Silicon Valley and Technology Alley
For years, Silicon Valley (San Jose and San Francisco area) has been the birthplace of high technology companies such as Hewlett Packard, Apple, Google, Facebook, and thousands more. Today, there is a new competitor: New York City’s Technology Alley.
Many cities all over the world tried to copy the Silicon Valley model but few were successful. Everybody knows that high tech industry creates high paying jobs and prosperity (One high tech job can create 8 additional jobs). But why the financial capital of the world wants to get into a high technology business? Is it a change in direction? Is it about creating more jobs? Or is it something else?
New York City is the center of business where large company headquarters are located. New York City is the center of finance where many important financial decisions are made. New York City is also the center of investments where many types of business are negotiated. Since technology startups require investment, there is a strong notion that if you want to build company and need investment, this is the place to start. If you can get support and investment in New York, you can make it anywhere. If your company can succeed in New York, the whole world market can be yours. A Financial analyst said: “In the past, startups are based in garage, move to local market then national market. By starting in a place like New York City, you can move immediately to national and international market. You grow your business faster and capture the global market. Today you do not want to start in a garage; you must start in Wall Street.”
The city is also trying to encourage its technology image. Last month, Mayor Michael Bloomberg announced the creation of a $22 million venture capital fund to invest in New York startups. Many investors believe that the future of wealth will be in technology startup. The trend is clear, despite the economic recession; investment in high technology is increasing about 18% each year. An investment analyst explained: “The global market is in a recession; Europe is in serious problem; China and India economies are in declining; the stock market is not doing well; the housing market is not doing well, and the manufacturing industry is not doing well. People with money to invest are asking where do they put their money? The obvious answer is” “Technology industry”. If you invest in Apple’s stock over ten years ago at 18$ a share, today it is $750 a share. No one can beat investment like that. Professional investors who invested in Apple do not count in million dollars but in Billion. That is why more investors are looking to technology industry as the place to invest their money. Of course they want to make sure that the company that they invested in is profitable. They do not want to see another DOTCOM problem. By having startups in New York City, it is logical. Having startups here where investors can carefully monitor their progress is a perfect example of having business and technology working together.
In a short time, New York’s “Technology alley” is beginning to compete with San Francisco’s “Silicon valley” with some successful startups of its own such as Tumblr, the blogging platform; Foursquare, the mobile social-networking game; and Gilt Groupe, an online store for discounted designer clothes. This movement is now attract more techology entrepreneurs to start their company and as long as they are doing well, investors are ready to invest. Last week, New York City has the a major event called “Internet New York”, an eight-day celebration of the city’s growing startup community. Organizers said it draw more than 30,000 people to meet and discuss startups idea. Local newspapers called it “Matchmaking” where entrepreneurs meet investors in an open discussion. An investment company representative excited: “With hundreds of millions of people are using the Internet today, they need Internet tools, more Internet supports, more web developers and that is how we decided to invest in this area. With billion of people are using smart phone, more mobile apps are being developed and we are investing in this area. We want to meet entrepreneurs who want to start their company in Internet and mobile industry. They have the brain, we have the money and we should “Get married”.
The future of “Technology Alley” remains to be seen. Can New York City beat San Francisco? Who will be the capital of high technology industry? No one knows but by having two great technology centers at both sides of the country do have an advantage. It balances out the job distributions, especially high paying jobs. It opens more opportunities for entrepreneurs as they do not have to go west anymore.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
