The New York Region Is Hot

There’s always a lot of talk within the NY venture community about how well the region is doing as a place to found and grow technology businesses. Working with some of the folks at DFJ Gotham, I recently did some analysis that quantifies a few of the strengths of the NY Region – I’m going to share a few of those findings below. Looking at the data one can objectively state what all of us who live here know to be true: NY is a growing hub of high-tech activity.

Methodology

The AEA Cybercities report provides a great deal of data about the high-tech sectors in the top 60 US cities. However, the city view doesn’t accurately capture the regional tech communities – these ecosystems often span more than one city. As a result we rolled up the territories defined in the report into regions that parallel the actual technical communities. While the AEA has Silicon Valley as an isolated territory, we integrated San Francisco, Oakland, Menlo Park, etc. into what we called the Silicon Valley Region – a more realistic view of where Sand Hill VCs actually invest and where entrepreneurs out there consider their stomping grounds. Similarly, the SoCal Region includes San Diego, LA and a few other independently listed geographies. The NY Region includes East PA, East NJ, West CT, Westchester, etc.

Findings

Here’s the scoop. Based on the AEA data, of the major regions the NY Region is:

• 1^st in total high tech jobs
• 1^st in the number of new high tech jobs annually
• 4^th in high tech salaries, behind both Boston and Silicon Valley

Making Sense of This Information

Given the sheer number of people in the densely populated NY region, it’s not surprising that there are a lot of high tech workers. However, the fact that there are more techies here than anywhere else in the US might surprise some. My gut tells me that this viewpoint may be a result of the reality that the NY tech scene is sometimes overshadowed by the other prominent industries in the region (finance, advertising, pharma). However, living in a land of giants doesn’t make you small.

It’s worth noting that based on this the implied percentage of the technical talent in the NY Region is currently working in startups in smaller than that of the Valley, leaving a deep bench of talent to join companies or start the next big thing.  We’re poised to continue to grow.

On another note, it’s common to hear those who don’t know NYC well state that it’s an expensive place to be a startup. I often hear the local entrepreneurs argue otherwise. The data point about NY tech talent being less expensive than it is in Boston or out West supports the argument that NY is an affordable place to start a company, at least with respect to the biggest cost for most start-ups: people.

It’s nice to see some data that supports what all of us on the ground here already knew: New York is hot.

This column was provided by Mark Davis. Mark is the author of Get Venture, a column designed to help entrepreneurs raise venture capital. In addition to his column, Mark is active in the venture community as an entrepreneur, advisor and venture capitalist. He currently works at DFJ Gotham Ventures, a leading early-stage IT venture capital fund based in NYC.