NYC Tech Industry Booms but Diversity of Employees and Locations Remains Elusive, Study Finds

November 21, 2022 Greg David, THE CITY

A woman works on a laptop at a cafe along Broadway in Manhattan. Photo: Ben Fractenberg/THE CITY

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This article was originally published on Nov 15 5:00am EST by THE CITY

As tech jobs surged in New York City over the last decade, Manhattan continued to be home to the vast majority of them, while Brooklyn established itself as a viable alternative, especially along the waterfront.

Yet Queens has seen only minimal growth and the Bronx and Staten Island have been completely bypassed by the boom, according to a report on the “tech ecosystem” to be released Tuesday by the civic group Association for a Better New York and the trade group Tech:NYC.

The geographic concentration of tech jobs contributes to the industry’s persistent diversity challenge: Just over one-fifth of tech workers identify as Black or Latino, compared with one-third of the entire New York City workforce.

“The report shows some progress on diversity,” said Jason Clark, executive director of Tech:NYC. “We can’t continue to rest on the job numbers.”

“The New York City Tech Ecosystem,” updating a similar study a decade ago, makes clear how technology companies — and technology work at non-tech companies — have become essential to the city.

It found that the “tech ecosystem” employed 369,000 people in 2021, up 32% over a decade. Tech accounted for one-quarter of all new jobs in that period, and 7% of the city’s total workforce.

The industry pays well, with an average wage of $48 per hour compared with the $35 city average. Even people without a college degree earn $30 an hour in tech, compared with a $22 average.

“The report shows how powerful tech has become in driving the economy, and the large role it has played in the past 10 years in generating jobs,” said Kate Wittels, a consultant at the firm HR&A Advisors who oversaw the effort. “If New York is to continue to grow, tech has to be a core component of our economy.”

While other studies employ a traditional industry analysis by looking at the number of employees at companies where the central business is technology, this report examines the “tech ecosystem” by combining all jobs at tech companies — whether technology-oriented or other positions such as salespeople — along with tech-oriented positions at non-tech companies such as IT support staff, programmers and computer engineers.

It comes as major tech companies like Twitter, Facebook and Amazon are laying off workers, although the impact of those reductions in New York is not yet clear.

Manhattan continues to dominate. The borough saw tech jobs grow by a third in the last decade, and its 272,000 positions account for fully three-quarters of the ecosystem. As the report notes, Manhattan offers density — both in terms of other tech companies and workers — and ample office space, plus major investments in incubators and other programs that provide a support system.

Google’s new office under construction in lower Manhattan, Sept. 21, 2021. Photo: Ben Fractenberg/THE CITY

At the same time, the Brooklyn waterfront emerged as a second hub for the industry.

“Brooklyn became by the early 2000s ideally endowed to support a diverse tech economy,” said Sharon Zukin, professor emerita of sociology at CUNY and author of “The Innovation Complex,” a book on the rise of tech in the city. “Cheap formerly industrial space, gentrifiable neighborhoods where tech workers could live and, at least on the East River waterfront, the aura of irreverent cool.”

Crucial to that growth, Zukin said, was investment by city government at formerly industrial sites it owned, beginning with the Brooklyn Navy Yard and then extending to the Brooklyn Army Terminal, along with the space for tech companies at the privately owned Industry City.

Missing out on the growth of the last 10 years was Queens, which gained only 3,000 jobs and saw its share of the ecosystem decline.

The Adams administration’s emphasis is on access to jobs rather than expanding tech’s geographic footprint.

“This administration is building a more equitable tech economy,” said Anthony Hogrebe, a spokesperson for the mayor. “The reality is that much of our tech office space — and commercial space in general — remains in Manhattan and Brooklyn. But what is more important is that New Yorkers in every community can access those jobs or launch their own startups — and that’s where we have already seen progress.”

The Amazon effect

Long Island City on the Queens waterfront was once seen as a promising location, with the establishment of Cornell Tech on nearby Roosevelt Island in 2017 expected to produce entrepreneurs who would settle there.

But Amazon’s decision in early 2019 to scrap plans for a 25,000-employee second headquarters in Long Island City — after facing opposition from progressive politicians who decried $3 billion in tax breaks the city and the state offered — was a blow to the promise of a Queens tech cluster. The site Amazon ended up using in Alexandria, Va. already employs 5,000 people.

Meanwhile, the state of New York just handed the semiconductor company Micron $5.5 billion in tax breaks for an upstate plant that will employ 9,000 people.

The Queens Chamber of Commerce is seeking to fill the void left by Amazon by forming a Queens Tech Council. This week, it is opening the first of five tech incubators, to be established in the Rockaways, downtown Jamaica, Flushing, Forest Hills and Long Island City. Chamber President Thomas Grech has money from the state and donations to provide free space to 20 companies, along with help from the city’s Small Business Services and the state’s Empire Development Corp.

Grech is also trying to raise $40 million for a startup fund to lure young companies to Queens.

“We will never get another shot at an HQ2, but the whole effort is to build an environment where tech is welcome and people trained at our universities stay in the city,” he said.

The residential nature of Staten Island, with only 6,000 tech jobs, makes a hub there unlikely.

Instead the city should try to make sure that residents have access to jobs in the rest of the city, says Wittels of HR&A.

The Bronx, with only 11,000 jobs or 3% of the total, represents potentially the greatest opportunity for growth. A few planning efforts have been made in areas like the Hub in the South Bronx, but they have not amounted to much and there needs to be much greater investment, she said.

“We need to take from this report that there has been amazing growth in tech, if we could do more to create tech hubs in these boroughs there is unlimited potential,” said Clark of Tech:NYC.

In addition to broadening the geographic diversity of tech, the report notes that the city must find a way to create a stronger pipeline linking New Yorkers to tech jobs.

A report earlier this month from the Center for an Urban Future showed how CUNY has doubled to 4,000 its number of computer science graduates, but that a year after graduation only half had jobs in their field. Only 10% of CUNY students can land paid internships, a key pathway into well paying jobs.

CUF said that while many new programs are promising, they are too small and poorly funded — as is CUNY’s own career services support. “It is hard to make a dent,” said Wittels. “I endorse everything the Center said.”

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