Why did New York City, particularly Manhattan, experience such explosive growth in tech start-ups at the outset of a major economic downturn?
At the turn of the new century, relatively few tech start-ups were located in New York City. Silicon Valley, New England, LA/Orange County, San Diego and even upstate New York far outstripped the New York metropolitan area in the number of tech start-ups. From 2007 to 2011, however, tech start-ups in NYC grew by 32%, during a severe economic recession when other regions experienced sharp declines.
This rapid growth of tech start-ups in NYC cannot be explained by overall economic growth alone, especially given that the NYC financial industry was the epicenter of the most serious financial crisis since the Great Depression. So why did New York City, particularly Manhattan, experience such explosive growth in tech start-ups at the outset of a major economic downturn?
Our interdisciplinary approach—including teams of sociologists and economists—focuses analytic attention on institutions in the making of a knowledge-based regional economy. In explaining the rise of regional centers of knowledge-based economic development, our approach explores the institutional drivers of successful entrepreneurial activity. We plan to conduct basic research on knowledge-based economic development near to the timing of emergence, with a focus on the social mechanisms and institutional processes enabling and promoting this new wave of entrepreneurship.
We have launched a follow-up survey of the tech entrepreneurs who participated in the initial stage of this ground breaking study. Our research thus far has shown that social networks and expectations have a great deal to do with the success of NYC’s Tech economy. Our research today is focused on exploring further the different ways and means that social networks and inter-firm cooperation function, how they assist entrepreneurs and strengthen the NYC tech community. We hope to uncover potential solutions and strategies that facilitate a transition to a knowledge-based regional economy.
We invite you to watch the video below to understand some of what we have learned.