New York City mayor Mike Bloomberg wants to attract technologists to New York by creating facilities to rival Silicon Valley. But, says Max, New York will have to compete on multiple levels that have traditionally given the West Coast an edge.
New York City’s Roosevelt Island has been home to workhouses, hospitals and asylums. Now, it may become home to a new technology campus to attract technology talent that has traditionally migrated to California’s Silicon Valley. The project is the brainchild of the city’s mayor Michael Bloomberg, who knows the challenges of competing for talent.
Choosing where to work is a complex decision. One lure of the West Coast is the ecosystem of technology vendors and potential partners. “We’re part of an ecosystem of switch vendors and application vendors based here, so we need to be building stronger relationships with those players who have been here for 20 years and have established relationships,” says Tim Nichols, vice president of global marketing at network monitoring vendor Endace, which is building a new marketing headquarters in Sunnyvale, Calif.
Another lure is Silicon Valley’s association with technology start-ups, which has traditionally led to technology investment focusing on Silicon Valley. “We’re not trying to drive revenue from the region; we have to drive sales from the East Coast—London, New York and Chicago are where the money is, but Silicon Valley is where the investor center is,” Nichols adds.
According to a recent PricewaterhouseCoopers MoneyTree report, Silicon Valley attracted $2.08 billion in funding in the first quarter of 2012—or 36 percent of all US venture capital funding during the period, compared to the New York metro area, which attracted just 6.6 percent—with more than 30 percent of that going to the software industry.
Silicon Valley is also where the next round of clients are for many cutting-edge technology companies. Most of Ottawa, Canada-based messaging technology vendor Solace Systems’ West Coast clients are in industries outside the financial markets. Local financial clients tend to be hedge funds, retail brokerages and retail banks—but these are becoming a larger part of Solace’s business as the vendor expands from serving low-latency front-office requirements to providing broader messaging infrastructures to firms experiencing the same pain points around speed, throughput, and reliability as larger institutions, says senior vice president of marketing Larry Neumann.
Often, the decision to move west is driven by climate rather than career. Ed Guy, managing partner at recruitment agency NationStaff—who himself is looking to relocate to the West Coast—says West Coast staff often work East Coast hours and suffer lower pay and higher costs in return for the lifestyle.
But once companies find the right person, it can be easier to retain those who have made a lifestyle choice, while opportunities to move to similar jobs are less common than in New York.
“In New York or Chicago, there is more competition for talent because people can more readily look for a new job as close by as right across the street. Here in the Bay Area, you get more long-term stability and retention, which is a real asset,” says Paul Famular, vice president of business operations at Interactive Data Desktop Solutions.
However, it is Silicon Valley’s ability to grow its own talent that makes it attractive to locate there, and it’s this level of home-grown talent that New York wants to create for itself by stemming the brain drain to the West Coast. Maria Gotsch, president and CEO of the New York City Investment Fund, acknowledges a shortage of coding talent in New York, but says the city is attracting more technology investment than in the past—in part encouraged by Bloomberg’s efforts to encourage high-tech centers of excellence in the city—and that when people in the financial technology industry set up companies, they tend to stay in New York and continue to contribute to its expansion.
But ultimately, it makes no difference whether technology used on Wall Street is developed around the corner or across the country, though attracting wealthy entrepreneurs and bolstering the ranks of developers will no doubt raise New York’s standing under Bloomberg’s term in office—not to mention the taxes going into the New York pot. At the end of the day, users care whether tools make or save them money, not where they came from.
Bryan Cross, who heads UBS Asset Management's QED group, joins to discuss alternative data and AI.Subscribe to Weekly Wrap emails