In our latest City Focus feature, New York comes under the microscope as it builds on its reputation as an international business destination.
As the most populous region in the United States with about 8.6 million residents in the city and 20 million people in the metropolitan area, a wide variety of sought-after talent and entrepreneurial visionaries contribute to New York's economy.
Vast amounts of businesses have headquarters or branches in New York for all sizes and manners of operations, making New York State the third-largest economy in the United States with a majority of the economic development taking place in the city and downstate. New York is among the top twenty world economies with an annual gross metropolitan product exceeding $1.5trn and recent figures put the unemployment rate at 4.3%.
The economy of New York
While New York has always been a global and national economic powerhouse, the city has recently experienced the largest economic boom since World War II. An unprecedented 4.4mn total jobs are held city-wide which accounts for three quarters of the entire state's 11.5% job growth over the last eight years. The city's economy and that of the entire metropolitan area are incredibly diverse with activity in finance, technology, tourism and hospitality, entertainment, healthcare, manufacturing, and professional services to meet the needs of such a large population.
The financial services industry, securities in particular, remains a bedrock of New York's economy on account of the New York Stock Exchange which is the most influential securities exchange in the world. Over 90% of New York state's investment-related jobs are located in downtown New York with the remaining 10% in the metropolitan area. Despite this geographic concentration, the city's financial industry activity has a major influence on the entire state's economy.
New York may be best-known for its role in the financial industry but economists postulate that "Silicon Alley" will surpass its west coast counterparts given the technology-fueled business revolution taking place. With fast growth in the technology sector in Brooklyn and Manhattan in particular and the city serving as a major international port and travel hub, New York has unique advantages over Silicon Valley and the other technology meccas out west. Technology jobs have subsequently risen 25.5% since 2010 (compared to 31% for non-tech jobs) and predominantly fueled by billions in venture capital.
The business of the arts
New York has historically been a prominent world landmark for publishing, media, and entertainment.
As the second-largest film and television production region in the country and world leader in independent film production, the film industry contributes almost $9bn to the city's economy alone. With the steady presence of TV and book publishing alongside digital media and the growing presence of the video games industry, all types of media serve as a cornerstone of New York's economy. The generous tax incentives for film and TV production, with a proposed tax credit for video game and digital media production, have consistently made New York attractive to investors and entrepreneurs.
Companies to watch
Silicon Alley is making a rapid ascent in the city. Google, Apple, Facebook, Microsoft and other tech giants have satellite offices in New York and VCs have invested over $1.2bn in New York-based startups, with the former helping to stabilize the startup ecosystem that is quickly growing and thriving in the city. Startups are forming, incubating, and getting venture capital in mass numbers but there are other large technology companies to look out for that are New York natives.
Despite representing less than 5% of the company's total workforce, the computer titan is still the largest tech employer in New York with 20,000 employees in the city. As a New York tech institution, 9,000 of these employees are in engineering roles.
The digital marketing giant that posted over $10bn in revenue in the 2018 fiscal year has a substantial presence in New York with over 1,000 employees in the city. Roughly one-third of them are in engineering roles with the majority being non-tech.
Thriving on New York's rich diversified economy and talent pool, Planted is a Brooklyn-based startup that builds teams in other startups and established companies by matching them with professionals in non-tech roles. Seeded by Great Oaks Venture Capital, Planted is expanding its New York operations and looking to expand to other markets.
Troops is a software developer building workflow automation tools designed to integrate with the most popular tools such as Salesforce, Slack, and G Suite. The founders credit New York's diversity and quality talent for their success. The fast-growing startup has raised $7mn in Series A funding from Felicis Ventures after $2.6mn in seed money from First Round Capital.
New York is often not considered "business friendly" relative to other states and cities due to onerous taxes and regulations. The city has its own income tax and a variety of vague local business taxes, including S corporation status being recognized by New York State but not the city.
New York City real estate is among the most valuable and sought-after in the world, with Midtown Manhattan holding the world's the largest central business district and almost 400mn square feet of commercial office space. Commencing or moving operations to New York is difficult and costly as a result but many business leaders find the tradeoff of the voluminous talent pool and attractive location to be worth it.