New York, NY (April 1, 2014) -- The New York City tech ecosystem generates more than half a million jobs, $50 billion in annual compensation, nearly $125 billion in annual output, and $ 5.6 billion in tax revenues, a new study released today finds. The study, “The New York City Tech Ecosystem,” conducted by HR&A Advisors and commissioned by the Association for a Better New York, Citi, Google and NY Tech Meetup, aims to understand the comprehensive size and economic and fiscal impact of all New York City tech jobs, and reframes how tech is defined by going beyond the traditional tech and start-up sector.
This study is the first ever to look at all jobs in technology industries as well as technology jobs in non-tech industries, and the self-employed. Where prior studies have treated the tech industry as an independent silo, this study considers the entire ecosystem, and tech’s distribution and impact on the overall economy.
The study finds that 291,000 people, or 7% of New York City’s workforce, are employed in the New York City tech ecosystems. More than half of those, 150,000, work in non-tech industries. Indirectly, the ecosystem generates an additional 250,000 jobs through multiplier effects. Together they comprise 12.6% of New York City’s total workforce.
The New York City tech ecosystem is a major economic driver for New York City, comparable to the retail and healthcare sector. Surprisingly, 44% of all tech ecosystem jobs do not require a Bachelor’s degree, but workers earn 45% higher than average hourly wages.
“With 7% of the New York City workforce, this study shows definitively that tech is a critical component of New York’s vibrant and diverse economy,” said Kate Wittels. “The spectrum of tech-related occupations – from programmers to sales reps – is creating well-paying and quality jobs for New Yorkers at all levels of educational attainment. Fostering the growth of the New York tech ecosystem will increase economic opportunities for all New Yorkers.”
“ABNY is proud to have coordinated this group to reimagine the way the tech sector is measured to better capture the strength and diversity of New York City’s economy and the outsized impact tech is having on our city,” said Bill Rudin, Chairman of the Association for a Better New York. “The study makes it abundantly clear that New York City tech ecosystem is a major economic driver for the city, and that it generates opportunity for all New Yorkers. We need to continue building these opportunities for the city and its people by expanding tech educational programs, investing in tech infrastructure and spaces for startups, and promoting New York City as tech hub to attract more workers and companies.”
"This groundbreaking study confirms once and for all that technology can no longer simply be considered just 'a slice' of the economic pie, but rather 'the pan' that is supporting the dramatic and dynamic transformation of all of New York City's core industries in the hyper-connected 21st century global economy," said Andrew Rasiej, Chairman of the 38,000-member NY Tech Meetup. "We hope that the findings of this report will help policy makers understand why technologically-driven innovation and infrastructure are key to the continued growth of New York City and benefit all New Yorker's lives."
"As Google New York's first engineer, I have been amazed by the transformation of New York's tech ecosystem over the last decade," said Craig Nevill-Manning, Google Engineering Director. "Its growth and impact on New York's traditional industries, like finance, insurance and advertising, is a testament to the strength of the sector. It's the main reason why Google has continued to rapidly expand in the city – a strong tech economy creates a virtuous cycle that attracts more talent and makes companies like ours grow."
“In one sense, we shouldn’t think about tech as a separate sector,” said Ed Skyler, Citi’s Executive Vice President for Global Public Affairs. “Tech jobs are infused throughout New York City’s diverse economy, from financial services and media to retail and fashion, enabling these sectors to reach consumers who are more digitally connected than ever before.”
The study’s findings:
SIZE: The New York City tech ecosystem includes 291,000 jobs that are enabled by, produce, or facilitate technology. Tech industries generate 58,000 tech jobs (e.g. a programmer at Google) and 83,000 non-tech jobs (e.g. a sales rep at Etsy), while non-tech industries generate 150,000 tech jobs (e.g. a web developer at Citi). In total, New York City’s tech ecosystem employs 291,000 people or 7% of the 4.27 million people working in New York City. To put this figure into context, the retail sector employs 354,000 people or 8% of total workers, while healthcare employs 665,000 people or 16% of total workers.
GROWTH: From 2003 to 2013, the New York City tech ecosystem added 45,000 jobs, growing faster than both total New York City employment and total U.S. employment. The New York City tech ecosystem grew from 246,000 jobs to 291,000 jobs, an increase of 18%. In comparison, over the same period, employment increased by 12% in New York City and 4% nationally.
ECONOMIC IMPACT: The New York City tech ecosystem generates approximately 541,000 jobs, $50.6 billion in annual compensation, and $124.7 billion in annual output. Of the 541,000 total jobs, 291,000 are direct, and 250,000 jobs are generated through multiplier effects. Together they comprise 12.6% of New York City’s total workforce.
TAX REVENUE: The New York City tech ecosystem generates over $5.6 billion in annual tax revenues to the City, representing 12.3% of the City’s 2013 tax revenue. $2.5 billion comes from property taxes, $1.3 billion from personal income taxes, $0.9 billion from sales and use taxes, and $0.9 billion from corporation and business income taxes.
EDUCATION: The New York City tech ecosystem includes more than just highly-educated workers – up to 44% of jobs in the New York City tech ecosystem do not require a Bachelor’s degree. 128,000 jobs in the tech ecosystem do not require a Bachelor’s degree, with 11,600 of those being tech jobs in tech industries.”
COMPENSATION: Workers in the New York City tech ecosystem earn 49% more than the average City-wide hourly wage. The hourly wage for the tech ecosystem is $39.50, while the average City-wide wage is $26.50.
Jobs in the New York City tech ecosystem that do not require Bachelor’s degrees pay 45% more in hourly wages than jobs with the same educational requirements in other industries. Tech ecosystem jobs that do not require a Bachelor’s degree pay $27.75 per hour, while the average City-wide hourly wage for a job with the same educational attainment requirement is $19.00 per hour.
The study’s authors recommend specific public policies to foster growth:
Education and Workforce
Create continuing education and workforce development programs that provide training for the required skills of growing tech occupations. Continue to support the technical programs of existing NYC-based universities and educational institutions. Expand efforts to incorporate computer literacy and other technical curricula into the New York City primary education system.
Real Estate and Infrastructure
Create and expand tech hubs that centralize goods, supportive services and other resources critical to tech firms. Provide low-cost, flexible spaces for startups and business incubation, including critical step-up space to support new companies as they grow. Invest in state of the art infrastructure to enable the productivity of tech firms and workers across New York City.
Attraction and Retention
Promote New York City as a hub of commerce and innovation and centralize and coordinate New York City’s existing and impactful tech-oriented programs and services.
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