Entrepreneurs like to build their next start-up often elicits the same three-word response: New York City. Over the past four years, there’s been a 40% spike in start-up financing in “Silicon Alley” — a bigger increase than anywhere else in the U.S.
Cities around the world are increasingly looking at New York, rather than San Francisco or Silicon Valley, as a model for nurturing start-up growth through policy making and urban planning.
What’s New York’s secret to start-up success? The answer is twofold: it’s half the fault of the financial collapse of 2007/2008, and half the result of intelligent public planning and policy making.
Thousands of the city’s brightest coders, says Hargreaves, were working for the finance industry when the bubble burst. As companies sank, those software engineers were either let go or abandoned ship — leaving some of them free to spark New York’s startup explosion.
Software programmers are uniquely suited to start new companies. Over the past ten years, the cost — in time and money — of starting a new technology company has dropped significantly. Whether a technology company is developing new products, selling those products in a new way, or helping people live longer and better lives, the first step in a company’s development often involves writing some software — the realm of programmers.
New York’s startup scene, as Hargreaves puts it, found a “silver lining” in the economic collapse. However, it’s not exactly advisable for a city looking to copy New York’s success to tank a major industry in favor of another. Instead, says Hargreaves, the replicable nature of the city’s strategy lies in its policy making. New York has heavily invested in start-up culture — literally and metaphorically — and that, says Hargreaves, can be copied elsewhere.
New York City’s success, especially smaller cities, follow these steps:
- Start-up talent — entrepreneurs, coders and others — must be developed and nurtured.
- Cities must work to keep that homegrown talent from flocking to cities such as New York, San Francisco or Boston.
- Students are an investment, and brain drain can ruin that investment.
- Focus on training people in their 30s and 40s to become coders.
- More likely to have laid down geographic roots, and therefore less likely to move away.
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