Tag: Innovation

The growth of technological innovation has several benefits that can be brought to New York. One benefit as stated by Steve Blank in The Hacking NYC panel discussion is that the startup scene in NYC makes “economy more diverse and not as dependent upon Wall Street”. This is positive because when the Lehman Brothers collapsed and filed for bankruptcy in 2008, this caused a financial global crisis. The technological innovation in NY helps NY to move away from relying on Wall Street to be able to stand on its own. Thus any busts in Wall Street won’t impact NY’s economy as heavily as it did in 2008.  The second benefit due to the growth of technological innovation in New York is the rapid creations of tech jobs. Jason Bram and Matthew Ploenzke, the authors of “Will Silicon Alley Be the Next Silicon Valley?”, organized data to show the growth of the tech sector in New York. They stated that, “New York City’s tech sector still outpaces growth nationwide, 60 percent to 27 percent, or more than double”. The tech sector in NY is not only growing rapidly but even bypass the growth of tech sectors nationwide. In addition, these jobs pay fairly well with an average of $118,000 per year citywide as of 2013. I think disagreements on these benefits are possible because people can argue that there are too many employments focused in the tech sector and not enough employments focused on other sectors. People can also argue that these benefits can just be temporary and that if there is a boom, a bust will be inevitable.

A potential negative issue I can see emerging is that the tech sector is very concentrated in certain areas of NY. Adam Forman’s “New York’s tech Profile” shows that Manhattan has the highest tech employment  of the 5 boroughs with 94, 717 employment in 2014 compared to Bronx’s employment of 1, 284 and Staten Island’s employment of 1,286 in 2014. Staten Island actually has a -6% growth in tech sector from 2004-2014. This can become a problem because if Manhattan has more employments, the employees will be more likely to move to Manhattan to live since it will be around the area where they work. These employees with a higher income than the average income in the city ($84,000) will gather there which will also influence the landscape of Manhattan and other boroughs. More investments will be put in Manhattan such as more expensive stores to easier access to transportation. Manhattan will be the priority in New York while the other boroughs won’t have as much benefits as Manhattan will receive. The wealth gap will grow between Manhattan and the other boroughs and this will lead to an imbalance in New York. This can lead to the discontentment of the working class and the lower class people which will cause internal conflicts with their wealthier counterparts. David Streitfeld in “In San Francisco and Rooting for a Tech Comeuppance” brings up the point that “The consequences for people who do not make their living from technology are increasingly unpleasant”. The traffic there is horrible because of the increase population of people either moving to live there or commuting to work there. Rent increased with tenants living in fear and the tech elites are corrupting the local government by buying elections. What is happening now in San Francisco can easily happen in New York. It is something to be wary and aware of, that technological innovations can have many benefits but they can also cause many negative consequences.

The Economic Development Curmudgeon in its critical review of Enrico Moretti brings up a good point regarding the innovation global market. He states that, “Today’s winners can become losers in the future”. The innovation market seems to be thriving on the surface level right now but it is not certain what will happen in the future. As the innovation market continues to grow, we have no way of knowing where this market will take us. Richard Florida also makes the point that the technology capital is very concentrated. The United States alone accounts for 68.6% of total global venture capita not to mention it is only concentrated in metro cities such as New York and Boston. The technology market is very concentrated which makes it limited only to these cities that are densely populated with “great universities, and the open-mindedness and tolerance required to attract talent from across the world”. Not all cities have the draw to attract talents and investors won’t invest in those cities either because they don’t see the appeal. Metro cities like New York and Boston are safe bets for investments because the technology sector is blooming in those cities. Because of the concentrated investments in technology in only these few selected cities, the innovation global market itself is very limited. It is not certain whether this market will grow outside of these metro cities if other cities don’t have the resources or appeal to attract investments.

Having said that, I would still consider myself as a “techno-optimist”. Maybe it is the influence of movies but I want to believe that the technology market can expand more and more so that flying cars and robot helpers can become a reality. Of course, there will always be a downside to everything but I am optimistic about the benefits of technology overweighting the negatives. Though before that, the issue of technology market being concentrated in only certain areas definitely needs to be addressed. If only certain cities have big technology investments and a growing market, we might potentially see a world in which one city has flying cars replacing road cars while the next city has no access to flying cars. The economy gap is a huge factor in this and it is happening right now with education, incomes, healthcare, and etc. In order for further technology advancements, the gaps between all the cities from different parts of the world need to close so that there won’t be such a vast difference. If all the cities in the world have a good balance of good education, good earning income, healthcare, and more, this can serve as the attraction point for investors to invest in different cities. The spread of investments thus won’t be concentrated and there will be a larger potential for growth and creativity in innovation.