, cities such for example.168 as San Francisco and New York are already Create and ofer programs providing resources ∙ exploring “co-living” housing opportunities and support to leverage the most emerging focused on Millennials.170 technologies: AI, Cryptocurrency, Cyber Provide a wide range of fexible memberships Security, IoT (especially NYEDC), Fin Tech, ∙ for students, graduates, the unemployed, Cryptocurrency Start Ups, New Technologies startups, and so forth, in the way that co- of Money, and Blockchain. working spaces like The Wing and WeWork do. 2. Promote visa and regulatory frameworks for 5. Provide access to seed funding and international entrepreneurs venture capital ∙ Provide afordable city-sponsored loans Make more public venture capital funding available to immigrant entrepreneurs, women, ∙ available; state and city funds should be and other underrepresented communities. used for entrepreneurs and social enterprises Provide further legal alternatives and resources ∙ backed by people of color and women. to international entrepreneurs starting up their business in the U.S. (e.g., streamlined 6. Leverage and experiment with visa entry). emerging technologies ∙ Set up talent pipelines to attract talent and ∙ Use and experiment with new emerging facilitate people from all over the world technologies (AI, Blockchain, IoT, etc.) to come to work in the feld of technology by opening urban challenges to solve and entrepreneurship in New York City. (for example NYCx). For example, Canada has a high-tech visa.169 ∙ Create small funds to experiment with and leverage new technologies. For example, the city could provide funds and other resources for entrepreneurs and other members of the community to advance on these felds.

______Silicon Alley: A Framework for New York City’s Entrepreneurship Ecosystem and its Public Policy Considerations"| 49 Acknowledgements

This paper was made possible with support from the Nasdaq Educational Foundation. Special thanks to Aliya Bhatia, Ester Fuchs, Sarah Holloway, Pablo Andres Mandiola, Euan Robertson, Anya Schifrin, Ted Stifel, Gemma Torras Vives, and Lily Wei. Above all, thanks to Dean Merit E. Janow for her support, guidance, and feedback.

50 |"SIPA’s Entrepreneurship & Policy Initiative Working Paper Series ______Endnotes

1. UN Report, World Urbanization Prospects, 2014, 18. A future that works: Automation, employment, and https://esa.un.org/unpd/wup/Publications/Files/ productivity. James Manyika, Michael Chui, Medhi WUP2014-Report.pdf Miremadi, Jacques Bughin, Katy George, Paul Willmott, and Martin Dewhurst. McKinsey & Company. 2. James Manyika, Michael Chui, Jacques Bughin, Richard Dobbs, Peter Bisson, and Alex Mars, “Disruptive 19. World Economic Forum, “5 million jobs to be Technologies: Advances That Will Transform Life, lost by 2020,” January 2016, www.weforum.org/ Business, and the Global Economy,” McKinsey Global agenda/2016/01/5-million-jobs-to-be-lost-by-2020 Institute, May 2013, Preface, www.mckinsey.com/~/ 20. The Digital Workforce of the Future, LinkedIn, Acquire, media/McKinsey/Business%20Functions/McKinsey%20 Build and grow Tech Talent, https://business.linkedin. Digital/Our%20Insights/Disruptive%20technologies/ com/content/dam/me/business/en-us/talent-solutions/ MGI_Disruptive_technologies_Full_report_May2013.ashx cx/2017/PDFs/digital_workforce_future.pdf 3. Ibid 21. Ibid 4. RBC Global Asset Management, “Global Megatrends: 22. McKinsey Global Institute, “A future that works: Automation in Emerging Markets,” 2014, automation, employment, and productivity,” January 2017, https://us.rbcgam.com/resources/docs/pdf/whitepapers/ www.mckinsey.com/~/media/mckinsey/featured%20 Global_Megatrends_Automation_Whitepaper.pdf insights/digital%20disruption/harnessing%20 5. Forbes Technology Council, “Tech Experts Predict 13 automation%20for%20a%20future%20that%20works/ Jobs That Will Be Automated By 2030,” March 2019. mgi-a-future-that-works-executive-summary.ashx; www.forbes.com/sites/forbestechcouncil/2019/03/01/ LinkedIn, “The U.S. is facing a critical skills shortage, tech-experts-predict-13-jobs-that-will-be-automated-by- reskilling can be part of the solution,” April 2018, 2030/#4dd148bc22bf https://blog.linkedin.com/2018/april/19/the-u-s-is- facing-a-critical-skills-shortage-reskilling-can-be-part-of- 6. Darrell M. West, “What happens if robots take the jobs? The impact of emerging technologies on employment the-solution and public policy,” October 2015, Center for Technology 23. Digitalization and the American Workforce, Innovation at Brookings, p.2, www.brookings.edu/wp- www.brookings.edu/research/digitalization-and-the- content/uploads/2016/06/robotwork.pdf american-workforce/

7. Ibid 24. Ibid

8. Shukla Shudhendu and Jaiswal Vijay, “Applicability 25. Ibid of Artifcial Intelligence in Diferent Fields 26. A future that works: automation, employment, and of Life,” International Journal of Scientifc productivity (January 2017), McKinsey Global Institute Engineering and Research, September 2013, p.4, https://pdfs.semanticscholar.org/c06a/ 27. Victor Mulas, Michael Minges, and Hallie Rocklin b259ede1ebefbd0ba01f0f4603c4b2bb19ea.pdf Applebaum, “Boosting Tech Innovation Ecosystems in Cities: A Framework for Growth and Sustainability of 9. Darrell M. West, “What happens if robots take the jobs? Urban Tech Innovation Ecosystems” (The World Bank, The impact of emerging technologies on employment and November 1, 2015), p. 7, http://documents.worldbank. public policy,” p.5 org/curated/en/623971467998460024/Boosting-tech- 10. Ibid innovation-ecosystems-in-cities-a-framework-for-growth- and-sustainability-of-urban-tech-innovation-ecosystems 11. Ibid 28. Ibid 12. Ibid 29. Ibid 13. Darrell M. West, “What happens if robots take the jobs? The impact of emerging technologies on employment and 30. Ibid public policy,” p.6 31. Ibid 14. Ibid 32. Bruce Katz and Julie Wagner, “The Rise of Innovation 15. Ibid Districts: A New Geography of Innovation in America” (Brookings Institution, May 2014). 16. OECD, “Future of Work and Skills”, February 2017, p.4, www.oecd.org/els/emp/wcms_556984.pdf 33. AnnaLee Saxenian, Regional Advantage: Culture and Competition in Silicon Valley and Route 128. Cambridge: 17. Ibid Harvard University Press. 1994

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40. Norton, R. “The Thought Leader Interview: 56. Entrepreneurship and Innovation. Available at: www.stern. Henry Chesbrough”, www.strategy-business.com/ nyu.edu/programs-admissions/full-time-mba/academics/ article/11210?gko=af24f specializations/entrepreneurship-and-innovation

41. The Rise of Innovation Districts: A New Geography 57. Grand Central Tech. Available at: of Innovation in America, Metropolitan Policy https://grandcentraltech.com/ Program at Brookings, Bruce Katz and Julie Wagner, 58. “NYCx efort will be New York’s next pipeline for smart www.brookings.edu/wp-content/uploads/2016/07/ city innovation”, www.digital.nyc/news/nycx-efort- InnovationDistricts1.pdf will-be-new-york%E2%80%99s-next-pipeline-smart- 42. Henry Chesbrough, “The Era of Open Innovation,” city-innovation MIT Sloan Management Review 44 (3) (2003): 35-41 59. NYC Mayor’s Ofce of the Chief Technology Ofcer, 43. Saskia Sassen, “Cities Today: A New Frontier for Major https://tech.cityofnewyork.us/teams/nycx/ Developments,” Annals, AAPSS, 626, November 2009 60. Victor Mulas, Michael Minges, and Hallie Rocklin 44. Enrico Berkes and Ruben Gaetani, “The Geography of Applebaum, “Boosting Tech Innovation Ecosystems in Unconventional Innovation” June 21, 2017. Cities: A Framework for Growth and Sustainability of Urban Tech Innovation Ecosystems” 45. Richard Florida and Charlotta Mellander, “Rise of the Startup City,” California Management Review 59, no. 1 61. Ibid (November 1, 2016): 14–38. 62. Ibid

46. OECD and Eurostat, Oslo Manual: Guidelines for 63. Ibid Collecting and Interpreting Innovation Data, 3rd Edition (Paris: OECD Publishing, 2005). 64. Katz B. & Wagner J., “The Rise of Innovation Districts: A New Geographics of Innovation in America” 47. Birol Mercan and Deniz Gökta, “Components of Metropolitan Policy program, Brookings Institution. Innovation Ecosystems: A Cross-Country Study,” International Research Journal of Finance and Economics 76 65. Birol Mercan and Deniz Gökta, “Components of (November 1, 2011): 102–12. Innovation Ecosystems: A Cross-Country Study,” International Research Journal of Finance and Economics 76 48. Birol Mercan and Deniz Gökta, “Components of (November 1, 2011): 102–12. Innovation Ecosystems: A Cross-Country Study,” International Research Journal of Finance and Economics 76 66. Sassen, Cities in Today’s Global Age p 23 (November 1, 2011): 102–12. 67. Yasuyuki Motoyama & Knowlton, Karren. (2017). Examining the Connections within the Startup Ecosystem: 49. New Tech City | Center for an Urban Future (CUF) (no date). Available at: https://nycfuture.org/research/new-tech- A Case Study of St. Louis. Entrepreneurship Research city (Accessed: 30 April 2018); Michael Mandel, The Journal. 7. 10.1515/erj-2016-0011. California Tech Info Revolution: How It Is Spreading 68. Edward L. Glaeser and William R. Kerr “What Makes Across the State, www.progressivepolicy.org/wp-content/ a City Entrepreneurial? Harvard Kennedy School uploads/2015/07/2015.07-Mandel_The-California-Tech- February 2010. Info-Revolution_How-It-Is-Spreading-Across-the-State.pdf 69. Ibid. p 4 50. Deborah J. Jackson, “What Is an Innovation Ecosystem?” 70. Sassen, Cities in Today’s Global Age p 35 (National Science Foundation, 2011). 71. Florida R., “Venture Capital Remains Highly 51. Henry Chesbrough and Marcel Bogers, “Explicating Open Concentrated in Just a Few Cities,” October 2017, Innovation,” in New Frontiers in Open Innovation, ed. Henry Citylab, www.citylab.com/life/2017/10/venture-capital- Chesbrough, Wim Vanhaverbeke, and Joel West (Oxford: concentration/539775/; Florida R., Mellander C., Oxford University Press, 2014). “Rise of the Startup City: The Changing Geography of 52. Naqshbandi, M. M., & Kamel, Y. (2017). Intervening role the Venture Capital Financed Innovation,” Working Paper of realized absorptive capacity in organizational culture– Series: Martin Prosperity Research, September 2014, open innovation relationship: Evidence from an emerging http://martinprosperity.org/media/StartupCity-CMR- market. Journal of General Management, 42(3), 5-20. FINAL-formatted.pdf

52 |"SIPA’s Entrepreneurship & Policy Initiative Working Paper Series ______72. New York City Comptroller, Report: Venture 90. Mayor Bloomberg announces NYC Seed, a Capital in New York City’s Economy, April 2019 partnership with Poly to ofer capital to tech start-ups, https://comptroller.nyc.gov/reports/venture-capital-in- http://engineering.nyu.edu/news/2008/06/04/mayor- new-york-citys-economy/ bloomberg-announces-nyc-seed-partnership-poly-ofer- capital-tech-start-ups 73. Ibid 91. Mayor Bloomberg and frst mark capital announce 74. Florida R., Mellander C., “Rise of the Startup City: The Changing Geography of the Venture Capital Financed frst investment of the NYC entrepreneurial fund, Innovation,” Working Paper Series: Martin Prosperity www1.nyc.gov/ofce-of-the-mayor/news/226-10/mayor- Research, September 2014, http://martinprosperity.org/ bloomberg-frstmark-capital-frst-investment-the-nyc- media/StartupCity-CMR-FINAL-formatted.pdf entrepreneurial-fund#/6 92. Roadmap for the digital city – Achieving New York 75. Ibid City’s Digital Future, www.nyc.gov/html/media/media/ 76. Florida, R. “Venture Capital Remains Highly PDF/90dayreport.pdf Concentrated in Just Few Cities,” 2017, www.citylab.com/ life/2017/10/venture-capital-concentration/539775/ 93. Meet O’Reilly, http://chimera.labs.oreilly.com/ books/1234000000774/ch02.html 77. Florida, R. “Confronting the New Urban Crisis,” 2017, www.citylab.com/equity/2017/04/confronting-the-new- 94. Endeavor Insight, “The Power of Entrepreneur Networks: urban-crisis/521031/ How New York City Became the Role Model for Other Urban Tech Hubs.” Emphasis added. 78. Wallace T., “Fastest Growing Cities Are in the South,” May 2017, www.usnews.com/news/us/ 95. Shead Sam “Amazon plans to build another US articles/2017-05-25/fastest-growing-us-cities-are-in-south- headquarters that’s ‘equal’ in size to its Seattle campus”, 4-of-top-5-in-texas Business Insider, September 2017, www.businessinsider. com/amazon-announces-hq2-2017-9 79. Grifths A., “New York ‘can overtake Sillion Valley’ as tech hub,” June 2013, Dezeen, www.dezeen.com/2013/06/19/ 96. Laura Stevens, Raice Shayndi and Lombardo Cara, plans-for-new-york-to-surpass-silicon-valley/ “ Amazon Seeks Prime Location for Its Second Headquarters”, The Wall Street Journal, September 2017, 80. Katz B. & Wagner J., “The Rise of Innovation Districts: www.wsj.com/articles/amazon-opens-search-for-second- A New Geographics of Innovation in America” headquarters-city-in-north-america-1504780191 Metropolitan Policy program, Brookings Institution. 97. Jonathan O’Connell, “Amazon Receives 238 Proposals 81. Xavier de Souza Briggs, Democracy as Problem Solving: for Second Headquarters”, The Washington Post, Civic Capacity in Communities Across the Globe (Cambridge: October 2017, www.washingtonpost.com/news/business/ MIT Press, 2008), 302. wp/2017/10/23/amazon-receives-238-proposals-for- 82. Bowles and Giles, “New Tech City.” second-headquarters/?utm_term=.037e03ec08f4

83. Mulas and Gastelu-Iturri, “New York City: 98. “Amazon Selects New York City and Northern Virginia Transforming a City into a Tech Innovation Leader.” for New Headquarters”, Amazon, November 2018, https://press.aboutamazon.com/news-releases/news- 84. www1.nyc.gov/ofce-of-the-mayor/news/392-09/mayor- release-details/amazon-selects-new-york-city-and- bloomberg-welcomes-frst-27-start-up-companies-city- northern-virginia-new sponsored-business-incubator-and 99. Sam Raskin, “Amazon’s HQ2 deal with New York, 85. Incubators and Coworking spaces, NYCEDC, explained,” NY Curbed, February 14, 2019, www.nycedc.com/program-category/incubators-and- https://ny.curbed.com/2018/11/16/18098589/ coworking-spaces amazon-hq2-nyc-queens-long-island-city-explained 86. “Mayor Bloomberg outlines 11 initiatives to support 100. “NYC, Newark among the fnalists for Amazon’s HQ2,” New York City’s fnancial services sector and encourage https://ny.curbed.com/2018/1/18/16905132/amazon- entrepreneurship,” 2009, www.nycedc.com/press-release/ hq2-fnalists-new-york-newark-tech-hub mayor-bloomberg-outlines-11-initiatives-support-new-york- citys-fnancial-services 101. Leanna Garfeld, “Amazon ofcials are reportedly visiting New York City in April, Business Insider, 87. Cornell Tech, https://tech.cornell.edu/ www.businessinsider.com/amazon-headquarters-hq2-new- 88. Mayor Bloomberg announces request for proposals for york-city-bid-10/#new-york-city-is-proposing-four-sites- new or expanded engineering and applied science campus across-three-boroughs-for-amazons-hq2-midtown-west- in NYC, www1.nyc.gov/ofce-of-the-mayor/news/261- and-the-fnancial-district-in-manhattan-the-brooklyn-tech- 11/mayor-bloomberg-request-proposals-new-expanded- triangle-and-long-island-city-in-queens-collectively-the- engineering-applied#/0 proposed-areas-span-625-million-square-feet-1

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______Silicon Alley: A Framework for New York City’s Entrepreneurship Ecosystem and its Public Policy Considerations"| 53 103. “NYC Reveals Amazon HQ pitch, De Blasio says 121. Mayor de Blasio unveils new design and programs coming Amazon hurts NYC businesses,” http://gothamist. to Union Square Tech Hub,” www1.nyc.gov/ofce-of- com/2017/10/19/always_be_closing.php the-mayor/news/095-17/mayor-de-blasio-new-design- programs-coming-union-square-tech-hub#/0 104. Brad Stone, “Amazon’s Escape from New York,” Bloomberg Businessweek, February 14, 2019 122. Civic Hall, Impact Reports, https://civichall.org/about- www.bloomberg.com/news/articles/2019-02-14/how- civic-hall/impact-reports/ amazon-lost-new-york “Amazon has canceled its NYC 123. “New York City’s tech community is getting a $250 headquarters plans in a stunning defeat” www.recode. million home base at Union Square,” www.fastcompany. net/2019/2/14/18225014/amazon-hq2-cancels-nyc- com/3066733/new-york-citys-tech-community-is-getting- queens-long-island-city-new-york a-250-million-home-base-at-union-square 105. Bloomberg Philanthropies, Government Innovation, 124. Ibid www.bloomberg.org/program/government- innovation/#overview 125. Alley Corp, www.alleycorp.com/kevin-ryan/

106. Bloomberg Philanthropies, Government Innovation, 126. Kevin Ryan. Available at: www.alleycorp.com/kevin-ryan/; www.bloomberg.org/program/government- Ryan, K. (2012) Gilt Groupe K CEO on Building a Team innovation/#overview of A Players. Available at: https://hbr.org/2012/01/gilt- groupes-ceo-on-building-a-team-of-a-players 107. Progress in New York City: Technology for Social Good, https://blogs.microsoft.com/newyork/2018/01/11/ 127. Miller, C. C. (2012): AlleyCorp Seeds a Blossoming progress-in-new-york-city-technology-for-social-good/ Internet Hub in New York’, The New York Times, 31 August. Available at: www.nytimes.com/2012/09/01/ 108. Ibid technology/alleycorp-seeds-a-blossoming-internet-hub-in- 109. Ibid new-york.html

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120. The Wing, Membership, www.the-wing.com/memberships 140. Hewlett S.A., “How diversity can drive innovation,” 2013, https://hbr.org/2013/12/how-diversity-can- drive-innovation

54 |"SIPA’s Entrepreneurship & Policy Initiative Working Paper Series ______141. Progress in New York City: Technology for Social Good, 157. Ibid https://blogs.microsoft.com/newyork/2018/01/11/ 158. Ibid progress-in-new-york-city-technology-for-social-good/ 159. Edward L. Glaeser and William R. Kerr, “What Makes a 142. Mashable, “If we want to solve tech’s talent crisis, City Entrepreneurial?,” February 2010, Harvard Kennedy we need to change how we hire,” 2018, School, p.4, www.hks.harvard.edu/centers/rappaport/ https://mashable.com/2018/03/18/diversity-in-tech- research-and-publications/policy-briefs/what-makes-a- talent-gap-hiring/#ye_D4JkrHsqL city-entrepreneurial 143. Bowles J., “Opportunities for Women Entrepreneurs in 160. Stillman J., “Silicon Valley vs. New York: How Does New York City,” April 2016, Center for an Urban Future, Startup Culture Difer?,” August 2016, www.inc.com/ https://nycfuture.org/research/testimony-opportunities- jessica-stillman/silicon-valley-vs-new-york-how-does- for-women-entrepreneurs-in-new-york-city startup-culture-difer.html 144. Ibid 161. Boland Hannah, “Alphabet faces pressure over diversity at 145. Ibid shareholder meeting”, The Telegraph, June 2018, www.telegraph.co.uk/technology/2018/06/06/alphabet- 146. Ibid faces-pressure-diversity-shareholder-meeting/ 147. Angove D., “New York City’s culture will shape the next tech sector,” https://hbr.org/2013/07/new-york-citys- 162. Mak Aaron, “The Former Employees Suing Google Have culture-will-sh Conficting Allegations About Its Biases”, Slate, March 2018, www.slate.com/technology/2018/03/google- 148. Victor Mulas and Mikel Gastelu-Iturri, “New York City discrimination-lawsuits-roundup-allegations-denials.html : Transforming a City into a Tech Innovation Leader” (World Bank, November 2016), http://techecosystems. 163. “Google, Amazon, Facebook, And Apple Are Hiring To org/; Partnership for New York City, “New York’s Defend Against The ‘Techlash’”, CB Insights, September Innovation Economy” (Partnership for New York City, 2018, www.cbinsights.com/research/google-amazon- June 2016). facebook-apple-hiring-techlash/ 164. NYC Small Business Services, Tech Training, 149. Mulas and Gastelu-Iturri, “New York City: Transforming a City into a Tech Innovation Leader.” www1.nyc.gov/site/sbs/careers/tech-training.page 165. Greenwald M., “A new wave of innovation hubs 150. Peterson B., “New York City has topped San Francisco when it comes to startups raising VC cash – but it may sweeping the world,” 2018 www.forbes.com/sites/ not last,” October 2017, www.businessinsider.com/ michellegreenwald/2018/04/02/a-new-wave-of- new-york-beat-out-san-francisco-as-a-venture-capital- innovation-hubs-sweeping-the-world/#60162ac41265 powerhouse-2017-10; Majewski T., “2016 NYC Startup 166. Ibid Report: $9.5B in funding and 109 exits,” January 2017, 167. Ibid 151. www.builtinnyc.com/2017/01/30/2016-new-york- 168. For example, see Columbia SIPA’s Dean Challenge Grant startup-report to help support public sector social entrepreneurship 152. New York State Ofce of the Comptroller, “The https://sipa.columbia.edu/ideas-lab/deans-public-policy- Technology Sector in New York City, September 2017. challenge-grant

153. New York Beat San Francisco in Venture Capital Funding, 169. CBC, “New immigration program helping Canada in Thanks in Large Part to WeWork | Inc.com. 2017. the global war for high-tech talent,” www.cbc.ca/news/ Available at: www.inc.com/business-insider/new-york- business/immigration-high-tech-canada-global-skills- city-beats-san-francisco-venture-capital-funding-2017.html strategy-1.4391409 (Accessed: 30 April 2018); Investor Dollars 170. Hillary Hofower, “The trendy co-living spaces attracting Move into Co-Working Space (2018). Available at: millennials in New York and San Francisco are just http://middlemarketgrowth.org/investor-dollars-move- the latest version of a concept that’s been around for into-co-working-space/ (Accessed: 30 April 2018). 200 year” Business Insider, September 9, 2018 154. www.forbes.com/sites/alexkonrad/2017/08/24/wework- www.businessinsider.com/co-living-increasing-expensive- confrms-massive-4-4-billion-investment-from-softbank- cities-old-concept-2018-9 and-its-vision-fund/#480ff995b3c

155. New York City Venture Capital Report 2019, p. 3.

156. City of New York, “Mayor de Blasio Announces $40 Million in Private Investments to Advance Economic Opportunity for Minority and Women-Owned Businesses and Small Businesses, February 2018, www1.nyc.gov/ofce-of-the-mayor/news/090-18/ mayor-de-blasio-40-million-private-investments-advance- economic-opportunity-for#/0

______Silicon Alley: A Framework for New York City’s Entrepreneurship Ecosystem and its Public Policy Considerations"| 55